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me and my money

Annie and Rich English, both 50



The portfolio

Over 35 dividend stocks, including BCE Inc., Toronto-Dominion Bank, Premium Brands Holdings Corp., Canada Bread Co. Ltd. and Algonquin Power & Utilities Corp.

The investors

Annie and Rich English retired from their mid-level jobs two years ago. Neither has a defined-benefit pension, but while working they saved 35 per cent of their gross income and invested in Canadian dividend stocks. The result was "a portfolio in the seven figures and annual dividend income of around $70,000."

How they invest

They look for stocks with dividends yielding at least 3.5 per cent, reasonably low price-to-earnings ratios and dividend-payout ratios that are "not too high relative to earnings." They also like to buy shares in companies that have a history of raising their dividend.

"We try to reduce risk through diversification," the couple add. "For example, we buy different stocks in various sectors and set limits for the amounts we hold in each stock depending on market capitalization– lower limits for smaller companies and higher limits for larger, blue-chip companies."

One of their more recent purchases was Canada Bread, which has a dividend greater than 4 per cent. The share price has gone up and the company "handed out a bonus dividend of $8 per share in January." But it's now being taken over and a replacement needs will have to be found.

Dividend investing is not that stressful, they find. "We are insulated from the impact of roller-coaster stock prices as long as we continue to concentrate on the stability of the dividends."

Best move

"Learning how to … manage our own investment portfolio and not panicking when stock prices crashed in 2008 and 2009."

Worst move

"Not understanding the adverse tax implications of holding income trusts and real estate investment trusts in non-registered accounts."


"Learn how to understand and manage your own portfolio." And, as Ms. English notes in her book, Retired at 48: One Couple's Journey to a Pensionless Retirement, the ease with which early retirement is achieved often depends on individual circumstances. In their case, not having kids was an important factor.

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