Net Worth Update - March 28 2020

Today is March 28, 2020.  Although passive income through dividends and option premiums is my focus when it comes to investing, I decide to do a post about my current net worth.

What is net worth? Simply put, net worth is calculated by adding up all assets and subtracting the total of all liabilities.  Net worth is sometimes referred to as shareholder's equity.  Assets and liabilities are part of the balance sheet. 

Assets

Savings

The savings section is broken into 3 segments. This is a taxable high interest savings account, a TFSA savings accounts and combination stock investment and ETF investment.  The TFSA savings account has been removed due to low interest rate after the decrease in the interest rate by the Bank of Canada.  Bank of Canada is basically Canada's version of the federal reserve.

The taxable high interest savings acount, in which the interest rate is laughable, was with Tangerine.  It currently at 0.4%, which is down from 1.1% from 3 months ago.  I switched to EQ Bank due to it having a 2.45% interest on their savings account.  

The TFSA savings account was also with Tangerine.  I was frustrated with getting such a low interest rate with Tangerine.  I took the money out and placed it in non-registered high interest rate savings account with EQ Bank.  

So, I have 1 savings account now instead of the 2 accounts I had before.  On March 28, 2020, the value of the savings account is $1731.58.  After the fall in interest rates to help combat the COVID 19 pandemic and fall of oil prices, the bank of Canada had to reduce interest rates by enacting emergency rate cuts.  EQ Bank lowered their interest rate from 2.45% to 2.00%.  We just had another interest rate cut by the bank of Canada this past week.  I suspect EQ Bank may reduce their interest rate in the very near future. 

The stock and ETF investment involves a stock and an ETF that I hold within my margin account.  I keep the dividends and distributions received separate from the dividends I post in my dividend income updates.  

The stock is Inter Pipeline.  The ticker symbol is IPL and trades on the Toronto Stock Exchange.  I own 42 shares with an adjusted cost base of $901.80.  The cash not including dividends is $10.36.  I received a total of $59.90 in dividends since starting this position.  

I purchased 15 shares of BMO High Yield Covered Call ETF at a cost of $212.42.  The ticker symbol is ZWC and trades on the Toronto Stock Exchange.  My brokerage has zero commissions on purchase of ETFs.  There is a small ECN fee which is a few pennies.  I believe for the purchase of these units it was like $0.03 total.  This ETF pays monthly. This ETF traded ex-dividend on March 27, and I will receive my first distribution in early April. 

On March 28 , the current value of this "stock / ETF account" is $567.83.  I have not added any money to this account.

Overall, the savings total is $2299.41.

Non-registered Accounts

The non-registered accounts consist of a margin account and 2 stocks held directly with the transfer agents.  The margin account is with Questrade.  The total value is $65470.04 as of March 28, 2020.

TFSA Investing Account

The TFSA investing account balance is $29040.53 as of March 28, 2020.  This account is with Questrade.

Trading Account

The trading account is with Questrade.  This is done within my margin account.  I keep track of the balance, market value and cost basis of the trades. I currently have a trade on in Mullen Group. The ticker symbol is MTL and trades on the Toronto Stock Exchange.  Mullen Group is a group of trucking companies which consist of approximately 70% conventional trucking and 30% oilfield trucking.  The stock has fallen by almost $5.00 due to the fallout over the COVID-19  pandemic and the fall of oil prices.  I did not set a stop as I was trying to sell covered calls.  As of March 28, the value of this account is $1787.23.

RRSP

My RRSP is with Tangerine.  This is in the process of getting transferred.  I held their funds for a while and eventually sold the funds.  Therefore, the RRSP is basically in a savings account.  On March 28, the balance is $12027.92.  The interest on this account is 0.40%, which is down from 1.1% interest rate from 3 months ago.  

Regardless of  the double whammy of the COVID-19 pandemic and the fall of oil prices, I decided to switch this account.  I submitted the paperwork to transfer the RRSP to Questrade.  This will enable to purchase investments that would possibly generate better return.  

Summary of Assets

Total Savings :  $2299.41  

Non-Registered accounts : $65470.04

TFSA Investing :  $29040.53

Trading Account: $1787.23

RRSP Savings Account:  $12027.92

Total Assets = $110625.13 (decrease of 25.5% from 3 months ago)

Liabilities

The balance on my line of credit is $5126.54.  This is a decrease of $1373.46, or  from 3 months ago. Since I rent and do not have collateral, the interest rate on this account is 5.66%.  This interest rate is down from the 7.16% interest rate from 3 months ago.  The Bank of Canada has decreased rates a few times over the last 3 months, which caused the big Banks to reduce their prime rates with each interest rate reduction.  I get charge an insurance fee when carrying a balance.  This insurance fee depends on the balance, therefore it changes every month.  

Conclusion

On March 28, 2020, my net worth is $105498.59.  This is a decrease of $36437.32, or  25.7%, from 3 months ago.  

A large part of this decrease is due to the economic fallout over low oil prices and the COVID-19 worldwide pandemic.  

To read my last net worth update, click here.  

Disclosure:  Long IPL, ZWC 

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 Buy

During the few stocks the stock markets have made huge swings in both directions across the entire world. From the oil price ware between brought on by Russia and Saudi Arabia to the World Health Organization has declared the Coronavirus a pandemic.

The Cononavirus has caused many countries to take drastic measures including banning incoming flights from hot zones. Sections of different countries are taking drastic measures from cancelling schools, banning social events of all types over a certain amount of people and governments announcing shutting down for weeks. Major sporting leagues such as NHL, NBA, WHL, AHL and MLB have suspended their seasons to protect the health of their players and fans.

Recently, Canada has another major issue to deal with major rail blockades that were setup causing shutting down major rail routes across Canada. This causes shortages of all different things from propane to consumer goods. The federal minister of Crown-Ingenious Relations and the British Columbia minster of Indian Affairs met with the hereditary chiefs of the Wetʼsuwetʼen first nation in Northeastern BC.

Individual companies have changed out they do things such has limiting interactions with their customers or clients to help prevent the spread of the virus.

I never saw people panic like this over a virus.

Recent Buy

Almost all my positions are now in negative territory. Anyone who has bought investments in the last several years have lost money. Best thing to do is not sell and ride it out.

I had some money I could put to work in my margin account. It was not much, but I felt I could make a position of average down a position.

I have owned Enerplus for several years. This company has fell out of favor with investors the last few years due to the major oil crash that started in 2015. Enerplus is an energy producer headquartered in Canada. Enerplus has increased their activity in the United States due to a better environment to be in the oil and gas business. Enerplus has reduced their activity in Canada due , in part, to regulations and other things making it difficult to conduct business and make a profit.

I owned 558 shares of Enerplus at the time of the purchase. The company had to reduce its dividend due to low oil prices and switching form an income trust to a corporation in Canada in 2011.

On March 10, my limit order was filled to purchase 170 shares of ERF.TO at $2.93 per share for a total cost of $503.30 including commissions. I now own 728 shares of Enerplus Corporation.

Enerplus pays a monthly dividend of $0.01 CAD per share. This purchase adds $20.40 CAD to my annual dividend income. The yield on cost for this purchase is 4.05%.

I have had the DRIP turned on for a few years but the wasn't enough to purchase a whole share. With the stock falling in price, I will see drip shares start to appear in my account in the next few days.

Conclusion

Would I had purchase shares if I had not have owned shares already? I would of definitely would of put my money elsewhere as their are lots of good opportunities in the markets at this time.

This purchase reduced my average cost base per share by over $4.00.

This stock was recently featured on BNN's market call a month ago, which you can watch here.

I am down a lot on the stock, so I will continue to hold for now.

I will update my investment tab spreadsheet in early April to reflect this purchase.

Disclosure: Long ERF

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 Buy

   What a crazy couple of weeks in the capital markets!  That last few days have been super crazy.  The markets fell over 10% which mean we are dealing with a market correction.  The situation could get worse before it gets better.  A couple of major factors that lead to these markets tumbling this week are the impacts of the coronavirus coupled with Russia and Saudi Arabia flooding the market with low priced crude oil.

Canada is a high cost producer of crude oil due to the oil being very low in the ground due to mountain range of western Alberta east of Edmonton.  Canada also has the oil sands in the northern part of Alberta.  The mining for oil located in the oil sands has very high cost and it is often said that $70 WTI price crude oil is needed to make it viable.

During this week, the Bank of Canada reduced it over night prime rate by 50bps or 0.50%.  This means will cost less to borrow money and the interest rates on savings will be decrease.

Markets go up and markets go down.  It is difficult to time the market.

Purchase

On May 10, I made 2 purchases.  I will talk about one of those purchases in this post.

Besides my positions for this blog, I have a few positions in savings.  I also have a regular high interest savings account as well.

Prior to today, I had one position in this account with some cash.  That position is 42 shares of Inter Pipeline (IPL.TO).  I kept the cash from the dividends in the account and added some extra cash in the account.  I had a total of $135.92 in cash in this account.  

My brokerage has commission free ETFs when purchasing units of ETFs.

With the $135.92 in cash, I purchased 9 units of BMO Canadian High Dividend Covered Call ETF.  The ticker symbol is ZWC.TO.  I purchased the 9 units at $15.25 for a total cost $137.28, which included ECN fees of $0.03.   This ETF is an ETF that is owned by Bank of Montreal which is a bank that I am a shareholder.  The yield on cost for this position is

BMO Canadian High Dividend Covered Call ETF has been designed to provide exposure to a dividend focused portfolio, while earning call option premiums. The underlying portfolio is yield-weighted and broadly diversified across sectors. The ETF screens for securities for dividend growth, sustainability and option liquidity. The ETF also dynamically writes covered call options. The call options are written out of the money and selected based on analyzing the option's available premium. The option premium provides limited downside protection. Source BMO

This ETF currently has 73 holdings, which you can discover by clicking here.

 The BMO Canadian High Dividend Covered Call ETF currently pays a monthly distribution of $0.11 per unit.  This position will pay me $0.99 per month in distributions .  The yield on cost basis is 8.65%.

With this purchase, there is a cash balance of -$1.36.  This cash balance will be in positive territory as Inter Pipeline will pay a dividend on March 16, 2020.

Summary:

This savings account in which I keep these 2 positions and cash is held within my margin account.  These positions are not reflected in my investing tab spreadsheet link above and are not mentioned in portfolio updates.  However, this savings account will be mentioned in future net worth posts under the savings section.

This position adds an extra $0.99 per month of income to this account.  The total income per month generated by this account is expected to be $6.98.

The distribution may be reduced in the coming months for this ETF due to the large reduction in prices of its various holdings and the difficult selling covered calls due to this deduction.

This is a 3 month chart of ZWC which includes today price action.

Click to Enlarge

I will purchase more units of ZWC if cash is available and at a good price.

Note:   This position will not be included in my portfolio updates or investing tab spreadsheet.  However, this position will be included in net worth updates.

Disclosure:  Long BMO, IPL, ZWC

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 Update: February 2020

      

The month of February 2020 is another month of dividend income landing in my accounts. Recently, I switched my pay yourself first model to concentrate a little on debt repayment.  The interest on debt is 7.16% 6.66% plus the insurance on the debt.  During the last week, the Bank of Canada reduced the interest rate by 50bps or 0.50%.  I currently pay myself 10% of income from job(s) and non-registered accounts to my TFSA.  The TFSA income is staying within the account.  I will deviate the 10% to savings account instead of to TFSA if a large expense comes up like a dental appointment. 

Note:  All the dividends and totals below are in Canadian Dollars. 

       

 Non-registered Accounts

• Bank of Montreal (BMO) - $90.10
• Cineplex (CGX) - $24.00
• Emera Inc. (EMA) - $61.25
• Enerplus (ERF)  -$ 5.58
• Shaw Communications (SJR.B)  - $19.75

Subtotal : $200.68

TFSA

• A&W Royalties Income Fund (AW.UN) - $6.04
• Boston Pizza Royalties Income Fund   (BPF.UN) - $23.97
• Cominar REIT (CUF.UN) - $13.32
• Killam Properties REIT (KMP.UN) - $16.61
• Royal Bank (RY) - $58.80

Subtotal: $118.74

Total = $319.42

 I received a total of $319.42 in dividend income for the month of February 2020.  This represents a 2.77% increase from 3 months ago and 39.81% increase year over year.  

 The increase from 3 months ago is less than 3%.  Boston Pizza Royalties Income Fund announced a distribution decrease from $0.115 per unit monthly to $0.102 per unit. This decrease in dividend income was offset by the increase in the payment from Bank of Montreal.  

 I received dividend / distribution income from 10 different companies.   

  I received $0.00 in option premiums within my investment accounts in February 2020.

Below is a visual of my dividend totals for the last 5 years.  

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

How was your dividend income for February 2020?

Disclosure : Long all mentioned securities

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.