May’21 – Monthly Passive Income update!

Hi there!

I will be honest, this month’s update took me longer to write and it wasn’t because of complexity or length, it was simply because I didn’t felt like writing! I tried quite a few times and couldn’t finish due to lack of focus and interest and this was the first time since I started blogging an year ago! By no mean this shows lack of my commitment to our financial goals or towards this site, I believe it is just a “phase” and it happens! Normally I write our monthly updates in one sitting but this one took like four and I don’t intend to keep it this way. Not to blame myself totally and giving some slack, a lot is going on currently. Be it mortgage refinancing/renewal, selling a property, focusing on two new businesses setup (though my involvement in comparatively less), arranging funds, basement renovation, 9-5 work etc. This phase should pass and I would like to go back with my routine of publishing it before 10th of each month.

We got our first Covid vaccine shots and are a bit more relieved, if not pandemically, at least psychologically. The cases are declining and things finally seems returning back to normal or shall in next few months. The biggest relief to me is seeing stores open and people lining up for businesses and this is a heartning and normalancy sign.

Our monthly update begins with updating below two pages with the latest data:

• 2025 Goal tracker on homepage – Again an overall negative income because of more expenses than earnings, two months in a row!
• Dividend Portfolio with latest holdings

Passive Income Pie

Monthly Dividend Earnings

Key points from this month’s dividend income are:

• We received dividend deposits from total 14 companies (10 Canadian & 4 US), with total value of $181.30, a 20% increase from May’20
• For ease and simplification, I assume 1 USD = 1 CAD
• Top 3 dividend contributors were Pembina Pipelines, Abbvie and AT&T
• We dripped 3 shares in total – 1 each for Diversified Royalty, Pizza Pizza & Plaza REIT
• Received one dividend increase of 7% from Apple
• Monthly average for 2021 dividends so far is $556.20 Or about $18.50 a day!

Dividend Goal Tracker – Planned vs Actual

Within first 5 months of 2021, we achieved 33% of this year’s goal against targeted 47%. The difference between planned and actual keeps on increasing and this is mostly due to our recent focus on growth and non-dividend paying stocks. This was a deliberate move since we have a relatively long horizon before we wish to retire and live off dividends. Based on this rebalancing, I may have to revisit the goal towards the end of third quarter but I hope not to fall too short in our goals.

My Marketplace

It was unusually busy month with 2 sells and proceed going towards 2 buys and still holding some cash (BTW at the time of writing, the cash got already used up in May.. 😉).

We sold AT&T after the news of them buying Discovery, while I loved their juicy 7% dividend yield, the price has been relatively flat in past 5 years and I lost the patience on this news. Their debt is high and probably to fund this deal, they shall cut their dividend and hence price could further slump. After two and a half years of holding, I sold them with meagre 1% profit or 19% if I factor in the dividends.

Second sale was Chorus aviation and now when I look at it, it was a bad decision to buy in the first place! I hold them under both my RRSP & TFSA accounts and had sold them in November’20 from my RRSP and then was just waiting for a better price before getting rid of them totally. They cut their dividend back in Apr’20 and ever since struggled to appreciate in pricing due to pandemic and lesser flight demands. In both accounts I sold at a loss of more than 30% each but I didn’t had a big position so the loss wasn’t too big.

Our first buy was adding 10 shares of Algonquin Power to our existing position, taking our total count to 127 shares and increasing the forward yield by $6.20 annually. If you are a Canadian dividend investor than AQN should be a familiar name, they are a Canadian renewable energy and regulated utility conglomerate with assets across North America. They actively invests in hydroelectric, wind and solar power facilities, and utility businesses, through its operating subsidiaries.

Our next buy was 76 shares of Palantir Technologies, they do not pays dividend and the buy was more from growth perspective and a long term hold. I was eyeing them since a long time and finally got the opportunity! Palantir is an American software company that specializes in big data analytics, founded in 2003 and headquartered in Denver, Colorado. The company is known for three projects in particular: Palantir Gotham, Palantir Metropolis, and Palantir Foundry. Palantir Gotham is used by counter-terrorism analysts at offices in the United States Intelligence Community and United States Department of Defense. Palantir Metropolis is used by hedge funds, banks, and financial services firms with clients such as Morgan Stanley, Merck, Airbus and Fiat Chrysler Automobiles. We are already up 20% but our holding is for a long term and we will add to our position at given opportunity.

As always, we also kept accumulating more of CIBC shares as part of my regular RRSP contribution through my payroll clubbed with Employee Share Purchase Plan.

No new action in crypto space this month, just watching and ups or downs on every small news. I wish I had unlimited funds to buy the dips, unfortunately I don’t! As I mentioned in the past, I will officially track crypto investment only if the valuation increases more than $10,000 until then it is just having fun!

Rental Earnings

Principal residence – As I mentioned in April updates, we were just waiting for legal basement work to start and gladly we chose a very professional contractor! The work started as promised, they day after meter movement work and by end of May we got lot of work accomplished. So far, we got a side entrance built (steps, door, railing) along with internal framing, plumbing, electricals, insulation. Being a legal second dwelling, all of these work is also inspected and approved by city officials. Next step is roof insulation followed by dry wall, mudding, finishing etc. The contractor is one of a kind and it amazes me how he manages multiple projects in parallel. If anyone needs a contractor in GTA area, feel free to ping me for his contact. As stated last month, this basement unit should go for $1,200 a month rent, which is about 20% annual return and at the same time should increase the property valuation by $125,000.

Investment property 1 – Nothing special to report, we kept collecting the rent and overall the cash flow is positive. The mortgage on this property is up for renewal next month and we are in the process of renewing it along with option to refinance. If anything, with low interest rate, we expect to extract more money from the property to pay off some debts and still lower the monthly mortgage payments and hence better cash flow. By the time next month, we should have clarity on whether we will go with existing bank or move on to a new one.

Investment property 2 – If you followed our last update, we sold this property and closing was end of May but the excitement do not cease on this one! The buyer couldn’t secure mortgage and we signed a mutual amendment to extend the closing to end of June now. Honestly, if I did not extended and put the property in the market, I wouldn’t have got the price I locked back in April. I am really hoping now to get over this and move on. I already have plans for the proceeds and this delay is keeping my anxiety level high, unfortunately this is part of the process and at times, it happens sometimes. To remind you all, I co-own this property with my own real estate agent and at a high level we are looking at doubling our initial investment in short span of one and half years. I will delve into details once we formally close the property.

Will repeat from last time, we have had great returns in real estate in last 8 years when we invested in 5 different properties, thanks to GTA real estate bull run! After the sale of property 2, we will still be left with two houses and are invested in four different pre-construction condos in partnership with my agent and friends. We feel we should take a bit of a break from real estate investment and focus on other opportunities. Hence we are looking to deploy the proceeds from the property sale towards two different businesses in partnership with friends as silent partners! More on this in next month’s update, all I can say for now is we are super excited and also scared as it is an uncharted territory and we have no experience but we always wanted to diversify our earnings. 🤞🏻

Lending Interest Earnings

This space will keep getting boring now onwards with nothing to report whatsoever except minuscule Lending loop income. This month it was $18 on our initial investment of $2000, interests re-invested bringing our lifetime earnings to $479.25! You can also invest and we both can earn $25 each using my referral link, once you invest $1,500 on their platform. As I mentioned last month, we received back most of the principal from the only outstanding loan and hence our lending earnings is drying up except Lending loop for which I have under $25 of monthly interest from various commitments. This month we received $18 in interest. We may (..or may not) revisit private lending once we refinance one of our property, this is surely a no-brainer passive income source and you can read more on how to start here where I wrote about first steps on lending!

We continued our new year’s resolution of sharing our good fortune in a measured approach, wherein we aim to giveaway 10% of our previous year’s passive income towards a good cause. I feel happy to share the news that on this front, we are quite ahead of our plan just within six months, please check our page sharing with society for more details. I personally also decided to express more gratitude and appreciation towards the little things in life that I feel blessed with and enjoy, but is mostly taken for granted. While I normally document it at this link – gratitude & goodness, I haven’t gotten a chance to update it lately but I hope to resume it soon.

This is a wrap for now and 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, Get vaccinated and don’t forget to Save-Invest-Repeat. Please do share with people in need and count your blessings.. Good luck! 😊