Telus, one of the companies that I own in my DRiP portfolio, has announced last week that its next dividend will be unchanged at $0.475 per share. This means no change to the dividend, whereas this is usually the time when the company announces the annual increase in dividend.
The announcement was part of the third quarter results (full text here). Revenues were sligthly lower, a reflection of the country's weak economic growth. Meanwhile, the company is continuing with its capital expenditures program to complete its next generation wireless network (which will be completed in 2010) and continue its wireless broadband expansion. Personally, I also get the feeling that the company is bracing for the entrance of new competition in Canada be being cautious.
The lack of a dividend increase is a bit of a disappointment. However, the company also announced an amendment to the reinvestment plan to introduce a 3% discount on shares purchased by reinvested dividends. As a result of this, I am effectively getting a 3% increase in my dividend even though the nominal dividend remains the same.
Thursday, November 12, 2009
Sunday, November 1, 2009
Net Worth Update
As of November 1st, my net worth was $101 220 (up 11% from $91 013). If I exclude house-related assets and liabilities, my net worth was $64 503 (up 2.7% from $62 822). As I mentioned a few weeks ago, our house gained a lot of value over the last couple of years, and that is now reflected in the new municipal rolls. This increased my net worth by $8 000.
Assets ($165 447, up 6% from $155 973)
Assets ($165 447, up 6% from $155 973)
- Bank Accounts $4 907 (down 24% from $6 457)
- Emergency Funds $2 040 (up slightly from $2 038)
- RRSP Accounts $42 966 (up 4.8% from $40 993)
- Non-Registered Investments $18 351 (up 0.7% from $18 231)
- Home $96 330 (up 9.4% from $88 050)
Liabilities ($64 227, down 1.1% from $64 960)
- Credit Cards $4 384(down 10% from $4 902)
- Mortgage $59 613 (down 0.4% from $59 859)
- Line of Credit $0 (stable)
Ratios
- Debt / assets: 0.388 (down from 0.417)
- House value / total assets: 0.582 (up from 0.565)
The repairs for the chimney were paid this month, which explain why available cash dropped. This brings me back to my usual range of about $4-5K in my bank accounts.
Although the markets were strong for the first two weeks of the month, the last two reflected more uncertainty. People are being told that the recession is over, so they expect things to be back to where they were before the downturn. Except that coming out of the recession is the quick part of it. The recovery, in terms of jobs and profitability, will take years. This is beginning to sink in.
Even though the markets were basically flat in October, my RRSP accounts went up. That's because one of my investments (Harvest Energy) is getting bought out at a premium to market value. As a result, the value of my investment went up.
Wednesday, October 14, 2009
New Credit Card
Last spring, the sponsor of my main credit card announced that it was increasing the annual fees from $20 to $30. This is an optional fee to raise the cash-back incentive from 0.5% to 1%, which made plenty of sense when I signed up for it years ago. I had already been thinking for a while about switching to a less costly credit card (there are now plenty of no-fee cash-back cards out there), but at the time it was only $20 a year, so laziness had won out. The increase pushed me over, but as other things happened, I did not follow through on this and the anniversary of my account passed, and I was billed $30 for the annual fees.
So this summer I called the company and asked them to reduce the fees. The agent told me they couldn't do that. I told her that I thought the fees were getting too high and I was thinking about moving my money elsewhere, so what were she suggesting to keep me with them? She proposed removing the option so to avoid paying the fees. This didn't make sense to me,since that would mean reducing the amount of cash I would receive back. I told her so, and asked again whether she could offer me something to keep me with them. To no avail. The conversation ended with me letting her know that the company was leaving me no other choice than to move my business to a different company.
Things went on unchanged for another couple of months. There were a few alternatives, but none were good enough to immediately grab my attention -- I had some time before I cut my current card lose. I had previously read about MBNA's Smart Cash credit card, which seemed the most interesting to me (3% back on grocery and gas, 1% on everything else, no annual fees). Only thing that bugged me was that this card was only being offered to existing clients, which I was not. I could have signed for another card with MBNA and then asked to be switched over, but that seemed a lot of hassle. So time passed.
About two weeks ago, I read a post from Million Dollar Journey about the new Scotia Momentum Cash Back Visa. This led me to read a thread on Red Flag Deals about the MBNA Smart Cash. And, wonder of wonders, apparently they had just announced that the card was now offered to new clients as well! I read everything that I could about the card, to make sure I wouldn't get dinged with unexpected fees. (There are no annual fees, but be aware that there are many other fees hidden away for non-purchase uses of the card -- balance transfers, fund advances, using the cheques, late payments, etc.) However, none of these were relevant to how I use my credit cards, so everything looked like a great deal to me. So I signed up for the card.
I received the card yesterday (it took only 12 days since signing up online). Activated it right away. (Told the agent that no, I don't want the balance protection. No, no need for a second card. Just activating, thank you.) So I now have my new card.
As a sign-up bonus, I will be getting 5% cash back on grocery and gas for the first 6 months (instead of the normal 3%). The maximum eligible amount in grocery and gas is $600 per month.
I usually spent about $1200 to $1500 per month using my main credit card. Of this amount, about $500 to $700 is for grocery and gas. With my previous card, I was getting just a bit less than $200 a year, and I had to pay the annual fees. With the new card, I should get about $216 back during the first 6 months; after that, I should get about $288 a year. What this cost me: 2 hours to document myself about the card, 15 minutes to sign up, 10 minutes to activate it.
That's what I call a deal.
So this summer I called the company and asked them to reduce the fees. The agent told me they couldn't do that. I told her that I thought the fees were getting too high and I was thinking about moving my money elsewhere, so what were she suggesting to keep me with them? She proposed removing the option so to avoid paying the fees. This didn't make sense to me,since that would mean reducing the amount of cash I would receive back. I told her so, and asked again whether she could offer me something to keep me with them. To no avail. The conversation ended with me letting her know that the company was leaving me no other choice than to move my business to a different company.
Things went on unchanged for another couple of months. There were a few alternatives, but none were good enough to immediately grab my attention -- I had some time before I cut my current card lose. I had previously read about MBNA's Smart Cash credit card, which seemed the most interesting to me (3% back on grocery and gas, 1% on everything else, no annual fees). Only thing that bugged me was that this card was only being offered to existing clients, which I was not. I could have signed for another card with MBNA and then asked to be switched over, but that seemed a lot of hassle. So time passed.
About two weeks ago, I read a post from Million Dollar Journey about the new Scotia Momentum Cash Back Visa. This led me to read a thread on Red Flag Deals about the MBNA Smart Cash. And, wonder of wonders, apparently they had just announced that the card was now offered to new clients as well! I read everything that I could about the card, to make sure I wouldn't get dinged with unexpected fees. (There are no annual fees, but be aware that there are many other fees hidden away for non-purchase uses of the card -- balance transfers, fund advances, using the cheques, late payments, etc.) However, none of these were relevant to how I use my credit cards, so everything looked like a great deal to me. So I signed up for the card.
I received the card yesterday (it took only 12 days since signing up online). Activated it right away. (Told the agent that no, I don't want the balance protection. No, no need for a second card. Just activating, thank you.) So I now have my new card.
As a sign-up bonus, I will be getting 5% cash back on grocery and gas for the first 6 months (instead of the normal 3%). The maximum eligible amount in grocery and gas is $600 per month.
I usually spent about $1200 to $1500 per month using my main credit card. Of this amount, about $500 to $700 is for grocery and gas. With my previous card, I was getting just a bit less than $200 a year, and I had to pay the annual fees. With the new card, I should get about $216 back during the first 6 months; after that, I should get about $288 a year. What this cost me: 2 hours to document myself about the card, 15 minutes to sign up, 10 minutes to activate it.
That's what I call a deal.
Tuesday, October 6, 2009
Municipal Assessment Roll
We just received the new municipal assessment roll for our house, and the value is going up from $126K to $153K. That's a 21% increase and a bit less than I expected (apparently the average for Quebec City is about 30%).
An increase in the value of our house is both good and bad. In the short term, it is bad since it means we will be paying more taxes every year (it remains to be seen how much -- we will only know in January).
In the long term, it is good, since it means that our house is worth more. The day we sell (even though that's far in the future), we will recover the money we spent to buy it and some more. The important thing here is that the value of our house should at least keep up with inflation, so that we don't end up with less purchasing power.
But overall, this revision of the assessment is neither good nor bad news.
It will, however, have a fairly big impact on my net worth, since the value of my part of the house has just gone up by a few thousand dollars. Only half of the increase will be reflected in my net worth, since I use the average between the municipal assessment and my insurer's rebuild cost to determine the value of the house.
Still, that means an $8K increase to my net worth. Based on my latest estimates, this should be enough to push my net worth over the $100K milestone. Nice!
An increase in the value of our house is both good and bad. In the short term, it is bad since it means we will be paying more taxes every year (it remains to be seen how much -- we will only know in January).
In the long term, it is good, since it means that our house is worth more. The day we sell (even though that's far in the future), we will recover the money we spent to buy it and some more. The important thing here is that the value of our house should at least keep up with inflation, so that we don't end up with less purchasing power.
But overall, this revision of the assessment is neither good nor bad news.
It will, however, have a fairly big impact on my net worth, since the value of my part of the house has just gone up by a few thousand dollars. Only half of the increase will be reflected in my net worth, since I use the average between the municipal assessment and my insurer's rebuild cost to determine the value of the house.
Still, that means an $8K increase to my net worth. Based on my latest estimates, this should be enough to push my net worth over the $100K milestone. Nice!
Friday, October 2, 2009
DRiP: Pengrowth Cuts Distributions
Pengrowth has announced a 30% reduction of their distribution starting on November 16, as a result of changes to its "value creation strategy".
I own a few trust units of the company in my DRiP portfolio, where it holds a very smal place. This is the third time in less than a year that this income trust has reduced its monthly distributions:
I own a few trust units of the company in my DRiP portfolio, where it holds a very smal place. This is the third time in less than a year that this income trust has reduced its monthly distributions:
- From $0.225 to $0.17 starting January 15, 2009;
- From $0.17 to $0.10 starting March 16, 2009; and now
- From $0.10 to $0.07 starting November 16, 2009.
So in a year, unitholders have seen their distributions decrease by almost 70%.
On the one hand, I can't say that I'm happy about this, even though this will have only a small impact on my portfolio. It is still a reduction of $12 to my dividends for next year.
On the other hand, I can't blame the board for finally looking to the long-term well-being of the company and its unitholders. I had not been putting much money into that company, and this confirms that it will remain only a small part of my portfolio.
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