October’20 – My Passive Income Update!

Hi there.. I hope you all ducked the pandemic and other related challenges that 2020 offered so far, if there is any consolation we only have about 6 weeks to go! While we can’t predict what future has to offer but hoping new year bring along some positivity and overall situation improves. After many failed drug trials the Pfizer announcement on a possible Covid-19 vaccine sounds promising and most likely we shall see them mass producing the vaccine in coming weeks if not months. According to their press release – Vaccine candidate was found to be more than 90% effective in preventing COVID-19 and based on current projections we expect to produce globally up to 50 million vaccine doses in 2020 and up to 1.3 billion doses in 2021. So far worldwide 54.2M Covid cases and 1.31M deaths have been reported and not to mention the impact it had on millions of families in terms of life or job losses, hardship it brought along and businesses ruined. I personally know so many people who had cases of Covid in their family, fortunately no fatality but even so, I can only imagine how scary it could get and disrupt the life. With second wave picking up, a vaccine would certainly be seen as the light at the end of the tunnel. If you were able to stay clear of the direct or indirect impact, you should consider yourself lucky, as we do.

October was a great month for us and our passive income, we saw little over $1500 from different sources, and to my liking the dividend income was the frontrunner. Like previous months, my update begins with refreshing below two areas with the latest data:

• 2025 Goal tracker on homepage
• Dividend Portfolio with latest holdings

Passive Income Pie

Monthly Dividend Earnings

I feel immense joy to see (and tell..) that October was our highest dividend income month EVER! We crossed $800 a month mark for the first time with 18% year-over-year growth. It surely does pay to stay the course and show patience and discipline. Key points from this month’s dividend income are:

• We received dividend deposits from total 17 companies (16 Canadian & 1 US), with total value of $827.87
• CIBC with $556.24 in dividends comprised 67% of total dividends, dripping 5.5 shares. They pays in Jan-Apr-Jul-Oct and hence these months are pretty huge deals for us!
• Dripped 3.5 additional shares for Algonquin Power, Diversified Royalty & Transcontinental
• Philip Morris was the only company which announced a dividend raise by 2.6%
• A&W Royalties & Pizza Pizza continued paying their reduced dividend. As I mentioned last month, A&W announced a one time 0.30 per share special dividend, which I saw deposited in first week of Nov, sweet!!

Dividend Goal Tracker – Planned vs Actual

While I like all the charts I have to track passive income, I must admit this one is my favourite as it tells how we are doing at any given time and it is quite important to track progress. Looking at this chart, I am highly optimistic that we will reach our 2020 dividend goal in Nov itself. With 1 month early it shall give us the much needed head start to the steep next year’s goal of $8500! Other than regular RRSP contribution, I don’t foresee much scope for new money allocation toward buying new shares in 2021 and hence we will rely a lot on dividend growths and price appreciation. This also means buying some of the duds that I own and redeploy towards better companies such as Telus who have guidelines in place for their dividend growth for next 2-3 years.

My Marketplace

We had zero action once again except dripping few shares and nibbling through CIBC shares as part of regular contributions in RRSP. All sell limit orders expired one more time and were set for November again with hope to see some price appreciation and curtail the loss. We have about $3000 in cash from last month’s Maxar sell proceed and dividends, but been sitting on the fence and taking our own sweet time to deploy them. In October we set few more stocks to DRIP and should start seeing accumulations in coming months, the more I think about it the more I realize now that I should have set drips long back for eligible stocks. It is indeed a great way to let solid companies be on auto pilot/accumulation to see increased dividends by each passing month, especially if you also don’t have much time on hand to focus on the portfolio.

Rental Earnings

If you read my last month’s post, we had a closing on an investment property in September and then October was completely dedicated to renovating the upstair portion of the house. Most of the planned work got wrapped up with few things yet to be taken care of. Now to realize the full potential of our investment, we chose to take the right approach and apply for legalization of basement apartment as a second dwelling. The house is having a partially finished basement and we plan to tear apart the full area and build it in two sections – a 1 bedroom self contained apartment and a big sized recreation room with attached washroom. An architect was hired to put our ambition on paper and he put together a decent design for the basement apartment and submitted it to the city for permit. It normally takes about 8-12 weeks to get the design approved but considering covid related delays and backlogs, it may take little longer. Looking at the timelines, we shall be able to get the permit in March but most likely have to wait another month or so as we can’t kickoff the work during mid of winter. The first step is cutting the exterior wall to build a separate entrance which descending staircases and apparently this can’t be done with snow and cold outside. This is actually good as it will give us a breather to arrange funding and finalize contractor(s) for April-May to begin the work and get it done in 2-3 months.

Don’t trust anyone if they tell you that real estate investment is the easiest, while it is surely a time tested and proven way to grow your money, it surely isn’t as easy as it may look. In the last 7 years we have been part of about 11 different deals (Buy or Sell) and each had its own set of challenges but I personally see this as a hobby, rewards is secondary to me. From my personal experience the whole process can be quite stressful and full of hassles, so unless you also enjoy the process like I do, you should look for an opportunity elsewhere.

Lending Interest Earnings

Our lending income decreased 60% as compared to last month as we settled majority of our principal to fund the investment property. This is in line with our long term goal and I expect further reduction in first quarter of next year to pay off the line of credit balance and fund the basement renovation. As I mentioned in last month’s update, we dip deep into our line of credit to fund this a new property and renovation meaning we are paying significant interest, which again eats into our overall lending income.

This is a wrap for October passive income updates and overall I am quite satisfied with the way we are heading. Please do subscribe using a widget at the bottom of the page to get an update on my monthly blog, I don’t spam and you will only get an email whenever I post on this website which is about 1-2 a month. Thank you for the read and see you next month and until then… Stay indoor, stay safe and Save-Invest-Repeat. 😊