Tuesday, December 31, 2013

Recent Purchase

I recently made a purchase in the investing account with the direct purchase right from the transfer agent.   I purchased $200 worth of Bank of Nova Scotia (BNS) for 3.070188 new shares. I was filled at $65.14. The yield on these shares is 3.81%.  This purchase adds $7.61 to my annual dividend income.

Currently, Bank of Nova Scotia has a 2% discount of shares purchased with reinvested dividends which means the yield will be a little higher. This allows my money to work harder for me. My broker that I use for my main investing does not pass this discount onto me. There are some brokers in Canada that do honor the discount.

Note: As this transaction is through the transfer agent directly, I have to send a check to the transfer agent within there deadline and then wait to the day they advertise (which I know in advance) for new shares to be purchased.  I have no control over the price these new shares will be purchased at. There is no commission doing it this way. The downside is that the stock could go way up in price prior to purchase date and after I already sent the check. Is is also harder to sell the stock using the transfer agent directly.  A person can transfer amount of shares they own over to a broker for a fee.

Disclosure : Long BNS


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Monday, December 23, 2013

Dividend Increase Killam Properties.

        Killam properties today announced they are increasing their monthly dividend from $0.048333 a share to $0.05 a share ($0.60/ share annually). This represents a 3.45% increase.
       Killam Properties is headquartered in Halifax, Nova Scotia. Killam owns and operates overt 12000 apartment units and over 7400 manufactured home communities in Atlantic Canada and Ontario. The company started in 2002 and now owns 206 properties.
       Killam Properties is not a Real Estate Investment Trust.  They are established as a corporation which means they are taxed at the corporate level and do not have to pay out 90% of their profits to their shareholders. In Canada, the dividend from Killam Properties qualifies for the dividend tax credit. Killam Properties started paying a dividend in 2007.

I currently hold Killam Properties in two accounts.

                                                         In the Halifax Area

Photo Credit: Killam Properties website

Disclosure: Long KMP.TO

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Monday, December 16, 2013

Recent Trade

I recently purchased shares in a high tech company that is struggling. The company is Blackberry Ltd.  Blackberry, formerly Research in Motion, is  a high-tech company headquartered in Waterloo, Ontario. The company signature product is Blackberry, a smart phone. Unlike their competition, Blackberry as a keypad instead of a touch screen.

Blackberry is supposedly a better secure phone than the competitors. The company is currently struggling as Apple and Android have more apps then Blackberry does. Blackberry was a very profitable company just a few years back.

I recently purchased 500 shares at $6.25 on the Toronto Stock Exchange. My plan with this stock was to do a quick trade. Today, my sell order went through at $6.60 for a profit of approximately  $165.00 after commissions.



DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, December 14, 2013

Dividend Increase

I am invested in Enbridge in 2 accounts. Enbridge is a company headquarted in Calgary, Alberta Canada and employs around 10000 people in Canada and the United States.  Enbridge is involved in distribution of energy. transportation of energy and generation of energy. 
   In 1949, a pipleline was envisioned to carry Leduc crude to refineries in Regina, Saskatchewan. Enbridge eventually expanded across western Canada and into the United States. Since 1949, Enbridge was awarded shareholders with about average annual return of 13%.

Enbridge recently announced a dividend increase of 11% starting March 31, 2014. The Dividend History shows the increase in dividends over time.  My dividend income from Enbridge increases and I did absolutely nothing but own some shares. I will take increases like this to my income and be grateful.

 My non-registered shares of Enbridge are owned through a transfer agent. This is a true DRIP so all my dividend income received is reinvested to purchase fractional shares. So my money is working harder and harder for me with each dividend payment.

Disclosure : Long ENB

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Sunday, December 8, 2013

Dividend Income for November 2013


November 2013 has come and gone. During the month, passive income through dividends having been paid to me.
The total for this month is  $203.04. This is roughly an 11% increase from 3 months ago . This increase in dividend income is due to dripping a few companies. I also made a new purchase in Emera in which I qualified for the recent dividend paid in November. The total dividends of $203.04 represents a 55% yoy increase from November 2012.
 

Not included in this amount is a distribution payment from Dundee REIT in my margin account. This is a trade and all income will stay in this account to help grow the cash in this account to be used for investing or transferred to the TFSA for the same purpose. As this a trade, I am treating it different.
Currently, the income received from Dundee REIT in the margin account is $259.47 after 6 months.
I will update my dividend tab with the above  total.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Friday, December 6, 2013

Recent Purchase

Recently I made purchase for a long time hold in my TFSA, or tax free savings account..


I averaged down my position of Dundee REIT (D.UN.To)) as Dundee REIT was trading near a 52 week low.  I purchased 32 shares @27.25for a total of 877.06 with commissions. The yield on this purchase is 8.75%.   This purchased added $71.68 to my annual dividend income.  I own Dundee REIT in a non-registered account (300 units) and with this new purchase 89 shares in my TFSA.

Dundee REIT traded on the Toronto Stock Exchange. Dundee REIT is an unincorporated, open-ended real estate investment trust.  Dundee REIT owns real estate assets totalling approximately 24.1 million square feet of gross leaseable area in major urban centres across Canada. A couple of years back Dundee REIT acquired Whiterock REIT, which I owned at that time.

I will update my investing portfolio tab in early January.

Disclosure : Long D.UN.TO


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Wednesday, December 4, 2013

Portfolio Update for Nov 2013

November 2013s now behind us and it is time to update the portfolio. I did not make any purchases this month and grew my cash position. My cash position currently represents 7.62 % of my portfolio.


I also DRIP a few stocks and acquired a few more shares though this avenue.
   - 6 shares of Just Energy (JE.TO) @ $7.56
    - 2 shares of Enerplus (ERF.TO) @ $18.22

Both of these reinvestments lower my adjusted cost basis in both of these stocks, which basically means my yield on cost goes up.
   
The value of the portfolio bounces around, but the income that the portfolio generates is steady and will increase over time. The income from my portfolio, will be used to help escape the rat race.


I have updated my investment tab spread sheet.


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, November 30, 2013

Why invest money? Part 2

This is post in a continuation a recent article called Why Invest Money ? Part 1.

The traditional way to save  money was to put your money in  a bank account. This bank account will then pay you interest on the balance of the account calculated over usually over a calendar month. This interest rate is very small as interest rates are at historic lows right now. Also, the interest received is taxed at marginal rate. Therefore, when saving money in a bank account right now, an individual is actually losing money because of inflation.  Having a bit of savings is important though, such as for an emergency fund.  Savings can be used to help pay for a down payment on a house or wedding for example.
   I invest money in companies that pay me to own them. I am mostly invested in corporations and REITs at the money.  These companies pay me once a month or once a quarter. This money in the form of dividends or distributions is more tax efficient than interest from a bank. When a company makes more money they often reward their shareholders with increased payouts. The increase in payouts is, in most cases, greater than the rate of inflation.

        Yield on Cost  (YoC) = annual dividend rate / purchase price
    
         Current Yield = annual dividend rate / current price

 Example : If stock ABC pays a annual dividend of $1.00 per share and I paid $20.00 per share, then
                  yield on cost is 5%.   In 5 months time, the price of the stock goes to $25.00, then the                   current yield is 4%. If company ABC raises the dividend by $0.05 to $1.05 per share,                    YOC increases to 5.25% meaning your initial investment is working harder for you.

The interest rate on a savings account will not have increases that are greater than the rate of inflation.


With the dividends and distributions being more tax efficient, that means I get to keep more of my money. As the amounts of dividends and distributions I receive on an annual basis increases, I am able to have more options. This money can be used to enjoy a better lifestyle, to save for retirement of financial independence at a quicker rate, or to leave a job if it is not a good fit for me.

 If a person is living paycheck to paycheck, they have to keep working there to they are able to find a different job. The job they hate currently have a negative effect on their mood which can have negative effects in a interview setting.

Increasing passive income allows a person to have more options. They are able to sleep better as they are less stress. Financial independence is when there is enough passive income to exceed expenses. When this occurs, an individual can CHOOSE to do what they want with their time.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Sunday, November 24, 2013

Why invest money ? Part 1

     We all have been around the people who say "you only live once". These same people can't wait to get paid from there jobs so they can spend the money.  These people have the best video game console, big screen tvs, a good car. When the end of the month comes,  they are completely out of money and saved nothing. I have been around people who say things like " I am too old to start investing" and "I will have to work until I die". These same people seem to be stressed out a lot more than people who spend less.








       I decided I didn't want to be like these people. So I decided to read more and more financial books.  I read Rich Dad Poor Dad by Robert Kiyosaki.  Robert and Kim Kiyosaki started out paying themselves first 30% of their money regardless of where it came from.  With this money that they paid themselves first which was used to buy cash flowing assets. So I basically started with the 30%  as a number  to pay myself first. The 30% was divided 2/3 to savings and 1/3 to investing. I want to make it clear that I do not agree with everything Robert Kiyosaki does.
        What has this done to by life? I found I have been able to sleep better as I am less stressed. I have been raised in a household were money was not mentioned. My parents didn't invest or know anything about investing. I have built up a portfolio that generates approximately $3000 in annual passive income. This is money that I don't have to physically work for. Everything single month my passive income grows through DRIPs and on occasional an investment purchase.

        The investments decisions I make today, will help in dealing with inflation. Their are companies to invest in that increase there dividend annually and it if often greater than the increase in inflation.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Wednesday, November 13, 2013

Types of Investments - Part 2

This is my second post  for Types of  Investments . The first part talked about savings, stocks, bonds and mutual funds.

  Real Estate

       When talking about rental real estate, people are often referring to income generating rental properties. The idea is by putting down a percentage of the purchase price and then borrowing the rest from the bank to create income. When a tenant pays rent, this rent should cover the mortgage, insurance, property taxes and other monthly expenses. The rent can also include a property management fee. The goal is to have money left which is positive cash flow.
       The downside to rental real estate it takes the average person a lot of money to get started.  Also if the tenant moves out, then the owner of the property must now pay the mortgage.  Rental real estate can have a high "Pain in the ass" factor for those who do not use a proper manager such as early, early morning toilet problems.
       Is there a way for people to get involved in Rental Real Estate without being a landlord? The answer is yes. REITs, or Real Estate Investment Trusts, are income trust that buy real estate. A REIT trades on a major stock exchange. By law,  a REIT must pay out at least 90% of their profits as a distribution to its unit holders. REITs can be involved in residential housing, apartment complexes, retail centers, office space, seniors housing, medical facilities etc.In order for a REIT to grow, it will issue more units (i.e. shares) to build up a cash . The yield on a REIT is usual  high such as 6%. REITs make it easier for the average person to invest in commercial  real estate as this would be really expensive.

 Business

        Starting a business is one of the most profitable avenues that an investor can take.  Starting and running a business is the hardest to maintain out of all the asset classes. When running a business as a corporation, the business can have enormous tax deductions.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Monday, November 11, 2013

Types of Investments - Part 1

There are various types of investing vehicles. How is an investor to chose which ones to use?  The investor should decide the investment vehicles that are best suited for their risk tolerance. An investor can choose from these types of vehicles.

(1) Savings and Cash Instruments
            - High Interest Savings accounts
            - GICs ( known as CD's in the United States
            - Precious Metals.

(2) Stocks, Bonds, or Mutual Funds

(3) Real Estate

(4) Businesses

Savings and Cash instruments

    An high interest savings account basically pays interest of roughly under 2 percent.  With interest rates so low this is basically below the rate of inflation.  I currently use a high interest savings account for my savings and emergency fund. I want to be able to access the money immediately if need be. The interest that is paid by the investor is taxed at your marginal rate.
    A GIC, or Guaranteed Investment Certificate, pays slightly more interest than an high interest savings account. The down side is that the money is locked in until expiration The interest on a GIC is taxed at the investor's marginal rate. 
    Precious metals such as gold and silver do not pay any yield. The only way for an investor to make money is to sell the precious metals at a higher price than what was initially paid for.

Stocks, Bonds and Mutual Funds

Stocks

     A share of stock represents ownership in a company. The ratio of the number of shares owed by and investor to the amount of shares outstanding represent the investor's percent ownership of the company. Owning shares of stock means an investor owns a partial ownership of company and its assets. The investor (ownership of common stock ) also gets to vote on some matters regarding the company such as election of board of directors.
      If a company makes a profit, the company must decide on what to do  with the cash. The cash can be retained and reinvested back into the business. The cash can also be passed on to the investors in the form of a dividend.  Companies usually have a dividend payout ratio between 40-60 percent. A company raises its dividend, through the board of directors, when the company increases its earnings.
 
             yield = dividend rate / purchase price

The yield represents the annual return on a yearly basis. The dividends that are paid out  are taxed less than regular income.  A high yield means investors do not have high confidence in the company in the near future.

Bonds

 A bond is a debt instrument. A bond is basically a loan by the investor to the government or a corporation. The corporation or government  must pay the loan back plus interest in the time allotted. The interest is paid to the investor usually paid every six months. This interest that the investor receives is taxed at the marginal rate, or as earned income. The interest on a bond is slightly higher than a guaranteed investment certificate. The interest rate , or coupon rate, will not increase of decrease year to year.
       It is difficult for an average investor to invest in bonds directly unless that have money like $10000.  The average investor starting out, would be better to invest in a bond ETF or a bond mutual fund.  An ETF is basically a mutual fund that trades like a stock. Examples of bond ETFs are PCY and JNK on the NYSE.

Mutual Funds

       A mutual fund is basically an investment company. A mutual fund is run by a professional money manager. A mutual fund is a pool of money from investors that is invested in the stock market in instruments according to its own objective. Mutual funds are run by professional money managers, offer instant diversification and allows an investor to diversity with a small amount of capital. When an investor invest in mutual funds they pay a management expense ratio, or MER. A mutual fund does not trade like a stock. Instead, if an investor wants to purchase units in a mutual fund, there order must be in 3-5 hours before the market closes. The net asset value of the assets under management  is calculated at the end of each day for the market being open. If you put in your order early enough in the trading day, the purchase will go through that day after the net asset value, or NAV, is calculated.
        When people are trying to sell there mutual funds, a mutual fund must sell shares of some of its assets they own if they do not have cash on hand. This will cause the assets under management to be less resulting in the price of the mutual fund to be less.
         The distributions that are paid out can include capital gains, foreign income, eligible dividends , non-eligble dividends or return of capital.

Coming soon : Type of Investments - Part 2

D
DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Thursday, November 7, 2013

Dividend Income for October 2013

October 2013 has come and gone. During the month, passive income through dividends having been paid to me.
The total for this month is  $229.49. This is  a slight increase from 3 months ago. This increase in dividend income is due to dripping a few companies. Due to the market being where it is, I am being cautious with my money as trying to buy stocks at good long term prices.

Not included in this amount is a distribution payment from Dundee REIT in my margin account. This is a trade and all income will stay in this account to help grow the cash in this account to be used for investing or transferred to the TFSA for the same purpose. As this a trade, I am treating it different. Recently I decided to pay myself first 35% which is up from the 30%.  If money is left over at the end of the month, then I put this amount into my investing account.

Currently, the income received from Dundee REIT in the margin account is $203.47 after 5 months. As indicated in the above paragraph this entire money is staying in the account or be transferred to the TFSA account.

I will update my dividend tab with the above  total.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Dividend Income for Sept 2013

September 2013 has come and gone. During the month, passive income through dividends having been paid to me.
The total for this month is  $177.56. THis is  a slight increase from 3 months ago. This increase in dividend income is due to dripping a few companies.

Not included in this amount is a distribution payment from Dundee REIT in my margin account. This is a trade and all income will stay in this account to help grow the cash in this account to be used for investing or transferred to the TFSA for the same purpose. As this a trade, I am treating it different. Currently, I take 30% of all my income from job, investing and interest from savings and pay myself first . If money is left over at the end of the month, then I put this amount into my investing account.

Currently, the income received from Dundee REIT in the margin account is $147.47 after 4 months. As indicated in the above paragraph this entire money is staying in the account or be transferred to the TFSA account.

I will update my dividend tab with the above  total.


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, November 2, 2013

Portfolio Update

Another month has come and gone and time to an update of my portfolio.

With the markets going higher and higher, I am holding off on making any major investment buys.  Therefore I decide to not make any investments at all besides the ones that are automatically through DRIP. Towards the end of the month, I bought 1 Dec 21 2013 62.5 Put option at a total cost of $60.95.

I also DRIP a few stocks and acquired a few more shares though this avenue.
   - 6 shares of Just Energy (JE.TO) @ $7.39
    - 2 shares of Enerplus (ERF.TO) @ $17.92
    - 0.082494 shares of Bank of Nova Scotia @$61.22

The value of the portfolio bounces around, but the income that the portfolio generates is steady and will increase over time. The income from my portfolio, will be used to help escape the rat race.


I have updated my investment tab spread sheet.


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Recent Trade

When the markets at an all time I, I decided to make a very small purchase due to not having a lot a cash.  On Oct 29th, I bought  Bank of Nova Scotia Dec 21 2013 62.50 Put Option at a cost of 60.95 including commissions. If the price of the stock goes down then the value of the Put option goes up.

I have 3 options when it comes this trade.
  (1) If the market goes up, I can do nothing and let the option expire worthless. My loss would be my overall purchase price of the option
(2) I can exercise the option, which mean I get to purchase the 100 shares at 62.50 of Bank of Nova Scotia.
(3) I can Sell to Close my option to another trader or investor.

The closer I am to the expiration day the effect of the market will have less and less  effect of the price of the option.  I am not an investment professional, so I won't go into detail about why happens.

Buying an option, whether a call option of put option, allows an investor or trader to control 100 shares of a company  for very little money.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, October 26, 2013

Signs of an Improving Economy

Just a few years ago, there was a major recession. It was the biggest financial melt down since the Great depression that started in 1929.  The chart below represents some of the major markets over a 5 year span.

              Blue Line    = S&P 500  (Up over 80%)
              Red Line     = DJIA  (Up over 60%)
              Green Line  =S&P TSX (Up over 30%)


Markets Over Last 5 Years



For stock market year to date as seen big increases in the major Indexes. The major indices are as follows:
                 Green Line    = S&P TSX up  6.85%
                 Red Line      = DJIA up 16.09%
                 Blue Line    = S&P 500 up 20.33 %



Major Markets YTD
      
 With the markets doing as good as they are, it is difficult to find stocks of good companies trading at attractive yields. They are a few gems out there but they require more work to find them. Currently as I wait to find a company to invest in and building my cash position. I would like to see a minor pullback before I pull the trigger on a buy transaction.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Monday, October 21, 2013

A New Record..

Recently on Oct 15, I had my highest one day total of dividends and distributions (as I own a few REITs)..

 I received a total of $149.26 in dividends and distributions. Of this $149.26 total, $56.00 is from a swing trade I have which will not be counted in my monthly dividend update. That is $149.26 I got paid for just being an owner of high quality companies.

Also, Emera recently increased its dividend to 1.45 per share. This represents a 3.57 percent increase in the dividend which is equivalent of a 3.57 percent raise for doing little to no work. Gotta love it and other companies I own will likely have a bigger dividend increase.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk




Monday, October 14, 2013

Income Streams

      Often, people have only one source of income. That is often an income from a job. If a person is married, the couple often has only two incomes coming in from their jobs.  As an employee, an individual if taxed at the highest rate, which is commonly referred to as earned income or marginal tax rate.  When an individual makes more money this way, they get taxed even more as they get put in a higher tax bracket.


                                             (image courtesy of www.bmichellepippin.com)



      A person can have multiple streams of income. These other streams of income can come things such as businesses ( 100 % owner or partial ownership), rental properties, network marketing, bond interest, interest from savings accounts, and peer to peer lending. Interest from bonds, savings accounts and peer to peer lending are taxed as earned income, there is no extra taxes like CPP and EI in Canada or like the extra taxes in the United States.
      Income from businesses and investments are taxed less and some of these incomes can be done with little to no effort. There is only 24 hours a day so the amount of money a person can earn from his job depends on his wage and the amount of hours he or she works.  If you own a dividend paying stock, then the company will pay you on a monthly, quarterly or semi-annual basis for being an owner in their company.  This is like clockwork as along as the company continues to be profitable.  The dividend can be increase, cut, and stay the same year to year.
        If you own a rental property that positive cash flows after the expenses of the property are paid, that money is extra money that you have to pay your own bills or do whatever you like. There are four types of income with a  rental property that show up on a financial statement.  Rental Income, Depreciation, Appreciation and Amortization

  The biggest benefit of  multiple streams of income is that it can make your life a lot less stressful as you will still have money coming in if one of the income streams is eliminated.  Currently, my main income is from a job and is supplemented by dividend income from the companies that I am a part owner of.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Thursday, October 3, 2013

Portfolio Update

Another month has come and gone and time to an update of my portfolio.

I made one investment directly though the transfer agent.  I purchased 1.752 shares @ $42.80 for a total of $75.00.  When dealing with the transfer agent in most cases there is no commission.

I also DRIP a few stocks and acquired a few more shares though this avenue.
   - 6 shares of Just Energy (JE.TO) @ $6.64
    - 2 shares of Enerplus (ERF.TO) @ $17.38
    - 0.037 shares of Enbridge (ENB.TO) @41.94


I have updated my investment tab spread sheet.


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Sunday, September 22, 2013

Why be an Investor?

            As the years go by more and more companies are getting rid of their defined benefit plans. This is because they are a big liability for them. A defined benefit plan means a guaranteed pension income from the same company you work for until your death indexed to inflation. The 2 most dependable defined benefit plans are for government employees and military personnel.  To replace these plans, new retirement plans came out which were defined contribution plans?

What are defined contribution plans?

        A defined contribution plan is where the individual is responsible for their own retirement. An employer might match a percentage of your salary up to a given percentage ( which is basically free money). With a defined contribution plan there is no guarantee of your investment gaining in value.  For example, if you are about to retire and there is a big stock market crash then the value of your portfolio could be drastically reduced. 
      
     The 2 common defined contribution plans in North America are the RRSP ( Canadian) and 401k (US). These are basically tax deferral plans, in which you investments grow tax free, until you go take the money out. An added benefit of investing in these plans you can claim a tax deduction for your contributions against the your taxable income at tax time. The higher your tax bracket, the greater percentage of the tax deduction that you are eligible for.
       
      An individual can invest in various investment vehicles inside the registered savings plan such as stocks, bonds and mutual funds.
      
       What happens if you take money out of your plan early? When you take money out early, you are penalized and plus come tax time you are taxed at your marginal tax rate.  At a previous employer, there was a GROUP RRSP plan. When I left there, a few months late I called the place that the company has it GROUP RRSP through. They told me I can switch it too an individual plan. I decided to cash it out has it was small. I was penalized right away at 10% of the balance right away and then taxed at my marginal rate at tax time.

      Currently, I am not investing in an RRSP as I would like to escape the rat race early in life.  Currently, I invest in a non-registered account and a TFSA.

   So, why be an investor?

      Today, more and more people are responsible for their own retirement!!! Individuals can make better investment decisions by learning how to read financial statements and increasing their financial education.  Individuals can read financial information from reports published by companies, the investor relations section of a company's website or various financial websites.  If an investor is not comfortable investing on their own, they can still use a financial planner or broker.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk



  



Wednesday, September 18, 2013

Watching Your Account Balance

         At the end of last month, I received a dividend from one of my stocks called Just Energy.  This stock gets dripped inside my brokerage account. I looked at my account activity and notice it was not right. My account said that I received the correct amount of dividends that I was expected to receive for that dividend payment.

So what went wrong ?

        So the stock has the DRIP turned on and I have enough to acquire a whole share. My account activity states I receive  6 shares @ $6.45  for a cost basis of  $36.75.  I noticed this right away and contacted my broker ASAP through e-mail.  I told my broker that either the $6.45 was wrong or the $36.75 was wrong and one of their employees said they think the stock trades in US dollars.  I have owned this stock for a year and a half at least.  I told them that I purchased the stock in Canada on the TSX. I told the stock in Canada trades in CDN dollars and the listing on the NYSE (New York ) trades in US dollars.

Towards the end of the e-mail they suggested on contacted Just Energy to find out which currency they trade in. I then contact Just Energy Investor Relations and ask them to clarify what currency the stock trades on the TSX and the NYSE..  They replied " The stock in Canada on the TSX trades in Canadian Dollars and the stock trades in US dollars on the NYSE. The dividends are paid in Canadian Dollars for both the Canadian listing and the US listing"

I then contacted my broker through e-mail and attached a copy of the e-mail from JE investor relations. My broker then admitted that they made a mistake and used US currency.

What to learn from this ?

As an investor you need to know the following:
  1. When your dividend payment dates are roughly
  2. What currency you dividends are being paid
  3. What currency you stock trades in
  4. Monitor activity in  your account.
  5. If dripping, if your cost basis makes sense according to your number of new shares and the reinvestment price.

Disclosure: I currently still own JE


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk


Wednesday, September 4, 2013

Recent Buy

Recently I made purchase for a long time hold in my investment account. I was not going to make a purchase as I was planning on building up my cash in my account.

The valuations of most companies in Canada are high right now making it difficult to find value. One of the sectors that has been hard hit is REITs. This is due to the concern over interest rates. I didn't add to my positions in the REITs as a big percentage of my stock portfolio is already in REITs and a real estate corporation.

I averaged down my position of Emera (EMA.TO) as Emera was trading near a 52 week low.  I purchased 49 shares @29.40 for a total of 1445.72 with commissions. The yield on this purchase is 4.745%.  This purchased added $68.60 to my annual dividend income.  Emera has increased there dividend yearly since 2007.

Cost = 1445.72
Cash= 775.56
Borrowed Money (6 %) = 670.16 on margin



Emera Inc. is an energy and services company with over 8 billion in assets and 2012 revenues of 2.1 billion. The company is involved in electricity transmission and generation, transmission and distribution along with gas transmission and utility energy services. They are mostly in the north east of United States and eastern Canada. Emera also has operations in the Caribbean. - Emera Investor Relations.

A large percentage of Emera's business is from Nova Scotia Power. Nova Scotia Power is the only company in Nova Scotia, which has a population of near 1 million, to deliver power to consumers. The wind mills there are owned by Nova Scotia Power or companies that supply the power to NS Power.

I believe Emera will continue to grow and make Nova Scotia Power a smaller percentage of their over all business matters.

I will update my portolio in early October.

Disclosure Long EMA.TO


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Portfolio Update

Another month has come and gone and time to an update of my portfolio. In doing so, I notice I had a few mistakes.

These mistakes were Bank of Nova Scotia dividend rate ( which also increased its dividend ) and the amount of shares I own of Killam Properties in may margin account (indicated by the non -green  lines ).

The  additions to the portfolio as of this date is 2 shares of Enerplus and 6 shares of Just Energy I received via DRIP.  There is a error in my brokerage account  with this reinvestment of Just Energy. It states I received 6 shares @6.45 for an investment amount of 36.75. So either the 6.45 is wrong or the 36.75 is.  I contacted my broker and they will review this case and get back to me within a couple of days LOL.. Right now I am going to assuming the 6.45 and my cost basis will be then 38.70.

 I think going forward I will wait to the DRIPS for the month are complete. I will update my spreadsheet to reflect the 6 shares.

Hope your portfolio is doing well.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk


Sunday, September 1, 2013

Dividend Income for Aug 2013

August 2013 has come and gone. During the month, passive income through dividends having been paid to me.
The total for this month is  $182.84.

Not included in this amount is a distribution payment from Dundee REIT in my margin account. This is a trade and all income will stay in this account to help grow the cash in this account to be used for investing or transferred to the TFSA for the same purpose. As this a trade, I am treating it different. Currently, I take 30% of all my income from job, investing and interest from savings and pay myself first . If money is left over at the end of the month, then I put this amount into my investing account.

Currently, the income received from Dundee REIT in the margin account is $91.47 after 3 months. As indicated in the above paragraph this entire money is staying in the account or be transferred to the TFSA account.

I will update my dividend tab with the above  total.


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Tuesday, August 27, 2013

Dividend Increase : Bank of Nova Scotia




This week all the 5 major banks report earnings. Today Bank of Nova Scotia earnings cam in at 1.77 billion profit. This net  income is lower than the same period of last year, but there was a large profit in 2012 from the sale in Toronto of the their headquarters. If you take away this gain from the sale of their headquarters, the profit in the same quarter last year is approximately 1.44 billion.

The Bank of Nova Scotia (BNS) has announced a quarterly dividend increase  of 0.02 a share. This equates to a raise of  3.33 percent and is their second dividend increase this year. The total dividend increase in 2013 is 8.77%.  It is difficult to get raises like that year over year from an employer.

I currently own less than 9 shares, buy these shares are enrolled in a DRIP program directly through the transfer agents. The allows my shares to compound at a greater rate. So over time, dividend income will grow at  quicker pace


It will be small now, but will grow faster and faster as the years go by.

DISCLOSURE:  Long BNS


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, August 24, 2013

Share Buy Backs


Killam Properties Inc. is a corporation (NOT A REIT ) , listed on the Toronto Stock Exchange, that deals with rental real estate.  Killam Properties Inc  made their  first purchase in 2002.   Killam Properties has properties that are located in Atlantic Canada and Ontario. Killam Properties Inc. also own  44 manufactured home communities, or land lease communities that are located in Atlantic Canada in Ontario. Killam Properties Inc. can keep more of the profits to grow the company as they are not obligated to pay out 90% of their profits to investors like a REIT.  Killam Properties pays a dividend as it is a corporation whereas a REIT pays a distribution.

Killam Properties Inc. recently been approved to buy back 2500000 shares over a 52 week period.   The shares will be retired when Killam purchases them on the open market. 

Why would a company buy back its own shares? A company will buy back its own shares when they feel the share price of their stock doesn't accurately represent the current value of their company. Buybacks can be a good use of company funds at the right price and beneficial to remaining investors as these investors get to own a bigger percentage of the company.

As of this post, I currently own 395 shares of Killam Properties Inc. I get to own a bigger percentage of this company at no cost to me. As the amount of shares outstanding decreases, the share price will likely increase due to supply and demand issues.

When shares are retired  as a result of buy backs the EPS automatically goes up and vice versa when the company issues more shares.   This could fool investors. So investors need to do their due diligence  in which they can discover an increase of decrease in the amount of shares outstanding, and in turn earnings year to year.


Disclosure  : Long KMP.TO (Killam Properties)

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, August 17, 2013

REITs - Part 2

This is a continuation from my previous post on REITs.

Some Advantages:

  • A small funded investor can get expose to the real estate market
  • The yields are high as the distrutions are high as REITs must payout 90% or more of their profits to shareholder.
  • Don't have to deal with tenants directly and all the problems that comes with it.
  • Managed by experts.
  • Some tax advantages depending on the break up of the distribution payments.

Some Disadvantages

  • you don't get all the tax breaks if you own rental real estate directly.
  • you don't have control over the investment


As you travel around a city and see large commercial buildings, they are, more than likely, owned by a REIT. The tenants of the buildings or section of a buildings sign long term leases with the REIT.  The earnings from rent and sales of income producing real estate are passed on to the investors as REITs are required to payout 90% or more of their profits to investors. By doing this they are not required to pay corporate tax.

My first REIT I purchased was Whiterock REIT. My yield on cost was 9.1%. The entire distribution was 100% return of capital so there was no tax on the distributions.  The REIT was acquired by Dundee REIT. I decided to redeem my shares at this point. The return of capital that I received was subtracted from my adjusted cost base, there by lowering my ACB. This mean my capital gain was higher as I sold the units had a higher price than what I paid for them.  I transferred the proceeds of this sale to my tax free account and initiated a position in Dundee REIT.

Note: Not all REITs have distributions that are 100% Return of capital. So you will have to pay taxes on things like interest. In Canada, the distributions ARE NOT eligible for the dividend tax credit as the REIT doesn't pay corporate tax.



                                                            Telus Tower (Calgary Alberta)
                                                               owned by Dundee REIT

Being an unit holder of Dundee REIT I own a very small piece of this building and many others.

Disclosure : long  Dundee REIT

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Thursday, August 15, 2013

REITS - Real Estate Investment Trusts - Part 1

This is a continuation from my previous post on REITs.

Some Advantages:

  • A small funded investor can get expose to the real estate market
  • The yields are high as the distrutions are high as REITs must payout 90% or more of their profits to shareholder.
  • Don't have to deal with tenants directly and all the problems that comes with it.
  • Managed by experts.
  • Some tax advantages depending on the break up of the distribution payments.

Some Disadvantages

  • you don't get all the tax breaks if you own rental real estate directly.
  • you don't have control over the investment


As you travel around a city and see large commercial buildings, they are, more than likely, owned by a REIT. The tenants of the buildings or section of a buildings sign long term leases with the REIT.  The earnings from rent and sales of income producing real estate are passed on to the investors as REITs are required to payout 90% or more of their profits to investors. By doing this they are not required to pay corporate tax.

My first REIT I purchased was Whiterock REIT. My yield on cost was 9.1%. The entire distribution was 100% return of capital so there was no tax on the distributions.  The REIT was acquired by Dundee REIT. I decided to redeem my shares at this point. The return of capital that I received was subtracted from my adjusted cost base, there by lowering my ACB. This mean my capital gain was higher as I sold the units had a higher price than what I paid for them.  I transferred the proceeds of this sale to my tax free account and initiated a position in Dundee REIT.

Note: Not all REITs have distributions that are 100% Return of capital. So you will have to pay taxes on things like interest. In Canada, the distributions ARE NOT eligible for the dividend tax credit as the REIT doesn't pay corporate tax.



                                                            Telus Tower (Calgary Alberta)
                                                               owned by Dundee REIT

Being an unit holder of Dundee REIT I own a very small piece of this building and many others.

Disclosure : long  Dundee REIT

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, August 10, 2013

Importance of dividends

Say you owned 100 shares of Jan 2, 2008 of Bank of Nova Scotia.


On Jan 2, 2008 BNS closed at $49.63

On Dec 31, 2012 BNS closed at $57.46

Gain = 100(57.46-49.63)=$783.


But, during that time there has been dividends paid of $1008.

With dividends, gain =783+1008=1791


Subject to approval by the Board of Directors, the payment date for common and all preferred shares is usually the third last business day of each fiscal quarter. The closing price on the dividend payment date as the drip price.

Jan 2008  100*0.48=$48.00 dividend payment   fill @$50.82 equals 0.945 shares
    ** total 100.945 shares

April 2008  100.945 shares *0.48=48.45  fill @ 54.00 equals 0.897
    **  total 101.842 shares

July 2008  101.842 shares * 0.48=48.88  filled @ 49.50 equals 0.987 shares
  ** total 102.829 shares

Oct 2008  102.829*shares * 0.48=49.36  filled @ 52.53  equals 0.940shares
  ** total 103.769 shares

Jan 2009  103.769*0.49=$50.85 dividend payment   fill @$31.7 equals 1.604 shares
    ** total 105.373 shares

April 2009  105.373 shares *0.49=51.63 fill @ 34.28 equals 1.506
    **  total 106.879 shares

July 2009  106.879 shares * 0.49 =52.37 filled @ 45.01 equals 1.164 shares
  ** total 108.043 shares

Oct 2009 108.043 shares * 0.49=52.94 filled @ 45.04 equals 1.175 shares
  ** total 109.218 shares

Jan 2010  109.218*0.49=$53.52 dividend payment   fill @ 50.82 equals 1.053 shares
    ** total 110.271 shares

April 2010  110.271 shares *0.49=54.03 fill @ 54.00equals 1.001
    **  total 111.272 shares

July 2010   111.272 shares * 0.49 =54.52 filled @ 49.50 equals 1.101 shares
  ** total 112.373 shares

Oct 2010 112.373 shares * 0.49=55.06 filled @ 52.53 equals 1.048 shares
  ** total 113.421 shares

Jan 2011  113.421*0.5125=$58.13 dividend payment   fill @ 57.05 equals 1.019 shares
    ** total 114.440 shares


April 2011  114.440 shares *0.5125=58.65 fill @ 60.16 equals 0.975 shares
    **  total 115.415 shares

July 2011  115.415 shares * 0.5125 =59.15 filled @ 57.79 equals 1.024 shares
  ** total 116.439 shares

Oct 2011 116.439 shares * 0.5125=59.67 filled @ 53.63 equals 1.113 shares
  ** total 117.552 shares

Jan 2012 117.552*0.5475=64.36 dividend payment   fill @ 52.34 equals 1.230 shares
    ** total 118.782 shares


April 2012  118.782 shares *0.5475=65.03 @54.88 equals 1.185 shares
    **  total 119.967shares

July 2012 119.967 shares * 0.5475=65.68 filled @ 51.77equals 1.269 shares
  ** total 121.236 shares

Oct 2012 121.236 shares * 0.5475=66.38 filled @ 54.04 equals 1.228 shares
  ** total 122.464 shares

Total gain = 122.464*57.46 - 100*49.63= 2073.78   

Dividends increase your gain and when the dividends are reinvested the gain is even higher. Also note that there is a 2% discount on shares reinvested with dividends through the transfer agent and most brokerages. So the gain with the DRIP will be even higher about if I applied to 2% discount .

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk






















Saturday, August 3, 2013

Dividend Income for July 2013

July 2013 has come and gone. During the month, passive income through dividends having been paid to me.
The total for this month is  $227.47.

Not included in this amount is a distribution payment from Dundee REIT in my margin account. This is a trade and all income will stay in this account to help grow the cash in this account to be used for investing or transferred to the TFSA for the same purpose. Currently, I take 30% of all my income from job, investing and interest from savings and pay myself first. If money is left over at the end of the month, then I put this amount into my investing account.

I will update my dividend tab with the above  total.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Monday, July 22, 2013

Income Trade Update

I  did an income trade a while ago with Royal Bank. 

May 15, 2013 - Purchased 100 shares of Royal Bank at 61.26  for a total of 6130.30 including commissions.

May 16, 2013 - Wrote a covered call Jun 22, 2013 62 for a option premium of 69.05 after commissions. I receive this premium right away as I am obligated to sell my shares at 62.00 strike price on or before expiration date. The option expired an I got to keep my shares.

June 26, 2013 - Wrote second covered call July 19, 2013 62 for an option premium of 39.05 after commissions. Like above I received this immediately in my brokerage account.

July 19, 2013 - My shares were called away as the price of  Royal Bank went up over $65 a share.
The assignment has a commission of 12.00 for the broker I use.


Total Return = Profit / Money invested
                     = (6200-6130.30+39.05+69.05-12.95)/6130.30
                     =2.689%

NOTE : I originally used an option assignment charge of $12.00, but after checking trading confirmations noticed it was changed to $12.95.


So what did I do with the option premiums and the capital gain from this trade ( Total $165.80). It stays in my brokerage account.

I missed the dividend record date for Royal Bank when I purchased the stock.

So for comparison sake, if I just sold the shares at $62.00 (assuming $4.95 commission to sell)
             Total Return = (6200-6130.30-4.95)/6130.30
                                  = 1.06%

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Monday, July 1, 2013

Dividend Income for June 2013

June 2013 has come and gone. During the month, passive income through dividends having been paid to me.
The total for this month is  $175.59

Currently I am unemployed so there will be now new capital added to the accounts until I find employment. Therefore my dividend income will not increase much and some of it will be used to pay my investing line of credit.

I will update my dividend tab with the above  total.


DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Monday, June 24, 2013

You Never know !!!

I recently left a job over something stupid that I did. Never knew how good I had it until I am no longer working there.

Am I going to be OK? Yes because I have an adequate funded emergency fund. This is because I delayed gratification by saving and investing money rather then having a car or buying things expensive clothes. Having an adequate funded emergency fund allows me to sleep at night. You never know when an emergency is going to happen whether voluntarily or involuntary. This doesn't negate the fact I made a mistake leaving my job.

What would happen if I didn't have an adequate funded emergency fund. I would have no way to pay rent or pay for food. Since I left the job, after 2 weeks notice, I do not get Employment Insurance as I left the job on my own.

The moral of this is that don't jump to quick and to something you will regret later. I am glad I have an adequate funded emergency fund.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Friday, June 7, 2013

Averaging down!!!!

          Do to the recent correction, I decided to average down on my trade in my margin account for Dundee REIT.  I decided to average down the cost per share was around $2.45 less than what I originally paid.  On June 6, I purchased 50 shares of Dundee REIT  @32.95 for a total of 1652.45 including commissions.

           So I now owe 120 shares of Dundee REIT with an ACB of $34.46. The yield on cost is 6.50%.  As this REIT pays monthly, I will get paid $22.40 monthly while I wait for my exit point. 

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk



Tuesday, June 4, 2013

Dividend Income May 2013

May 2013 has come and gone. During the month, passive income through dividends having been paid to me.
The total for this month is  $180.83

Every month I continue to add capital to my savings and investing accounts. I also DRIP some stocks to "average down" a few investments to lower my yield on cost. I would like to add more stable blue stocks to more portfolio that pay a decent yield.


I will update my dividend tab with the above total.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Tuesday, May 28, 2013

Sacrifice

        Where do you find the money to invest and save? You reduce your expenses by doing things such as driving less, cutting cable and/ cable packages, cheaper cell phone plan etc. An individual needs to set save a percentage of their income. This has to be a priority before paying rent, paying mortgage, buying groceries or anything else that you spend money on. You will see your savings grow and when you have enough saved it is time to make your money work harder for you. If you are short money before the end of the month, a person should look at additional forms of income such as a second job or part time home business. NO ONE is going to be in your face to pay yourself first so its take a lot of discipline.


        Starting out, buying shares in established companies that pay dividends can be advantageous. When Canadians invest in dividend paying stocks from Canadian corporations, the dividend income is taxed favorably over ordinary income (marginal tax rate). Interest from savings accounts and bonds and dividends from foreign companies are taxed at your marginal rate. The dividends from foreign companies can be offset by the foreign tax credit as there is a 15% withholding tax when buying US stocks in a non-registered account. Companies that pay dividends also increase their dividends on a yearly basis.

        You can use your dividend income to help pay bills or you can reinvest the dividends to help compound your money. You can use the dividends along with fresh capital to invest in the stock market or use DRIPs. You have to leave money alone to see the benefits of compounding.


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Saturday, May 25, 2013

Recent Buy/ Trade

On May 23, 201, I purchased 70 shares of Dundee REIT at $35.40 with $5.20 commission in my margin account. At my ACB, the yield is approximately 6.31%. 

Why did I purchase this REIT at this price? The 52 week low / high is 34.05 / 39.740. The REIT has a lot of government departments as tenants in their REIT portfolio. I also like this REIT as their other tenants in their top 20 tenants are highly successful companies. According to Morningstar.ca as of May 25, 2013, Dundee REIT is trading at Price/ Book of 1 and ROE of 12.8% (TTM).   In January 2012, Dundee REIT purchased Whiterock REIT to make it one of the biggest REITs in Canada. I was a unit holder of Whiterock REIT and elected to have my units redeemed as cash. As the Whiterock REIT units  was held in my margin account, I transferred the cash I received to my TFSA and purchased shares of Dundee REIT and held it ever since.

My plan is to sell these 70 shares  for $150 -$170 gain excluding distributions. I will continue to hold my other units of Dundee REIT in my TFSA.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Monday, May 20, 2013

How do you spend your money?

When you receive money what is the first thing you do?

       The  average person spends money and tries to save what is left at the end of the month. The problem is when the end of the money comes there is usually no money left or little money left at the end of the month.

What did I decide to do?

        I pay myself first  before spending money on rent, bills, food, entertainment. Paying yourself first means you are making yourself most important in your life. This allowed me to build an emergency fund and start saving and investing. This has definitely made it easier to sleep at night. After paying myself first, I try to live off what is left for the month.
        A couple of books that talk about the pay yourself first concept is The Richest Man in Babylon and The Wealthy Barber.
       
DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk


    

Friday, May 17, 2013

Income Trade

A few days ago I decided to do an income trade.  I purchased 100 shares on Royal Bank (RY) at a cost of 61.26 excluding commissions. I then wrote a covered call with a Jun 21/13 62 call option for an option premium of 69.05 after commissions. This amount gets immediately into my broker account. Using a covered call allows an person to increase there rate of return.

If the price of Royal Bank stock goes above $62.00 the option might be "called away". That means I  am obligated to sell my shares at $62.00, which is the strike price. If the option expires worthless, I will then decide to sell or sell with a covered call.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Tuesday, May 14, 2013

Dividend Update April 2013

April 2013 was the highest dividend income  I ever received in one month.  This is income that I didn't have to physically work for.

This is a whopping $228.49.

Every month I continue to add capital to my savings and investing accounts. I also DRIP some stocks to "average down" a few investments to lower my yield on cost. I would like to add more stable blue stocks to more portfolio that pay a decent yield.

 Currently, I invest mostly in a non-registered account as I am using leverage a little. This means I am using other people's money (OPM) to increase my income through dividends. The interest money I borrow to invest is tax deductible.

I will update my dividend tab with the above total.


“Do you know the only thing that gives me pleasure? It's to see my dividends coming in.” -John D Rockefeller


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Sunday, April 14, 2013

Why Trade, Invest or Save Your Money?

        As the days pass one by one, the cost of goods and services rise with inflation. I see people buying in the next new cell phone although there current one works excellent and stills over a year left on their cell plan. I see people buy a new car every 3-4 years just because they want a new car.  The cost of living will rise quicker than raises you MIGHT receive from your employer.
      
       What is a person to do to live a less stressful life. A person needs to live below their means and pay themselves first. You can do this in 2 ways:
  1. Save/invest/trade this money. The income that is generated stays in these accounts and gets reinvested by using DRIPs or reinvested along with fresh capital in new assets. This income can be either capital gains, dividends, distributions, option premiums, or interest.
  2. Pay yourself first a giving percentage of every dollar no matter where it comes from. You will be increase your means this way in a more tax efficient manner.
The First Way  

      This is the most common way people live below their means. No money is taken out until you have enough income to be financially independent or want to retire. The exception is taking money out of an emergency fund it an emergency occurs.  In order to avoid debt, you will have to save extra money to buy the things you want.

The Second Way

     This way allows you to increase your means as your income increases through the cash flow or capital gains of your assets.


Which way is better? Only you can decide that?

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk