Welcome to my October 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 October, hitting 900k. 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!
Speaking of cash flow, the rental properties haven’t been performing and it had everything to do with my property manager. So I fired the one and hired another. As it stands now, work is still being done on the one unit (vacant since Sep 1st) and I’ll have another vacancy starting December 1st. Given all we’ve been through this Fall, I think the rentals should be back up and running (and cash flowing) once again in the new year. For now though, we will be cash flow negative…which totally sucks but this will actually help us come tax time. Yes, there’s always a silver lining in every dark cloud.
While the rental properties weren’t performing well, our financial assets were doing great. October 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. Earlier in the year, however, the rental properties were doing better than the stocks. That’s why I think it makes sense to diversify our income-generating assets. Anyways, on to October’s investing activity and investment income.
Monthly Investing Activity
As usual, 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), TD Bank (TD), TransCanada Corp (TRP), CIBC (CM), and RioCan (REI).
January’s 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’m focusing on building up my positions in Telus (T), BCE (BCE) and my pipelines and utilities. The problem is that these shares are trading at or near all-time highs! So I haven’t been able to bring myself to pile a lot of money into them just yet. I’m waiting for a big pullback before I invest any serious amount of money.
No dividend raises this month 🙁
Monthly Passive Dividend Income
October has been another great month for dividend income. This month’s dividend income has grown by nearly 17.23% from that of October 2015 ($1,032.25). 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 October:
Bell Canada Enterprises (BCE) – $44.34
Telus (T) – $23.68
KP Tissue Inc. (KPT) – $99.54
RioCan REIT (REI) – $4.32
TransCanada Corporation (TRP) – $19.56
Bank of Nova Scotia (BNS) – $519.84
Canadian Imperial Bank of Commerce (CM) – $27.51
Toronto Dominion Bank – $375.65
TransAlta (TA) – $0.75
ETFs and Mutual Funds
iShares S&P TSX Canadian Preferred Share Index ETF (CPD) – $55.98
iShares S&P TSX Capped REIT Index ETF (XRE) – $38.96
Vanguard Canadian Short-Term Corporate Bond Index ETF (VSC) -$0
Vanguard Canadian Short-Term Bond Index ETF (VSB) – $0
Total Dividend Income – $1,210.13
This month 3 of 4 units were rented and the properties are still cash flowing. October’s profit on the rental units was one of the lowest to date at just $182.43. This is after all expenses. 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 = $182.43
This brings the grand total for our October 2016 Investment income to $1,392.56
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 new annual passive income goal is $18,000 and we have so far received $13,590.28. So we are already 75.5% of the way there.
Both the dividend portfolio and our rental properties are adding a considerable amount to the monthly investment cash flow. We manage to get roughly $1,000 / month from both sources. Hopefully I can increase this amount further.
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