January’21 – Monthly Passive Income update!

Hi there!

First of all, I want to begin the first update for 2021 by thanking you for being part of our journey. I started writing about my personal finance back in June of 2020 in the midst of pandemic. It is my way of staying the course, be disciplined and showing commitment to our goal towards financial independence, please browse our monthly updates on passive income when you get a chance. By this blog I also hope to inspire few people to stay committed with their saving, investment and financial wellbeing, it is so so important in a time we all are witnessing presently. As usual, our monthly update begins with updating below two pages with the latest data:

• 2025 Goal tracker on homepage – You will notice a negative income to begin with, this is because of more expenses than earnings in January
• Dividend Portfolio with latest holdings

Passive Income Pie

Monthly Dividend Earnings

While we ended 2020 on a solid note by crossing $6000 in annual dividend and not to mention beating our 2020 goal handsomely, we also started the year with a bang by raking in the highest monthly dividend ever! This surely gives us the confidence to beat this year’s dividend goal of $8500 as well. Key points from this month’s dividend income are:

• We received dividend deposits from total 20 companies (19 Canadian & 1 US), with total value of $939.15
• CIBC is the biggest contributor for Jan-Apr-Jul-Oct months and with its help I am looking forward to see a 4 digit monthly dividend amount for the first time in April (or certainly July!)
• Dripped 11.3 additional shares for CIBC, Diversified Royalty, Pizza Pizza, Plaza REIT, Telus & Transcontinental
• Received increased dividends from: Telus 6.8% & Transcontinental 3.5%

Dividend Goal Tracker – Planned vs Actual

I have mentioned this several times in the past – this is my favourite visual of our dividend earnings as it helps visualizing where we stand with our dividend goal. As per our Dividend Portfolio, the projected annual dividend earning is just over $6700, so every bit of dividend raise will help narrowing the gap of $1800 that I currently have. I will be monitoring the progress closely and take every action possible to meet the goal if not beat it!

My Marketplace

I sold 209 shares of Brookfield Property Partners (BPY.UN) under one of our TFSA account, with about 9% of profit (including dividends earned over little over two years), this reduced our forward annual dividend by about $360. With the sales proceed I grabbed the opportunity with both hands by buying 100 shares of Alimentation Couche-tard (ATD.B) when it dropped 10% on the news of Carrefour acquisition, which failed later on due to French government’s rejection by stating it will risk their food safety. The purchase value appreciated little over 6% already in less than a month. This purchase also makes ATD.B our biggest TFSA holding and added $35 to forward annual dividend. They were also one of the contender of my Top 2021 stock picks but didn’t make the final three, nevertheless I see it as a company with great growth potential, both in terms of share appreciation and dividend raises.

I also bought miniscule amount of Nio Inc which do not pay any dividend. They are known as a Chinese Tesla and are in the business of designing, manufacturing and selling electric vehicles primarily in China and several other countries. The stock price appreciated more than 3550% in the last one and a half year and they reported 7225 vehicle sales in January which is 352% sales growth year-over-year. With a long timeframe to retire I wish to tilt the scale a little bit towards growth stock as compared to dividend payers and this buy was a step towards it.

I also kept accumulating CIBC shares as part of my regular RRSP contribution through my employer, they match 50 cents to every dollar I contribute up to an annual limit of $2550. I will repeat again, if you have such contribution plan with your employes, don’t leave money on the table and enrol NOW!

Rental Earnings

The rental property which we own 50% with our real estate agent is vacant now. Tenant’s last month was January and hence no rent but we did had mortgage and other bills to pay which led our passive income to go below zero. Our plan is to spend some money in renovation and put it in the market for sale. If you followed us in the past, you will know that we bought this townhouse in Jan’20 for $495000 and it was rented for $2100, with all expenses we were neither earning nor losing but price appreciated drastically. So we are thinking of cashing it on the current market run and deploy the money elsewhere. We bought another investment property back in Sept’20 and it was a rundown bungalow. We spend a good amount of borrowed money in renovating upstairs and had applied for a legal basement permit which came in last week, We are now in the process of screening contractors and collecting estimate and have almost zeroed in on one, hopefully we will kick-off the construction soon. It would take eight to ten weeks to wrap up the work before we put it out for rental. Currently due to people working remotely, a lot moved out of Toronto downtown (and pockets of GTA as well) which impacted the rental market and rents came down by 10%-25% or more. I am already having difficulty finding a tenant for one of our downtown property and hopefully we will find a good tenant soon. Else we keep depleting our personal money and achieving new height with line of credit balances and paying higher and higher interests every month! That’s all for now for rental income update and we really aim to bring back the rental earnings on track soon.

Lending Interest Earnings

As we are paying a lot of interest on borrowed money from line of credit, the net interest earning is quite low but thanks to the private lending money, we are still in green! The commitment for lending is ending this month and we will receive the principal back, which will partly go towards the basement construction and rest to reduce line of credit balances. We have literally exhausted most of the balance and let me tell you.. we have quite a good limits under different accounts! We may again look at private lending when we sell the townhouse and have some cash to lend, I am pretty comfortable with the arrangement and have good and reliable contact. As far as our Lending Loop income goes, all I want to say is.. it roughly pays for a Pizza every month! Ever since Covid started, the new funding needs from small businesses have almost stopped, we hardly get one request a month while pre-Covid the average was 4-6 requests a month. This itself shows the impact on small businesses!

As a new year’s resolution we decided to share our good fortune in a measured approach where we aim to giveaway 10% of our previous year’s passive income towards good cause. I also decided to express more gratitude and appreciation towards the little things in life that I feel blessed about 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 our first update of the year. 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! 😊