February’23 – Side Income Update

Hello again!

Hope this winter haven’t tested your nerves yet, few more weeks of cold hopefully! When the weather crossed 10 degrees back in early Feb we thought it is over and then came 20 inches of backbreaking snow to dash the hope. When we first came to Canada back in 2013, the winter wasn’t so bothering but slowly over years we “charm” is fading and probably our tolerance level is decreasing as we are getting older. Hence it is highly likely that once we achieve financial independence and work gets optional, we may spend majority of the winter months in India or at least somewhere warmer and “snowless”. To make the dark winter months bearable, we have worked on an decent arrangement with bunch of friends – to meet and have a potluck (..or order food) on alternate weekends at one of our place. Gladly we live in a neighborhood where we have 3 friends within 200 meters and meeting often lets our kids play together indoors while grown-ups can chit-chat & laugh over food and drinks. Winters makes us immigrants realize how fortunate we are to have a social network of friends in a country where we don’t have any immediate family to go to or look for any help.

Delving straight into the business, please find below our February updates which as usual starts by updating below two pages with the latest data:

• 2025 Goal tracker on homepage – With everything going on in our lives financially, after careful consideration we revised our 2025 passive income goal (more on this in next section).
• Dividend Portfolio with latest holdings

Passive Income Pie

Monthly Dividend Earnings

While Jan’23 attained all time high dividend earnings, Feb did not meet the same fate, which was expected. We always had a weak spread of dividend payers in Feb-May-Aug-Nov months, something to work on but not a priority. We also saw this decline in YoY as Pembina Pipelines switched their dividend schedule from monthly to quarterly and their next payment will be in Mar’23. Key highlights from this month’s dividend income are:

• We received dividend deposits from a 11 different entities (7 Canadian & 4 US), with total value of $182.29, a 15% YoY decline from Feb’22
• For ease and simplicity, we consider 1 CAD = 1 USD
• Top 3 dividend contributors were RBC, Abbvie and Pizza Pizza
• We dripped 3 shares in total – one each from Pizza Pizza, Plaza REIT & Whitecap Resources
• We received 3 dividend raises this month: Abbvie: 4.96%, Royal Bank: 3.13% & Whitecap Resources: 31.61%
• Average monthly dividends for 2023 so far is $771.86 or about $26 a day. By 2025, we aim to reach $1500 monthly (or $50 daily)

Dividend Goal Tracker – Planned vs Actual

Our revised aspirational dividend earnings for year 2023 is $12000 and two months into the year, we achieved 13% of our goal. Due to other financial commitments, the money is quite tight right now for investing and the skyrocketing rate of interest isn’t making sense anymore to invest from available line of credit. Up until early 2022 we used to dip into “cheap” credit for investments but not anymore as nothing is cheaper than 6.5%. Hence investment strategy for this year is a lot complicated – We aim to save as much money as possible from our day jobs, divert a major portion towards paying off high interest debts & with a much smaller portion, invest under our TFSA accounts to narrow down the contribution limit gap we have. Most of our buys under TFSA are focused on buying companies with low yield but with a track record of double digits dividend growth. While many don’t like significant debt, we are not that uncomfortable with it and hence would like to focus on both debt repayment & investing as much as possible. 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.

My Marketplace

While Jan’23 was a busy month for transactions, Feb is much quieter as we did not buy any share other than CIBC which we accumulate by having bi-weekly payroll deduction and goes straight into my RRSP account. Other than this already set routine, we just dripped 3 additional shares and had 3 companies raising their dividend, resulting in Projected Annual Dividend Income (PADI) for the month increased by $82.96, not a huge amount but over time and with discipline & determination, we should see much bigger increases in next few years.

There was no dividend paid either from any of the stocks we own under WealthSimple TFSA accounts which we immediately use up to buy fractional shares. WealthSimple is a commission free stock trading platform and they support fractional buys for any amount 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

I provided detailed insight on our properties in Jan’23 updates and hence going forward I am going to keep it simple as there doesn’t changes much month-over-month. I will report net cashflow from each of the properties, which 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 paid 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. So here are the details for this month:

Principal residence – We rent out a portion of our basement which is legally built as a second dwelling unit. The net cashflow from our principal residence for this month is -$831.15 which is lower than normal as we have to pay property taxes in Feb-Mar-Apr-Jul-Aug-Sept months, which eats up the cashflow. I know the picture doesn’t look rosy but imagine bearing all the cost by ourselves with $0 external support!

Investment property 1 – Net cashflow from this property for this month is $1504.47 and this property acts as a backbone to many of my financial needs and decisioning. And this is the same house where we incurred significant loss due to a tenant not paying the rent and we had to evict by going to LTB. If you take into account all the money we lost leaving aside the pain, anxiety, depression; we are way behind the recovery but I am happy with a good positive cashflow, for now. Once the 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 is -$28.53 due to property tax payments. If you followed us in Jan’23, you will know that this house was purchased in equal partnership with a friend of mine. If not, do read our last month’s updates to know how we renovated this house by building a second legal unit and turned it into a positive cashflow entity. It wouldn’t have been possible without 6 months of hard work and more importantly courage in the time when market “tumbled” and a we saw many houses booking losses. We expect much better numbers coming out of this property in non-tax months. Out near term (2-4 years) intention with this house is to sell and book profit for which we will wait for market to improve, no rush.

Lending Interest Earnings

We earned $12.90 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! 😊