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.

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.

Executed My First Covered Call Roll Forward (TransCanada Corporation $TRP)

Not long ago I added a "Covered Call" component to my investing strategy. Then as the markets tanked further I found this tool to be useful as a "Hedge-Lite". The markets have been riding up lately and as outlined before as a risk; the hedges turned to "Sellers Remorse". I sought to preserve my position as the price of TransCanada Corporation ($TRP) rose above my Covered Call's Strike Price.

January 22:

- Original holdings of 244 shares + waiting for another 2 shares from DRIP.
- Wrote 2 March 18 Covered Calls $49 for $0.85 premium per contract.
- Average premium net of commissions: $0.78775
- Total Premium: $157.55
- TRP continued on its upwards trajectory.
- TRP Closing Price: $46.89

January 28:

- TRP rose within range of $48 and hence I became fearful of a quick climb towards $49.
- Added 54 shares @ $47.89.
- Average share price: $39.2530537
- Wrote a final 3rd Call @ $49 for $1.60 premium per contract.
- Average premium net of commissions: $1.021166667
- Total Premium: $306.35
- TRP Closing Price: $48.57

Feb 4:
- TRP Closed above Strike Price: $49.02

February 5:

- DRIP executed, purchased 2 shares @ $47.77
- Average share price: $39.3098
- TRP Closing Price: $49.40

February 22:

- TRP Closing Price: $50.80
- In The Money Calls meant I would be more likely to be assigned and lose the shares.
- Sellers Remorse kicked in and a bit of attachment as I've owned TRP since February 18, 2009. (Literally, 7 years!!!!)
- Wanted higher compensation for my shares, but buying back the Calls would be costly.
- Closing price of the Calls: $2.53.

The solution to my Seller's remorse was relatively simple: Do a Roll Forward. Ok, maybe not THAT simple, but the concept is to buy back the options then write a new set of options to garner a higher premium that can offset the difference in prices.

However, the only way to make up for the losses would be to write a further out Premium. I found my target looking out to the May 20 expiry and a higher Strike price of $52.

Here's how the Roll Forward was executed:

- Bought To Close the 3 outstanding March 18 Calls $49 @ $2.14.
- $655.70 (Closing Premium Paid) - $306.35 (Original Premium Received) = $349.35 loss upfront.
- Wrote 3 new May 20 Calls $52 @ $1.45.
- New Premium: $421.30
- $421.30 - $349.35 = $71.95 Premium Offset and Gain.

End result:

- Covered losses with new money.
- Removed the obligation to sell my shares at a lower than current market price.
- Added a new potential obligation to sell my shares, but at an increased sell price from $49 to $52.
- Extended the Covered Call's "Hedge-Lite" from March to May (two months).
- Maintained dividend potential for the ex-dividend date March 27, but not June 26.
- The extended time gives me an opportunity to re-assess whether I will need the hedge.
- I'm still quite emotional about my stocks and a sense of 7 year long ownership that TRP has given me (Yea, guess I'm old school). Letting go will/would be difficult.

Psychological Threshold: Portfolio Turning Red (Mid-January 2016)

Well, it's been a bumpy ride, but it isn't the worst that things could get. These last few months have been marked by volatile and declining markets, which have given me reason to slightly pause from my current path. However, since New Years the declines have accelerated and this past week of January 11, 2016 marked a turning point: my primary non-registered portfolio crossed over into the Red.

Leading up to the New Year my portfolio was in the green $10,000 then declined further as we crossed into 2016. By January 11 all the paper gains evaporated and on that first day it seemed fine with an overall ~-$100 loss. As the week wore on it accelerated and has now closed -$5,160.79. My other portfolios were already in the Red for some time, so they have not been of any surprise.

What does this mean? Having gone through superficially the Internet/Dotcom bubble and the 2007-2009 "Financial Crisis" there is a certain amount of fear in my mind of the potential declines. My portfolio and strategies have evolved since that time, but so has my experience. I discovered long ago that trading and timing is definitely not my forte so the route of passive income and growth was how I geared my portfolios. Hence, I've created my DRIP'd Report and 50K Report in order to keep track of my income goals and to stay on track.

A couple factor have added to some uncertainty; my extreme home bias and the declining CAD$. Both of which I will need to fix, although it is late in the game and buying USD at these low CAD rates is definitely not preferable.

Looking forward, I am absolutely expecting a lot more pain in the markets as it feels the declines within the peripheries of the global economy have crept deeper in the core areas. This Wednesday January 20, 2016 will be another Bank of Canada "Interest Rate announcement and release of Monetary Policy Report", it is expected that we move towards another rate cut. The BoC also noted they have in their back pocket the ability to do Quantitative Easing and Negative Interest rates. In their back pocket for extreme circumstances and regardless of whether they will pull those tools out; they are now in the back of our minds.

The 50K Report - Income Jump (Q4 FY2015)

Q4 FY2015 (October, November, and December)


- $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 @ 4.65%: $1,074,949.34

- Next major update: End of Q1 FY2016 (January, February, and March).

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 more on stocks that can be DRIP'd.

Distribution Changes:

- Distribution income jumped higher from Q3's $11,321.85 to Q4's $15,176.50. +$3,854.65 or +34.046%

- Represents highest potential yearly distribution ever.

- "First goal post" moved further out to $17,550. Effective October 1, 2015 Ontario Minimum wage was increased to $11.25/hour.

- Explanation of "First goal post" Minimum Wage: Number of Hours (Min. 30 hrs) 30 x # of Weeks 52 x (Minimum Wage: $11.25) $11.25 = $17,550.

- Achievement of reaching the Minimum Wage Goal is now at 86.47% with $2,373.49 outstanding.

- Revision for Q3 FY2015 50K Report, minimum wage:

Dividend Goal	% Completion	Remaining
$50,000	22.643708%	$38,678.15
$25,000	45.287416%	$13,678.15
(REVISED Q3) $17,750	63.785093%	$6,428.15

- Here's how it has been coming along as of Q4 FY2015. (Values represent potential full year cash flow.):

	Book Value		Yearly Div
Total	$326,323.596873		$15,176.506280
		Yield Total	4.650754%

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

Dividend Goal	% Completion	Remaining
$50,000	30.353013%	$34,823.49
$25,000	60.706025%	$9,823.49
$17,550	86.475819%	$2,373.49

Holdings:

- Increased BNS, CAR.UN, CWB, ENB.PR.T, IPL, NA, MFC, SLF, and T.

- Added FFH.PR.I

- Removed EMP.A

- Not sure if I should still include HSE in my dividend list as their last dividend was changed to a "Stock Dividend" instead of "Cash Dividend".

Upcoming:

- I'm working on a monthly DRIP Report. As the name suggests it will be a report showing the DRIPs completed each month. It will be exciting to keep track of how my long term investments have been progressing in terms of developing future income.

The 50K Report - Getting income up to speed (Q3 FY2015)

Q3 FY2015 (July, August, and September)

- Income portfolio began in 2008.

- $50,000 passive income target.

- $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)

- Next major update: End of Q4 FY2015 (October, November, and December).

- Shift focus towards quality and large caps.

- Here's how it has been coming along as of Q3 FY2015. (Values represent potential full year cash flow.):



- September 30, 2015 Totals (All accounts):

	Book Value		Year Div
Total	$262,529.033006		$11,321.854040
		Yield Total	4.312610%

- 3 goal posts: $17,160 (Approximate Minimum Wage), $25,000 (Half-way), and $50,000.

Dividend Goal	% Completion	Remaining
$50,000	22.643708%	$38,678.15
$25,000	45.287416%	$13,678.15
$17,160	65.978170%	$5,838.15

Staying the course for steady investment gains

A couple years before the Internet Bubble popped I acquired my first couple investments and let them sit there.  It wasn't until 2007 when the Financial Crisis was starting to explode and after university when I began working that I started paying attention to my tiny portfolio.

Back then with my limited funds and some unsuccessful trades it became obvious I needed a new strategy: portfolio of passive income, ie. dividends.  It has been fun, but time consuming and frustrating to build this portfolio over the years and the process continues.

There are plenty of blogs out there of how to create an income/dividend portfolio, but I want to share my thought process, moves, concerns, and most importantly my mistakes.

Hopefully, you will find something useful on this blog.  You can read my original blog at theamateurmojoinvestor and follow my twitter feed MOJOJONO.