Hello!
I hope you are staying sane and sticking to whatever plan you laid out for yourself.. be it maintaining your schedule while working from home (..trust me it isn’t easy to work from home anymore though there are benefits) or staying the course with your exercise routine or the plan to save and invest! It is all the more important to maintain the sanity with ongoing pandemic, the lockdowns and restriction with growing level of stress and frustration. It seems like the limit is reaching when we just want to break free and return back to normal life as before, free from fear and stress and masks and sanitizers! Have patience and hopefully after few months, we shall be like before. Coming back to business, as usual, our monthly update begins with updating below two pages with the latest data:
- 2025 Goal tracker on homepage – Again an overall negative income because of more expenses than earnings, two months in a row!
- Dividend Portfolio with latest holdings
Passive Income Pie
For the second month in a row, we had no rental income but surely mortgages and taxes to pay so the pie looks ugly and scary! By 2025, our ideal pie should have the following income split:
- Rental Income – 45% – $3000 per month
- Dividends – 40% – $2500 per month
- Lending Interest – 15% – $1000 per month
We are actively exploring other passive income sources to build a solid foundation for our 2025 goals with good diversification and sustainability and hopefully over time we will see less fluctuation and more stability.
Monthly Dividend Earnings
Key points from this month’s dividend income are:
- We received dividend deposits from total 13 companies (8 Canadian & 5 US), with total value of $191.16
- While to keep it simple I assume 1 USD = 1 CAD, I realize this month brought us dividends from both sides almost equal!
- I normally compare yearly dividends but couldn’t help myself noticing Feb’21 brought in 30% less than Feb’20 and this was due to bad investments (can’t believe they were recommended by a paid subscription!) such as Chesswood & Vermillion Energy, I sold them and redeployed elsewhere!
- We dripped a share each for Pizza Pizza & Plaza REIT
- Received an increased dividend from Abbvie 10.2% and reduced dividend from RioCan -33%, I plan to drop RioCan at some point after recouping some of the loss
Dividend Goal Tracker – Planned vs Actual
Two months down and ten more to go and so far we have achieved 13% of our dividend goal for this year. With the annual target of $8500 we roughly need 9% a month, so we are already slipping. I am knowingly redeploying more to low (or no) yielding stocks when opportunity presents, keeping in mind the broader time horizon we have and hence tilting a bit more towards growth stocks but maintaining a healthy balance with dividend payers. While the dividend target is still the same for the year, I would admit that I may revisit the goal if need be, towards the end of third quarter.
My Marketplace
Unfortunately we don’t have net new cash to take benefit of recent dips. I still got a chance to buy 15 shares of Algonquin when it dipped due to Texas snow and blackout, increasing our annual dividend to miniscule $12. AQN needs no introduction and is a well known name in dividend world, they have tremendous growth potential and I have a good faith in them.
We also had some accumulated dividends in one of our account and I dipped my toe into 90 shares of Banxa Holdings Inc (CVE:BNXA). They are a payments service provider (PSP) with mission to build the bridge between fiat and digital currency. This was more of an impulse buy in the heat of the moment when I witnessed cryptocurrencies scaling new highs and Bitcoin adoption by several mainstream companies lead by Tesla & Square.
I again started buying some Bitcoin but I don’t track the gain (or loss) anymore as it is strictly now a dump-and-forget play. I had been severely burnt in the past and don’t want to repeat the same mistake again. I started buying weekly cryptocurrencies (BTS, ETH & LTC) in late of 2019 when BTC was in the range of $5000-$25000 but to much of my dismay sold the entire portfolio last year at about 35% gain when BTC was $23000. I needed the money to help with the renovation for the house we bought. When I think about this transaction now I laugh (..in pain) as the investment would have tripled by now but then hey.. I still made a good profit in a year and half and the money helped us when we needed the most, isn’t that’s what money is for? Back then I used Coinbase for the transactions but at some point the credit card transactions started getting declined for some reason (I suspect banks denying them). So I now use a Canadian company Coinsquare, and it supports Interac and wire transfers (over $10000) as mediums to transfer funds, no complain so far except the interac transfer takes few hours to complete.
Lastly, I kept nibbling at CIBC shares as part of my regular RRSP contribution through my payroll. With great F21 Q1 results and stock hitting 52W highs, this particular account of mine reached a milestone of $50000! I have been contributing since last 6 years through my bi-weekly payroll deductions. If you have heard the saying – drop by drop is the water pot filled, it perfectly fits here!
Rental Earnings
We are going through some really tough times with the rental properties as both properties are vacant and we are bleeding money. While rents are not coming, we still have to pay the mortgages, property taxes and several utility bills! Rental income may look enticing but vacancy periods are real dampeners and unless you have deep pockets, it could put you into a lot of stress. Thankfully for us, we have things in control so far, thanks to good line of credit limits! The townhouse is undergoing renovation before we will put it in market for sale and as per my real estate agent, he aims to make this the highest seller on the street! Talk about seeing the light at the end of the tunnel! We purchased this house 14 months ago and it was rented for 12 months so we haven’t bleed a lot of money in this one. At the end of the deal, each of us expect to net about $75000 on our initial investment of $50000 after capital gain and expenses.
For the second property, we are actively looking for tenant and I must tell you, the rental market isn’t good at this moment. Last year it took us just 1 week to rent it out but this time around, we are in second month without finding a good tenant and not to mention the much reduced rent!
The third house we have for which legal basement permit came in and I finalized a contractor, the work hasn’t started yet! The area where we planned to make the basement entrance has hydro cables going in and hence the electrical meter (and probably the panel) would require relocation. While cost is fine, this will delay the start of the work by minimum 2-3 weeks. If it goes smooth, it isn’t construction or renovation!
Lending Interest Earnings
Wife had a 0% balance transfer offer on her credit card for 10 months so we transferred some of the line of credit balance on the card last month but still we are paying good amount in interests on borrowed money from line of credit accounts. They do charge a one time 1% transaction fee but still it was helpful though on the flip side it decreased my wife’s credit score drastically! If you ever do it, do make sure you leave about 20% on the card and not utilize the full limit, like we did. Now I am trying to get back within the limit so that her score can start climbing back, we have a mortgage renewal coming up and a good score helps.
The principal from our private lending hasn’t come yet, the borrower asked for an extension of a month and we expect to get the money some time this month. Eagerly waiting for this money so it can cover the basement construction cost and reduce some line of credit balances.
Lending Loop kept paying its monthly interest and while I don’t closely monitor the statements, I haven’t been informed of any defaults so far except couple of delays, which is totally understood considering the prolonged lockdown and adverse impact on small businesses. I wish for a speedy recovery for these guys!
Continuing our new year’s resolution of sharing our good fortune (well it isn’t so good right not but nevertheless..) in a measured approach where we aim to giveaway 10% of our previous year’s passive income towards good cause. I personally also decided to express more gratitude and appreciation towards the little things in life that I feel blessed with and enjoy, but is mostly taken for granted. Sharing with Society & Gratitude & Goodness are dedicated towards these new goals of life, please do visit them when you get a chance.
This is a wrap for now and please do subscribe using the widget at the bottom of the page to get monthly updates, I don’t spam and you will only get an email whenever I post on this website.
Stay indoor, Stay safe and Save-Invest-Repeat. Do share with people in need and count your blessings.. Good luck! 😊
