May 2016 Investment Income

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

Well no sooner did we get the HELOC paid off, then I scooped up another rental property that closed on June 1st.  The strange thing about this property was that it came up for sale in February, but unfortunately I wasn’t ready financially to buy it.  Then the seller took it off the market and it came up just as we had paid off our HELOC balance…must have been fate or something.  So I immediately made an offer and won the property.  Needless to say, I’ve been busy this past month trying to get everything done for closing.

In other news, I was happy to see that our net worth stayed above the $800k mark this month.  A lot of that had to do with the strength of the TSX.  What can I say, everything seems to have done well lately…banks, utilities, pipelines, telcos, oil stocks and even the miners.  Again, this just goes to show that it pays to stay the course and stay invested – even in turbulent markets.  I can’t imagine what those who sold at the January lows must be thinking right now.    

Monthly Investing Activity

On the investing front, I continue to make extra cash purchases in my DRiP account to buy more Telus (T), Emera (EMA) and Bank of Montreal (BMO) shares.  I also continued with my longstanding plan to save and invest automatically by continuing to invest in low-cost index funds in our retirement accounts and by making automatic share purchases in my DRiP accounts.

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”!

This month, our reinvested dividend income purchased over $300 in stocks and ETFs in our various investment accounts.  We received more shares in BMO, EMA, POT, XRE, and CPD among others.  Those additional shares will, in turn, give us even more money in annual dividend income.

Overall, my portfolio income continues to increase at a decent pace.  I didn’t do anything special to achieve that much dividend income.  I just keep on investing whatever money that I can and I keep reinvesting the quarterly dividend income.  It’s not rocket science, just the magic of compounding.

Dividend Raises

I had 5 companies raise their dividends this month.  TransCanada Corp (TRP) raised by 8.7% or 0.045 cents/quarter, Telus (T) raised by 4.5% or 2 cents / quarter, Canadian Imperial Bank of Commerce (CM) raised by 2.54% or 0.03 cents / quarter, BMO raised by 2.34% or 2 cents / quarter and Sun Life Financial (SLF) raised by 4% or 1.5 cents / quarter.

Monthly Passive Dividend Income

May has been a decent month with regard to dividend income.  We received $334.07 in passive dividend income!  This month’s dividend income has grown by nearly 26% from that of May of 2015 ($265.70).  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 periodically.

So far this year, we have received $3,373.33 in passive dividend income.  Here is the breakdown of the numbers for May:

Dividend Stocks

Emera (EMA) – $21.83

Bank of Montreal (BMO) – $60.02

Citigroup (C) – $1.27

Procter and Gamble (PG) – $85.50

Potash Corp of Saskatchewan (POT) – $32.96

RioCan Real Estate Investment Trust (REI) – $4.23

Mutual Funds and ETFs

iShares S&P/TSX Canadian Preferred Share Index ETF (CPD) – $50.86

iShares S&P/TSX Capped REIT Index ETF (XRE) – $39.94

Canadian Short-Term Corporate Bond Index ETF (VSC) – $21.19

Canadian Short-Term Bond Index ETF (VSB) – $16.27

Total = $334.07

Rental Income

Both units are rented out and the property is cash flowing nicely.  After all expenses we made a profit of $633.90.  This is the reason that I decided to invest in rental property in the first place and why I recently purchased another one this month.

Total Monthly Rental Income = $633.90

This brings the grand total for our May 2016 Investment income to $967.97

I’ve raised our annual passive income goal from $10,000 to $12,000.  So far this year, we have received $5,887.82.  So we are already 49.1% of the way there.  I wasn’t sure exactly how much the rental property would add to the monthly investment cash flow, but it’s looking good so far.

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