Category: Finance

Hi there! First of all.. I wish you and yours’ a very Happy New Year, hope this year let you achieve whatever you aim for, be it spiritual or materialistic. Finally 2020 ended and oh boy.. what a year we all witnessed! I am sure most of us will remember this year for a long long time and will have many interesting incidents and stories to share with our grandchildren. Personally we were not impacted at all by this ongoing pandemic and hope it end soon but this whole situation makes us realize how lucky we are and are thankful to the invisible power behind it! In fact this realization lead me to kickstart following two blogs:

1. Gratitude & Goodness – Write one gratitude (or something good in life) for each week of 2021! I plan to append one paragraph every week, please do visit when you get a chance. 😊
2. Sharing with Society – Measured yet thoughtful approach towards helping an organization or an individual in need, all year long. ✌️

Now getting back to business, as I mentioned last time, we achieved our 2020 dividend goal in November itself and our portfolio attained a milestone of crossing $150K mark! As usual, our monthly update begins with updating below two areas with the latest data:

• 2025 Goal tracker on homepage
• Dividend Portfolio with latest holdings

Passive Income Pie

The diversity pie which depicts the split between our various income stream for this month shaped up pretty nicely, to my liking. Over time I expect the ups and downs to smoothen out and get closer to below split which I consider ideal for our situation:

• Rental Income – 45% – $3000 per month
• Dividends – 40% – $2500 per month
• Lending Interest – 15% – $1000 per month

As I keep mentioning, in coming years we also wish to add at least one more solid income source and hence we shall start exploring other opportunities as soon as our debt situation improves, to ensure our 2025 goals is amply diversified and sustainable.

Monthly Dividend Earnings

We ended 2020 crossing $6000 in annual dividend and it was the first time ever in my life, hope to continue this journey and keeping beating our goals, year after year. Key points from this month’s dividend income are:

• We received dividend deposits from total 20 companies (18 Canadian & 2 US), with total value of $581.62
• Dripped 12 additional shares for Brookfield Property, Diversified Royalty, Enbridge, Exxon Mobil, Pizza Pizza, Plaza REIT & Suncor
• Received increased dividends from: Alimentation Couche-Tard 25%, Fortis 5.8% and OTEX 15%

Dividend Goal Tracker – Planned vs Actual

We beat 2020 dividend goal by $658 which gives us the much needed headstart for 2021 goal of $8500 in dividends. As per our Dividend Portfolio, the projected annual dividend earning is just over $7000, so we are short by $1500 to attain our laid out goal. If we consider achieving the goal by pumping new money only (the worst case scenario), then at a healthy yield of 4%, we will need to contribute additional $37,500. Looking at our debt situation, most of our savings this year will go towards paying off the debts and hence contributing to dividend portfolio will be quite challenging. Apart from regular payroll deduction under RRSP, we can probably look at adding some funds in TFSA or take yet another loan for RRSP. On the other hand, we have many quality stocks and upcoming dividend raises and drips will surely help us narrow down the gap. The good part about dividend investing for us is we have no plan to take out any money any time soon and we also have ample contribution room under both TFSA & RRSP. In short, the 2021 journey is steep but not unattainable.🤞

My Marketplace

George Soros said – If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring. I strictly followed his philosophy this month and stayed away from the market and news, most of the time. I just kept accumulating CIBC shares as part of my regular contributions in RRSP through my employer.

Rental Earnings

There was no change in cash flow from the rental property in which we have 50% ownership. After deducting mortgage & maintenance fee from the rent, the property gives us $180, and if we split two ways then our shares is $90. We let the money accumulate in our joint bank account and it is mostly used for the property tax installments; factoring this we are losing about $100 a month. This doesn’t include any random tap leak or heat malfunctioning or any other issue with the property. There is an upcoming kitchen cabinet change and some other cosmetic repairs, which will further drain money. Having said this, we still believe we are doing pretty well as based on few comparables, this property shows a price appreciation of 25% already in just 1 year. If you keep a tab on GTA real estate market, you will know the madness, it is much hot and surely more exciting than stock market! To give you an example, a house was sold in the end of 22-Sept-20 for $790,000 after which they renovated and sold again on 4-Jan-21 for $998,000, got sold in just 1 day! The signage in the front lawn proudly boasts – Sold at highest price on the street! Even if the buyer spent $100,000 (which is quite lavish) for the renovation work and 3 months of mortgage, they still earned $100,000 in 3 months. This property is on the same street we bought a house, also back in Sept’20 and are awaiting legal basement permit. We have no plan to sell it anytime soon but are eagerly waiting for it to start bearing fruit.

Lending Interest Earnings

The interest we received reduced yet another month as we are paying half of the incoming interest towards various line of credit accounts. This income stream is going to end up in a month or two as the contract is coming to an end, we will use the proceed to pay off some of our debt. Once we are financially comfortable I totally want to get back to this yet again.

This is a wrap for 2020 and overall we are quite pleased with our achievements. We are super excited and looking forward to 2021 and its offering. Thank you for being part of our journey and once again we wish you and your family a great new year. Please 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. 😊

We are almost at the end of 2020 and it had been a heck of a year. Who knew we will see days akin a zombie or pandemic movie showing empty ghost town with people walking in masks and gloves! Below are few pictures I snapped recently on my unavoidable visit to the downtown. It is heartbreaking to see near empty streets, stations and trains at 11AM in the morning. In a normal day at this time, these places will be choked with honking cars and bustling people.

While these scenes are surreal, there will be countless heartbreaking stories from small and big business owners which almost entirely depended on the inflow of people into the downtown. With empty offices and near zero traffic, most of these business are already closed or breathing on government assistance. I know of a place where we use to go after work and recently read that it is closed auctioning off the kitchen equipments and furnitures; felt sorry for so many lives in suffering! Personally for us the only inconvenience was the lockdown and restrictions, which is nothing as compared to hardship faced by numerous others. We consider ourselves quite fortunate and are thankful that our lives remained unimpacted.

While October brought us our highest dividend ever, November is again a special month for us in two ways – we surpassed our annual dividend goal in Nov itself; and our portfolio hit the highest value ever surpassing a special milestone! As usual, our update begins with updating below two areas with the latest data:

• 2025 Goal tracker on homepage
• Dividend Portfolio with latest holdings

Passive Income Pie

The diversity pie keeps fluctuating every month drastically and I must admit, I don’t like it! Over time I expect the ups and downs to smoothen out and get closer to below split:

• Rental Income – 45% – $3000 per month
• Dividends – 40% – $2500 per month
• Lending Interest – 15% – $1000 per month

In coming years we also wish to add at least one more solid income source and hence we shall start exploring other opportunities as soon as our debt situation improves, to ensure our 2025 goals is amply diversified and sustainable.

Monthly Dividend Earnings

Nov’20 is the second time (after Aug’20) this year that our year-over-year dividend dipped, while last dip was 11% this time it is 16%.. ouch, it surely hurts!! This as I mentioned back in Aug was due to bad purchase choices I made such as VET, CHW, CHR etc where I lost plenty of capital as well as $140 per month in Dividends. Nevertheless this month was still an awesome as we hit our yearly dividend goal a month earlier and we couldn’t be any happier. Key points from this month’s dividend income are:

• We received dividend deposits from total 14 companies (9 Canadian & 5 US), with total value of $214.16
• Dripped 3 additional shares for Diversified Royalty, Pizza Pizza & Plaza REIT
• Received increased dividends from: General Mills 4.1%, Saratoga Investment: 2.5%, Pizza Pizza – 10%
• As I mentioned last month, A&W announced a special dividend of 0.30 per share on top of their regular 0.10, and it got deposited this month! This special payment compensated for Apr-May-Jun months when they had suspended their dividends.
• Fortis announced a dividend raise of 5.8% while OTEX raised it by staggering 15%, both effective Dec’20

Dividend Goal Tracker – Planned vs Actual

As you can see from the tracker, we beat 2020 dividend goal by $77 with a month to spare. All dividends now on will contribute towards 2021 goal of $8500, which is quite steep. Currently our entire portfolio’s projected annual dividend earning is about $7000 meaning we have to fill the gap of about $1500 in dividends by Drips, Raises & More money! I have many quality stocks with rich history of dividend growth and some of this gap will surely be filled by the raises. Also, not to forget all dividends earned are reinvested via drips or occasional buyings, which will again increase the future dividends. Worst case I need to pump in $30000 in new money to increase my annual dividend by $1500 at 5% yield, some of it will be taken care of by RRSP investment at work and for the rest, I may have to rob a bank or Oh yes.. just take a RRSP loan!

My Marketplace

November was also the busiest month in entire year and I literally had to come up with a quick table to show the trades! I ripped off the bandage on my laggard stocks which I was considering selling ever since pandemic hit and they dropped by like 60%-90%. I booked nearly $11000 in losses on just 4 stocks but I am quite happy with the sellouts as I was able to deploy the proceeds (and some additional cash) in much better options which already started showing results. While I opened no new position, I added to my existing ownerships in 7 different companies. I have full faith in all of them except Suncor which I bought to lower my book value a bit. These buyings will boost the annual dividend by about $400 at a healthy yield of 3.7%.

Along with above trades, I kept accumulating CIBC shares as part of my regular contributions in RRSP through my employer.

Rental Earnings

The cash flow from the rental property in which we have 50% ownership remained the same. After deducting mortgage & maintenance fee from the rent, the property gives us about $180 in positive cash flow. The months when we also have to pay the property tax installment, the cash flow dips to negative. Overall we are losing about $100 a month but it is still a good deal when you look at the bigger picture. The price appreciation on this townhouse is already about 20% in less than a year and the longer we keep the better capital gain we’ll see. The other property that we bought is still far from fruition and the patience as well as cash continues to drain! But I have full confidence in the investment.

Lending Interest Earnings

Lending income kept nosediving as compared to previous months as we are paying more interest on various line of credit accounts and hence net earning continue to slide. This aligns with our goal to decrease the interest earnings and continue diverting the funds to real estate or better investment prospects.

Concluding November reporting gives immense satisfaction as we reached our yearly dividend goal and we already started looking at the next years’ planning and implementation. Feel free to subscribe using a widget at the bottom of the page to get an update on our monthly blog, I don’t spam and you will only get an email whenever I post on this website.

Thank you for the read and see you next month and until then… Stay indoor, stay safe and Save-Invest-Repeat. 😊

Hi there.. I hope you all ducked the pandemic and other related challenges that 2020 offered so far, if there is any consolation we only have about 6 weeks to go! While we can’t predict what future has to offer but hoping new year bring along some positivity and overall situation improves. After many failed drug trials the Pfizer announcement on a possible Covid-19 vaccine sounds promising and most likely we shall see them mass producing the vaccine in coming weeks if not months. According to their press release – Vaccine candidate was found to be more than 90% effective in preventing COVID-19 and based on current projections we expect to produce globally up to 50 million vaccine doses in 2020 and up to 1.3 billion doses in 2021. So far worldwide 54.2M Covid cases and 1.31M deaths have been reported and not to mention the impact it had on millions of families in terms of life or job losses, hardship it brought along and businesses ruined. I personally know so many people who had cases of Covid in their family, fortunately no fatality but even so, I can only imagine how scary it could get and disrupt the life. With second wave picking up, a vaccine would certainly be seen as the light at the end of the tunnel. If you were able to stay clear of the direct or indirect impact, you should consider yourself lucky, as we do.

October was a great month for us and our passive income, we saw little over $1500 from different sources, and to my liking the dividend income was the frontrunner. Like previous months, my update begins with refreshing below two areas with the latest data:

• 2025 Goal tracker on homepage
• Dividend Portfolio with latest holdings

Passive Income Pie

The rental income as I mentioned in my September’20 updates decreased significantly as we resumed paying the mortgage on our investment property. Also as we had quite an increase in dividend income this month, the diversification landscape changed drastically. By 2025, we aim to diversify the existing three passive income sources as follows, while adjusting the split as needed:

• Rental Income – 45% – $3000 per month
• Dividends – 40% – $2500 per month
• Lending Interest – 15% – $1000 per month

In coming years we also wish to add at least one more solid income source and hence we shall start exploring other opportunities as soon as our debt situation improves, to ensure our 2025 goals is amply diversified and sustainable. For now we are recouping from our last month’s property deal and we would like to take some time off any spending or risk taking and focus just on savings and paying off our line of credit balances!

Monthly Dividend Earnings

I feel immense joy to see (and tell..) that October was our highest dividend income month EVER! We crossed $800 a month mark for the first time with 18% year-over-year growth. It surely does pay to stay the course and show patience and discipline. Key points from this month’s dividend income are:

• We received dividend deposits from total 17 companies (16 Canadian & 1 US), with total value of $827.87
• CIBC with $556.24 in dividends comprised 67% of total dividends, dripping 5.5 shares. They pays in Jan-Apr-Jul-Oct and hence these months are pretty huge deals for us!
• Dripped 3.5 additional shares for Algonquin Power, Diversified Royalty & Transcontinental
• Philip Morris was the only company which announced a dividend raise by 2.6%
• A&W Royalties & Pizza Pizza continued paying their reduced dividend. As I mentioned last month, A&W announced a one time 0.30 per share special dividend, which I saw deposited in first week of Nov, sweet!!

Dividend Goal Tracker – Planned vs Actual

While I like all the charts I have to track passive income, I must admit this one is my favourite as it tells how we are doing at any given time and it is quite important to track progress. Looking at this chart, I am highly optimistic that we will reach our 2020 dividend goal in Nov itself. With 1 month early it shall give us the much needed head start to the steep next year’s goal of $8500! Other than regular RRSP contribution, I don’t foresee much scope for new money allocation toward buying new shares in 2021 and hence we will rely a lot on dividend growths and price appreciation. This also means buying some of the duds that I own and redeploy towards better companies such as Telus who have guidelines in place for their dividend growth for next 2-3 years.

My Marketplace

We had zero action once again except dripping few shares and nibbling through CIBC shares as part of regular contributions in RRSP. All sell limit orders expired one more time and were set for November again with hope to see some price appreciation and curtail the loss. We have about $3000 in cash from last month’s Maxar sell proceed and dividends, but been sitting on the fence and taking our own sweet time to deploy them. In October we set few more stocks to DRIP and should start seeing accumulations in coming months, the more I think about it the more I realize now that I should have set drips long back for eligible stocks. It is indeed a great way to let solid companies be on auto pilot/accumulation to see increased dividends by each passing month, especially if you also don’t have much time on hand to focus on the portfolio.

Rental Earnings

If you read my last month’s post, we had a closing on an investment property in September and then October was completely dedicated to renovating the upstair portion of the house. Most of the planned work got wrapped up with few things yet to be taken care of. Now to realize the full potential of our investment, we chose to take the right approach and apply for legalization of basement apartment as a second dwelling. The house is having a partially finished basement and we plan to tear apart the full area and build it in two sections – a 1 bedroom self contained apartment and a big sized recreation room with attached washroom. An architect was hired to put our ambition on paper and he put together a decent design for the basement apartment and submitted it to the city for permit. It normally takes about 8-12 weeks to get the design approved but considering covid related delays and backlogs, it may take little longer. Looking at the timelines, we shall be able to get the permit in March but most likely have to wait another month or so as we can’t kickoff the work during mid of winter. The first step is cutting the exterior wall to build a separate entrance which descending staircases and apparently this can’t be done with snow and cold outside. This is actually good as it will give us a breather to arrange funding and finalize contractor(s) for April-May to begin the work and get it done in 2-3 months.

Don’t trust anyone if they tell you that real estate investment is the easiest, while it is surely a time tested and proven way to grow your money, it surely isn’t as easy as it may look. In the last 7 years we have been part of about 11 different deals (Buy or Sell) and each had its own set of challenges but I personally see this as a hobby, rewards is secondary to me. From my personal experience the whole process can be quite stressful and full of hassles, so unless you also enjoy the process like I do, you should look for an opportunity elsewhere.

Lending Interest Earnings

Our lending income decreased 60% as compared to last month as we settled majority of our principal to fund the investment property. This is in line with our long term goal and I expect further reduction in first quarter of next year to pay off the line of credit balance and fund the basement renovation. As I mentioned in last month’s update, we dip deep into our line of credit to fund this a new property and renovation meaning we are paying significant interest, which again eats into our overall lending income.

This is a wrap for October passive income updates and overall I am quite satisfied with the way we are heading. Please do subscribe using a widget at the bottom of the page to get an update on my monthly blog, I don’t spam and you will only get an email whenever I post on this website which is about 1-2 a month. Thank you for the read and see you next month and until then… Stay indoor, stay safe and Save-Invest-Repeat. 😊

Hope you all are staying Safe-N-Sound, maintaining social distancing and staying indoors as much as possible, who knew we have to live in a time like this? I had a funny encounter a week ago when I was at a tiles wholesaler with my real estate agent to pick up some hardwood floor. Someone greeted him and my agent friend couldn’t identify the person behind the mask so the guy had to clarify – Hey.. I am Steve! I guess this is the new normal, earlier to forego small talks, you avoided eye contact by pretending to read an advertisement, now you simply wear a mask and stare at a known person without any hesitation! Schools started this month and it was expected that Covid-19 cases may increase and it did. Probably schools weren’t the only reason, relaxed social distancing norms, indoor rules relaxation and people taking Covid-19 less seriously also added to this second wave. I have seen a family of four coming to Costco which could be easily avoided. If your kids are getting restless, I would rather recommend going for a long walk outdoors as it is safer than an indoor crowded spaces. There are plenty of other safe outdoor activities that you can chose over a grocery shopping. We decided not to send our elder one to school and let her join online instead, and I am noticing she’s getting more independent with her computer skills and enjoying the short breaks to play with her sister. While our daughter do miss the social interaction and I’ll admit, also causes a bit of a trouble for us as we work from home as well, we still thought it would be wise to wait and watch which direction the cases go. Besides, there will always be another chance to enroll for physical schooling and we can take an informed decision, avoiding some risks. It is a bit of a pain with all the adjustments and while nobody asked for it, we need to live with the fact that restraints will be needed especially till a vaccine is available. We are all in this together and some patience and better decisioning will help us all contribute towards the eradication of this pandemic. September was one heck of a stressful month, both in my professional 9-5 life as well as part time investment gig. If you read my August passive income update, we had put an offer on an Investment property in July, Mortgage got approved in August and Closing was in September; and hence the stress. I will discuss some learnings and best practices further down under Rental Earnings section.

As usual, my monthly updates begins with updating below two pages with the latest data:

• 2025 Goal tracker on homepage
• Dividend Portfolio with latest holdings

Passive Income Pie

The net cash flow from rental income decreased significantly as I terminated Covid-19 mortgage deferral program, leading to change in income split drastically. Anyway the relief program was scheduled to end in September, I had to cut it short a month early to secure a mortgage on new investment property, you can’t justify an ongoing deferred mortgage while seeking a new one! This action changed the whole landscape drastically and lending income comprised 70% of total passive income. By 2025, I am aiming roughly for following income diversification and may adjust as reality sinks in:

• Rental Income – 45% – $3000 per month
• Dividends – 40% – $2500 per month
• Lending Interest – 15% – $1000 per month

We will continue to explore more passive income sources and opportunities and revise diversification and ratio as needed, to achieve our 2025 goals.

Monthly Dividend Earnings

While August saw a dip in year-over-year dividend, September was quite heartening as the dividend earnings increased 38% as compared to last September, thanks to new money and few dividend growths. Due to increased demand from day job and new investment property, I realized I am not doing justice to deploying accumulating dividends to immediate use, hence we set up DRIP on selected stocks which we want to keep for long term and are also get enough dividend to buy at least one or more share. Highlights from this month’s dividend income are:

• We received dividend deposits from total 24 companies (22 Canadian & 2 US stocks), total value of $542.06
• Dripped 13 shares in total for Brookfield Property, Diversified Royalty & Pivot Technology
• Saputo & Sylogist raised their dividend by 2.9% & impressive 13.6% respectively
• A&W, Pizza Pizza and Suncor continued paying their reduced dividend though I read A&W announcing a one time 0.30 per share special dividend!
• My top two earners were Brookfield Property & Enbridge, contributed about 40% of total dividends
• USD comprised of 11% of total dividend earned, though for this reporting I consider 1 USD = 1 CAD

Dividend Goal Tracker – Planned vs Actual

With 3 months remaining in year completion, we are about $1000 less in achieving our annual dividend goal of $5500. Looking at the forward dividend earnings, I am pretty confident we will meet if don’t exceed our target. This shall give us a good head start to next year’s target of $8500!

My Marketplace

My August wish to sell some of the losers remained unfulfilled as all sell limit order expired unexecuted! I know we are too heavy in Oil & Gas sector and overall portfolio is still about 8.5% down and it is mostly due to stocks in this sector. As much as I do wish to get rid of them, I think I am not ready to book heavy losses yet. I haven’t placed new sell orders yet, but I surely will in coming days giving some careful consideration to the selling price. While I wasn’t able to sell any losers, I did sold a winner Maxar Technologies as part of my preplanned swing trade. I bought 100 shares in June for 22 a piece and sold half of them at 37 each, adding little over $700 under my RRSP account. Talk about filling the whole tank, drop by drop! This trade made remaining shares almost free and I do plan to keep them and see how it goes, at the time of writing it already breached $42 mark!

We didn’t bought any new stock this month and have been pondering what to add with the proceeds from Maxar trade and so far I am tilted towards adding more Sylogist or Telus. For the first time, we also set multiple stocks on DRIP this month, keeping in mind busy schedule and lesser focus on portfolio or stock market in general. I figured it is easier to let the keepers keep accumulating and grow forward dividends on auto pilot without any attention; besides DRIPing also saves some transaction fee! As usual we also kept nibbling CIBC shares as part of RRSP contribution & Employee share purchase plan, it is usually 5-12 shares per month depending on current price and also dividend months when we DRIP more shares.

Rental Earnings

As I mentioned in my August post, we had a closing in end of September for an investment property we finalized. The mortgage was preapproved with staggering 16 conditions! With our high debt-to-earning ratio, we were fortunate to even gotten considered. Bank pre-approved in first week of August and it took me and mortgage advisor almost 7 weeks to fulfil them as per bank’s satisfaction. I have been through many property deals in the past but this was most nerve wracking as we got the final approval merely one day before closing deadline. No one should undergo the stress like this as it makes your night go sleepless. If you can’t secure a timely mortgage you won’t be able to close the deal and it shall have cascading effect starting with losing your deposit money. It would still be fine if you just lose the deposit but more severe consequences could be but not limited to – seller asking for punitive damages (at times legitimate but mostly outrageous) and drag you to court, your own plan to move-in/rent/renovate may go out of control. To me, the worst thing would be to recoup the confidence and get back on track. Sometimes the trauma and suffering could have long lasting impact and you may lose the optimism and self-confidence. Some of my learnings and best practices from this deal would be:

• ALWAYS secure your firm mortgage approval at least 1 week before closing day
• While shopping around for lower rate is good, also give importance to the mortgage advisor. A flexible and creative advisor makes this tedious process easier. One has to be equally well versed with the processes and loopholes and guide you with your unique situation.
• TRY to negotiate the deposit amount with seller agent, most of the time a lower deposit is acceptable
• ALWAYS ask your mortgage advisor for Cash back, most of the time bank offers $1000-$3000 back. If you go via brokerage, they usually keep this money (apart from their commission) and won’t tell you!
• Ask your mortgage advisor to register the property for a reasonably higher amount, they can do this easily and it can save you lawyer fee while refinancing in future
• Try to ALWAYS put 20% down payment towards the property as it helps avoiding CMHC insurance cost and secure better mortgage deal
• CONNECT directly with seller agent as it increases your chance of closing the deal and that too at a cheaper price, as agentless buyer save seller agent about 2% in commission payable to buyer agent

While closing was stressful, we only planned for 1 month for renovating upstairs, again put ourselves into a stressful situation! Real estate construction is a tricky landscape full with all kinds and you will be in luck if you find right people at right price at right time. And renovating 3 bedrooms with living room, kitchen and washroom can lead you to deal with bunch of contractors and challenges at each stage. You have the choice to give full contract to an established professional but then it will cost you much higher and mostly they don’t get their hands in smaller renovation work, so a bit difficult to find and could take much longer. My real estate agent is helping with the renovation as time is less and we live 50 kilometers to keep an eye on day to day work. At a high level, work involves demolition of entire upstairs – removing carpets, hardwood floor & doors, washroom and kitchen tiles & fixtures, scraping walls, tearing down the staircases and couple of walls to build an open concept kitchen; re-laying hardwood floor throughout the bedrooms and living area, tiles in kitchen, washroom and entry landing; redoing entire electricals including changing switchboards, wiring and lights/potlights; relocating & changing furnace, AC, HVAC, even water tank; cutting through the wall and adding a sliding door to patio; building new cabinets and island in the kitchen overlooking living room, adding a gas pipeline; fitting in new standing shower, toilet and vanity in washroom, minor plumbing job; changing staircase & doors; painting & finally cleaning. I missed on numerous smaller subtasks but trust me even when you have right people on the job, there are decisioning required every two hours and I am not even exaggerating! If all goes well and our calculation holds true, we should see a 20% appreciation in property value immediately and renting should see cash flow of about $1000 per month. Our plan is to keep it for long term and let the value appreciate assuming the GTA real estate market will continue to be in top gear in coming years. Fingers crossed, all the hard work that went into this deal, risk taken and primarily the time-money spent shall make this a successful investment. I will keep you updating on how this shapes up in coming days, feel free to subscribe via widget at the bottom of the page to stay updated.

Lending Interest Earnings

I had to settle half of the lending money to pay towards down payment of the property so this month the cumulative interest earning shot up significantly due to previous pending dues settlement. This action will also decrease our monthly interest by half starting October and is aligned with our goal to reduce interest earnings anyway. Also, to fund renovation work we have taken out heavy debt from our personal line of credit, hence we will also be paying significant interest towards it, which will further decrease the overall interest income.

That’s all for September folks! Tons of work still need to be done on all fronts and all we need is not to get restless, tons of patience, aggressive savings and staying focused. I don’t know about you but for us, this whole isolation thing have increased our savings – be it less commuting expense or negligible indulgence on unnecessary mall visits or no expense at all on formal clothes! While all our savings got diverted in buying a new property, I hope once things normalize we will be able to divert some of these savings towards new stock positions. Thank you for the read and as always, would love to see your take on savings and investment ideas.

See you next month and until then… Save-Invest-Repeat. 😊

Another month passed by and I tell you if you set a clear and achievable goal(s), working towards making it a reality is quite gratifying! You can literally see yourself inching towards the goal with the help of numbers, charts, spreadsheets; and the journey itself becomes so much exciting and fulfilling. Now I look forward to month end when I update my tracker and look at all the earnings for which we didn’t had to go out and work! The beauty of passive income is it keeps accumulating while you enjoy life. August was again a busy month for outings and we tried to make the most out of pleasant weather. While it wasn’t warm enough for beach anymore, we along with bunch of friends decided to explore small towns so each week we visited one such hidden gem. We went to Paris, Stratford & Elora and were quite impressed with their their lively & clean downtowns and laidback lifestyle. Most of our trips we plan are on weekdays, it helps avoiding the crowd and maintain social distancing (yeah I think this is going to be a thing for long long time!). I would recommend weekday trips if you have the flexibility, it is so much more relaxing and fun when you meet less traffic and fewer faces! Everytime we visit a small town, me and my wife mull over moving to one, but can’t gather the courage to make the move. I guess we are so accustomed to a city life and gotten spoilt by its offerings, be it shorter commute or easy access to facilities or proximal options with everything. But then a city also gives you smaller (and expensive) abode, traffic, crowd, noise and other headaches! I think it is a tradeoff between what you really want and what you can let go. Maybe one day we’ll be able to break the shackle and move to one of these places and I am quite certain that financial independence will give our decision a boost; more of a reason to achieve our goals sooner than later!

In contrast to July, August was a very busy month on all front which I will discuss in detail in respective sections below. As I mentioned in my June and July postings, I updated below two pages to reflect the latest data:

• 2025 Goal tracker on homepage
• Dividend Portfolio with latest holdings

Passive Income Split

Same as last two months, the passive income split doughnut depicts I am still heavy on lending income, but I plan to slowly align to our comfort level in coming months, once our ongoing real estate deals are closed. More comfortable ratio would look like:

• Dividends – 60%
• Lending Interest – 25%
• Rental Income – 15%

I will continue to keep an eye on income opportunities and revise the ratio as needed, eventually inching towards our 2025 goals.

Monthly Dividend Earnings

August dividend earnings had been quite lacklustre and lesser, as compared to August of last year. This was due to dividend cuts announced in past few months for several of my holdings such as CHW (-$35 per month), CHR (-$14 per month), VET (-$91 per month). Key highlights for this month’s dividend income are:

• I received dividend deposits from 9 Canadian & 4 US based companies, total value of $182.46
• The dividend is about $20 less than last August due to several dividend suspension and cuts as I mentioned above

Dividend Goal Tracker – Planned vs Actual

With 4 more months to go, we are only $1500 less in achieving our annual dividend goal of $5500 and even in worst of the market, I am pretty confident we will meet and exceed our target. As per our portfolio and forward yield, we may cross $6000 this year itself.

My Marketplace

A tweet by a person I follow had quite an impact on me and I decided to get active with my cleanup and rebalancing. The gist was, while you can get wrong with your picks, don’t stay wrong, instead be ruthless in cutting losers! This changed my perspective towards being lazy and giving losers time to recover, I decided to book loss (heavy ones I emphasise..) and move on. I setup several sell limit orders and none of them got executed in August but I am pretty certain I will “move on” from some of my losers especially in Oil & Gas sector. As far as adding more to the portfolio goes, I put our 3% of cash reserve to use by adding 50 shares of Manulife and initiating a position of 93 shares in Telus. I also dipped my toe in Apple the day their share split came into effect. As usual I kept accumulating about 5-7 shares (depending on price) of CIBC as part of Employee share purchase plan. Again will repeat for your benefit, if your employer offers share purchase plan then you must take advantage of it, it is FREE money and I haven’t come across a single person yet who like leaving money on the table!

As far as my Buy goes, any Canadian dividend investor will know the companies I traded in. Manulife averaged about 11% dividend growth rate in last 5 years and the last increase at the beginning of 2020 was 12%. The market haven’t been just to the share price though even after posting good last quarter result. Telus is again a household name in telecom sector and I always wanted to initiate a position. The recent stock split made it more “affordable” and impressive dividend yield made it too tempting to ignore any longer! Last but not the least, Apple – world renowned name and the first trillion dollar company and what a rally in last 1 year! Recent stock split spurred the price to an all time high and my buy was on the first day post the split, as this was probably the only time I could afford it. We had some chump change in USD, sitting in one of our RRSP which I utilized for a minuscule position. I do plan to add more when our sell order materializes. This will help us with our goal to diversify more into growth stocks based south of the border.

Rental Earnings

Few months back we thought of buying an investment property so we can increase our rental income. As I mentioned in my July post, we checked out several properties and put a conditional offer on a house subject to mortgage approval. I am quite excited to share the news that our mortgage got approved and we made our offer firm! The closing is scheduled for September end, thereafter the house will require good amount of renovation upstairs and legal second unit basement apartment will be added later on. If all goes well and our calculation holds true, we will have a positive cash flow of about $1000 per month and at least 10% appreciation in property value immediately after renovation. Our plan is to keep it for long term and let the value appreciate for higher capital gain, assuming the GTA real estate market will continue to be in top gear for coming years.

With the same hope, this month we also invested in a pre-construction condo unit. The down payment is staggered across 3 years making it less burdensome financially and there is a free assignment, meaning we will have the option to sell it before actually closing the deal. The scheduled closing is in 2024 and again going by the trend, we expect the price to appreciate by 20%, giving us a handsome gain on our investment. Pre construction market comes with several benefits primarily being no hefty upfront cost and more on this will be discussed in my upcoming blog on Rental Income, you can stay informed by subscribing via widget at the bottom of the page.

Lending Interest Earnings

Same as last month, both incoming interest and outgoing payments towards leveraged PLC account remained more or less constant. Since we have an upcoming property deal closing to take care of, we plan to redeploy half of our lending money towards 20% down payment and hence there will be a considerable dip in interest income next month onwards. This aligns well with our goal to reduce lending income and at the same time fund the new property. I strongly believe in minimum 20% down payment towards investment property to keep CMHC insurance cost out of the equation and overall cost low. You can read more on this in my earlier blog on Lending income.

To wrap up our August update, I would say I feel much more focused and confident ever since I started blogging about our goal and progress; and I hope you as a reader takeaway some action items too. Thank you once again for the read and would love to see your take on savings and investment ideas. Until next month.. Save-Invest-Repeat. 😊

This is my second monthly update and I tell you I still haven’t gotten used to this whole idea of posting our deeds in front of people! But as I mentioned in my earlier posts, I am doing this to discipline myself and hoping to “inspire” the readers, hope in the end it is all worthwhile. I think it will probably take few more months before this exercise a habit and eventually it will be a piece-of-cake! July was quite a busy month on touring front and we went to quite a few nearby places almost every week, to make the most out of this summer. I guess this hunger and urge was fueled by months of quarantine and cold weather so within a month we went to three different beaches, Niagara falls (again!!) and Cherry picking! The Covid-19 lockdown in our province was relaxed as the new cases count was on decrease and I must say the government is doing an admirable job balancing between lockdown to contain the virus but at the same time also opening up businesses in phases to ensure this battered economy get a boost. I strongly believe the wellbeing of people is as important as ensuring business do not suffer more, hence a measured approach is the need of the hour. While mayors and premiers are doing what is necessary, the citizens have an equally important role to play in this by being responsible and follow the laid out guidelines. I was appalled by seeing flood of people at Niagara falls with no mask or maintaining no social distancing at all! I think before this whole thing settles down, we all should try avoiding visits to crowded places, if at all one has to go, masks and six feet rule is a must. In the end we are all in this together and if we don’t take care then this pandemic will last much longer than we all want it to.

On the other hand the investment scene was totally lacklustre and boring, in fact there was no trading at all! Partly because of travels and mostly because I feels the market is not at all in sync with pandemic related economic downfall and business losses. To my amazement I have seen some of my watchlist stocks such as Apple surging 10% in a day on the news of stock split and decent quarterly result. The stock crossed $400 barrier for the first time and ended at an all time high of $425. To put it in perspective, Apple share price almost doubled in last 4 months since March crash! There have been several other crazy rallies I have seen sitting on the fence, and one of these days I may nervously jump into one of the technology stock, south of the border, I do have some cash on hand! As far as my 2025 Goal goes, I am still on track but mulling some decisions mentioned below.

As I mentioned in my June posting, I updated below two pages to reflect the latest data, along with month specific details further in other sections.

• 2025 Goal tracker on homepage
• Dividend Portfolio with latest holdings

Passive Income Split

This colourful doughnut represents monthly percentage split between all 4 income streams. As in June, I am still pretty heavy on lending interest. I am targeting to adjust to a more comfortable ratio of:

• Dividends – 60%
• Lending Interest – 25%
• Rental Income – 15%

The aim is to keep looking at opportunities to rebalance these streams till above ratio is reached or close enough to our liking.

Monthly Dividend Earnings

July dividend earnings had been quite a month from Dividend perspective as Covid-19 is still contributing to uncertainty and creating a havoc on earnings, resulting in companies either reducing or worst case, suspending dividends altogether. While many sectors have been on recovery path as the lockdown is relaxed, there are few exceptions such as Technology (especially eCommerce, Remote working enablers), Consumer-Staples, Utilities which have seen growth during pandemic. Key highlights for this month’s dividend income are:

• I received dividend deposits from 17 companies out of which CIBC is set to drip, total value of $764.26
• This is almost $300 more than June because of my large holding in CIBC, which I aim to reduce by increasing investment in other solid companies
• As I mentioned in last month’s post, A&W indeed resumed its dividend (royalty actually) after suspending it from Apr-Jun. Though it is not at par with March payment, it is still a positive sign and we hope to see an increase in coming months. This will contribute $60 towards forward annual dividend income for 2020.

Dividend Goal Tracker – Planned vs Actual

It is quite satisfying to see we crossing entire last year’s dividend earnings in July itself. We still have 5 months to go and are strongly on-track to achieve our 2020 dividend goal of $5500.

My Marketplace

No new addition this month except adding/dripping CIBC shares under RRSP account. As I mentioned last month, this is one of the best way to passively increase your earnings, icing on the cake it, employer matching a portion of your contribution. If you haven’t checked/enrolled into employer backed retirement plan, you should enquire immediately!

I have about 3% of cash left to be deployed and I am strongly mulling one of the technology stocks, either US or Canadian. I do hold bunch of top tiered Canadian IT stocks as part of XIT holding, which by the way is firing on all cylinders and adding further to the position may not be a bad idea at all! Another technology holding of mine Sylogist announced a dividend increase yet again, making it two quarters in a row, and I am still considering adding further more. On the other hand the recent Microsoft & Apple rallies are quite impressive and it is worth riding the wave, only demotivator is the CAD to USD conversion rate. Currently my dividend income comprises 90% out of Canadian companies and just 10% from US based stocks (keep in mind for me CAD = USD for simplicity!). I would love to alter this ratio to 50-50 and hence I may jump the gun on one of these US stock, sooner than later!

Rental Earnings

We aim to reduce lending interest earnings and increase rental income instead, it is also shown in the colourful pie above. Over the past few weeks we have been thinking and considering buying a rental property by deploying some of the lending money towards the property down payment. With this intention, we were quite busy looking at several properties. Running down the numbers to see what you can afford, finalize the neighbourhood, browse through the listings, checking photos and virtual tours, shortlisting, working with real estate agent to book visits, tour the property, review renovation need, scanning the neighbourhood, exploring commute options, check rental prospects, look at future appreciation potential, making an offer, applying for mortgage, providing papers, inspection, arranging down payment etc, the activity list is quite long, tiring and tedious. But I tell you it is equally exciting provided you are interested in real estate.

The single most important activity remains going through the numbers to look at your affordability and potential cash flow from the rental property. Always look at the risk and reward, in the end you are doing this to increase your passive income, not increase your blood pressure! Try keeping it simple, if you think the numbers doesn’t make sense and you can’t afford it then don’t get into it. After careful thinking we have put a conditional offer on a property, hopefully more on this in August!

Lending Interest Earnings

There is no significant change in interest earnings, and this is one of the reason lending money is a bit satisfying, the income more or less remains stable month after month. If our rental property deal materializes then there will be a huge dip in this income stream but it aligns with our overall goal to rejig our ratios. As I said under first steps for lending income, it still remains a high risk high reward endeavour if you have money to spare. There is not enough options to consider which consistently earns you 12% on your money.

Thank you for reading through the updates and as always, I welcome your comment and feedback. I hope you enjoyed the read and take away the main objective of these postings – Save-Invest-Repeat. Until next month! 😊