Annual Update – 2017 Review

Welcome to the annual 2017 update. This is part of  a series where I track our financial progress on a regular basis. I present three parts in this series: (i) Investment & Portfolio Update, (ii) Passive Income Update, and (iii) Goals Update.

1. Investment & Portfolio Update

2017 was quite an interesting year. The broad equity markets performed very well with S&P 500 returning ~19%. Regular readers of this blog may be aware that I have been following a multipronged approach to investing lately — with a focus on diversification and following multiple strategies for different portfolios. I focus on active stock investing in both dividend growth companies and growth-focused companies, while my wife’s and daughter’s portfolios use index funds.

The companies from our portfolios increasing their dividends and details of portfolio changes are summarized below.

Portfolio Highlights

2017 saw our portfolio grow quite a bit thanks to big contributions into our tax sheltered accounts during the course of the year. In addition, our portfolio had amazing growth thanks to two hot sectors of investing: crypto and weed. I started researching and investing in cryptoassets during the summer; while I started investing in weed stocks in the fall. Both of these parts of my portfolio have grown beyond my wildest imaginations (I am close to having my first ten bagger in my crypto portfolio). While I sit on plenty of unrealized gains, I also managed to take advantage of the volatility in these sectors to book some gains. Some of the gains we realized in 2017 include:

2. Passive Income Update

A great year on the passive income front. In 2017, we managed to earn a passive income of $9,697.25. While this fell about ~$300 short of the $10K goal, I am still extremely happy with the progress.

‘Other’ Passive Income

Passive income that we achieve is split between investments from dividend paying companies, writing covered call options and what I call other sources of passive income, which includes cash back rewards credit card, advertising revenue from this blog, affiliate programs, interest on cash, writing for Seeking Alpha, cryptocurrency mining etc. As you can see from the chart below, our other category has been a consistent source of the months/years.

I realize that some of our sources of passive income are not completely passive, as it requires us to put some time and effort into it. However, I consider these sources to be semi-passive and I wrote an article to capture my thoughts on the scale of passivity of each income type. Be sure to check out Passivity of Income.

3. Goals Update

Onto the goals that I set and see how we did overall on that front.

  • Earn $10,000 in annual passive income Failed!
    • Passive income for 2017 was $9,697. While this number is not terrible by any means, we still fell short on the $10K goal I had set in early 2017.
  • Start two portfolios for our daughter – one for post-secondary education via RESP (Registered Education Savings Plan) and the other- a DRIP plan Achieved!
    • I started the two portfolios mentioned and have been making regular contributions to grow these accounts. See the details here.
  • Pay down an extra 25% towards mortgage debt Failed!
    • We failed to pay any extra amount on the mortgage debt. We decided to hold off on paying extra until we sorted a few things out financially in other areas of our life. However, I intend to up this target and start whittling away at the mortgage debt starting 2018.
Not the best achievement rate on the goals, with 2/3 goals failing. Nevertheless, this shouldn’t be disheartening as it tells me that I am not aiming too low. I will up these goals for next year and work towards achieving them. Stay tuned for the upcoming post on the Goals for 2018.
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That’s all folks! Thanks for reading. Be sure to leave a comment at the bottom – I love to hear from the readers on your thoughts and opinions.

16 thoughts on “Annual Update – 2017 Review

  1. The passive income is growing nicely, but am I correct in noticing a slowing trend? Is that because you are making more money with capital gains and playing around with other assets? Anyhow, nice year again Mr R2R!

    • Thats right, CF. I sold a bunch of my dividend growth holdings in 2016 and have been investing more actively in other areas, which are seeing better returns. Still hoping to keep that income growing…lets see what the new year brings.

      R2R

  2. Congrats on a solid year.

    Just curious -why are you looking at paying down the mortgage faster vs investing the difference? Have you already maxed out RSP/TFSA for the wife and yourself? If not you will probably see much better gains in the market vs the debt reduction..at least at current interest rates (though admittedly the piece of mind may be worth it to be mortgage free sooner).

    Those are some crazy gains on the Crypto/Weed stocks as well. I am in the same boat – wondering if i should continue to ride some out – or take some profits.

    • The mortgage paydown is more for psychological comfort. Yes, the interest rates are low, but they are also rising although I dont expect to see them going north 4% anytime soon….but who knows. I would still like to have lower debt. I am making pretty good returns in the market so far, but with the markets hovering at all time highs, theres only small spots of investing where real gains can be made. Crypto and weed are definitely the two places where we are seeing a lot of capital inflow and am amazed at the growth rate.

      R2R

  3. JC says:

    Looks like a pretty solid year Sabeel. Out of curiosity what’s the reason for paying extra on the mortgage? Just to knock out the debt for security/stability reasons or is the interest rate relatively high? Ours is low enough that I think we’ll come out ahead in the long run by investing the extra payments. Although I wouldn’t be opposed to having it completely gone because that frees up so much cash flow every month.

    • Mostly psychological, but also the rising rates. Mortgages are structured a bit differently here in Canada — we get a rate for 5 yrs and then they are reset based on current central bank overnight interest rate. So, the next time we are due for a renewal, I want a smaller debt load. In addition, we want to be mortgage free much before the current 20+ years remaining, so that we have more piece of mind for FIRE (or atlast partial FIRE).

      R2R

      • JC says:

        That’s interesting about the mortgages there. Is that all mortgages or are there fixed rate options? We have fixed rates and ARMs and the ARMs work similar to what you described. Is the rate fixed for 5 years and then resets every 5? That definitely changes the equation and I don’t blame you one bit for wanting to reduce your debt load in that scenario. Our plan with the mortgage is to build up the portfolio rather than paying extra on the mortgage for now and then once our investments get to self-sustaining level to produce enough income for FIRE of some sorts then we’re going to aggressively pay down the mortgage. Lots of moving parts but I think in the long run that’ll work out best.

        • Hi JC,
          Mortgage owners need to pick either variable rate or fixed rate for the duration of 5 yrs (although there are mortgage options, like what we have, where we can switch from variable to fixed if we choose to in the middle of the 5-yr period). Once the 5 yrs are up, you renegotiate and renew your mortgage for the next 5 yrs, based on the overnight interest rates at the time.
          Based on what you have in the US, it def makes sense to carry the mortgage debt and invest the extra money. I believe you also have tax credits for the mortgage debt? We dont get that either. We are not aiming to pay it down aggressively or anything…just want to chip away at it slowly and surely so that we dont carry mortgage for 20+ years.

          R2R

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