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).
I 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!
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.
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:
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
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.
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