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).
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.
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).
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:
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
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.
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