Yes, indeed, you are reading it right. We expect to receive $41,500 in passive
income in 2020. Wow! It is like we have an imaginary member of our family working hard and helping us achieve our goals. We have been on our financial journey only six years, and it is incredible to expect such a return in 2020.
In 2015, we made our first investment in stocks that pay dividends, and then we set our first financial goals for 2016. It was a first step, and we did not know where it would take us. Start your journey and the results will come! Regarding personal financial goals, no one cares more about your money than you do.
I would like to thank 2019 for being very good to us. We almost fully achieved our goals, but as they say, if everything is under control, it only means you are not moving fast enough. We traveled a lot this year — from Orcas Island to Orlando to cruising in the East Caribbean. Thanks to our passive income streams, we stayed on the course to financial freedom, even while spending money on vacation.
Let’s review how our 2019 performance served our financial goals. We set them here.
2019 in Review:
We received $11,278 in dividends, beating our goal by $778. We exceeded our dividends income goal mostly because of a Genworth MI Canada (MIC) special dividend. MIC paid us a dividend of $784 beyond its regular distribution of 5.83 percent. The current MIC yield is 3.81 percent; however, taking into account dividend hikes and dividend reinvestment over time, our yield was 5.83 percent. This is fantastic! We are close to receiving $1,000 in monthly income solely from dividends.
We profited $16,375 from our investments in private mortgages.
Our investments in Lending Loop resulted in a return of $2,328, which was significantly greater than the $2,040 we expected.
Credit card cash-back rewards totaled $1,397; however, we must watch our spending — our long vacation contributed significantly to this number.
Our income from rental properties was a negative number (-$3,444) because we refinanced one of our condos. We borrowed money against our property, which is what brought this number to negative territory; however, it was offset by income from private mortgages.
So, in total, our passive income for 2019 was $27,934.
This is amazing! We did nothing to receive almost $28,000. Although it is $2,000 less than we anticipated, I am very proud of our achievement.
Simply reinvesting $28,000 will make you a millionaire within 15 years, but we are going to accelerate this growth by investing more in income streams that generate passive income.
Looking Ahead to 2020:
Dividends $13,000:
Our current projected income from dividends is $11,140. That number does not include dividends hikes in 2020. I am assuming that some of our holdings will increase their dividends despite uncertainty in the market now. Along with DRIP I would estimate the organic increase as of $400 in 2020.
We are going to maximize our TFSA contribution in the coming year. The TFSA limit is $6,000 in 2020, so the combined limit for my wife and me is $12,000. Receiving a conservative 3.5% profit on $12,000 would yield $400.
To compensate for receiving income from real estate, we will deposit $15,000 into our RRSP accounts. By doing so, we would avoid paying taxes on the income from real estate. At a rate of 3.5% that would add about $525 to dividends.
As a result, all anticipated dividends in 2020 would total $12,465.
We will challenge this goal through a stretch goal of $13,000 in dividends. It is achievable through allocation of additional capital toward dividend-paying companies.
Real Estate $25,000:
This estimate comprises rental property income and investments in private
mortgages.
Lending Loop $2,500:
To further diversify our Lending Loop portfolio, we plan to increase our
investments, and as a result, we expect to profit $2,500.
Credit Cards Cash-Back Rewards $1000:
Assuming our spending rate will be less than it was in 2019, it is reasonable to predict cash-back rewards of about $1,000.
We forecast our passive income to be $41,500 in 2020.
wow Fantastic year and what looks to be a wonderful 2020.
Love all those different streams!
Curious which credit card you use to obtain that much in cash back?
keep it up
cheers
We use Scotiabank Momentum Infinite cash back credit card. 4% cash back is earned on eligible Recurring Bill Payments and Grocery Store purchases; 2% cash back is earned on eligible Gas and Daily Transit purchases; 1% cash back is earned on all other eligible purchases. Another our card is Capital One Platinum solely for using in Costco. TD First Class card is for travel purchases and we rarely use it, it was our first credit card which comes in bundle as part of TD unlimited chequing account and we keep it for credit history.
Thanks for sharing the 2019 results. Good job!
I am curious how the $28K income translates into the rate of return. Do you calculate annualized rate (%), to be able to tell how your combined investments performed as compared to other investment opportunities out there? Also, do you set a net worth target goal and track it?
At very rough estimate the rate of return is about 6.5% but it does not include any unrealized capital gain. For example unrealized capital gain of Dominos Pizza (DPZ) is about 100%, EMA 40%, FTS 35%, CNR 21% and so on in out portfolio. Paid mortgages is not in the rate of return. Our mortgages on two condos shrink 15,000 annually.
I do not count our net worth because I am not about to sell any of our assets. We plan to live off income streams without touching our valuable assets.
Herkunft thanks for reading.