Frank Urbaniak, 51
Occupation
Project supervisor
The portfolio
Includes shares in Canadian banks, Enbridge Inc., Manulife Financial Corp., RioCan Real Estate Investment Trust, BCE Inc., Fortis Inc., TransCanada Corp., General Mills Inc. and Colgate-Palmolive Co.
The investor
Frank Urbaniak works in the telecommunications field in Ontario but would rather be snorkelling in the Caribbean and running a coffee shop by the beach. So he's putting aside money and investing it to generate the capital required for the transition.
How he invests
Before 2007, Mr. Urbaniak invested in mutual funds and hot stock tips that both went nowhere. Then he read some investing books and now invests in blue-chip companies with dividend reinvestment plans (DRIPs).
DRIPs increase the compounding of returns by automatically reinvesting dividends and not charging commissions. An added bonus is that some DRIPs allow members to put up cash to buy shares at 3- to 5-per-cent discounts to the market.
A number of DRIP websites and forums were helpful in getting Mr. Urbaniak started. A DRIP app that he developed in his spare time for the iPhone also keeps track of his portfolio.
He has also joined his company's group registered retirement savings plan. Such plans can be a smart move since employers match contributions, effectively providing free money to employees.
Finally, money that he had in a mutual fund was transferred into the Saskatchewan Pension Plan (open to all Canadians). Contributions are tax deductible and managed by a top pension fund manager. The average annual return is 8.14 per cent since inception 28 years ago.
"I never worry about the daily market value of my stocks – in fact, if they go down for a while, it just means I can purchase more," Mr. Urbaniak said.
Best move
BCE's regular dividend increases and strong capital gains.
Worst move
The iShares S&P/TSX Capped Materials exchange-traded fund was dumped after it tumbled 50 per cent.
Advice
"Start as early as you can and stick with companies that have a long history of dividend payments that have increased over time."
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