Passive Income Update – Jun 2016

Welcome to our monthly passive income update for June 2016. This is part of the scorecard series where we track our dividends and other sources of passive income. We also include changes and updates related to our investments during the month – showing the growth of our dividends going forward.

Passive Income  Update

Passive income for the month of June 2016 was C$1,151.07 — an all time high and crossing into the magical four digits for the very first time!!! 🙂 A big reason for reaching that number was thanks to writing a covered call option on my IAMGold position. The passive income for the month comprised of US$455.02 and C$559.54 (exchange rate is US$1 = C$1.30).

Monthly Passive Income - Jun 2016

Passive income change is 33.5% QoQ and 67% YoY for the month. The passive income YTD is $4,572.38, which achieves 50.8% of our annual goal of earning $9K.

Even though this was a spectacular result, and my passive income mid-year is right at the 50% mark, I will most likely fail to reach my goal of $9K for the year. As most regular readers are aware, I sold off a big part of our portfolio which drops our forward dividend income. Dividend income plays a big part in our overall passive income sources. I am personally ok with failing to reach this goal for the year, as I wanted to take some money off the table for the reasons mentioned in the article.

image (3)

Passive income contributing entities:

Stocks:

  • Archer Daniels Midland (ADM)
  • Amgen Inc (AMGN)
  • Brookfield Infrastructure Partners LP (BIP.UN.TO)
  • Canadian National Railway (CNR.TO)
  • Canadian Utilities Ltd (CU.TO)
  • Cineplex Inc (CGX.TO)
  • Inter Pipeline Ltd (IPL.TO)
  • Johnson & Johnson (JNJ)
  • Magna International (MG.TO)
  • Main Street Capital (MAIN)
  • Power Corp of Canada (POW.TO)
  • Qualcomm Inc (QCOM)
  • Realty Income Corp (O)
  • Thomson Reuters (TRI.TO)
  • Ventas Inc (VTR)
  • Wells Fargo & Co (WFC)

Options:

  • I wrote 7 covered call options on IAMGold (IMG.TO). Strike price: C$6.00
    • On a massive rally the day after Brexit vote, I decided to write covered call options on this security as I don’t mind selling it. I am looking to upgrade in terms of quality of my gold mining holding.

Funds:

  • BMO Aggregate Bond Index ETF (ZAG.TO)
  • Scotia Diversified Monthly Income Fund (mutual fund)
  • Vanguard FTSE All-World Ex-Canada Index ETF (VXC.TO)

Other:

The breakdown of our passive income contributing entities: dividends and options premium totaled $760.33 and other passive income totaled $390.74. Read more about why we consider this as passive income in the Passivity Index post.

Portfolio Update

Dividend Increases

June saw dividend increase announcement from the following in our current holdings.

  • Realty Income Corp (O) announced a 0.25% raise

Added Positions

  • I initiated a small speculative play position in Critical Elements Corp (CRE.V)
  • US Equity & International Equity Index Segregated Funds – details shared here

Closed Positions

Following positions were closed. Details of why I chose to close these positions are detailed in this post here.

  • Apple Inc (AAPL)
  • Agrium Inc (AGU.TO)
  • Amgen Inc (AMGN)
  • AT&T (T)
  • Cineplex Inc (CGX.TO)
  • General Electric (GE)
  • Main Street Capital (MAIN)
  • Thomson Reuters (TRI.TO)
  • Wells Fargo & Co (WFC)

That’s all folks! Hope you had a great June as well. Be sure to share your thoughts, comments or concerns below. I love hearing from the readers.

Disclosure: My full list of holdings is available here.

< Passive Income

Stay updated: Be sure to stay updated on all the posts by subscribing via email or following via Twitter, Google+Facebook, Instagram or Pinterest.

32 thoughts on “Passive Income Update – Jun 2016

  1. Wow you smashed through that barrier congrats! Got to love owning O, what a gem of a stock. I really need to learn more about option trading, I understand them from an academic perspective but never attempted a trade… maybe one day. Awesome month!

    • O has been on quite a tear and most REITs seem to be rallying quite a bit….I have wondered if this was because of the upcoming REIT sector creation in the GICS classification. If it is, we might see some stability after its done and Im sure index funds will be including O as one of the top holdings.

      R2R

  2. Congrats on the $1k month! That’s still eluded me so far although I expect September might be able to get me there if I get on track with regular writing. What was the biggest reason for the jump in passive income both QoQ and YoY? Do you attribute that mainly to dividends or your other passive income sources? Because those are some huge numbers on both fronts. About how much did your dividend income drop from all of the sales?

    All the best R2R and best of luck in the second half. Maybe your other passive income sources can help pick up the slack.

    • Hi JC,
      The jump was due to option writing on the IAMGold position. I decided to write a covered call the day after the Brexit vote once the shares rallied. If they get called, I am ok with it as Ive been looking to upgrade to a better company anyway.
      The sales will probably drop my forward dividends by 20% or so….even though I sold a lot of companies — some of them are low yielders and a big part of the income I receive (my heavy hitters) comes from REITs — which I intend to continue holding. So, all things considered, the stop isnt so bad.

      Hope you get to hit the $1K number in Sep. Best wishes
      R2R

  3. Hi R2R

    Congratulations on your record-setting month of dividend income! Don’t you just love those quarter-ending months!?

    BTW, there are some $XXX amounts in your article, which you may want to fix 🙂

    Cheers
    FerdiS, DivGro

  4. R2R,

    Wow that’s an impressive month! I enjoy seeing more and more of you guys starting to eclipse the $1000 mark. I too have several covered calls outstanding and love the extra income that it can create. If the shares get called away, no big deal. Buy them back or reinvest the capital elsewhere.

    MDP

    • Thanks MDP. Hope you had a great month too. I dont think I will be crossing $1K again for a while, but it was good to experience that this time around 🙂

      Best wishes
      R2R

  5. Huge congrats. All time high at $1100. That’s a great accomplishment. Your dividend income growth is amazing as well over years. Great job! 🙂 We just achieved $200K of milestone (avg of $500-600 monthly dividend income) since we started financial independence journey 2 years ago. It wasn’t easy but I can see the growth getting faster and faster. I am very glad that we are doing it together.

    Cheers.

    BeSmartRich

    • Thanks BSR. I still remember clearly when I was making $100 per month and thinking ‘Whats the point?!’ 🙂

      Thats great news that you have hit a $200K milestone. Keep it up. You should see the returns increasing month after month.

      Best
      R2R

  6. Roadmap,

    DAMN! Killing it over there, you beat me out, no!!! However, if you convert from Canadian to US – I may have you beat haha. GREAT month and pumped to see what else you have up your sleeve as you close out the 2nd half of the year. Congratulations!

    -Lanny

    • haha you got me there, Lanny. When converted to US$, your income sure is higher. I will be lagging again going forward as I expect my dividend income to drop a bit after all the sales. Hopefully the market will provide some good opportunities in the coming months.

      Best wishes
      R2R

  7. It’s very encouraging to keep reading from various DGI bloggers that are reaching all time highs from their passive income. Just goes to show what a dividend growth strategy can achieve over time along with other sources such as options premiums etc. Always love seeing ADM in other dividend portfolios too. Congrats on a four digit month. Thanks for sharing.

    • Thanks DivHut. The options premium just pushed me past that $1K post. Great feeling that I didnt think was achievable when I started this journey. ADM is such a great company — its one of those buy-and-forget companies. I shouldve added more when it was trading at $32 a few months ago..but didnt have the cash ready. Next time it falls, I will be waiting to buy more.

      cheers
      R2R

  8. Hi R2R,

    I’ve been following your journey for 2 years now. Great progress getting that 4 digit passive income! I’m almost at 3 digits myself, which feels like a great accomplishment as well.

    Keep inspiring people!
    Best wishes, DfS

    • Hi DFS,
      We’ve both come a long way. Congrats on passing into the three digits! The start is harder and the journey becomes easier as you build on your previous income. Keep on truckin’ along!

      Best wishes
      R2R

Leave a Reply

Your email address will not be published. Required fields are marked *