May 2016 Investment Income

Welcome to my May 2016 investment income report.  This report will help me track all of my investment income from the rental property, dividend stocks, index funds and exchange-traded funds (ETFs).

dividend incomeWell no sooner did we get the HELOC paid off, then I scooped up another rental property that closed on June 1st.  The strange thing about this property was that it came up for sale in February, but unfortunately I wasn’t ready financially to buy it.  Then the seller took it off the market and it came up just as we had paid off our HELOC balance…must have been fate or something.  So I immediately made an offer and won the property.  Needless to say, I’ve been busy this past month trying to get everything done for closing.

In other news, I was happy to see that our net worth stayed above the $800k mark this month.  A lot of that had to do with the strength of the TSX.  What can I say, everything seems to have done well lately…banks, utilities, pipelines, telcos, oil stocks and even the miners.  Again, this just goes to show that it pays to stay the course and stay invested – even in turbulent markets.  I can’t imagine what those who sold at the January lows must be thinking right now.    

Monthly Investing Activity

On the investing front, I continue to make extra cash purchases in my DRiP account to buy more Telus (T), Emera (EMA) and Bank of Montreal (BMO) shares.  I also continued with my longstanding plan to save and invest automatically by continuing to invest in low-cost index funds in our retirement accounts and by making automatic share purchases in my DRiP accounts.

The great thing about being a dividend investor is that all of my dividend income is automatically re-invested.  Every month this income buys more shares in my favourite companies that will, in turn, produce even more monthly income for me.  This is how compounding works and is why it’s such a powerful force…what Einstein called the “Eighth Wonder of the World”!

This month, our reinvested dividend income purchased over $300 in stocks and ETFs in our various investment accounts.  We received more shares in BMO, EMA, POT, XRE, and CPD among others.  Those additional shares will, in turn, give us even more money in annual dividend income.

Overall, my portfolio income continues to increase at a decent pace.  I didn’t do anything special to achieve that much dividend income.  I just keep on investing whatever money that I can and I keep reinvesting the quarterly dividend income.  It’s not rocket science, just the magic of compounding.

Dividend Raises

I had 5 companies raise their dividends this month.  TransCanada Corp (TRP) raised by 8.7% or 0.045 cents/quarter, Telus (T) raised by 4.5% or 2 cents / quarter, Canadian Imperial Bank of Commerce (CM) raised by 2.54% or 0.03 cents / quarter, BMO raised by 2.34% or 2 cents / quarter and Sun Life Financial (SLF) raised by 4% or 1.5 cents / quarter.

Monthly Passive Dividend Income

May has been a decent month with regard to dividend income.  We received $334.07 in passive dividend income!  This month’s dividend income has grown by nearly 26% from that of May of 2015 ($265.70).  A large part of that increase came from investing my own personal savings, while the remainder was due to the regular reinvestment of my dividend income and from companies raising their dividend payout periodically.

So far this year, we have received $3,373.33 in passive dividend income.  Here is the breakdown of the numbers for May:

Dividend Stocks

Emera (EMA) – $21.83

Bank of Montreal (BMO) – $60.02

Citigroup (C) – $1.27

Procter and Gamble (PG) – $85.50

Potash Corp of Saskatchewan (POT) – $32.96

RioCan Real Estate Investment Trust (REI) – $4.23

Mutual Funds and ETFs

iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $50.86

iShares S&P/TSX Capped REIT Index ETF (XRE) – $39.94

Canadian Short-Term Corporate Bond Index ETF (VSC) – $21.19

Canadian Short-Term Bond Index ETF (VSB) – $16.27

Total = $334.07

Rental Income

Both units are rented out and the property is cash flowing nicely.  After all expenses we made a profit of $633.90.  This is the reason that I decided to invest in rental property in the first place and why I recently purchased another one this month.

Total Monthly Rental Income = $633.90

This brings the grand total for our May 2016 Investment income to $967.97

I’ve raised our annual passive income goal from $10,000 to $12,000.  So far this year, we have received $5,887.82.  So we are already 49.1% of the way there.  I wasn’t sure exactly how much the rental property would add to the monthly investment cash flow, but it’s looking good so far.

Photo by sscreations/FreeDigitalPhotos.net

June 2016 Net Worth Update $817,018

Here is my June 2016 net worth update.  As I’ve said before, I like to track my family’s progress through monthly net worth updates.  To calculate our net worth, I add up all of our household assets and subtract any outstanding liabilities (ie. debt owing).  The result is simply a snapshot of what my family is worth at a particular moment in time and does not give any of the relevant details as to how or why we reached that point.  For that kind of information, please refer to our dividend income and monthly highlights section.

June 2016 net worth updateIn a previous post, I laid out a variety of financial goals for 2016.  My focus for the year however, will be on achieving 3 major goals.  First, we want to pay down the HELOC as quickly as possible.  This debt is a drag on our financial plan so it is the big priority for this year.  I’m happy to report that we finally paid this off!

Secondly, we want our net worth to hit $800,000 by the end of the year.  I’m happy to report that we achieved this already.  I’m going to have to revise the Net Worth goal upwards.

Finally, we still want to aggressively pay off our mortgage so that we can be mortgage-free in 10 years or less.  To this end, we plan to pay off at least an extra $10k this year in the form of lump sum payments.  We need to get on this ASAP.

Assets: $1,516,154.73 (+10.49%) 

Home: $815,000 (0%)

In December 2014, we purchased our “final” family home where we expect to be for at least the next 30 years.

Rental Properties: $290,000 (0%)

In 2015, we purchased our first rental property and have since added a second.

Cash: $4,076.42

As a matter of habit, I rarely keep a lot of cash on hand in a savings account.  The reason being is that at today’s record low interest rates I’d rather put the money toward paying off my mortgage faster or invest it.  That said, I do keep some cash on hand in my investment accounts in case any market opportunities arise.

Non-Registered Investment Accounts: $39,503.04 (+8.5%)

Our non-registered investment accounts include DRIP accounts with Computershare and Canadian Stock Transfer, a discount brokerage account and a work savings plan.  For the most part, in these accounts, I prefer to hold Canadian companies that pay eligible dividends.  The decrease in this account is a result of moving non-registered stocks into our TFSAs.

TFSA: $92,925.95 (+1.8%)


In the TFSA I like to hold growth assets, such as low-cost ETFs, TD e-series index funds or Canadian dividend paying stocks.

Retirement: $234,468.80 (+3.45%)

Our retirement accounts consist of RRSPs, a small locked-in retirement account (LIRA) from a previous employer and a company defined contribution pension plan.  The RRSPs and LIRA hold low-cost TD e-series index funds and other low-cost ETFs, while the company pension plan is invested in a low-cost target date fund.

RESP: $13,180.52 (+2.7%)

In the RESP we hold low-cost TD e-series index funds.  We contribute the annual amount of $2,500 so we can get the 20% match from the government.  Our strategy for contributing is to use the money we receive each month from the universal child care tax credit and make up the difference at the beginning of each year.  This ensures that we receive the maximum government contribution of $500.

Other: $27,000 

Under the “other” category, I include an extensive coin and paper money collection.  For years I collected rare gold and silver Canadian coins and Canadian paper money.  The collection has a face value of $10,000 so I conservatively estimate the collection’s worth at around $27,000.  For the purpose of my net worth calculations, I’ve been keeping this number constant versus increasing it over time because (a) coins and paper currency can be difficult to accurately appraise as they are subject to changing market trends and (b) can become illiquid if you can’t find a buyer for them.

Liabilities: -$699,136.23

The only debt we now carry that is not tax deductible is the mortgage on our primary residence.  This is a priority to pay off so we can get out of debt!

Mortgage: -$459,332.55 @ 2.89%

Paying down our mortgage will be a high priority for 2016 and we expect to be mortgage-free in less than 10 years.

Rental Property 1 Mortgage: -107,166.82 @2.62%

Rental Property 2 Mortgage: -103,900.00 @2.54%

We added mortgage debt with our rental properties.  The mortgage interest is tax deductible so we won’t prioritize paying off these mortgages.

HELOC: $28,997.70 @ 3.35%

I used the HELOC for a downpayment on a rental property.  The interest is tax deductible so I’m fine with carrying this debt for a while.

Image Credit: Image courtesy of hywards/FreeDigitalPhotos.net