Monday, August 31, 2015

Sunshine Blogger Award

   I was nominated for the Sunshine Blogger Award by Dividend Hustler. This is a fun way to sharing some details about the blogger that is nominated. Dividend Hustler posted five questions that I will answer below. I want to thank Dividend Hustler for the nomination.

1. Name the top three experiences from your past, that help form who you are today.

    I grew up in a small town where it was hard for young people to get a job. You had the usually jobs in retail, grocery stores and fast food restaurants. Most people worked in the fishing industry , coal mines or the steel plant. As I was growing up, the cod fishery collapsed due to over fishing.  The steel plant was owned by the provincial government, who closed it down. The coal mines were owned by the federal government, who took it over in 1967 to wind down operations. The government owned coal mines eventually closed down in 2001. My father worked in the coal mines for 33 years and took an early retirement package in 1999. This was not a defined benefit package and ended when he turned 65.
        My father has a good memory put never put it to use. My father was no good with money never invested a single penny. Money was never talked about in my house growing up.  I vowed to live differently when I was older. In 2010, I started to invest in the stock market.

     Around when I was 15, my parents separated. The financial situation went even worse. My mother went on social assistance as she never worked. My father was stuck with all the marital debts and plus had to pay child support for my youngest brother.  I was very observant about how this was handled and vowed to not have children unless I was in a good situation in life.

     When I was growing up nobody cared about what to do with the rest of their lives. There was no talk about entrepreneurship or investing. People would go to parties, dances, or to the mall just to hang out with people. I don't have a problem with people socializing, but when they do it all the time and not engage in conversations of their future and what they would like to do with their lives it is wasting time.  I decided I want to make good use of my time.

     Although the questions asks for 3, I have forth one. I worked at job that was crappy. My co-workers and I were treated like garbage from time to time. Also, we were told to stay home without pay if it wasn't busy enough. One time this went on for 3 weeks due to our client having better heath standards than Health Canada in terms of exposure levels.  It definitely makes you realize how much power the employer has over you. This definitely help light a fire inside me to change my life financially. 
 
2.  If you have one important piece of advice for investors starting out what would it be?

      My important piece of advice for investors is to start earlier as possible.  Usually a person is not able to work until about 16 years of age due to child labor laws.  But that doesn't mean you can not start a business of some sort such as mowing lawns.  The person can than take this money and invest in dividend paying companies that are well run and easy to understand.


3.  What was the worst investment in your life?  How do you avoid making the same mistakes?

         I invested in a mining company in British Columbia through the Canadian Venture Exchange.  There projects seemed to have the goods in the ground, but when the recession of 2008-2009 hit, the price of Molybdenum stayed very low as it was stock piled in countries such as China. The main project of this company never got off the ground. The company stopped sending financial reports out. Eventually the company got de-listed and is now with zero. My loss was under $2500

4.  Outside of work and investing, what is your biggest passion in life?

      My biggest passion in life outside of work and investing is travel.  I currently do not do it as I am not in a position financially to do it. This is one of the reasons I had the epiphany in 2010 when I woke up one day and decided to change.  By creating streams of passive income, I reduce the stress in my life and make living easier.

5.  What is your top 3 Favorite books of all time?  Why?

       My favorite 3 books of all time are Rich Dad Poor Dad, The Cashflow Quadrant and Stop Working - Here's How You Can.
    
      Rich Dad Poor Dad is written by Robert Kiyosaki.  This book will change your view on money. The book is about Robert growing up wanting to be rich, and grew up in a family where money was not important. Robert's father was the superintendent for Education for the State of Hawaii. His best friend's father was a grade 8 drop out who owned businesses and real estate. Robert and his best friend started to learn from this entrepreneur how money works and how the rich think differently.
        Rich Dad Poor Dad talks about 5 or 6 things are important if you want to become wealthy. The book discusses why you personal residence is not an asset whereas the banks tell you that your house is an asset.  Kim and Robert started saving 30% of the income when they started out in 1985. In 2010, I started with 30% also, but I did 20% saving and 10% to investing until my savings was up to a certain amount then 30% went to investing.

      Cashflow Quadrant was also written by Robert Kiyosaki.  This book talks about the 4 different types of people who make up the world of business.  The quadrant has E (for employee) and S (self-employed) on the left side and B (for big business) and I (for investor) on the right side.
      The people who work in the E quadrant work for money and want a safe secure job with benefits.  The people who are in the S quadrant, work for themselves as they believe if you want a job done right do it yourself.  The people who are in the B quadrant, want people and money to work for them. If they leave the business for a while, it can still run efficiently as they put systems in place. The people in the I quadrant want money to work for them.
       As less and less companies have pensions, people have to learn how to be investors. The amount of taxes you pay depend on the quadrant you are in. Employees and Self Employed pay the highest amount of taxes. On the left side of the quadrant, you have to work to get paid. In the I quadrant, you can invest in a dividend paying stock, and the company will pay you a dividend on a regular basis for just being a shareholder.

      The third book is Stop Working - Here's How You Can by Derek Foster.  Derek Foster is an average guy who never made a lot of money but managed to retire from the rat race at the age of 34.  Derek invested in dividend paying stocks and income trusts that paid distributions. In later books Derek talks about an investment in a cigarette - making company after a major lawsuit.   He bet a lot of money, including a margin, on this company and fortunately the price did rise. Derek found this time stressful when holding the stock using so much margin.  Also in a later book, Derek talks about how he took out a loan of 8.5 percent to invest in a REIT with a 11.5 percent yield.  Derek Foster shows you how an average guy can retire early by investing. Derek often says the 95% of the stocks are garbage and he invests in the best of the best  such as Johnson and Johnson.

To continue with the tradition  with this award, I nominate two bloggers and pose my set of five questions for them. I nominate:

Jason Fieber of Dividend Mantra

And

Kraig Mathias of Create My Independence

The 5 Questions are:

 1. Name the top three experiences from your past, that help form who you are today.
2.  If you have one important piece of advice for investors starting out what would it be?
3.  What was the worst investment in your life?  How do you avoid making the same mistakes?
4.  Outside of work and investing, what is your biggest passion in life?
5.  What made you choose your method of investing to get to financial independence?

Hang out with people who lift you up and inspire you do be a better person.

Photocredit:  www.azquotes.com

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 29, 2015

Dividend Increases

    Last week, the Canadian banks reported their earnings for the most recent quarter. The Canadian banks are some of the best banks in the world.  I currently own shares in 4 of these wonderful businesses.

    RBC Royal Bank
 
 On Wednesday, Royal Bank of Canada (ticker symbol : RY) reported their earnings.  Royal Bank announced a dividend increase of $0.02 per quarter. This is the second time in the last 12 months Royal Bank has raised its dividend.  The last time it raised its dividend was for $0.02 per quarter also.  They raised their annual dividend by $0.16 per share which represents a increase of 5.33 % {$0.16/$3.00}. With the low price of oil and lowering of interest rates by the Bank of Canada, I will definitely welcome this raise.

 http://www.scotiabank.com/ca/common/banners/logo-scotiabank-lrg.png

  On Friday, Bank of Nova Scotia (ticker symbol: BNS) reported their earnings and announced a dividend increase of $0.02 per quarter  as well.  This is the second time in the last 12 months that Bank of Nova Scotia has raised its dividend as it raised it by $0.02 per share previously. Therefore, they raised their annual dividend by $0.16 per share which represents a 6.06% increase {$0.16/$2.64}.  Bank of Nova Scotia also owns Tangerine Bank, which is an online bank where individuals can bank and not pay any fees.

    I own shares of Bank of Nova Scotia directly though its transfer agent. I do not have to pay commissions to acquire more shares as I just mail in a check.  The disadvantage of this way of purchasing stocks, is that I have no control over what my purchase price will be.  I am also dripping this stock in which the complete dividend gets reinvested.

Disclosure:  Long RY and BNS

Photo Credits:  www.scotiabank.com
                        www.royalbank.com

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 27, 2015

Recent Trade Update

A few weeks ago, I initiated a trade involving Toronto Dominion Bank.  I purchased 3 call option contracts with a September 18 expiration date. You can read about this purchase here.

When the big drop that happened in the markets,  I decided to exit my position. So on Aug 24, I placed a limit order $0.03 higher than the bid price to sell my 3 contracts. This trade took place inside my TFSA.

Summary:

Initial Investment including commissions = 3*100*1.15+$12.95
                                                                   = $357.95

Proceeds of Sale = 3*100*$.38-$12.95
                            = $101.05

Return on Investment = ($101.05-$357.95)/$357.95
                                    = -71.77%
                                 

Click to Enlarge

In full disclosure, I still own 100 shares of TD in my margin account which I owned for months now.

Disclosure: Long TD

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, August 14, 2015

Recent Trade

    Last month, I wrote about an option trade in Toronto Dominion Bank. I purchased 3 contracts on July 14 and quickly sold these in less than 48 hours on July 16. I got a good return on this investment.

    On Aug 13, I decided to try a trade again in Toronto Dominion Bank.  I bought 3 Sept 18, 2015 call option contracts for a $52.00 strike for a premium of $345.00 excluding commissions inside my TFSA.

Summary:

Initial Investment including commissions = 3*100*$1.15+ $12.95
                                                                    = $357.95

Currently, Toronto Dominion Bank is trading at $52.05 on the Toronto Stock Exchange.

Disclosure: own 100 shares of TD in margin account
 
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, August 12, 2015

Dividend Increase

     On August 10, Emera Inc. announced there earnings for the second quarter. Some of the highlights of the most recent quarter are as follows.
  •     Adjusted earnings per share increase 6.5% to $0.33 per share in the quarter and 12.7% to $1.51 YTD.
  • Adjusted net income  increased 8.6% to $48.0 million this quarter and 15% to $219.6 million YTD.
Emera Inc is a  utility involved in the generation and transmission of electricity along with gas transmission and utility energy services. Also this company is involved in a major project that will involve a underwater transmission of electrical energy from Newfoundland to Nova Scotia. This project will involve harnessing the tidal Energy at Muskrat Falls in Labrador and provide power to Newfoundland and Nova Scotia, New Brunswick and parts of New England. This major project is known as the Maritime Link project. Emera also is the parent company of Nova Scotia Power and is a major shareholder in Algonquin Power & Utilities Corp. The have interests in Bangor power and assets in the Caribbean also.

With the release of the earnings, the company also announced a dividend increase of 18.75% starting with the first payment in Nov 2015. Emera also announced their goal is to grow the dividend at a rate of 8% annually through to 2019, which was the goal originally was 6% annually. Emera is also scheduled to pay a dividend on August 17, 2015.

The dividend increase from $1.60 a share to $1.90 a share adds $30.00 to my annual dividend income. What did I have to do to receive this raise? I had to do nothing except be a shareholder in this wonderful business. Everyone needs electricity to help live their lives these days.  If I assumed a 3.5% yield, this $30.00 a year in dividends, would be equivalent of investing $857.14 of my own money.

I will happily take an 18.75% dividend raise. It would be difficult to get that type of raise at a job in any given year. 

Disclosure: Long EMA

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 8, 2015

Weekend Reading - Aug 8 2015


    So the US dollar continues to gain strength against our Canadian Dollar.  At this very moment while typing this, the exchange rate is a follows:
                              $1 USD = $1.31 CDN
                               $1 CDN = $0.76 US

    The weaking of the Canadian dollar has been greatly impacted by the lower price of a barrel of crude oil. It is strange how Alberta has the greatest amount of oil in the world except for Saudi Arabia, but Alberta economy is dependent on the actions of OPEC for the most part.  With the exchange rate as it stands right now, a lot of Canadian investors are only investing new money in Canada. An investor can also buy a Canadian ETF that holds US equities, if they want exposure the the US companies.
     In Canada at the moment, their is a federal election going on right now in which the voting takes place on October 19.  Who ever Canadians elect to form government is going to affect the markets also along with the low oil prices

Some articles that I read during the week, that you might find interesting are as follows:

Dividend Mantra recently published about his averaging down in CAT in his Recent Buy post. I do believe this stock will face some headwinds in the short term, but it will be a great long term holding for dividend income now and increasing dividend income in the future.

Liquid Independence wrote an article about How Much Money Is Enough For His Retirement. Some people put off saving and investing until later in life, but it is definitely a lot better to start right now. Compounding is said to be the 8th wonder of the world. So the more time you have, the more time money has to compound. 

Liquid Independence talks about how he got started in farmland investing as he was interviewed by Jessica at momoneymohouses.com, which you can listen to here.

Dividend Hustler wrote about Recent Sales which you can read about here. At the top of this post I wrote about the low Canadian dollar. To avoid the exchange rate  if you have US equities doing well, you can sell them and purchase other US equities that are undervalued.  Dividend Hustler is going full steam with investing in dividend growth stocks. 

Tawcan recently published a post about Recent Buys in the Health Care space. As the population ages, there will be a greater need for  nursing homes and long term care facilities. These purchases will make great long term holds. 

Passive Income Mavericks recently published his dividend income for July.

There are some interesting articles and videos recently published at www.sharpetrade.com.


Photo  Credit : www.cafepress.com

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 4, 2015

Dividend Update July 2015 - New Milestone Achieved




      The month of July is another month of dividend income landing in my accounts. This money is used to help pay my expenses if it is needed. If the money is not needed, it is ALL used to purchase new investments to further increase my cash flow.

       The price of a barrel of crude oil is still a major focus of the markets and the economy. Some analysts are predicting the WTI price of a barrel of crude oil to remain between $40 to $55 for the next year. Recently some major players in the oil and gas sector in western Canada have started to lay off a lots of specialists. These specialists are the geologists, geophysicists, engineers and scientists.


 Non-registered Account
  • Bell Canada Enterprises (BCE) - $65.00
  • Bank of Nova Scotia (BNS) - $20.70
  • Enerplus (ERF)  -$ 26.45
  • Killam Properties (KMP)  - $5.75
  • Restaurant Brands International (QSR) - $6.19  
  • Roger's Communications Class B (RCI.B) - $48
  • Shaw Communications (SJR.B)    - $19.75
  • TD Bank (TD) - $51.00
TFSA
  • Boston Pizza  Royalties Fund (BPF.UN)   - $25.34
  • Claymore 1-5 yr Laddered Corporate Bond (ETF) - $0.92
  • Cominar REIT (CUF.UN ) - $5.39 
  • Dream Office REIT   (D.UN)  - $ 16.61
  • Killam Properties (KMP) - $  14.70 
Total = $305.80

     This monthly dividend income result represents the first time that I surpassed the $300.00 total in a month. This total represents a 2.783% increase from 3 months ago and 53.91% increase  year over year.  My dividend in Rogers Communications Class B stock, RCI.B,  was on 100 shares only. When the   put option was assigned in RCI.B, it was after the dividend record date.
  
       I also received a $3.50 dividend payment from Sherritt International Corporation. I purchased Sherritt International Corporation shares as a trade, so it is not counted for in the dividend income above.
 
    I also received another distribution payment of $56.00 for my swing trade in Dream Office REIT in my non-registered account. This is not listed above since it is a trade, so I keep the money in the account and do not pay myself first with this payment. I have received $1379.47 in distributions so far on this trade.

     I will update my dividend income tab with the new amount. It is great to see money from passive income sources deposited into my brokerage account every single month.

How was your dividend income for July?

Disclosure : Long all securities above.

Photo Credit: www.mipaq,co.za

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 1, 2015

Portfolio Update - July 2015

The month of July is now behind us. The major issue of the month continues  to be the low price per barrel of crude oil. A few days ago, as reported on BNN,  it appears that OPEC will not be cutting production for the foreseeable future.  This will mean the price of oil will remain low until the supply dwindles.

    I was not active in the accounts this month very much. I initiated an options trade on July 14 by purchasing call options in  Toronto Dominion Bank (TD) on a Canadian Exchange. I closed this trade rather quickly on July 16 as my limit order was filled. I own 100 shares of TD in my margin account which I purchased months ago.

    The other activity in my account was the purchase of Bank Of Montreal shares. I purchased 35 shares at $72.20, which you can read about here. The Bank of Montreal is one of the five BIG banks in Canada. I did not have enough cash on hand, so I used some margin to make the purchase possible.

   I still own shares in Sherritt International as the stock price has fallen below my purchase price.  With the state of China and low price of Nickel, this placed fears in a lot of investors.

  I did acquire more shares through DRIPs.

Shares added due to drip

2 shares of ERF @ $10.33 for a total of $20.66
1 share of KMP @ $10.27 for a total of  $10.27

      On July 29, Scotia Bank paid a dividend. I hold my BNS shares directly with the transfer agent. The entire dividend gets reinvested.  I received the dividend  but I do not know how many shares are acquired or the dividend re-investment price. This usually takes 3 to 7 days to show up in the account.

As of  August 1, 2015, the value of my portfolio stands at $79266.82. This is an increase of  0.40 % over last month. I will update my investing account tab above.

Disclosure: Long KMP,  ERF, TD,  BNS,  BMO

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 NOT 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