“I built a solid portfolio of dividend-paying stocks that will help me retire earlier”
Frank Urbaniak, 49 // Aurora, Ont.
Five years ago I became motivated to build my own stock portfolio. I’m a project manager for a telecommunications company, and I had just read some books on dividend investing that encouraged me to take the plunge. I was interested because this type of investing has been so successful that it’s allowed some of its followers to retire before age 55.
I developed a structured approach to buying blue-chip stocks and adopted a dividend reinvestment plan (DRIP) as my primary strategy. This means instead of receiving cash dividends, I automatically purchase new shares of the companies. I also developed a DRIP app to help me track my stocks and tell me when I should be topping up my $5,000 annual investment so I stay on track.
For me, it’s all about retiring as soon as possible. Age 55 would be nice, but for me it will probably be age 60. If I had started a bit earlier with my strategy I would have probably made the age 55 target. I always worried about my money and realized that my previous strategy of using mutual funds just wasn’t working. My RRSP mutual fund account just never increased at all. The fees were killing me. It was ridiculous.
I started my stock portfolio with a $5,000 investment in the Bank of Montreal. I soon wanted to diversify and now hold Enbridge, TransCanada Pipeline and Fortis. I’m happy with my returns, which are averaging around 8% a year. I stick to Canadian stocks because they’ve done really well for me. Blue chips will be here for the next 100 years. I really believe that.
My goal is to use my investment money to eventually retire some place hot like Costa Rica. I’m a beach guy who loves snorkelling and motorcycling. Opening a small coffee shop there also appeals to me and I know that staying on track with my dividend investing will help me get there more quickly.
My key tips for anyone interested in becoming a successful investor is to concentrate on buying blue-chip stocks and to reinvest all dividends. Don’t worry about price fluctuations or even falling prices.
In fact, those times often present the best buying opportunities. Have a goal in mind and stick to it. If you follow these steps, you’re certain to be successful.
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