January 2017 Investment Income $1105

By: GenXinvestor

Welcome to my January 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).

January 2017 investment incomeI was pleased to see that our net worth continued to rise in January, hitting 929k.  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 460k!  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’m even more pleased to see that our monthly investment income continues to stay above 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!

Rental Properties

Speaking of cash flow, the rental properties haven’t been performing.  I had 2 units vacant and had to do some repairs to get the get the other vacant unit rent ready.  Now we have 2 units ready to go and it looks like they’ll be rented out this month.

While the rental properties weren’t performing well, our financial assets were doing great.  January is always a great month for dividend income because our largest holdings pay out in January, April, July and October.  So at least for this month the dividend income came through for us.

Monthly Investing Activity

For the most part, 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 Bell Canada (BCE), Telus (T), KP Tissue (KPT), the Bank of Nova Scotia (BNS), TransCanada Corp (TRP), CIBC (CM), and RioCan (REI).

My January 2016 dividend income report made me realize that the majority of my dividend income comes from Canadian banks.  While I love the banks, I recognize the need to diversify a bit more.  So I focused on building up my positions in Telus (T), BCE (BCE) and my pipelines and utilities.  I also wanted to raise some cash so I sold the bulk of my TD shares.  I hope that I get an opportunity to buy them back at a lower price sometime this year.

Dividend Raises

I’ve had several companies raise their dividend this month.  Canadian Utilities (CU) raised by 10% from 0.325 to 0.3575 a quarter.  This adds about $26 to my annual dividend income from that one source.  Pipeline company Enbridge (ENB) also raised its dividend by 10% to 0.583 a quarter.  Canadian National Railway (CNR) also raised by 10% from 0.375 to 0.4125 a quarter.  It’s hard to believe that just 2 years ago, CNR paid an annual dividend of $1.00, now it pays $1.65, an increase of 65%!

Monthly Passive Dividend Income

January has been another great month for dividend income.  This month’s dividend income has grown by nearly 1.5% from that of January 2016 ($1088).  As always, 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 periodically raising their dividend payout.

Here is the breakdown of the numbers for January:

Dividend Stocks

Bell Canada Enterprises (BCE) – $249.57

Telus (T) – $26.12

KP Tissue Inc. (KPT) – $100.80

RioCan REIT (REI) – $4.37

TransCanada Corporation (TRP) – $19.74

Bank of Nova Scotia (BNS) – $524.36

Canadian Imperial Bank of Commerce (CM) – $28.54

Toronto Dominion Bank – $35.20

TransAlta (TA) – $0.75

ETFs and Mutual Funds

iShares S&P TSX Canadian Preferred Share Index ETF (CPD) – $52.69

iShares S&P TSX Capped REIT Index ETF (XRE) – $40.51

Vanguard Canadian Short-Term Corporate Bond Index ETF (VSC) -$12.65

Vanguard Canadian Short-Term Bond Index ETF (VSB) – $10.25

Total Dividend Income – $1105.55

Rental Income

This month, 2 of 4 units were rented and we were in a negative cash flow position on the rentals.  January’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 January 2017 Investment income to $1,105.55

I still can’t believe that our investments are paying us that much income!  After years of saving and investing, I’m finally seeing the fruits of my effort and I’m happy to finally have my money working for me.  If we can get the rentals sorted out and have our investments go  back to paying us over $2k a month that’s like having somebody bring in an extra monthly paycheque.

Our annual passive income goal is $25,000 and we have so far received $1105.55.  So we are  4.4% of the way there.

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 January 2017 Investment Income report and please help support this blog by liking my Facebook page in the sidebar!

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February 2017 Net Worth Update $929,018

By: GenXinvestor

February 2017 Net Worth UpdateHere is my February 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: $1,626,606.35  

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: $4133.61

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: $34,872.83

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): $127,773.96

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: $276,463.07

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): $19,962.88

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: -$697,588.52

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: -$444,446.70 @ 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: -104,798.80 @2.62%

Rental Property 2 Mortgage: -102,147.77 @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: -46,195.25 @ 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 February 2017 Net Worth Update!

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