June 2016 Investment Income

Welcome to my June 2016 investment income report.  This report helps me track all of my investment income from rental properties, dividend stocks, index funds and exchange-traded funds (ETFs).

I was pleased to see that our net worth continued to rise despite the recent volatility in the markets due to fear of a “Brexit,” a term that refers to the UK leaving the European Union.  The big increase in net worth had to do with a recent property assessment that indicated the value of my home had risen by 30k.

Speaking of real estate, I closed on another rental property on June 1st and went to work fixing it up so that I can get market rent on it.  Overall I’m pleased with the progress to date, but I’m anxious to get it producing solid monthly income to help offset the repair costs.

I’m also learning about options trading so that I can squeeze a little bit more income from my stocks.  I find that I’m getting to the point where I can’t possibly invest the amount of cash that I would like to, so I’m having to find ways to get more value out of the assets that I already own.

While I was pleased to see our net worth rise this month, I even more pleased to see our monthly investment income increase substantially.  In my opinion, having a high net worth is great and all, but unless it’s backed up with some solid investment cash flow it’s not really all that impressive.

Monthly Investing Activity

I was happy to see the markets correct as I continue to buy up blue-chip Canadian dividend stocks.  I keep making extra cash purchases in my DRiP account to buy more Telus, BCE, Sun Life Financial, Fortis and Bank of Montreal.  This is part of my longstanding plan to save and invest automatically because it’s a proven strategy for building long term wealth.  In addition to the stock purchases, I’m also investing in low-cost index funds in our retirement accounts.

One of the great things about being a dividend investor is that all of my dividend income is automatically re-invested.  Every month this income buys more shares in my favourite companies that will, in turn, produce even more monthly income for me.  This is how compounding works and is why it’s such a powerful force…what Einstein called the “Eighth Wonder of the World”!

This month, reinvested dividend income bought more shares in Canadian Utilities (CU), Enbridge (ENB), Fortis (FTS), Manulife (MFC), Sun Life (SLF), Suncor (SU), and RioCan (REI).

January’s dividend income report made me realize that the majority of my dividend income comes from Canadian banks.  While I love the banks, I recognize the need to diversify a bit more.  So I’m focusing on building up my positions in Telus (T), BCE (BCE) and my pipelines and utilities.

Dividend Raises

No dividend raises to report this month 🙁

Monthly Passive Dividend Income

June has been a decent month for dividend income.  This month’s dividend income has grown by nearly 5.5% from that of June of 2015 ($670.10).  As always, a large part of that increase came from investing my own personal savings, while the remainder was due to the regular reinvestment of my dividend income and from companies periodically raising their dividend payout.

Here is the breakdown of the numbers for June:

Dividend Stocks

Bank of America (BAC) – $1.58

Canadian National Railway (CNR) – $37.50

Canadian Utilities (CU) – $63.70

Enbridge (ENB) – $5.70

Fortis (FTS) – $28.97

Manulife Financial (MFC) – $32.48

RioCan Real Estate Investment Trust (REI) – $4.25

Suncor Energy (SU) – $16.75

Sun Life Financial (SLF) – $15.97

Mutual Funds and ETFs:

iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $51.06

iShares S&P/TSX Capped REIT Index ETF (XRE) – $40.08

Vanguard Canadian Short-Term Corporate Bond Index ETF (VSC) – $14.67

Vanguard Canadian Short-Term Bond Index ETF (VSB) – $11.30

TD e-series International Index Fund – e (TDB911) – $381.96

Total Dividend Income – $705.97

Options Income – $551.80

I decided to test out options trading to squeeze a bit more income out of my long term stock holdings.  I’m just learning about options trading so I took a conservative approach and sold some covered calls on my bank stocks.

Rental Income

All units are rented and the properties are cash flowing.  June’s profit on rental units was $915.39.  This is after all expenses.  This is the reason that I decided to invest in rental property in the first place.  I expect that in the next few months I’ll be able to increase the rental income by about $200 by fixing up my latest rental purchase.

Total Monthly Rental Income = $915.39

This brings the grand total for our June 2016 Investment income to $2,173.16!

I can’t believe that our investments paid us that much!  This is what it’s like to have your money work for you.  If we can have our investments pay us over $2k a month that’s like having somebody bring in an extra monthly paycheque.

Our annual passive income goal is $12,000 and we have so far received $8,062.53.  So we are already 67% of the way there.  I think a more realistic goal for the year will be to shoot for $18k in investment income.

Both the dividend portfolio and our rental properties are adding a considerable amount to the monthly investment cash flow.  We manage to get roughly $1,000 / month from both sources.  Hopefully I can increase this amount further.

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