Hello!
Hope you all are doing great regardless of the constant flip-flops with the weather! April is a special month in our household as we celebrate my better half’s birthday. If not everyday, at least this day is a solid reminder to all of us that how fortunate we are to have her in our lives. She makes it super easy on all of us by taking care of us relentlessly and effortlessly. The other day it was my physical office day and I was amazed to notice how much she accomplished before I even stepped out of bed – she cooked for kids, packed their lunches, fed them breakfast, gotten them ready and dropped both to school. All before I got ready and came to the dining table for my breakfast; and then she dropped me to the train station when I learnt she even got some of her freelancing work done a bit. Talk about super-woman! We celebrate birthdays almost every year the same way – by cutting a cake at midnight but this year was a bit different as our youngest one was under the weather and hence we let her sleep. Instead we cut the cake first thing in the morning and gave our gifts to her. April was also busy as we started planning for our upcoming Europe trip with friends. We plan to spend 16 days in Switzerland & Italy in May and we all are pretty excited for the trip as it will be our first major holiday post pandemic.
Getting to this month’s business, please find below our April updates which as usual starts by updating below two pages with the latest data:
- 2025 Goal tracker on our homepage – At the beginning of 2023 we revised our 2025 passive income goals after careful consideration and keeping in mind heavy financial obligations we carry currently. You can read more about it here under our 2025 goals
- Dividend Portfolio with our latest holdings. We are aggressively modifying our holdings to align more with growth mindset instead of income at present.
Passive Income Pie
This month, our passive income split comprised 85% of Dividends, 14% in Rental income & a miniscule 1% interest earnings from Lending loop. Our 2025 goal is to have income from below sources with target percentage split as mentioned:
- Dividend Income: 50.00% ($1500 per month)
- Rental Income: 32.50% ($975 per month)
- Lending Interest: 0.83% ($25 per month)
- Restaurant Earning: 16.66% ($500 per month)
Over time we will work to smoothen the earning fluctuations so to have steady monthly side income from these hustles. As I mentioned in previous months we haven’t seen any income from our restaurant business yet and the first earning distribution is aimed for Oct’23 (on it’s 2nd anniversary) and thereafter we will have annual profit sharing. For now I just added a token amount of $500 monthly and will update to a more realistic number post first earnings. Also, the other Grocers business we invested isn’t considered yet as we are years if not quarters from seeing any profit! In all likeliness, we will re-strategize our financial freedom goal post more clarity on the businesses.
Monthly Dividend Earnings
Last month brought us little over $800 in dividends and if you missed reading my monthly update, you can read it at Mar’23. This month broke all our previous monthly record and fetch almost $1400 in dividends! While we still have a long way to go, I feel the dividend incomes have finally started taking shape with considerable amounts coming in month after month. Once we reach consumption phase, we will have 3-6 months of emergency funds and monthly dividends will just be added to that pool for our daily needs and hence any monthly fluctuations will have no impact on our budget and cause no stress.
Key highlights from this month’s dividend income are:
- We received dividend deposits from a 15 different companies (14 Canadian & 1 US), with total value of $1370.21, a 16% YoY increase from Apr’22
- For ease and simplicity, we consider 1 CAD = 1 USD
- Top 3 dividend contributors were CIBC, GoEasy Ltd and Telus Corp
- We dripped 27.72 shares in total – 17.72 from CIBC, 2 each from Algonquin & Telus and 1 each from Pizza Pizza, Plaza REIT, Transcontinental & Whitecap Resources
- We received 2 dividend raises this month: GoEasy Ltd: 5.49% & Pizza Pizza: 3.57% whereas Algonquin Power & Utilities reduced their dividend by 39.99%
- Average monthly dividends for 2023 so far is $931.07 or about $31 a day. By 2025, we aim to reach $1500 monthly (or $50 daily)
Dividend Goal Tracker – Planned vs Actual
Our aspirational dividend earnings for this year is $12000 and four months into the year, we achieved 31% of our goal so far. Due to other financial commitments, the money is quite tight right now for investing and hence finding money to invest this year is a pain – For now, we saves as much money as possible from our day jobs, then divert a major portion of that savings immediately towards paying off high interest debts & with a much smaller portion we invest under our TFSA accounts to narrow down the wide contribution limit gap! Most of our buys under TFSA are focused on companies with low yield but with a track record of double digits dividend growth over past 5 years minimum. While many don’t like significant debt, we are not that uncomfortable with it and hence are still trying to maintain a fine balance between debt repayment & investing. Readers may know we carry a significant debt right now which was taken to fund couple of businesses. This situation forced us to reduce our 2025 dividend goals from $30000 to $18000 and if the businesses continue to demand additional capital, we may even have to sell some/all of our TFSA holdings.
My Marketplace
Unlike Mar’23, we did not sell any stock this month. For tax efficiency, I contributed $5000 to my RRSP account by dipping into RRSP loan as I don’t had any other resources available. This fund is used to buy Thomson Reuters Corp (TSE:TRI) which again like last month buys, have low yield and high dividend growth with 5 years CAGR just over 200%. As usual, we also continued accumulating CIBC (TSE:CM) under automated bi-weekly contributions going straight into my RRSP account.
WealthSimple (referral link) had an offer where any deposit of $500 or above was eligible to enter a draw to win $5000 (10 prizes). While my luck at these draws is quite bad, I couldn’t stop myself from depositing $500 each under both mine as well as wife’s account. These deposits were used to buy fractional shares of Equitable Bank Inc (TSE:EQB) & TFI International Inc (TSE:TFII) under our respective TFSA accounts.
We also dripped 25.72 shares of various companies and received dividend raises from 2 companies we hold which contributed to a bit as well to our Projected Annual Dividend Income (PADI) for the month. On the other hand Algonquin Powers reduced their dividend by almost 40% impacting our PADI. The net increased hence was $157.81, not a huge amount but by giving it time and being disciplined & determination, we should see much bigger increases in next few years.
For fractional buys we use WealthSimple which is a zero-commission stock trading platform and hence putting our money immediately to work for us. If you don’t have WS Account and would like to try them out, you can use my WealthSimple referral link to earn $5-$3000 to invest in stocks!
On Crypto front, we did nothing at all in entire 2022 and don’t think I have any funds or appetite to deploy any more than what we currently have. Last year was pretty rough year for cryptocurrencies both in terms of price depreciation & many providers declaring bankruptcy. Unfortunately Celsius network was one such platform on which we had all our Bitcoin & Ethereum holdings and since August of 2022 they have stopped paying interests on holding cryptos & even withdrawals from their platform is halted. So money is stuck there, let’s see when we could recover our holdings. Once we are able to recover our money, we will redeploy on CoinSquare platform which apparently hold the fort pretty well when others kept collapsing! Also, once our financial situation improves we will resume investing in cryptocurrencies.
Rental Earnings
The cashflow is calculated by subtracting rent collected by all expenses including but not limited to mortgage, property tax, insurance, utilities and repairs (if any). These numbers don’t exactly translate on tax filing as I don’t take into consideration the interests we pay to the bank for mortgage or on any other loan we took to renovate the property. I do the final calculation at the time of tax season and don’t intent to share it here. The net cashflow for all our properties for the month are as below:
Principal residence – We rent out a portion of our basement which is legally built as a second unit and we occupy upstairs with a portion of the basement, for which we add $2500 as rent payable by us for our dwelling. The net cashflow from our principal residence for this month is -$953.51 which is lower than usual as we have to pay property taxes in Feb-Mar-Apr-Jul-Aug-Sept months, which eats up the cashflow. While the cashflow doesn’t look appealing at all but imagine bearing all the cost by ourselves with $0 external support in this high interest market!
Investment property 1 – Net cashflow from this property for this month is $1027.46 and this property acts as a backbone to many of our financial needs including paying off the interests for all outstanding line of credits. Once the real estate market improves I plan to test the waters by putting this house for sale and see what is being offered. Depending on it we may sell it and consolidate some of the debt we carry, I will keep you’ll posted!
Investment property 2 – The net cashflow from this property for the month is $156.52 and if you read my Jan’23 updates, you will know that this house was purchased in equal partnership with a friend of mine and hence I am only going to consider 50% of the income/loss. Our near term (2-4 years) intention with this house is to sell and book profit for which we will wait for the market to improve, no rush.
Lending Interest Earnings
We earned $12.92 in total interests this month from several lending loop commitments (loans) worth combined total of $2000 dumped back in 2019. It fluctuates a bit on monthly basis but no complains for now. At present both principal and interest amounts are insignificant but if I have spare cash, I would surely lend more on this platform. You can also explore this option with a smaller capital and if you invest, we both can earn $25 each using our lending loop referral ink, once you invest $1,500 on their platform.
That’s it for now readers for this month and I hope our journey irrespective of the baby steps, help you in some way. Please do subscribe using the widget at the bottom of the page to get our once a month update, I don’t spam and you will only get an email or two in a month, whenever I post on this website.
Stay safe, stay cool, and most importantly Save-Invest-Repeat! 😊