Apr 052014
 

Remember last year when I explained how investing in coffee businesses was an awesome idea? Well good news, because it looks like the daily grind is paying off ;) One of those companies, Tim Hortons (THI), recently increased its dividends from $0.26 to $0.32 per share!

That’s a 23% dividend increase! Holy hamburgers! That’s amazing eh (゜∀゜) I only bought 20 shares of Tim Hortons at $50 per share, so all it took was just $1K of my personal savings to make this happen. Ain’t it great that we don’t need a ton of money to start investing :) The first payment under the new increased rate was distributed last month. Here’s a look at what that dividend payment looked like for me.

Capturetim Tim Hortons

If you buy your doughnuts or coffee from Timmy’s I would like to say thank you on behalf of all Tim Hortons shareholders :D Without loyal customers like you, this company would not exist today. I look forward to receiving another $6.40 in June, and so on and so forth until the dividend is raised again! Aw yiss :D Collecting passive income is so exciting \(^_^)/

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Feb 282014
 

Absolutely incredible month for stocks in February. Most companies beat the street’s earnings expectations ;) Furthermore, one of my favorite companies, TD, did a 1:2 stock split and raised its dividends! I also had quite a lot of DRIPs this month :) #Score!

The title in today’s post isn’t just a reference to Bloodhound Gang’s catchy song ;)  DRIPs are super useful, and one of my favorite investing tools as a dividend investors. Dividend Re-Investment Plan (DRIP) means automating the process of using newly acquired dividends to purchase as many new shares as possible so the investment can snowball for maximum affect. For example, in the summer of 2011 I purchased 139 shares of Intel stocks for $3,000 and blogged about why I made that investment. But today, I have 149 shares of Intel. Where did the extra 10 shares come from? DRIPs of course! :D

Every 3 months I acquire a new Intel share. Setting up a DRIP is easy and free :) It’s been 10 quarters since I bought INTC, so that’s how I got my 10 extra shares, for free!

Since I purchased Intel the dividend was raised a couple of times from 18.12 cents/share to 22.50 cents now. That’s a 24% dividend hike over that 2.5 year period! #PassiveIncomeWin :) If you followed my strategy and also bought Intel back in 2011, then I hope you are as happy with your investment as I am :)

Here’s a look at DRIPs in action inside my RRSP trading account ^_-

14-02-dripsintel DRIP

In 2011 Intel paid me ($0.1812 x 139 shares x 4 quarters) = $100/year
But today Intel pays me ($0.2250 x 149 shares x 4 quarters) = $134/year :D

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Feb 022014
 

In a normal month my net worth would grow by about $2,000 or $3,000 depending on how much I save and how my investments perform. But January is often a special month where my net worth often grows by many times than usual, which I like to call the New Year’s Bump. This has happened every January for the past several years now. Anyone can take advantage of this annual phenomenon :D Just buy a home, and choose the right stocks! I will list the stocks I own below, but your portfolio could be different. The important thing is to do the research.

January is the time when I update my home’s worth, which is adjusted to inflation. In 2013 inflation in Canada (CPI) was about 0.9% overall, which means I add $2K to my condo’s value. Easy money right there :) The real market value is probably higher, but I like to be conservative. I think buying real property is one of the fastest ways to get rich quickly and passively :) Another reason for the Bump is because the stock market usually does well in January, averaging 1.5% positive return over the last 140+ years.

13_01_stocktrendsjan

Some people are pulling their money out of stocks because they think there might be a pull back since we had huge gains in 2013, but I’m staying fully invested because according to historical patterns it looks like the next few months will likely yield more positive gains. Don’t try to time the market, just stay invested for the long run.

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Jan 042014
 

In 2013 my net worth increased by $68,600 or 49%. Not bad compared to the $38,000 increase of 2012 :D But I can’t take most of the credit for it. As I will explain further below, more than $40,000 of my newly created wealth was purely coincidental. My financial performance in 2013 was mostly a reflection of the overall positive market trend, and not so much the results from my own acumen :P

*Side Income:

  • Part-Time Work = $600
  • Dividends = $400
*Discretionary Spending:
  • Eating Out = $100
  • Others = $500 (including a $400 microscope)

*Net Worth: (MoM)

chart_13dec

  • Assets: = $742,500 total (+3,700)
  • Cash = $200 (-1000)
  • Stocks CDN =$79,600 (+2700)
  • Stocks US = $46,500 (+1500)
  • RRSP = $39,200 (+500)
  • Home = $252,000 (same)
  • Farms = $325,000 (same)
  • Debts: = $533,600 total (-1,000
  • Mortgage = $200,400 (-300)
  • Farm Loans = $208,800 (-500)
  • Margin Loan CDN = $27,400 (+1300)
  • Margin Loan US = $24,000 (+400)
  • TD Line of Credit = $34,700  (-1200)
  • CIBC Line of Credit = $14,800 (-200)
  • HELOC = $18,000 (same)
  • RRSP Loan = $5,500 (-500)

*Total Net Worth = $208,900 (+2.3%)
All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.07 CAD

The way to invest successfully isn’t necessarily trying to pick winners and losers. We just have to be in the game :)

For example I have a $U.S. trading account to buy U.S. stocks in. A year ago $1 CAD = $1.01 USD. But by now $1 CAD = $0.93 USD. Which means it’s now 8% cheaper for Americans to shop in Canada, haha. So it’s not about picking the right equities (stocks) because any Canadian could have simply put some idle cash in a U.S. account at the beginning of the year, not invested in anything, and still make 8% in profit simply from the exchange rate delta, lol. Easy money :) And if that cash was used to buy stocks like I did, then that’s even better since the markets really outperformed in 2013.

I blogged about how I purchased super awesome companies like Google, Disney, Starbucks, etc. Which all performed well last year. The TSX Composite (Canadian index) returned 10.6% in 2013. The S&P500 did even better with a 31.8% return, jumpin’ jellybeans 8-O that’s a huge gain. But technology stocks grew the most with the Nasdaq Composite up 41%, Bloody Nora! 8O All one had to do to gain from these market returns was just buy an index ETF, such as the Vanguard S&P 500 ETF (VOO) or the iShares S&P/TSX 60 index fund (XIU), which typically holds a large basket of blue-chip companies that track the stock market indexes. Again, easy money :) No research or thinking necessary. I personally like to choose individual companies to invest in, but because I have a large diversified portfolio of large cap stocks, my overall performance pretty much tracks the index as well :) My stock portfolio returned $15,000+ in 2013, not including new purchases. Thank goodness for leverage too. Anyone could have borrowed money from the bank at 4.25% like I did (regardless of their credit rating) and invested that money in the stock market for double digit profits :) Without leveraging my margin account I would not have so much gains on paper today.

Same goes for real estate. The Canadian Real Estate Association released a report last month which estimates home prices in Canada on average rose by 5.2% in 2013 (4.1% in B.C.) So a $250K condo in B.C., like the one I have, would have appreciated by about $10,000 in 2013 on average. Home appreciation = passive easy money :) By the way, did anyone else hear about the insane housing numbers out of Kitimat B.C.?

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Dec 012013
 

When I first started this blog in 2010, I only had about $300K of financial assets. I thought that was a lot of money back then, but as I learned more about personal finance I realized that it’s actually not that much. The average household net worth in Canada today is $400K. I looked at other people’s balance sheets and was really inspired by bloggers from Planting Our Pennies. They have multiple rental homes, multiple cars, and lots of stock investments :) It’s because of the success of other people that has given me the motivation to work hard.

Today I still do not have a $400K net worth. But I have however broken $700K in assets for the first time ever :D I am now in the same boat as many of my online friends and acquaintances like the P.O.Ps. I feel like I fit in more now.

*Side Income:

  • Part-Time Work = $400
  • Dividends = $400
*Discretionary Spending:
  • Eating Out = $100
  • Others = $2,000 (closing costs on farm)

*Net Worth: (MoM)

  • Assets: = $738,800 total (+156,700)
  • Cash = $1200 (-5100)
  • Stocks CDN =$76,900 (-800)
  • Stocks US = $45,000 (+1600)
  • RRSP = $38,700 (+5800)
  • Home = $252,000 (same)
  • Farms = $325,000 (Farm 1 old value of 152,500, plus Farm 2 purchase price of 172,500)
  • Debts: = $534,600 total (+155,500
  • Mortgage = $200,700 (-400)
  • Farm Loans = $209,300 (+99,800)
  • Margin Loan CDN = $26,100 (Same)
  • Margin Loan US = $23,600 (+100)
  • TD Line of Credit = $35,900  (+17,000) $9,000 of this account was used for investment purposes.
  • CIBC Line of Credit = $15,000 (new)
  • HELOC = $18,000 (new)
  • RRSP Loan = $6,000 (new)

*Total Net Worth = $204,200 (+0.6%)
All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.05 CAD

Managed to squeeze in a small net worth increase despite some pretty big expenses in November. The legal fees were $1,700 to buy the farm, plus $300 for notarization so I didn’t have to be in Saskatchewan to sign the papers. Most of my debt is used to leverage against financial assets but I still have about $59,900 of consumer debt which I spent on living expenses and luxuries because #YOLO ;)

Cash – I used most of my reserve cash funds to complete the farm purchase. This would be the second farm I bought :)
RRSP – I borrowed $6,000 to invest in my retirement account. The borrowing cost is at 4% interest rate, not bad. I haven’t bought anything yet, but I’m looking at Cisco, Coke, Pepsi, Comcast, IBM, and Lockheed Martin :D
Farms – In my previous Fiscal Update I listed my 1st farm with a value of $152,500, and a 10% deposit on my 2nd farm. From now on they will be combined.
Farm loans – I got a $100,000 loan from the bank to buy my 2nd farm. I’ve combined the value with my existing loan for the 1st farm.