The 50K Report - Quick Update: Achieved Dividend Goal #1 ($17,784)

Dividend Goal #1 is derived by the Ontario Minimum Wage ($11.40/hr) x Minimum Full Time Hours (30) x 52 Weeks = $17,784.

An exciting milestone has been reached as my Bristol Meyers Squibb BMY Puts were assigned on Friday, December 16 and today I purchased some Toronto Dominion Bank (TD). Together these two stocks helped me achieve a yearly dividend (currency considered at par value) of $18,039.86794. This has broken through Dividend Goal #1 of receiving $17,784 by $255.86794.

Goal #2 is an increase of working hours to 37.5 taking the target to $22,230. Another $4,446-$255.8679= $4,190.13 to go.

However, this may be a temporary situation as retention of these two positions will be fluid. BMY was assigned last Friday and is currently underwater. I will hold on until profitability has been achieved and will hold until another opportunity is presented for a US stock. Though BMY seems to be a good hold as it helps round out my portfolio on the bio/pharma side and a slight +2.6315% +$0.01 dividend increase is coming up.

TD is an effort to utilize Covered Call writing. However, I am buying now close to the 52 week high, which was reached on today's intraday price $67.21. I sold it back in 2014 at $51.80. Totally should have held on and the dividend has increased since then.

US markets are blowing through all time highs and reaching DOW 20K... Nervous. TSX has been doing quite well.

The 50K Report - Market Continues Upward Trend Q3FY2016

The 50K Report – Market Continues Upward Trend (Q3 FY2016)

Q3 FY2016 (July, August, and September)

- $50,000 passive income target. (eg. $1,000,000 at 5% will yield $50,000 per year.)
- Calculation of Total Book Value Required: $50,000 / % yield = Book Value (eg. 4.31% = $1,160,092.81)
- Current Target Book Value @ 4.6878%: $1,066,598.40
- Next major update: End of Q4FY2016 (October, November, and December).

Investment Goals:

1. Continue adding to higher quality large cap equities.
2. Continue slimming down number of holdings within portfolio.
3. Continue seeking opportunities to broaden portfolio by sector.
4. Focus on stocks that have a DRIP plan.
5. Continue concentrating existing holdings to achieve $1,000 dividend mark (1K Club)

Distribution Changes:

- Distribution income decreased from Q2FY2016's $16,792.77 to $15,334.55. (-$1,458.22 or -8.6836%)
- Decrease mainly due removing Canadian Western Bank (CWB); doubled Canadian Apartment REIT adding it to 1K Club; added 100 more shares of Enbridge Income Fund to bring it into the 1K Club; Enbridge Preferred Share Series R added 15 shares via DRIP bringing it into the 1K Club; reduced Sunlife Financial SLF by 100 shares; and removed Wells Fargo WFC.
- Achievement of reaching the Minimum Wage Goal of $17,550 is now at 87.37% with $2,215.45 outstanding.

Progress for Q3 FY2016. (Values represent potential full year cash flow.):

Book Value	$327,113.90
Yearly Distribution	$15,334.55
Yield Total	4.68%

- 3 goal posts: $17,550 (Approximate Minimum Wage), $25,000 (Half-way), and $50,000.

Dividend Goal	% Completion	Remaining
$50,000	30.69%	$34,665.45
$25,000	61.33%	$9,665.45
$17,550	87.37%	$2,215.45

Holdings:

- Monthly Change:

July

Book Value: $314,151.397115

Yearly Dividend: $14,801.76496

Yield Total: 4.711666%

August

Book Value: $320,146.073931

Yearly Dividend: $15,013.72552

Yield Total: 4.689648%

September

Book Value: $327,113.900313

Yearly Dividend: $15,345.3688

Yield Total: 4.691139%

Updates:

- Added: Small position in Imvescor Restaurant Group (IRG)
- Increased: CAR.UN and ENF

- Decreased: SLF

- Removed: CWB

Upcoming:

- Updating the goalposts and adjustments on Minimum Wage and hours worked.

The 50K Report - Q2FY2016

Q2 FY2016 (April, May, and June)

- $50,000 passive income target. (eg. $1,000,000 at 5% will yield $50,000 per year.)
- Calculation of Total Book Value Required: $50,000 / % yield = Book Value (eg. 4.31% = $1,160,092.81)
- Current Target Book Value @ 4.557%: $1,097,120.388
- Next major update: End of Q3FY2016 (July, August, and September).

Investment Goals:

1. Continue adding to higher quality large cap equities.
2. Continue slimming down number of holdings within portfolio.
3. Continue seeking opportunities to broaden portfolio by sector.
4. Focus on stocks that have a DRIP plan.
5. Continue concentrating existing holdings to achieve $1,000 dividend mark (1K Club)

Distribution Changes:

- Achieved highest distribution amount of portfolio.
- Distribution income increased from Q2FY2016's $14,221.3584 to Q2FY2016's $16,792.77. (+$2571.4116 or +18.0813%)
- Yield remains roughly the same as Q2.
- Increase is mainly due to doubling holding of Canadian Western Bank (CWB) to average down in anticipation of temporarily higher oil prices; Averaging down Manulife; adding more IPL to join 1K Club; and addition of Enbridge Income Fund (ENF).
- Removed FairFax Financial Preferred Shares Series I (FFH.PR.I), InnVest REIT (INN.UN), and TMX Group (X).
- INN.UN buyout was announced in May. Missed buyout opportunity.
- Dividend Cut and frequency change from Monthly to Quarterly payout for GoldCorp (G).
- Achievement of reaching the Minimum Wage Goal is now at 95.69% with $757.23 outstanding.

Progress for Q2 FY2016. (Values represent potential full year cash flow.):

Book Value	$368,473.76
Yearly Distribution	$16,792.77
Yield Total	4.56%

- 3 goal posts: $17,550 (Approximate Minimum Wage), $25,000 (Half-way), and $50,000.

Dividend Goal	% Completion	Remaining
$50,000	33.59%	$33,207.23
$25,000	67.17%	$8,207.23
$17,550	95.69%	$757.23

Holdings:

- Monthly Change:

April

Book Value: $336,133.296205

Yearly Dividend: $14,782.138120

Yield Total: 4.397701%

May

Book Value: $321,571.687479

Yearly Dividend: $14,780.570160

Yield Total: 4.596353%

June

Book Value: $368,473.758979

Yearly Dividend: $16,792.7694

Yield Total: 4.557385%

Updates:

- Added: ENF
- Increased: CWB, MFC, IPL

- Dividend Increased: T, WFC
- Removed: FFH.PR.I, INN.UN, X

Upcoming:

- Still working on getting this 50K report in a more timely manner.

- Continue working on new report called the 1K Club to show holdings that have crossed over the $1,000 dividend mark.

Can't Let It Get To Your Head

The markets have been on fire since Trump won the US Presidential election back around mid November.

The US Fed has also been leaning towards a rate hike. In spite of this US markets have soared, reaching new highs. Canadian TSX has followed. The financial sector, no surprise, has made the gains with utilities and telecoms getting sold.

Stories of the Dotcom bubble come to mind where there were cases of people quitting their jobs because they were making so much money in the markets.

With rising portfolios comes the thought that we have the magic touch, but we need to realize almost everybody else is doing well. It's generally the market making us winners not entirely our skill. The strategy we employ in this environment might not work and could reverse if the market sentiment changes.

Those Dotcom bubble trader examples were wiped out and out of a job when the bubble burst. It was an illusion in a different type of market.

We need to keep our heads and not let our success get to our heads. Otherwise we take unnecessary risks that come back to haunt us later.

Choppy accumulation of Manulife $MFC

In terms of capital appreciation Manulife Financial has done poorly over the years, but it has been left as an integral part of my 50K Dividend goal.

A small 10 share position at $23.69 was initiated September 23, 2009. However, MFC slid further and 100 more shares were added at $18.84 on December 15, 2009. Taking the year's average price to $19.4618.

Over the years more shares were added at varying prices via direct share purchases and Dividend Reinvestment.

Average Price at Year-End:

2009: $19.4618

2010: $17.0131

2011: $15.9463

2012: $15.9209

2013: $15.9337

2014: $17.9087

2015: $19.9372

2016 (as of October): $19.2009

2015 signalled the high point of my MFC position when the June 26, 2015 DRIP acquired 3 shares @ $23.68. It took under five and a half years for MFC to round trip back to what I paid in the 2009. 

After that peak MFC retreated significantly. It slid back as the oil oversupply crisis was starting to intensify and talk of MFC's oil related portfolio caused great uncertainty in the stock. This prompted me to acquire more shares @ $20.50 in September and then again @ $21.80 in November.

The oil crisis deepened in the start of 2016 and MFC slid alongside. This was my chance to add MFC to my 1K Club and take the risk of averaging down then wait for a recovery of the share price and reduce my exposure. The risk of course being that MFC continues lower and my position could grow to large in relation to my other holdings.

Buy	2016-03-29	10	18.86
Buy	2016-05-10	280	18.56
Buy	2016-05-13	290	18.04
Sell	2016-05-27	250	19.48
Buy	2016-06-03	200	19.04
Buy	2016-06-10	200	18.04
Sell	2016-10-11	300	19.37

The markets got a little iffy on May 10, but the price was good to load up my position to 1360 shares bringing MFC to the 1K club with a $1,006.40 yearly dividend.

The stock declined further prompting me to add even more shares on May 13. Fortunately, by end of month the price rebounded giving an opportunity to reduce my position at a small profit. Average price: $19.3756.

Markets remained choppy and again within a short period of time I overloaded my position by adding shares twice at lower prices. A few uncomfortable months later on October 11 with interest rate hike speculation increasing MFC rose again allowing me to pare back. Average price: $19.2009. Yield: 3.8539%.

The year isn't over yet and there will likely be more opportunities to average down my long position.

DRIP Report (On Hold)

Since approximately April/May 2016 the majority of DRIPs in my primary portfolio were ceased. I was starting to get close to buy a property and needed the cashflow. While the property deal did not go through it has been uncertain whether another opportunity would open up. As such DRIP Report is on hold.

Certain DRIPs will remain such as those in my secondary portfolio and the Registered accounts TFSA/RRSP.

Currently:

CAR.UN 2% DRIP discount makes this worthwhile. Although rate hike fears and Canadian mortgage changes adds some uncertainty to it and similar REITs.

GWO letting it ride. Eventually, I add it to the 1K club via Secured Put or straight equity buy.

ENB.PR.T deep underwater on this one. I'll keep adding it to average down, income, and eventually in the unknown future it may be redeemed by Enbridge.

BCE.PR.H deep underwater on this one. Same reasons as above, but a rate increase could benefit the Prime Rate.

YRI on DRIP, but barely makes enough to purchase a share.

G on DRIP, but doesn't make enough to purchase a share.

AP.UN on DRIP, but does not make enough to purchase a share.

IIP.UN 4% DRIP discount makes this worthwhile. Same issue with rate hike fears and Canadian mortgage changes.

BBD.PR.B deep underwater. Same reasons as BCE.PR.H.

FIE letting it ride.

DIV 3% DRIP discount, but my secondary portfolio is within a brokerage that does not provide the discount. Deep underwater.

GRC a write off at this point. Continuing the DRIP to average down.

AXY new addition.

TWM new addition.

MTL new addition. doesn't make enough to purchase a share.

HSE Dividend continues to be suspended.

Club 1,000 - Concentrating Positions For More Dividends

Originally written: May 11, 2016.
Posting as is: October 9, 2016

Diversification is great to a certain extent. For a regular investor like myself holding maybe 20 or so stocks is more than enough to keep track. Over time adding little positions here and there makes the 20 grow into ever more positions and this becomes harder to track and manage. As well, commissions start to not make sense as they accumulate on almost inconsequential additions.

I decided to work on concentrating my portfolio through reducing the number positions. One of the reasons why I temporarily dropped INN.UN a few weeks ago and regretted it when a takeover was announced. Regardless, another other way to prevent further widening of the portfolio is to divert resources concentrate existing positions and gain greater dividends from them.

With this in mind I looked at my current non-registered account positions and noticed a few holdings that give me less than $100 per year. The bulk of holdings range between $200 and $700, which are along their way to becoming larger holdings. Then I've got my handful of $900 to +$1,000's, with the $900's within 30-50 shares away from tipping into the $1,000 mark.

Effectively, I now have four stocks in Club 1,000. Until May 10th, I only had 2 full unencumbered holding within Club 1,000: Bank of Nova Scotia and Bank of Montreal. Manulife Financial has been underwater for some time so I took the opportunity to increase my holdings and bump up the dividend returns. I also have Covered Call options on Sunlife Financial expiring in July, which at current price would have dropped my dividends below the $1,000 threshold. Today May 11th, I decided to purchase more shares of Sunlife Financial to firmly place this holding's dividends above $1,000.

The next largest dividend payer is Enbridge Preferred Shares Series R, giving me $978.00, but the dividend and share price upside potential are both currently limited. Within 2 years the preferred share's rate will reset based on the Government of Canada (GoC) 5 year rate +2.50%. If the yield of the GoC remains low then the existing payout may change and drop the holding outside of Club 1,000. Ex-dividend is May 15 (yippie!) with payment on June 1st. At current price of $15.61 and total quarterly pay out of $244.50; the Questrade Dividend Reinvestment could comfortably add another 15 shares. Calculating further, with the current $0.25/quarter dividend then I gain another $3.75 of income totalling $981.75. An incremental gain of 0.0383% or 1.533% annualized.

Further down the list of existing holdings that I wish to increase for greater sector diversification in Club 1,000 are my Telecom/Media stocks BCE and Telus. They are still far off from the $1,000 mark, paying $487.52 and $600.60 respectively. They have been raising their dividends yearly and consistently, which has helped boost their contribution to the goal. However, for significant increases in the dividend returned, I am waiting for the opportunity of a decline in the share prices to purchase more.

The goal is to continue increasing the Club 1,000's dividends; diversify the Club's sector holdings; maintain a higher average yield for the overall portfolio; and increase the dividends from up and coming stocks. The preference is to raise up investments with higher quality and upside potential and this means increasing holdings of those more likely to raise their dividends and continuing to use Dividend Reinvestment Plans to automatically accrue more shares.

It will take a lot of time and potential setbacks, but this is all to push towards the $50,000 distribution goal. Which reminds me; I haven't put together the 50K Report for some time...

The 50K Report – Market Volatility (Q1FY2016)

Q1 FY2016 (January, February, and March)

- $50,000 passive income target. (eg. $1,000,000 at 5% will yield $50,000 per year.)
- Calculation of Total Book Value Required: $50,000 / % yield = Book Value (eg. 4.31% = $1,160,092.81)
- Current Target Book Value @ 4.5572%: $1,097,164.925
- Next major update: End of Q2FY2016 (April, May, and June).

Investment Goals:

1. Add to higher quality large cap equities.
2. Looking for opportunities to slim down number of holdings within portfolio.
3. Conversely, looking to broaden portfolio by sector.
4. Focus on stocks that can be DRIP'd.
5. Concentrate existing holdings to achieve $1,000 dividend mark (1K Club)

Distribution Changes:

- Distribution income declined from Q42015's $15,176.50 to Q12016's $14,221.3584.(-$955.1416 or -6.2935%)
- Decrease reflects movements made in reaction to market volatility and in particular crashing oil prices.
- Major reduction occurred March as two separate strikes of BNS Calls were exercised; reducing BNS holdings by 500 shares and $350.
- Achievement of reaching the Minimum Wage Goal is now at 86.47% with $2,373.49 outstanding.
- Noticed increasing TRP dividend was not recorded since Q4 2014.

Progress for Q1 FY2016. (Values represent potential full year cash flow.):

Book Value	$312,057.64
Yearly Div	$14,221.36
Yield Total	4.56%

- 3 goal posts: $17,550 (Approximate Minimum Wage), $25,000 (Half-way), and $50,000.

Dividend Goal	% Completion	Remaining
$50,000	28.44%	$35,778.64
$25,000	56.89%	$10,778.64
$17,550	81.03%	$3,328.64

Holdings:

- Monthly Change:

January

Book Value: $329,129.20

Yearly Dividend: $15,264.9934

Yield Total: 4.637994%

February

Book Value: $339,061.66

Yearly Dividend: $15,978.06372

Yield Total: 4.712436%

March

Book Value: $312,057.64

Yearly Dividend: $14,221.3584

Yield Total: 4.557286%

Updates:

- Reduced: BNS, IPL, T, INN.UN, CAR.UN

- Added: SLF, WFC, MCBC, X, TRP

- Dividend Increased: BCE, GWO, MFC, TRP
- Removed: NA, HSE
- HSE eliminated its dividend

- TRP dividend increased and noticed record was not updated since Q4 2014.

Upcoming:

- I'm working on getting this 50K report in a more timely manner.

- Adding a new report called the 1K Club to show holdings that have crossed over the $1,000 dividend mark.
- Markets have risen since Q1, we'll see how the portfolio has changed by the end of June.

Boring... Slow and Steady Dividend Motivation $BCE

I wanted to get this post up for some time and alluded to dividend investing paying off big time in my other post One Night at the Fairmont Royal York Courtesy of $INN.UN. Since that post my INN.UN position was unloaded as it was a relatively small position, and I needed to shore up my cash levels for more long term purchases. Hopefully, INN.UN will be re-added to my portfolio when the price is right.

Back in December 16, 2008 the Ontario Teachers' Pension Plan discontinued its bid to takeover BCE at $42.75. Unsurprisingly, the stock cratered from 2007's high of around $41.74 to the December 12, 2009 low of $21.23. However, looking in context a few years later with the price now at $59.28, more than doubling, it made plenty of sense to buy into the shares.

A few months after the OTPP cancelled its deal, for some reason, I decided it was time to make a large investment (relative to my net worth back then) of 75 BCE shares at an average price of $24.0697. Perhaps I was seeking dividends and finally raised enough money to make the purchase. A couple days later on May 22, 2009 the stock plunged 4.773% from the opening price on news that OTPP closed out its position in BCE. I happened to take a screenshot at end of day and was very likely relieved to see the price recovering from the day's low of $22.94, $1.06/share loss, to a more palatable closing price of $23.91 with a $0.1597/share loss.

The dividend record date was June 15 and paying out $0.3850/quarter, which yielded me a wonderful 6.398%. As an added bonus the next dividend grew to $0.4050, an increase of 5.1948%, and yielding 6.7304%. A 5.19% increase in my income within a few months is always welcome. Even better, since owning it for the last 7 years there have been a total of 11 dividend increases. The last dividend paid of $0.6825 represents a total dividend increase of 77.2727% or an annualized 6.4393%!

Declaration date	Record date	Payment date	Amount of dividend	% Increase
2009-05-06	2009-06-15	2009-07-15	$0.3850
2009-08-05	2009-09-15	2009-10-15	$0.4050	5.19481%
2009-11-11	2009-12-15	2010-01-15	$0.4050
2010-02-03	2010-03-15	2010-04-15	$0.4350	7.40741%
2010-05-05	2010-06-15	2010-07-15	$0.4350
2010-08-04	2010-09-15	2010-10-15	$0.4575	5.17241%
2010-12-09	2010-12-15	2011-01-15	$0.4575
2011-02-09	2011-03-15	2011-04-15	$0.4925	7.65027%
2011-05-11	2011-06-15	2011-07-15	$0.5175	5.07614%
2011-08-03	2011-09-15	2011-10-15	$0.5175
2011-11-02	2011-12-15	2012-01-15	$0.5175
2012-02-08	2012-03-15	2012-04-15	$0.5425	4.83092%
2012-05-03	2012-06-15	2012-07-15	$0.5425
2012-08-07	2012-09-14	2012-10-15	$0.5675	4.60829%
2012-10-31	2012-12-14	2013-01-15	$0.5675
2013-02-06	2013-03-15	2013-04-15	$0.5825	2.64317%
2013-05-08	2013-06-14	2013-07-15	$0.5825
2013-08-07	2013-09-16	2013-10-15	$0.5825
2013-11-06	2013-12-16	2014-01-15	$0.5825
2014-02-05	2014-03-14	2014-04-15	$0.6175	6.00858%
2014-05-05	2014-06-16	2014-07-15	$0.6175
2014-08-06	2014-09-15	2014-10-15	$0.6175
2014-11-05	2014-12-15	2015-01-15	$0.6175
2015-02-04	2015-03-16	2015-04-15	$0.6500	5.26316%
2015-04-29	2015-06-15	2015-07-15	$0.6500
2015-08-05	2015-09-15	2015-10-15	$0.6500
2015-11-04	2015-12-15	2016-01-15	$0.6500
2016-02-03	2016-03-15	2016-04-15	$0.6825	5.00000%

I added more shares since that the initial purchase both from a synthetic Dividend Reinvestment Plan through my broker and additional purchases from the market. As a result the average cost has increased my yield has changed with the purchases. Looking at the original investment of 75 shares, by now they would have been yielding 11.342% and paying out $51.1875/quarter.

One rough final metric I like to use is my "Years to Freedom". This is roughly the number of years before the investment at the current dividend will pay off for itself by returning the principle paid. Everything afterwards starts generating funds in excess. The original investment's principle and dividend would have paid off in 15.63 years and with the current dividend that has now reduced to 8.82 years. Since the start the 75 shares have returned $1,149.5625 in dividends and the original principle $1,805.2275 leaving a deficit of $655.665. Based on the 75 shares' current quarterly return of $51.1875 then I've got about 13 quarters/3.2022 years to go.

While there is always a risk of a company cutting their dividend this risk is reduced (not eliminated) by purchasing quality companies with a track record of dividend increases. Hopefully, you can see the power of having patience and increasing dividends. There are many other examples of companies like BCE raising their dividend overtime and this increasing dividend is the basis of some long term dividend investment strategies.