January 2018 Summary

January is over! It’s good to know that we only have one month of winter left and the days are already getting longer. Furthermore, it’s holiday time for me for two weeks and we will be spending some time in the Canary island of Tenerife to recharge our batteries in a nice weather. A good thing is that my portfolio is not taking holidays and keeps on working for me. Let’s see how it went during January.

Dividend Income

Two companies of my portfolio paid dividends in January:

As usual, I received another monthly dividend from Realty Income (O). Stock price of O is not faring that well recently, though. It declined by ~13% from the beginning of 2017 to present day. When most of the U.S. stock market was climbing higher during 2017, the company took some beating due to a couple of factors. Firstly, the whole retail sector was not looking good recently. The rise of e-commerce has made it less important for stores to have physical presence. Since Realty Income has substantial exposure to retail real estate, it is seen as a negative thing for the future of the company. Rising interest rates in U.S. are also not favorable to performance of REIT so it was another factor that drove the price down. On the other hand, Realty Income still managed to grow their revenue by ~11% during the first 3 quarters of 2017 and is constantly increasing their dividend so I am not worried about the price. Quite the opposite, actually – a few fellow dividend investors are using the dip to buy shares of Realty Income (Bert’s from DividendDiplomats purchases here and here, DividendDaze’s purchase here), so it’s more as an opportunity for us. Realty Income account for ~17% of my stock portfolio and I am not planning to use this opportunity myself, though. Also, the bank that I am using for investment account no longer allows buying U.S. based REITs since beginning of this year but that’s another topic and I am planning to solve this problem in the future by changing brokers.

Cisco Systems is the opposite from the price point of view. I only purchased shares of CSCO in September and since my entrance the price of the stock jumped by ~28%. Some of that would be eaten due to weak dollar but I am not planning to sell it and convert it to EUR. I was lucky to get in just before the rally started. I am not sure if it has much more room to grow but the main reason why I bought the shares was their attractive dividend yield. I have now collected second dividend from them and am happy to have them in my portfolio.

Year on Year Comparison

Let’s see how it compares with January of last year:

That’s the kind of percentage increase I like to see! I wish the nominal values were also high… Still, the purchase of CSCO really improved my dividend income for the first month of the quarter. I will be able to enjoy the same kind of growth for two more months during the year. After that it will be much harder to achieve such growth in percentage points.

Dividend Increases

Realty Income raised their monthly dividend again from $0.2125 to $0.219 per share. Since I own 16 shares, it will increase my net annual income from Realty Income by ~$0,87($0.0065 * 16 * 12 – 30%). Every bit counts so I am happy to see yet another raise to my dividend income without moving a finger.

Purchases and Portfolio Contributions

This month I didn’t make any purchases but I managed to put aside €500 to my investment account. Once I have enough money to invest, I will look for possible targets. I’m afraid I will not be able to contribute much during February, as we will have a vacation and it will incur some additional expenses. I am not worried about that, though, as we should take some time off work and relax to stay sane 🙂

I also added additional €20 to my P2P lending account.

Other Passive Income

During January, I received €4.78 in interest from P2P lending. 3 out of 29 loans I was invested in are late to pay for January (€2.39 in total) but all of them are insured so I would receive the money back in case they are late for more than 90 days. I am seeing an increase of late loans recently and maybe that’s a worrying sign about our economy. Even with some of the loans being late, the profitability of P2P lending is quite high so I plan to stay in this field for some additional source of income. My current balance in this platform stands at €398.31 which is distributed among 29 active loans. I am aiming for it to account for ~10% of my portfolio so I might add a small amount to this platform during February.

Summary

In total, after converting to EUR, I received €11.74 during September. With this kind of rate I would not be able to reach my target of €240 from passive income during 2018 so I will need to step up my game in order to achieve it!

How was your month? Did you start the year strong? Are you sharing any of the companies of the above? Don’t hesitate to leave a comment and thanks for reading!

14 thoughts on “January 2018 Summary

  1. Hey BI, these are some really nice results. Its good to see your development yoy. 170% is just insane.

    My month was similar (check out the post!) to yours. We both got payed by CSCO and O, albeit your payout was higher. I had some other small positions paying me out.

    Again, love seeing your progress and it motivates me even more as we are in the same phase of our journey!

    1. Hi Mr. Robot,
      Just had a look at your post – the results are really similar but your portfolio is more diversified and I see that you are more actively adding to your portfolio, so great job!
      It definitely motivates reading those monthly updates from the community, so I am with you here 🙂

  2. A 170% increase in dividends is awesome. I used to have similar increases when I started out. I even had a 1000% increase. But, like you mentioned once the portfolio matures growth will be less pronounced. But, I don’t think increase will die down … thanks dividend growths 🙂 Congrats!

    1. Hi DividendGeek,
      It really feels good to have those huge percentage increases. But I guess it will be even greater to see bigger nominal increases, even if from percentage point it looks smaller 🙂

  3. Hi there. Same problem with US REITs here. Wonder if other brokers shouls allow you buy them. Nice to see CSCO, they were on my radar as well but I bought INTC which performs also quite nice 🙂 Wouĺd love to own O and CSCO 🙂

    1. Hi P2035,
      I actually had a conversation with a representative from MyriadTrading here in Lithuania. They are offering InteractiveBrokers platform so it got me interested. However, it would cost me to sell my assets from my current bank account and rebuy them in their platform, especially with the small size of my portfolio. But it will definitely be worth in the future. There are pros and cons for using them:
      Pros:
      Smaller minimum transaction fees for US buys ($7 instead of $10 in my current bank);
      15% tax is applied to dividends from U.S. (compared with 30% in my current bank);
      Cons:
      InteractiveBrokers apply minimum $10 monthly fee if you don’t make transactions (if you make transactions more than $10 it is not applied additionally). However, the representative said that their clients are not paying the fee yet but it may change in the future so it’s not guaranteed;
      Officially there is a minimum deposit of $5000 required but after conversation it turns out that they are quite flexible and ~$4000 would be enough. Still, I would need to sell and re-buy my stocks so it’s not worth it yet.
      Anyway, I am thinking about idea to gather enough capital and move to them, as those 30% taxes for U.S. dividends are really annoying me.
      I would suggest to register for a free consultation with them if you are interested. I think we have limited options for brokers here in Lithuania but it looks like the situation is changing.
      Best of luck!

      1. Yee these are quite nice prons. But im a bit conservative on chosing a broker. Having protfolio at the bank makes me sleep better 🙂 That 30% tax i think will be solved in long run as well as reits. For now thats just ~10$ im losing so not that big deal. But will keep an eye on alternatives 😉

  4. BI, that’s some great year on year growth, I like it. I also got paid by Realty Income and Cisco. Two great companies. I’m still thinking about adding to O.

    Enjoy your time in Tenerife! It’s a great place. I have been to the Canary Islands once too, to La Palma. The weather is absolutely fantastic.

    – SD

    1. Hi SD,
      Thanks for the good wishes!
      I just checked how your January went and I can see that you are killing it!
      Keep it up!
      -BI

  5. Thank you for the mention! Nice month. Love seeing O pay those monthly dividends. Lots of people taking advantage of that dip. And it keeps going lower now too. Good way to start the year off with over 100% growth. Keep it going!

  6. BI we had a similar month for January. Only O and CSCO paid me dividends as well and the total was $14.93. Looking forward to seeing how we both do in February.

    Quick question, can you tell me how you got the spreadsheet (table) to post into your blog. I’m trying to figure it out.

    Thanks.

    1. Hi DP,
      I actually just take a screenshot form Excel with Snipping tool and insert it as a picture here 🙂 Haven’t figured out a better way for that myself. Let me know if you come up with a more advanced way to do that 😀
      -BI

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