Hello readers!
While the post is coming late, the memories of June is still fresh and sweet! We were in Italy for the whole first week of June visiting Venice, Pisa & Rome. The weather was hot and humid and evenings were full of mosquitoes but these weren’t deterrent to our joy of just being there, wandering in the narrow stone paved alleys which stood there for centuries. There is rich history scattered everywhere and it fascinates how they have preserved it for the world to witness. Read about one of our scariest moment on this trip where we got lost in Venice at midnight with 2% mobile battery left and many more fun incidents here. I am also going to share detailed itinerary, hotel recommendation, places we visited and of course lot of pictures from Paris, Bern, Zurich, Jungfrau, Lucerne, Venice, Pisa & Rome!
It took us a while to adjust to routine post this vacation as mind was still there thinking about the memories we made, places we visited and great time we had. It was an expensive tip but totally worth it considering we haven’t been travelling much post Covid. Post this vacation, getting back to work was a rude awakening and a reminder that working towards financial freedom is more important than ever! We also got few surprises from Switzerland in terms of speeding tickets, more on this will be share in our Europe trip article I am putting together. Getting to this month’s business, please find below our May 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 34% of Dividends, 66% in Rental income & a miniscule 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
Our dividend journey so far have been quite a rollercoaster ride, May’23 brought us just couple of hundred bucks but June raked in four times higher! As I keep saying, over the period of time I would like to bring in regular and reliable earnings meaning it would require to smoothen out the monthly figures.
Key highlights from this month’s dividend income are:
- We received dividend deposits from a 20 different companies (17 Canadian & 3 US), with total value of $826.80, a 14% YoY increase from Jun’22
- For ease and simplicity, we consider 1 CAD = 1 USD
- Top 3 dividend contributors were Enbridge Gas, Pembina Pipelines and Manulife Insurance
- We dripped 11 shares – 3 from Enbridge, 2 from Pembina and 1 each from Manulife, Pizza Pizza, Plaza REIT, Suncor, Whitecap Resources & XAW (Ex Canada index fund)
- We received 4 dividend raises this month: Equitable bank: 5.71%, XAW: 4.88%, Pizza Pizza: 3.45% & Pembina Pipelines: 2.3%
- Average monthly dividends for 2023 so far is $796.49 or about $26.50 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 five months into the year, we achieved 40% of our goal so far. Due to many other expenses and financial commitments, the money is quite tight right now for investing and hence finding money to invest this year is quite a task – 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
In May’23, we sold Transcontinental Inc (TSE:TCL.A) as the price declined almost 50% in past 5 years alone! We used the proceeds to buy Canadian Natural Resources Ltd (TSE:CNQ) and Intact Financial Corporation (TSE:IFC). While past performance do not guarantee future outcome, but their last 10 years growth both in terms of price appreciation and dividend growth have been phenomenal and expect to grow at par if not better. Both these buys were in RRSP and shall increase the PADI by $290.80.
We also sold iShares S&P/TSX Capped Information Tech Index ETF (TSE:XIT) which we bought in Feb’20 and sold this month for a profit of just a bit over 41%. As their name suggests, they are an index fund of Canadian IT companies with nearly 80% in just 4 stocks (Constellation, Shopify, CGI & OTEX) and I already own OTEX outside so thought 0.60% fund fee when I can hold them separately. I shall look at deploying some funds in remaining stocks in future if need be.
Also, as usual we also kept accumulating CIBC (TSE:CM) under automated bi-weekly contributions going straight into my RRSP account and fractional shares of Equitable Bank (TSE: EQB), Metro Inc (TSE:MRU) and Thomson Reuters (TSE:TRI) via WealthSimple.
We also dripped total of 11 shares of various companies and received dividend raises from 4 companies we hold which contributed to a bit as well to our Projected Annual Dividend Income (PADI) for the month. Overall our PADI increased by $381.28!
As I mentioned in the past as well, Wealthsimple is an excellent trading platform for commission free trades & fractional buys! They now have introduced enrolling in automated DRIP program which can be used to put earned dividends immediately to work by buying more shares of the same company you received dividends from! If you don’t have a 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, yet again we did nothing 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
Our readers will know that at present we own one principal and two investment properties and provide an insight on our monthly cashflow. 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 am not taking into consideration the interests we pay to the bank for mortgage or on any other loan we took to renovate the property. I will do the final calculation at the time of tax filing and don’t intent to share it here.
Due to the steep interest rate increase by Bank of Canada in last 1.5 years, it doesn’t make sense to invest in Real Estate at present and we shall evaluate the market and take actions accordingly once the market improves a bit. Read about the interest rate increase and it’s impact in our last month‘s updates where I shared how our variable rate mortgages are impacted by the rate increase and challenges we are facing.
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 built as a legal second dwelling. We occupy the upstairs and a portion of the basement, for which we add $2500 as rent payable by us, which is a bit low as compared to prevailing market rentals. The net cashflow from our principal residence for this month is $63.98. 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 $1596.58 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 negative $46.49 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 (1-3 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 $10.76 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! 😊
