December 2016 Investment Income $2,162

By: GenXinvestor

December 2016 investment incomeWelcome to my December 2016 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).

I was pleased to see that our net worth continued to rise in December, hitting 924k.  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 450k!  This is why I think that it really pays to stay invested and not try to time the market.  It was only a short while ago that the markets were in dire straits and we could buy Canadian banks at bargain basement prices.  Now take a look at them, they’re trading at all-time highs!

Well now that we’ve broken through the 900k mark in net worth I can sees us hitting that coveted $1 million mark early next year if all goes well.  Like I said before, net worth is great and all, but unless it’s backed up with some serious cash flow, it doesn’t really mean all that much.

As for my monthly cash flow, it was one of the better months this year and it had everything to do with my financial assets.  As it stands with the rental units, I have 2 vacant units.  They are both ready to go so hopefully they get rented out and my rental income improves.

Overall, we had an amazing year financially.  Our net worth increased by $180k!  Much of that gain had to do with the performance of our financial investments and real estate.  Our annual passive income nearly doubled from 2015.  We earned about $16,400 in investment income in 2016 and only $8,400 for 2015.  It was a strong year across the board and I’m hopeful that this will continue in 2017.

Monthly Investing Activity

As usual, I’m sticking to the same old boring 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 Fortis (FTS), Canadian Utilities (CU), RioCan (REI), Enbridge (ENB), Manulife (MFC), Suncor (SU), and SunLife Financial (SLF).

Since my January dividend income report, I’ve been trying to diversify my stocks away from Canadian banks.  Bank dividends make up the majority of my overall dividend income so I want to build out some positions in other industries to reduce risks.

I took advantage of the big sell off in interest rate sensitive stocks in November.  In my registered accounts, I made a few big purchases: 300 BCE shares, 125 shares in Fortis (FTS), and 150 shares of Unilever (UL).

I’ve also sent a lot more money to my DRIP accounts to buy more shares in Enbridge (ENB), Fortis (FTS), Telus (T), Sun Life Financial (SLF) and Bell Canada (BCE).

Dividend Raises

I had a couple of dividend raises this month: CIBC (CM) raised its dividend by 2.5% or 3 cents/quarter.  The Bank of Montreal (BMO) raised by 2.3% or 2 cents/quarter.

Monthly Passive Dividend Income

December was the best month of the year for dividend income coming in at a solid $2,126.45!    This month’s dividend income has grown by 17.8% from that of December 2015 ($1804.95).  The reason for the big number has to do with year-end index fund distributions.

Here is the breakdown of the numbers for December:

Dividend Stocks

Bank of America (BAC) – $2.27

Canadian National Railway (CNR) – $37.50

Canadian Utilities (CU) – $65.34

Enbridge (ENB) – $6.80

Fortis (FTS) – $89.24

Manulife Financial (MFC) – $32.86

RioCan Real Estate Investment Trust (REI) – $4.35

Suncor Energy (SU) – $17.02

Sun Life Financial (SLF) – $18.34

Mutual Funds and ETFs:

iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $52.48

iShares S&P/TSX Capped REIT Index ETF (XRE) – $40.37

Canadian Short-Term Corporate Bond Index ETF (VSC) – $14.08

Canadian Short-Term Bond Index ETF (VSB) – $20.93

TD Canadian Bond Index – e (TDB909) – $7.82

TD International Index Fund – e (TDB911) – $174.90

TD European Index Fund – e (TDB906) – $35.73

TD US Index Fund -e (TDB902) – $676.12

TD Canadian Index Fund – e (TDB900) – $866.03

Total = $2162.18

Rental Income

This month, 2 of 4 units were rented and the properties we were in a negative cash flow position on the rentals.  1 unit is fixed up and rent ready and the other needs a bit of extra cleaning and work before it can be rented.  December’s profit on the rental properties was -$482.06.  This was after all expenses and is considerably less than I’m used to but things should get back to normal in the new year.  I should note that this is less than the equity portion of the mortgage payments – so technically I’m paying the principal for these units out of pocket, everything else is covered by the rent.

One reason I decided to invest in rental property is that it offers a decent amount of cash flow relative to the initial investment.  I expect that in the next few months I’ll be averaging about $1,100/month from my rental properties.

Total Monthly Rental Income = $0

This brings the grand total for our December 2016 Investment income to $2162.18

I was hoping to rake in at least $1k this month from the rentals but unfortunately we fell far short.  I’m glad that the rental properties are getting sorted out and I expect they’ll be performing much better in January.

Our new annual passive income goal for 2016 was $18,000 and we have ended up with  $16,398.57.  So we managed to get 91.1% of the way there.  We almost reached our goal, but fell short due to a vacancy and renovations at one of our rental properties.

Overall, both the dividend portfolio and our rental properties are adding a considerable amount to the monthly investment cash flow.  On a monthly basis, we manage to earn about $1,366.50 from both sources.  Not bad, but I see lots of opportunities to grow this income further.

Thanks for reading my December 2016 Investment Income Report!

Photo by sscreations/FreeDigitalPhotos.net

3 thoughts on “December 2016 Investment Income $2,162

  1. TheFIexplorer

    Congratulations and well done! Seeing that passive income expand has immensely satisfying, isn’t it? I also set a ‘stretch’ target for 2017, so I will be keen to check in and see how the year plays out for you, fellow blogger!

    Reply
    1. GenXinvestor Post author

      Thanks for checking in. 2017 will be another great year for investors. I’m looking forward to seeing that passive income increase – and it’s already happening as a few more companies recently increased their dividend payout.

      Reply
  2. Charles

    Years ago we purchased rentals in Southern Ontario close to a major university with the express intent of renting to graduate students. It has worked out well although in hindsight, we would have made way more money by investing that money in the stock market.

    We used a personal LOC to come up with our 25% portion of the purchase price because we did not want to liquidate any investments.

    We made a commitment to pay off the properties within 7 years so every year we would:

    * increase our weekly mortgage payments by 20%
    * make lump sum payments equal to 20% of the original amount of the mortgage

    Clearly, we were not able to increase rent by this magnitude each year so these additional payments had to come from personal resources.

    Certainly glad we did this because by the time my wife and I retired in 2016 at 52 and 56 years old, the properties were free and clear and throwing off a bit of FCF.

    Is there a particular market segment you target for your rentals? The ability to raise rent is severely restricted in Ontario. Do you purposely target a market segment where you know you will have turnover every few years so you can raise rent far more than 1 – 2 %?

    I would be interested in knowing a bit more about your strategy. If you are reluctant to share this information publicly I totally understand.

    Cheers.

    Charles

    Reply

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