February 2016 Investment Income

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

Paying off the HELOC balance is still our primary goal and we spent most of the month slowly paying it down.  This month we managed to get about 10k paid on it and it’s looking like it will be paid off by June at the latest.  This will free up tons of extra cash for investing and paying down our mortgage.  Despite having this huge debt to repay, I’m still investing small amounts to stay in the game.

Monthly Investing Activity

On the investing front, I keep buying the Canadian banks.  I continue to make extra cash purchases in my DRiP account to buy more Bank of Nova Scotia and Bank of Montreal.  I also continued with my longstanding plan to save and invest automatically.  I continue to invest in low-cost index funds in our retirement accounts and I also continue to make automatic share purchases in my DRiP accounts.  This month, I bought more shares in Bank of Nova Scotia (BNS), Bank of Montreal (BMO), Telus (T), Bell Canada (BCE) and Emera (EMA).

The great thing 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”!

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.  In my RRSP, I think I’ll add to my REITs by buying more shares in XRE.

Dividend Raises

I had lots of companies raise their dividend this month!  Bell Canada (BCE) raised by 5.3% or 3.25 cents/quarter.  Next, Manulife Financial (MFC) raised its quarterly dividend by 9% or 1.5 cents.  This is great news as I recently transferred some DRIP shares to my TFSA!

Pipeline operator TransCanada Corp (TRP) raised by 8.65% or 4.5 cents/quarter.  Even the banks which have been under lots of selling pressure for the past year raised their payouts.  TD bank raised by 8% or 4 cents/quarter, Scotiabank (BNS) raised by 2 cents or 2.9% and CIBC (CM) raised by 2.6% or 3 cents/quarter.  CIBC has raised its dividend now for 6 consecutive quarters!

Overall this is great news for my investment portfolio.  These dividend raises will add about another $200 to my investment income this year.  Even better is the fact that a lot of this additional dividend income will be in my tax-sheltered accounts.

Monthly Passive Dividend Income

February has been a decent month for dividend income.  I’m slowly building up my income for February, May, August and November.  These are my weakest months so it’s been a priority to try to earn more during these months.  This month’s dividend income has grown by nearly 41% from that of February of 2015 ($252.38).  Now 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 raising their dividend payout.

We are starting the year off right with $1,444.50 in passive dividend income.  Here is the breakdown on the numbers:

Dividend Stocks

Emera (EMA) – $20.57

Bank of Montreal (BMO) – $56.16

Citigroup (C) – $1.31

Procter and Gamble (PG) – $91.71

Potash Corp of Saskatchewan (POT) – $55.16

RioCan Real Estate Investment Trust (REI) – $4.16

Mutual Funds and ETFs

iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $52.16

iShares S&P/TSX Capped REIT Index ETF (XRE) – $42.81

Canadian Short-Term Corporate Bond Index ETF (VSC) – $18.88

Canadian Short-Term Bond Index ETF (VSB) – $12.81

Total = $355.73

Rental Income

Both units are rented out and the property is cash flowing.  We managed to make a profit of $639.45 this month after all expenses.  This is the reason I decided to invest in rental property in the first place.  I think I’ll be on the hunt for another one when the HELOC is paid off.

Total Monthly Rental Income = $639.45

Our annual passive income goal is $10,000 so we are already 22% of the way there.  I wasn’t sure exactly how much the rental property would add to the monthly investment cash flow.  I may need to readjust my 10k goal upwards!

This brings the grand total for our February 2016 Investment income to $995.18!

Photo by sscreations/FreeDigitalPhotos.net