Hi there!
Hope you’ll are doing great and enjoying the warmer weather outside. Finally it looks like we are at the end of this long and dark pandemic tunnel after excruciating last 15 months of lockdown and the nagging fear. Both myself and my better half are fully vaccinated now and have even completed the two weeks of post-vaccine immunity building period and I don’t know if we really achieved the advertised 95% Pfizer efficacy, but it surely feels relaxing. With provinces opening up and relaxing the lockdown norms, we have booked our first trip since Mar’20 and are very excited to go back to Quebec for 10 days and honestly more than the beautiful Quebec, I am just looking forward to out of home for this long! This would be our second trip to the province and looking forward to explore more of it other than going to Quebec city again, the whole vibe out there is so magical.
June is a busy month in my household with our anniversary and both kids’ birthdays to celebrate, within a span of 6 days.. needless to say, almost half of the month is spent making good memories, sharing gifts, foods-drinks and at least four cakes! This year it was our 15th marriage anniversary while our elder daughter turned 11 and the younger one is now 4 years old – and she’s already looking forward to her school! This month as a whole is a reminder that how blessed I am to have a family like this, so fortunate, really! While June was indeed an exciting month and it became even more special when we achieved another important financial milestone.. our combined portfolio reached $200,000 valuation!! I have read time and again that the first hundred thousand is the most difficult one, and thereafter you will witness the power and magic of compounding and my firsthand experience bolster this statement. We achieved our first $100,000 in Jan’20 and in exactly 1.5 years, we doubled our valuation. This magic was possible with the combination of continued regular contributions, growth and DRIPs and irrespective of the stock market mayhem we encountered back in Mar’20! So one learning here is, stay the course, if you choose good quality stocks to begin with, there is nothing to worry.
While I was pretty happy and content with all the goodness June had to offer, it was quite a pleasant surprise when we got mentioned by Hard bacon. Normally we don’t have much traffic on our website during mid-month as I only write monthly updates but it suddenly increased and I later got to know on my twitter account that we appeared in their list of 25 best financial independence and early retirement blogs in Canada for 2021! They had some nice things to say about us and this is the type of encouragement that keeps me going and gives a proud feeling! Please do visit the below link to know about several brilliant bloggers and what they are going to attain financial freedom. 😊
Also excited to share that I am working on an interview questionnaire for them and it may get published in a near future! Going back to our monthly update which as usual 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
This month, our passive income comprised of 44% rental, 54% dividends, and 2% from interest, our previous monthly updates can be found here. If you are our regular reader, you will probably know our aspirational passive income split is as below:
- Rental Income – 45% – $3000 per month
- Dividends – 40% – $2500 per month
- Lending Interest – 15% – $1000 per month
Our 2025 financial goals is based on the foundation of diversified and sustainable passive incomes. As I mentioned last month, we have decided to passively invest in two different businesses with our friends and I will provide some insight once it takes better shape formally. Once we start seeing some cash flow, I will update our diversity pie and 2025 goals as needed.
Monthly Dividend Earnings
Key points from this month’s dividend income are:
- We received dividend deposits from total 22 entities (18 Canadian, 2 US & 2 ETFs), with total value of $531.22, a 12% increase from Jun’20. I am quite happy with these double digit growths considering average annual raise for regular 9-5 job in Canada is about 3%
- For ease and simplification, I assume 1 USD = 1 CAD
- Top 3 dividend contributors were Enbridge, Exxon Mobil and Fortis
- We dripped 7 shares in total – 3 shares for Enbridge & 1 each for Diversified Royalty, Pizza Pizza, Plaza REIT and XAW
- Fun fact – We received dividend increases from various companies we hold for straight 9 months but the beautiful streak is broken.. no dividend raise for us this month!
- Monthly average for 2021 dividends so far is $552 Or about $18.40 a day!
Dividend Goal Tracker – Planned vs Actual
It is halfway past 2021 and so far we achieved 39% of this year’s dividend goal against targeted 50%. The planned vs. actual keeps increasing by each passing month and this is mostly due to our recent focus on growth and non-dividend paying stocks. This is a deliberate move as we have a relatively long horizon before we wish to retire and live off dividends. I haven’t done the projection yet but upcoming July & Oct are my golden months for dividends and I expect to break $1000 monthly mark for both these months and they will surely help us narrow the gap. I may still have to revisit the 2020 goal towards the end of third quarter but I hope not to fall too short with it.
I am a long term reader of tawcan and Bob recently published two parts interview with one of his reader who along with his wife lives off dividends since 2004 and while they started with a modest amount back in 1985, now their combined portfolio generates a whopping annual dividends of $360,000.. yes you read that right! Both part-1 and part-2 interviews have tremendous learnings and I must have read them several times and took notes. One key learning for me was to exhaust TFSA limits and only put enough in RRSP to grab my employer’s contribution. I am pretty much sold on this idea from future tax savings perspective and will be looking to rebalance our portfolios,aligned on this principle. Do read those interviews when you get a chance and learn from the pro!
My Marketplace
This month one of our sell limit order for Saratoga Investment Corp got triggered and our one and half year old position got sold with almost no profit, no loss factoring in the dividends we received over the time. I don’t even recall why I bought them back then but was a good riddance. We lost $88 worth of annual dividend and that was my only complain.
The proceed along with some other dividend money was utilized to buy 2 shares of Royal Bank, 25 shares of Apple and 40 shares of ZWC increasing our annual dividends by $77. I am sure both Royal bank and Apple requires no explanation at all; ZWC is a covered call ETF from BMO and comprises of all major Canadian stock. Their annual yield is 7.16% which is 0.11 cents per share, per month and they costs 0.72% as MER with 15.95% returns so far in 2021.
Needless to say I 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 the painful downward movements for both Bitcoin & Dogecoin that I hold. As I mentioned in the past, I will officially track crypto investment if the valuation increases more than $10,000 until then it is just having fun (..or pain)!
Rental Earnings
Principal residence – The legal basement construction continued this month and as I mentioned in May updates, last month work accomplished were:
- Electric meter movement from back of the house to side
- Electrical panel upgrade from 100 to 200 AMP
- Separate backyard entrance built (steps, door, railing)
- Internal framing
- Plumbing rough-ins
- HVAC
- Foundational electrical work
- Wall insulation
In June, the work continued with:
- Tiles installation
- Hardwood flooring
- Drywall installation
- Mudding and taping
- Painting
As you can see, there is so much work involved and more important is the sequence and staged inspection clearances as this is a legal second dwelling unit. The work is continued and is scheduled to be wrapped up in July. We have already found a potential tenant for this unit and more on this in next monthly update for July.
Investment property 1 – We collected the rents and overall the cash flow is positive but the upstairs tenant reported a temporary job loss due to Covid. It looks like we are going back into turbulence with this property and it just makes me upset and wonder if we should just sell it and deploy the money into stocks! We have locked in so much money into this property that it would easily generate about $2000 per month in dividend! The mortgage renewal application is in the final stage post property appraisal, which came in quite good. We decided to move to a new bank as the conditions were more favourable. More update on what action we took for the defaulting tenant and mortgage renewal next month.
Investment property 2 – Finally we closed the selling of this property and proceed is deposited in our bank account! So this is the last month I am providing an update on this property and will be removed going forward! If you followed our last few monthly updates, you may know how relieved we are after last minute buyer’s mortgage denial back in May (original closing month). This property was co-owned with our real estate agent at 50% partnership. Some facts and figures:
- Property: 3BR townhouse with unfinished basement in Brampton, ON
- Bought in Jan’20 for $495,000 plus $10,000 buying cost with 20% down payment ($50K each)
- Rented out to a great tenant for $2100 per month from Feb’20-Feb’21
- Renovated top to bottom including finished basement from Mar’21-May’21 costing about $50,000
- Sold in Jun’21 (originally May’21) for $720,000, highest sale price in the complex
- Usual expenses included Closing cost, Realtor fee, Bank fine (..ouch!) etc
- We both more than doubled our initial investment in 18 months, 230% to be precise
I don’t know about you but to me this certainly is a rosy story if I leave minor hiccups out but nevertheless a great investment story with solid (..and guaranteed) returns and we may do it again with our agent if such opportunity presents. But as I mentioned last month we were just waiting for this sale money to come so we can invest in a business opportunity with my friends. While I will add a section next month onwards, all I can say for now with super excitement is.. we are now officially a partner in an Indian restaurant scheduled to open in Burlington, ON soon! 🤟
Lending Interest Earnings
As usual, we collected $18 in interest from lending loop on our initial investment of $2000. Yyou can also explore this option for relatively smaller capital and if you invest, we both can earn $25 each using my referral link, once you invest $1,500 on their platform. All our private lending principal is now back with us and the money is used to pay-off some of our line of credit balance. 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 that we are already close to achieve our goal just in six months! Please check our page sharing with society for more details and do share if you can with any of the charities or initiative we donated, it will mean a lot to me and keep in mind, even a small amount helps! 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 (..oh boy a long one this time!) 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! 😊
