February 2017 Investment Income $326

By: GenXinvestor

Welcome to my February 2017 investment income report.  This report helps me track all of my investment income from rental properties, dividend stocks, index funds and exchange-traded funds (ETFs).

February 2017 Investment Income I was pleased to see that our net worth continued to rise in February, hitting 953k.  The increase in net worth had to do with the strong performance of global stock markets.  This brought the value of our financial assets to an all time high at just over 480k!  This is why I think that it really pays to stay invested and not try to time the market.

While I was pleased to see our net worth rise this month, I was disappointed to see that our monthly investment income was below the 1k mark.  In my opinion, having a high net worth is great and all, but unless it’s backed up with some solid investment cash flow it’s not really all that impressive.  To my mind, cash-flow is KING!

Investing in Myself

For me things have been super busy since January because I’m taking courses so that I can move up in my job and get a bigger paycheque.  It’s not often that opportunities like these come around so when I was offered the opportunity I jumped at it.  More money means more funds for investing, plus I like learning new things.  I find if you stay long enough in a job things start to get a bit stale.  Change is good, especially if it means learning new skills and having opportunities for advancement.

Rental Properties

Speaking of cash flow, the rental properties still aren’t performing.  I had 2 units sitting vacant this month and of course the bills keep coming in!

While the rental properties weren’t performing well, our financial assets were doing great.  At least for this month the dividend income came through for us.

Monthly Investing Activity

For me, the big move this month was the Kraft-Heinz bid for Unilever (UL).  This came on the heels of a terrible quarterly report by UL.  I bought 150 UL back in Nov 2016 for a little over 39 bucks so I was pleased to see the shares jump almost 10 bucks overnight.  I sold the shares and am sitting on the cash for now.  I don’t usually “trade” like this, I’m more of a buy and hold type guy.  But here I saw an opportunity to make a quick profit and hopefully get an opportunity to buy back in cheaper.

Beyond that move, I’m sticking to the same old investment plan.  I continue to buy up blue-chip Canadian dividend stocks and keep making extra cash purchases in my DRiP account to buy more shares of great dividend-paying companies.  I like to save and invest automatically because it’s a proven strategy for building long term wealth.  In addition to the stock purchases, I’m also investing in low-cost index funds in our retirement accounts.

One of the great things 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, reinvested dividend income bought more shares in Bank of Montreal (BMO), Emera (EMA), and RioCan (REI).

Dividend Raises

I’ve had a ton of companies raise their dividend this month which will help my future dividend income reports.  Bell Canada (BCE) raised by 5.1% from 0.6825/quarter to 0.7175/quarter.  This raise adds about $50 to my annual income from this one company.  Manlife Financial (MFC) raised by nearly 11% from 0.185 to 0.205 a quarter.  Suncor Energy (SU) raised by 10% from 0.29 to 0.32 a quarter.  Bank of Nova Scotia (BNS) raised by 2.7% or 2 cents/quarter.  CIBC (CM) raised by 2.4% or 3 cents/quarter and TransCanada raised by 9% or 6 cents/quarter.

These dividend raises really help my financial assets compound and it’s one of the great things about being a dividend investor.  After all, how often do we get annual raises in the 5%-10% range?

Monthly Passive Dividend Income

February is one of the weaker months for dividend income.  This month’s dividend income has actually shrunk by 8% from that of February 2016 ($355.73).  A big part in that weak performance was a result of Potash Corp (POT) cutting its dividend (twice) in 2016!

Here is the breakdown of the numbers for February:

Dividend Stocks

Emera (EMA) – $27.37

Bank of Montreal (BMO) – $68.02

Citigroup (C) – $4.14

Procter and Gamble (PG) – $86.67

Potash Corp of Saskatchewan (POT) – $13.79

RioCan Real Estate Investment Trust (REI) – $4.39

Mutual Funds and ETFs

iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $51.89

iShares S&P/TSX Capped REIT Index ETF (XRE) – $38.61

Canadian Short-Term Corporate Bond Index ETF (VSC) – $17.28

Canadian Short-Term Bond Index ETF (VSB) – $13.98

Total = $326.14

Rental Income

This month, 2 of 4 units were rented and we were in a negative cash flow position on the rentals.  February’s profit on the rental units was a big fat zero.  With expenses we actually lost a few hundred bucks.  The profit potential was the reason that I decided to invest in rental property in the first place.  I expect that in the next few months the rental income will be somewhere in the range of $1,000 to $1,200 per month.

Total Monthly Rental Income = $0

This brings the grand total for our February 2017 Investment income to $326.14

Our annual passive income goal is $25,000 and we have so far received $1431.69.  So we are  5.7% of the way there.  The rental properties are really screwing me on my investment income goal!

Both the dividend portfolio and our rental properties will add a considerable amount to the monthly investment cash flow.  My aim is to get roughly $1,000 / month from both sources.  Hopefully things work out this year.

Thanks for reading my February 2017 investment income report.

Photo by sscreations/FreeDigitalPhotos.net

March 2017 Net Worth Update $953,365

By: GenXinvestor

March 2017 Net Worth UpdateHere is my March 2017 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, as well as for our monthly investment income, please refer to our dividend income and monthly highlights section.

In a previous post, I laid out a variety of financial goals for 2017.  My focus for the year however, will be on achieving 3 major goals.  First, we want our net worth to hit 1 million dollar mark by the end of the year.  Today we’re at almost $930k so we need to increase this by 70k to achieve the 1 million dollar goal.  I think this should be doable barring a major stock market or real estate meltdown.

Our second major goal is to increase our passive income to $25k.  In 2016, we managed to earn just over $16k.  So I feel that if our rental properties perform nicely and we continue to invest a great deal of our paycheques then I think that it’s entirely possible that we earn $25k from our investments.  At that point we’ll be half way toward our goal of earning $50k a year in investment income.

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 $35k this year in the form of lump sum payments.

Assets: $1,646,838.36  

Well thanks to our approach to regularly invest our money, along with a little help from the Trump rally, our assets have risen past the 1.6 million mark!

Home: $846,000 (0%)

A few years ago we purchased our “final” family home where we expect to be for at least the next 30 years.  In June of 2016, we received the latest property assessment and the assessed value had increased to $846k!

Rental Properties: $290,000 (0%)

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

Cash: $8363.97

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’m building a cash cushion in my Tangerine Savings account.  If you’d like to open one, then visit the Tangerine website and remember to use my Orange Key: More25 to get $50 in free bonus cash just for opening up an account!

Non-Registered Investment Accounts: $37,467.29

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.  From time to time you may see a decrease in this account as a result of me moving some of these assets that are fully taxable into our registered accounts that are not subject to any immediate taxes.

Tax Free Savings Account (TFSA): $128,433.06

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 Accounts: $288,761.98

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.

Education Savings Plans (RESP): $20,412.06

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 Assets: $27,400 

Under the “other” assets 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 $27,400.  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: -$693,473.45

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: -$439,660.37 @ 2.89%

Paying down our mortgage will be a high priority for 2017 and we expect to be mortgage-free in less than 10 years.

Rental Property 1 Mortgage: -104,532.82 @2.62%

Rental Property 2 Mortgage: -101,895.34 @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: -47,384.92 @ 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.

Thanks for reading my March 2017 Net Worth Update!

Image Credit: Image courtesy of hywards/FreeDigitalPhotos.net