June’20 – My first ever Passive Income Update!

This is my first monthly update since I created this website last month and I must admit I totally misjudged the amount of work involved to update, month after months. It is quite overwhelming to gather the past month’s data to the best of my ability, collate it, and most importantly to put it in a presentable format and sequence it, for readers to follow through. In the end, the monthly reporting and performance should contribute towards the 2025 Goal and the reporting should clearly show the progress and identify any corrective action required on my part. I am already feeling disciplined by this whole exercise which makes me believe I am in the right direction!

While reporting is an evolving process and I will fine tune it as we go along, I for now chose to report below metrics on monthly basis:

• Update 2025 Goal tracker on homepage
• Update Dividend Portfolio with latest holdings
• Passive Income Split between Dividend, Rental & Lending incomes
• Monthly Dividend Earnings
• Dividend Goal Tracker – Planned vs Actual
• My Marketplace – Highlighting my trades for the month

Now since this is the first update, I am also including two additional sections which will be optional for regular monthly updates, as I may not have enough changes or update to share.

• Rental Earnings
• Lending Interest Earnings

Passive Income Split

Monthly Dividend Earnings

June 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:

• Out of 25 expected Dividend deposits, I only received payout from 23 companies totalling $474.54
• Chesswood cut their dividend by 50% in Apr’20 and then took an unfortunate decision to suspend it indefinitely in May’20, reducing annual dividend by $262.50
• TORC Oil & Gas reduced their dividend by 80% in Feb’20 and then suspended in May’20, reducing the annual dividend by $67.76
• Suncor cut their dividend by 55% in May’20, reducing annual dividend further by $111.39
• Total Jun’20 dividend loss is $43.05 while Forward annual dividend income loss is $441.65

Dividend Goal Tracker – Planned vs Actual

This is a great visual telling us if we are on track or need adjustments to the portfolio. As you can see, so far, we are on-track to achieve our 2020 dividend goal of $5500 unless more of our companies chose to reduce/suspend their payouts. Considering the situation we are in due to Covid-19, my strategy is to have patience and not to sell any stock, even after a dividend cut. Once the tide settles down and if they still don’t reinstate the dividend, I may change my position. We are in this for the long haul so don’t see a point to panic and book a loss. I already heard that A&W Royalty is resuming their monthly distribution, more on it in the Jul’20 updates. Fingers crossed!

My Marketplace

As usual, I kept nibbling on CIBC shares under RRSP where my employer also adds 50% of my contribution up to a certain limit. I must say, it is a sheer waste of money if anybody who’s having this option from their employer and not using it. I can’t think of any bigger lost opportunity then this! There are several benefits with employee share purchase program primarily being Tax deduction under RRSP contribution, 50% upfront benefit (in my case and may differ for each), and not to forget the usuals like share price appreciation and all those dividends. In fact this was the whole reason I got interested in Dividend investing! Regular nominal payroll deductions to fund this only hurts first few months and after that you (and your budget) automatically adjust to it. Besides, regular contributions is one of the most efficient way to reduce risk due to share price fluctuations and grow your investment.

I also bought 100 shares of MAXR at $22 a piece. I didn’t buy this for dividend and don’t intend to keep it for a long term. It is purely a quick play as I had made some money on this in the past as well and I see some potential again. Those who don’t know this company, Maxar Technologies is a space technology company headquartered in Colorado, USA and specializes in niche area of Space communication, Satellite products, and related services. Their share price plunged from mid $80s in early 2018 to about $6 in a year after the company reported a technical glitch in one of their satellite preventing it from taking images. It was a nasty ride for both the company and investors and they had to sell assets and subsidiaries to cope up. Also a news back in mid 2019 that insurance payment clearance for the failed satellite to the tune of $183M had been quite helpful to revive the company. Recently they made an announcement to acquire Vricon, a global leader in satellite-derived 3D data for defense and intelligence markets, with software and products that enhance 3D mapping. So the road to recovery looks bright to me and my entry is purely from growth perspective. Needless to say the stock price is quite volatile and I may exit once I see the price in the range of $27-$32.

My last trade of the month was TOG where I bought 1650 stocks and sold at a profit of 0.42 cents a share, minus trading fees. TOG is a small cap Oil & Gas company operating out of Alberta, Canada and price had been volatile ever since the beginning of 2019. While this company is recommended as a buy by different analysts and bloggers, I am sitting on the side and satisfied with small tradings, while things settle down. If you have noticed, I do have a small position left in my portfolio and may sell it with my next “trade” as they have suspended their dividend in May’20.

Rental Earnings

Increasing net cash flow from an investment property is quite a task and requires tons of patience and more so, savings! The incoming rent is gobbled mostly within a week by Mortgage payments, Insurance, Maintenance fee, Property tax, Property management or some random expense going towards a leaking pipe or a broken switch! You are lucky if by the end of the month, you are still in green. We have a 50% partnership in an investment property which we acquired at the beginning of this year. It is rented out for now and the outgoing pretty much balanced out by the incoming. Due to Covid-19 situation, all Canadian banks offered mortgage deferral for six months for qualified owners. We had applied for it and got approved to put the mortgage on hold for 6 months (till Sept’20) and that’s the reason we are getting profit out of this property. By the end of the deferral term, we will get the new monthly mortgage payment amount including some of the interest which we haven’t been paying for 6 months. You didn’t thought this six months deferral is free, did you? Nothing is for free in this world, not even relief packages!

Lending Interest Earnings

Income from Lending interest is steady and predictable, and you can read about our strategy documented under first steps for lending income. The only notable is I waited for too long to get lending loop monthly statement which didn’t arrived till 10th of the month and hence I gave up. Instead going forward, for my monthly updates, I will include last month’s income (May’20 in this case).

I wholeheartedly hope you enjoyed the updates and please let me know if you have any feedback on monthly updates or if there’s any specific data that you would like to see. Good luck with whatever you chose to do with your money though I wish you Save-Invest-Repeat. See you next month! 😊