May 2017 Net Worth Update $988,014

By: GenXinvestor

May 2017 Net Worth UpdateHere is my May 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 almost at the 990k mark, so we need to increase this by 12k 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: $1,446,691

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 1.4 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: $0

We recently sold our out of town rental property due to management issues.

Cash: $85,865.64

The big jump in cash is due to the proceeds from the sale of our rental units.  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: $40,300.57

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): $126,517.40

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: $299,125.58

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): $21,483.00

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: -$458,677.98

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: -$428,493.93 @ 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.

HELOC: -30,184.05 @ 3.35%

I use the HELOC for to boost my investing funds.  The interest is tax deductible so I’m fine with carrying a balance.  However, I intend to pay this off with the proceeds from the sale of our rental properties.

Thanks for reading my May 2017 Net Worth Update!

Image Credit: Image courtesy of hywards/FreeDigitalPhotos.net

March 2017 Investment Income $617

By: GenXinvestor

March 2017 investment incomeWelcome to my March 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 March, going beyond 960k.  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 490k!  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’re well beyond 900k mark in net worth I can sees us hitting that coveted $1 million mark real soon 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.

Good-Bye Rental Properties

For the past 6 months at least, I’ve been struggling to get these properties back on their feet.  I’ve tried many things, from switching property managers to renovating the properties to boost their appeal.  Things still haven’t worked out so I’ve decided to quit while I’m ahead and sell them.  In fact both sold quickly and close at the end of the month.  Normally I don’t like to sell my assets but when something just isn’t working out for me I prefer to cut my losses and move on rather than stick with a shitty investment.  As it turns out, I’ve come close to doubling my initial capital investment, so it’s not all that bad.  I’ll be writing about my foray into the rental property market in an upcoming post and I’ll be sure to share all of my lessons learned with you guys.

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).

This month, I had a lot of money on the sidelines so I used some of it to do a dividend capture.  I bought more BCE shares so my April dividend income will be really good.

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

None this month.

Monthly Passive Dividend Income

March was a pretty strong month for dividend income coming in at a solid $616.96!    This month’s dividend income has grown by 38% from that of March 2016 ($446.76).

Here is the breakdown of the numbers for March:

Dividend Stocks

Bank of America (BAC) – $2.47

Canadian National Railway (CNR) – $41.25

Canadian Utilities (CU) – $71.14

Enbridge (ENB) – $8.62

Fortis (FTS) – $92.97

Manulife Financial (MFC) – $36.62

RioCan Real Estate Investment Trust (REI) – $4.41

Suncor Energy (SU) – $18.90

Sun Life Financial (SLF) – $20.60

Unilever PLC (UL) – $65

Mutual Funds and ETFs:

iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $52.04

iShares S&P/TSX Capped REIT Index ETF (XRE) – $38.74

Canadian Short-Term Corporate Bond Index ETF (VSC) – $12.47

Canadian Short-Term Bond Index ETF (VSB) – $10.23

TD International Index Fund – e (TDB911) – $141.50

Total = $616.96

Rental Income

This month, 2 of 4 units were rented and the properties we were in a negative cash flow position on the rentals.  Both units are fixed up and rent ready.  March’s profit on the rental properties was -$482.06.  This was after all expenses and is considerably less than I’m used which is why I think it was time to get out of the rental business for now.

I’ll have to adjust my annual goals to account for the sale of the rentals.  I’ll wait until the dust settles before trying to figure out where I stand and trust me, there will be a post on some important lessons learned from my experience as a landlord.

Thanks for reading my March 2017 Investment Income Report!

Photo by sscreations/FreeDigitalPhotos.net