Two More Dividend Increases

Two more of the companies I own in my DRiP portfolio raised their dividend this week.

First, Fortis Inc. (Toronto: FTS) increased its dividend 3.5% from $0.28 to $0.29 per quarter. This is a small increase, but the company is in the power generation business, and in a recession less power is consumed as businesses decrease their products output and thus their energy consumption.

Second, Pfizer (NYSE: PFE) just announced this morning that it was raising its dividend 11% from $0.18 to $0.20 per quarter.

These will have only a small impact individually, but they do add up. :o)

2010 Review: Financial Goals

As the end of the year approaches, it is time to review my financial goals for 2010 to see how I did.

Financial Goal 1: Increase my Net Worth -- Success

In fact, I should call this a smashing success. I reached my objective of a $125K net worth mid-year, due to a combination of the market recovery and an increase in the value of our house. If things bear out, I should end 2010 with a net worth of $137K.

For 2011, I will raise that objective to a net worth of $160K.

Financial Goal 2: Increase my Dividend Income -- Success

Last year, I established a steep objective of $1300 in dividend income from my non-registered investments (DRiP portfolio and TFSA account). I made actually it! Thanks to the year-end dividend from CGI, my dividend income for 2010 will be $1306 -- right over my objective.

For 2011, my objective will depend on how I end up paying for my new car. If I purchase it outright with no financing, I will have to gut both my TFSA account and my DRiP portfolio, so I should only expect dividend income of about $750. If, on the other hand, I can get attractive financing and decide to go that way, I'd like my dividend income to climb to $1700.

What are you financial objectives for 2011?

Credit Card Change Follow-Up

Last year, I switched my main credit card to MBNA's SmartCash credit card (see my post). At the time, I estimated that I would get back about $360 in cash for the first year (taking into account the sign-up bonus) and $288 for each year after that.

So I did a quick check-up on how much money I got back since signing up for the new card. By my calculation, I actually got closer to $400 back. Based on that, I can probably expect something like $300 every year, which is 50% more than what I was getting back with my old card.

Not bad at all.

Canadian General's Year-End Dividend

Yesterday I mentioned that I was waiting to see what what the end-of-year special dividend would be for Canadian General Investments (Toronto: CGI).

Well, this morning the fund announced that it will pay a special cash capital gains dividend of $0.76 per common share, payable on December 24, 2010.

This brings up CGI's dividend this year to $1.00 per share, for a 5% yield. Considering that the stock has also moved up 30%, this makes for quite a profitable investment this year.

I've just moved most of my shares of CGI into my TFSA, so my year-end dividend will be sheltered from taxes. I did this because this "special cash capital gains dividend" is treated as regular income, instead of the preferencial tax treatment of a normal Canadian dividend.

Dividend News

Some recent news regarding my dividend-paying companies...

Enbridge (Toronto: ENB) has announced an increase to its dividend, from $0.425 to $0.49 per quarter. That's an increase of 15%. Cheers!

Bank of Nova Scotia (Toronto: BNS) and Bank of Montreal (Toronto: BMO) both announced good quarterly earnings. Things continue to look good for our Canadian banks, but no dividend increase yet. I had slight hopes that BNS would announce one.

Other companies in my portfolio that should soon announce dividend increases are Fortis (Toronto: FTS) and 3M Company (NYSE: MMM). I am also waiting to see what the end-of-year special dividend will be for Canadian General Investments (Toronto: CGI).

All of those companies are part of my DRiP portfolio, although I also own some shares of 3M in my RRSP.

Net Worth Update

As of December 1st, my net worth was $137 993 (up 0.9% from $136 763). If I exclude house-related assets and liabilities, my net worth was $95 888 (up 1% from $94 916). Things are slowing down for me as the end of the year arrives. A quick dip of the stock markets at the end of November had an impact there.

Assets ($197 251, up 1.46% from $194 419)

• Bank Accounts $5 754 (up 7.8% from $5 335)
• Emergency Funds $2 678 (up 4% from $2 575)
• RRSP Accounts $60 361 (up 0.5% from $60 061)
• Non-Retirement Investments $30 411 (down 0.8% from $30 643)
• Home $98 430 (stable)

Liabilities ($60 488, down 0.6% from $60 856)

• Credit Cards $3 482 (down 9.2% from $3 834)
• Mortgage $56 324 (down 0.4% from $56 583)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.303 (down from 0.307)
• House value / total assets: 0.498 (down from 0.499)

There has been a delay in replacing the planned windows, so this expense has not come through yet. It is not yet certain if the cheque will be cashed before the end of the year, either, so its impact may only be felt at the beginning of 2011.

Christmas shopping has also begun, so I expect a temporary rise in credit card debt. As usual, though, the balance of all my credit cards will be paid in full each month. It is simply that during the Christmas period, I spend a bit more money -- I'm not adding any long-term debt here, it is simply a question of cash-flow since almost all of my expenses go through my credit cards. I pay no interest at all, and collect the rewards.

RRSP: Bye Bye GE - Hello 3M

I had been thinking of selling my General Electric (NYSE: GE) shares in my RRSP. The company has been struggling for a long time, with its financial division dragging down the rest of the company. As I see it, the company will continue to grow slowly and recover from its past mistakes, just as slowly. I see that growth at less than 5% per year. With a current dividend yield around 3%, I think I can find a better use for that money.

So I've sold GE and used the money to purchase shares of 3M Company (NYSE: MMM). The company is also a large conglomerate with diversified income streams, but without the financial division that's been pulling GE down. 3M keeps innovating and developping new products. Current yield is a bit lower at 2.6%, but the company keeps increasing the dividend at a steady pace and its payout ratio is lower.

My money could have been put into a different company with better growth prospects. But GE (and now 3M) fulfilled a specific role in my portfolio and moving my money into a growth-oriented company would not have satisfied that role.

As I sold GE and purchased 3M on the same day, I was able to same on currency conversion fees (what is sometimes called a "wash trade"), reducing them almost to nothing.

I also own a few shares of 3M in my DRiP portfolio.

Brokerages Lowering their Commissions

There is a wave of fees reductions at Canadian brokerages going on right now. Many of them have announced a lowering of the minimum account value needed to get reduced commissions on purchases and sales.

I currently have 2 brokerage accounts, one with TD Waterhouse (for my TFSA) and one with Disnat (my RRSP). Both have announced a reduction of fees.

TD Waterhouse: "We are pleased to announce that effective November 4, 2010, clients with $50,000 or more in household assets, invested through TD Waterhouse Discount Brokerage, will now be eligible to trade Canadian or U.S. equities for $9.99 flat when using our online or automated telephone Electronic Brokerage Services. Canadian and U.S. option trades will be subject to the same $9.99 base rate plus $1.25 per contract. Clients with less than $100,000 in household assets must also register their account(s) for eServices to qualify."

That's good, but it will be some time before I reach $50K with only my TFSA. I might get there sooner if I were to consolidate accounts, but right now I get a service with Disnat that TDW does not provide: Medallion signature guarantees. I find those really useful to exchange shares directly with other investors, as part of my DRiP strategy.

There are also rumors that TDW may soon offer USD currency within their RRSP. *That* might make it worthwhile for me to consolidate some RRSP money to reach the treshold, as I hold a lot of US stocks in my RRSP. I'd have to bring at least $25K in the RRSP to avoid paying annual fees.

Disnat: "We are pleased to announce that as of November 1, 2010 you will be able to take advantage of our flat-rate commissions of $9.95 per transaction when you complete a minimum of 10 monthly transactions via our Disnat Classic website! This new flat fee will also apply to accounts with a minimum net worth of $100,000."

Not as good as what TDW offers. Disnat has not changed its treshold; it's just telling investors that if they trade more, they'll get a better deal. As I don't do a lot of transactions (and don't plan on doing much more in the future), this change has no benefit for me.

The major reason for me to keep this account with Disnat is the Medallion signature guarantee service and the fact that the brokerage has an office here in Quebec City. So I can just drop by to get my signature guaranteed (for securities transfers) at no cost. Although TDW also has such a service, they do not use the Medallion stamp, which I need for US transfers.

So in the end, the fees reduction wave has had little effect on me. But it will make it easier for me to reach the reduced treshold in the future.

Telus Increases Dividend, Removes Discount

Telus (Toronto: T and T.A) today announced that the company is raising its dividend from $0.50 to $0.525 per quarter. This is a 5% increase, which follows another 5% increase that was announced in May. Good news for me, as it will raise my yield on cost to 6%.

But the company has also announced that, starting with the March dividend, it will stop giving a discount on reinvested divideds. This second announcement was burried in its 3rd quarter results, at page 7. Shares for dividend reinvestment will now be purchased on the open market instead of being issued from treasury.

That's good news overall. I own Telus in my DRiP portfolio.

Net Worth Update

As of November 1st, my net worth was $136 763 (up 2.4% from $133 563). If I exclude house-related assets and liabilities, my net worth was $94 916 (up 3.2% from $91 973). Another good month, but again that's because of the stock markets. Things are chugging along, dividend gets paid, a little money is added here and there. Boring, but boring is good!

Assets ($197 251, up 1.46% from $194 419)

• Bank Accounts $5 335 (up 11% from $4 811)
• Emergency Funds $2 575 (up 4.2% from $2 471)
• RRSP Accounts $60 061 (up 2.8% from $58 407)
• Non-Retirement Investments $30 643 (up 1.8% from $30 093)
• Home $98 430 (stable)

Liabilities ($60 488, down 0.6% from $60 856)

• Credit Cards $3 834 (down 3.5% from $3 972)
• Mortgage $56 583 (down 0.4% from $56 841)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.307 (down from 0.313)
• House value / total assets: 0.499 (down from 0.506)

The first payment for the new windows went through, but was completely lost in the general rise of my assets. When the balance of the payment goes through, however, it will be more noticeable as the amount is bigger. The windows should be installed within the next two weeks. Cash position looks strong, so I should be able to pay for them out of my regular account, without touching my emergency funds.

Pengrowth Energy to Become a Corporation

Yesterday, Pengrowth Energy Trust (Toronto: PGF.UN) announced that it plans on becoming a corporation on December 31th, 2010.

Basically, nothing much will change. Distributions will become dividends (as so will be taxed less for investors) but remain at $0.07 per month, at least for now. As explained in the announcement, the company has a big tax pool that mean it doesn't expect to pay taxes until 2014.

One area was unclear in the announcement, and that was the continuation of the reinvestment and purchase plan. Investors relations was contacted, and apparently the company plans on keeping it the same. That would include the 5% discount on both reinvested dividend and new purchases. :o)

The conversion will need to be approved by the unitholders during a special meeting to be held on December 16th. With those terms, I expect it to be a formality.

New Finance Site: Moneyville.ca

Two of the bloggers that I read regularly have mentioned that they will be blogging on the new site developped by the Toronto Star, Moneyville.ca, so I thought I'd give it a look and see whether it would be worth reading.

My first impressions were quite good. The web site is clean and doesn't look cluttered, and the articles seem interesting. I'll be digging around the site some more, but it looks like a good one. What I particularly like is the fact that it is targeted at the average Canadian, instead of cathering to a nice or presenting things from a U.S. perspective.

Thumbs up from this Frog!

Net Worth Update

As of October 1st, my net worth was $133 563 (up 3.7% from $128 775). If I exclude house-related assets and liabilities, my net worth was $91 973 (5.2% from $87 442). A surprisingly good month, but this had more to do with how the stock market moved than anything else, as this caused two-thirds of the increase. I did watch my expenses more than usual, though, to cut down a bit on unnecessary spending. So it was more a matter of what I didn't do than what I did. :o)

Assets ($194 419, up 2.4% from $189 874)

• Bank Accounts $4 811 (up 6.7% from $4 509)
• Emergency Funds $2 471 (up 4.3% from $2 368)
• RRSP Accounts $58 407 (up 3.5% from $56 426)
• Non-Retirement Investments $30 093 (up 7.9% from $27 878)
• Home $98 430 (stable)

Liabilities ($60 856, down 0.4% from $61 099)

• Credit Cards $3 972 (up 1% from $3 934)
• Mortgage $56 841 (down 0.4% from $57 097)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.313 (down from 0.321)
• House value / total assets: 0.506 (down from 0.518)

The first payment for the new windows hasn't gone through yet, so this will impact the next update. I have reduced my monthly infusion of money into my DRiPs, as I will need to pay the balance of the windows in November. I want to do that using accumulated cash instead of having to dip into my emergency funds.

McDonald's Increases Its Dividend

McDonald's Corp (NYSE: MCD) has just declared an increase to its quarterly dividend, from $0.55 to $0.61 (an 11% increase), starting on December 15.

Well, it seems people keep gobbling up McFood and drinking McCoffee even during tough times. I know that I do, although I try to keep it to the occasional visit. I want to fatten my wallet, after all, not my waistline!

I hold shares of MCD in my RRSP account. Based on my cost of purchase, this new dividend brings my yield to a juicy 4.4% (as opposed to a 3.3% yield based on current price).

Spending Money on the House

Last week, I went ahead with our plan to replace another set of windows on the house. When we started replacing the windows 2 years ago, we decided to go with a gradual approach based on the amount of cash we could afford to pay each year for those renovations instead of using the line of credit or another form of financing to replace them all at once.

So before winter we will have new windows for the 3 upstair bedrooms. This will be good for 2 reasons. First, as a quality of life issue for Princess, as the old windows were very hard for her to open and close (they were heavy and would often stick). Second, the new windows will be provide much better insulation, so this should save us some money on heating.

Still, this is a fairly big expense at slightly over $3 000, so in order to have the cash available to pay for the windows I will cut back on my monthly DRiP purchases. This means I won't reach my stated goal of dividend income for the year, but I can live with that.

Net Worth Update

As of September 1st, my net worth was $128 775 (up 1.9% from $126 412). If I exclude house-related assets and liabilities, my net worth was $87 442 (up 2.5% from $85 336). Another good month, considering that we were on vacation. Of course, we didn't spend a lot for vacation (we seldom do) and the stock markets were generally good to me.

Assets ($189 874, up 1.2% from $187 623)

• Bank Accounts $4 509 (up 1% from $4 466)
• Emergency Funds $2 368 (up 4.5% from $2 265)
• RRSP Accounts $56 426 (up 1.9% from $55 371)
• Non-Retirement Investments $27 878 (up 3.8% from $26 865)
• Home $98 430 (stable)

Liabilities ($61 099, down 0.2% from $61 211)

• Credit Cards $3 934 (up 2.9% from $3 822)
• Mortgage $57 097 (down 0.4% from $57 353)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.321 (down from 0.326)
• House value / total assets: 0.518 (down from 0.525)

Next may see some rise on the credit cards, as well as some additional expenses for the house. We have been late in ordering the second batch of replacement windows, and I need to get to it if we want them to be installed before winter (about $3K). My car is also being repaired right now, because the air conditioner failed and the driver's window electric motor is dying (about $700).

On the other hand, I'll soon be maxed out on the mandatory contributions to the employment insurance and Quebec Pension Plan, so my net pay will increase for the rest of the year.

Scotiabank: Higher Earnings, No Dividend Increase

Third quarter earnings are out for Scotiabank.

Well, there you have it. I was hoping to get a dividend increase from Scotia, but alas I'll have wait some more. Dividend

Earnings rose to $0.98 per share, with net income over the $1B mark for the third quarter. So this is another good quarter for the bank.

I'll remind myself that one of the reasons that had me select this bank for my first-ever DRiP company was because management is prudent and disciplined. The obviously thought they'd wait until the details on the new international financial rules are known -- and what their impacts will be -- before raising the dividend.

Scotiabank, When Will You Give Me a Raise?

Bank of Nova Scotia (TSX: BNS) is the first company that I acquired in my DRiP portfolio, 4 years ago. I see it as a strong company that's quite good at making money (it is a Canadian bank, after all). It has held up well through the financial CDO melt-down in 2008 and through the following recession. A great company.

However, the last time the quarterly dividend was raised was for the payment of July 2008, when it went up from $0.47 to $0.49 per share. So for 6 straight quarters, the dividend has remained the same. This was understandable, since earnings were somewhat impacted by the financial melt-down and then recession. At the height of the troubles, the dividend payout ratio rose as high as 70% of earnings. This ratio was at 50% before things started going sour, and is now at 54% based on earnings from the last 4 quarters.

Another thing to consider is the status of Scotiabank as a dividend achiever -- a company that has raised its dividend every year for at least 5 years. This is important because many indexes (and index funds) use such criteria when deciding which companies to invest in. According to Scotia's web site, the bank has increased its dividend 37 out of the last 39 years.

Things have improved a lot in the last year, and although there is still some uncertainty (as regards to the new international regulations for banks), we are certainly out of the deep end. It would certainly encourage investors to see some positive sign. Even a small increase in the dividend would be seen as a sign of confidence.

So, Scotiabank, will you give me a raise now? Or will you wait some more?

What do you think?

(Scotiabank will announce details of its third quarter results on August 31, 2010 at 7h30 AM EDT.)

Good News from ING Direct Canada

There were recently some additions to ING Direct Canada, with new products being added. I thought I'd share this.

First, ING Direct now offer low-fee mutual funds in Canada. Although the selection is quite small (only 3 funds are offered), this adds another low-cost option for investors. All funds are diversified, with different profiles based on risk tolerance (Balanced Income, Balanced, Balanced Growth). This is straightforward index investing, with assets spread across 4 indexes (Canadian Bonds, Canadian Stocks via the TSX 60, US Stocks via the S&P 500, and International Stocks via the MSCI EAFE) with only the proportion invested in each index changing based on the fund selection. MERs are only 1%, and there are no other fees. A variety of account types can be opened (non-registered, RSP, RIF and TFSA).

Second and more important, ING Direct has announced that it will soon offer no-fee checking accounts (called Thrive). Basically, all transactions (bill payments, cheque writing, email money transfers). The account even has a small NSF protection of $250 built-in. Canadian Capitalist has a good review of the products, and Million Dollar Journey ran a comparison with PC Financial no-fee checking account, which is the reference right now in Canada.

I've looked closely at ING Direct's Thrive accounts, and the only drawback that I can see is that after the first 20-cheque booklet, you have to pay a fairly steep price for new paper cheques ($10 for 20 cheques) while they are free at PC Financial. Everything else is free, including EMT (email money transfers), which cost $1.50 at PC Financial.

But PC Financial is not available in Quebec, whereas Thrive will be!

So I signed up for the preview for the account, which will start on September 14th. Although at first I was disappointed with the cost of additional cheques (cheques for my current day-to-day account cost about half of what ING will ask for), I figured I could use this account to pay for many of my online bills, which will reduce the strain on the number of transactions in my main account.

RRSP Purchase: Manulife

Right before going on vacation, I put in an order for 250 shares of Manulife (TSX: MFC) in my RRSP account. This was when the tough earnings news came out. Turns out I was a bit early, paying $13.80 per share (the shares now stand around $12.25 per share).

In such situation (what I see as a fire sale), I'm usually early to buy -- it's just the way it works for me. If I wait too long for the price to drop some more, I often end up not buying. So that $1 I paid over the current price is fine with me. I'm looking at holding the shares for 1 to 3 years, at which time I think the company will have recovered from its current difficulties. In the mean time, I'll collect the dividend (over 4% yield right now) and reinvest it (synthetic DRiP through my broker).

Net Worth Update

As of August 1st, my net worth was $126 412 (up 5.6% from $119 661. If I exclude house-related assets and liabilities, my net worth was $85 336 (up 8.2% from $78 839). That's an amazing and unexpected increase, due to a combination of a 3-pay period month and a general the rise of the markets.

Assets ($187 623, up 3% from $182 169)

• Bank Accounts $4 466 (up 21% from $3 699)
• Emergency Funds $2 265 (up 28% from $1 763)
• RRSP Accounts $55 371 (up 4.6% from $52 936)
• Non-Retirement Investments $26 865 (up 7.8% from $24 911)
• Home $98 430 (up 2.2% from $96 330)

Liabilities ($61 211, down 2.1% from $62 508)

• Credit Cards $3 822 (down 20% from $4 790)
• Mortgage $57 353 (down 0.4% from $57 608)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.326 (down from 0.343)
• House value / total assets: 0.525 (down from 0.540)

I jusat realized that I had forgotten to report another increase to the estimated value of our house in May, as my insurer reassessment came in. The increase is $2 100 and was already taken into account for the value of my assets, but was not reported correctly on the corresponding line. I've made the adjustment starting this month.

My "debt reduction" drive has paid, since my credit cards are almost $1K lower than they were last month. I've closed one credit card that I had taken specifically for 0% financing of our mattress last year. A bad move, since that company had a $35 annual fee attached to it -- something that the salesperson failed to tell me at the time. I've black-listed that store for future purchse.

I moved back some money to my emergency fund to restore it to what it was in May. Last month I had mentioned moving some money to my daily bank account at the end of the month to pay back a credit card financing plan.

The shows I went to during the Summer festival were great. Santana was magical and Black Eyed Peas were awesome. :o)

Automatic Savings Plan at ING Direct

This morning I programmed a monthly automatic transfer of funds from my day-to-day bank account to my ING Direct account (where I have my emergency fund).

I had noticed that ING Direct was offering an incentive to start one, so I decided to take advantage of this. You have to have an account to even see the offer, so I cannot provide a link for the details. Basically, the offer is:

• Must be set up before August 16th;
• Minimum $100 per automatic transfer;
• Can be monthly, bi-weekly or weekkly; and
• Must be kept for at least 6 months.

So I set up a $100 transfer every month for the next 7 months. The $25 should be deposited around March next year -- I made sure to print the offer so I can follow up with them if the cash isn't transferred to me at that time.

I wanted to put away more money anyway, as I plan on purchasing a new car next year. So why not get a free $25 at the same time? This promotion yields me about 3.5% of the invested amount ($25 for $700), on top of the small interest paid on the savings account (currently 1.3% per year).

GE Increases Its Dividend

General Electric (NYSE: GE) has just announced that the company was raising its quarterly dividend 20%, from $0.10 to $0.12, starting in October. The company, which is often seen as a proxy for the U.S. economy, cited "continued strong cash generation, recovery at GE Capital, and solid underlying performance in our Industrial businesses through the first half of 2010" as a reason for boosting the dividend earlier than previously hinted. The company is also reinstating its share buyback program.

GE cut its dividend by 67% a bit over a year ago to $0.10 per quarter. Even with this increase, the dividend is still far from the $0.31 per quarter that GE was paying before the cut.

Still this is a positive move from the company. I own shares of GE in my RRSP portfolio, where the increase will mean a small $17 per year added to my dividends.

Preet Giving Away an iPad

To celebrate the 3rd anniversary of the "Where Does All My Money Go" blog, Preet is giving away an iPad and more.

Happy anniversary!

Net Worth Update

As of July 1st, my net worth was $119 661 (up 1% from $118 488). If I exclude house-related assets and liabilities, my net worth was $78 839 (up 1.2% from $77 920). I'm a bit late posting this month's update because I was on vacation beginning the month, and coming back to work I was quite busy.

Assets ($182 169, up 0.3% from $181 591)

• Bank Accounts $3 699 (up 24% from $2 981)
• Emergency Funds $1 763 (down 22% from $2 261)
• RRSP Accounts $52 936 (down 0.8% from $53 375)
• Non-Retirement Investments $24 911 (up 1.9% from $24 445)
• Home $96 330 (stable)

Liabilities ($62 508, down 1% from $63 103)

• Credit Cards $4 790 (down 7% from $5 154)
• Mortgage $57 608 (down 0.4% from $57 862)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.343 (down from 0.348)
• House value / total assets: 0.540 (down from 0.542)

I moved some money from my emergency fund to my daily bank account at the end of the month to pay back a credit card financing plan -- that way I'll be able to close that credit card before the end of July. Total amount on my credit cards was down, and I plan on lowering it even further this month. I got paid back for the summer festival passes that I purchased for family members. Haven't had much time to work on the house and courtyard, but next weekend I should be free to do that.

Tonight I'm going to see Santana as part of the summer festival, and Friday is Black Eyed Peas. Both shows should be quite good!

Imperial Oil Increases Dividend

Another company from my DRiP portfolio has increased its dividend. Imperial Oil (Toronto: IMO) has boosted its quarterly dividend from $0.10 to $0.11 -- a 10% increase.

This will have a very small impact on my dividend income, as I own only a very small part of the company (about 10 shares at this point). This is still welcome news.

Net Worth Update

As of June 1st, my net worth was $118 488 (down 0.5% from $119 075). If I exclude house-related assets and liabilities, my net worth was $77 920 (down 4.6% from $80 860). The main reason for the decrease is the stock market's stumble in May, although some unplanned expenses also contributed. Nothing to worry about, but I'll keep an eye on things.

Assets ($181 591, down 0.1% from $181 711)

• Bank Accounts $2 981 (down 14% from $3 483)
• Emergency Funds $2 261 (up slightly from $2 259)
• RRSP Accounts $53 375 (down 2.2% from $54 594)
• Non-Retirement Investments $24 445 (down 1.6% from $24 836)
• Home $96 330 (stable)

Liabilities ($63 103, up 0.7% from $62 635)

• Credit Cards $5 154 (up 16% from $4 456)
• Mortgage $57 862 (down 0.4% from $58 115)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.348 (up from 0.345)
• House value / total assets: 0.542 (up from 0.530)

The unplanned expenses (car repairs and purchase of the summer festival passes) mean that my credit cards werte higher this month. I should get back some of the money as family members for whom I purchased the passes pay me back for those.

On the non-financial side, our garden is now planted -- the first year we've been able to do so since purchasing the house 6 years ago. Part of the landscaping effort I did last year. For now the garden consists of 2 boxes (6.5' by 3.5' in size) in the back yard. We already had strawberries (I relocated some of them in one of the boxes), rasberry bushes along the patio, rhubarb and some herbs. The new garden is not a way to same money for us, it's more a way to get tasty and fresh vegetables -- nothing taste better than that!

Sold Kraft

I just sold the shares of Kraft (NYSE: KFT) that I purchased in January. A couple of reasons for the sale:

• Kraft announced its next dividend payment, and still no sign of an increase.
• Integration of Cadbury still likely to pose problems. The way things are being handled are raising questions, with bad sentiment about a plant in the U.K. that executives promised would stay open and which is being closed.

But the most important one is this: With the current situation in the world markets, I think there may be better opportunities coming. So I'll need some cash available to take advantage of any unreasonably low prices that are likely to present themselves. And I feel that Kraft is my holding that was least likely to grow in the next couple of months.

I should make a small profit with this sale. I'll know tomorrow when the exact exchange rate for the sale is known.

H&R REIT Announces Distribution Increases

The well-known real estate income trust, H&R REIT (Toronto: HR.UN), today announced as part of its 1st-quarter results that it will start increasing back its distributions. From the current $0.06 per month, distributions will slowly increase each quarter until it hits $0.0875 per month in the second quarter of 2012.

This is great news. The distributions were cut in half (from $0.12 per month to $0.06) in January 2009 when financing for The Bow (a big office tower in Calgary) became difficult during the financial crisis. But although that string of increases shows that situation is improving, it does not (yet) brings the distributions back to the pre-crisis level. But it is a nice reward for those who had faith in the future.

I own about 100 units of the trust in my DRiP portfolio. This year's increases will add about $7.50 to my dividend income.

The Importance of Staying Invested

When I looked at the financial news this morning, my first thought was: "Good thing I stayed invested in the markets."

After all, last week's deterioration of the Greece situation had hit the markets hard -- which probably drove many investors to cash out, thinking that a second bear market was coming. These investors will have lost out on this morning's jump/recovery, and are probably kicking themselves.

If I've learned one thing about investing in the last couple of years, it's that the behaviour of the markets is unpredictable. To paraphrase a famous value investor (Benjamin Graham): "Mr Market is somewhat neurotic. His moods can fluctuate anywhere between incredible optimism and overwhelming depression." And he can swing from one end to the other very quickly.

So what can one do to avoid missing out on a big boost like today's? One has to stay invested. Have a plan, and follow it.

Sell in May and Go Away?

There's a popular saying within investor circles: "Sell in May and Go Away." It is meant to reflect the belief that the stock markets doesn't perform well during the summer months, as a lot of traders are away on vacation.

Personally, I do not subscribe to this saying. Statistics have proven that associating a specific period of the year with over- or under-performance is inconclusive at best. Some years it works, other years ait doesn't. A good example is last summer -- someone who went away during the summer 2009 missed out on the 10% run on the S&P 500 over the month of August.

But with the current troubles in Europe regarding Greece (and other countries on shaky financial grounds), one has to wonder. Are we due for a big correction? Will the worldwide financial markets be destablized again? Should we move to a more defensive position?

I obviously don't have answers to these question. All I can do is have a solid plan, and be ready to take advantage of any irrational weakness. Long-term wins thinking the race over short-term emotions.

Telus Increases Dividend

One of my DRiP holdings, Telus Corp (Toronto: T and T.A), has announced yesterday that the company was increasing its quarterly dividend to $0.50 (up 5.3% from the previous $0.475).

This is a surprise, as the company had failed to increase its dividend in November. But a nice surprise it is. This brings the yield on non-voting shares (T.A) to 5.5%, which is quite high. There is still a lot of uncertainty in the telecom sector, as the impact of new entrants in the market is a big unknown.

I'm not the only one to have been pleasantly surprised by the move -- the shares have jumped 4% on the news this morning.

Net Worth Update

As of May 1st, my net worth was $119 075 (up 3.4% from $115 128). If I exclude house-related assets and liabilities, my net worth was $80 860 (up 4.8% from $77 165). My tax return explains some of this gain, but good control of expenses also helped.

Assets ($181 711, up 1.6% from $178 923)

• Bank Accounts $3 483 (up 21% from $2 889)
• Emergency Funds $2 259 (up 80% from $1 257)
• RRSP Accounts $54 594 (up 1.6% from $53 732)
• Non-Registered Investments $24 836 (up 2.9% from $24 141)
• Home $96 330 (stable)

Liabilities ($62 635, down 1.8% from $63 794)

• Credit Cards $4 456 (down 13% from $5 104)
• Mortgage $58 115 (down 0.4% from $58 367)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.345 (down from 0.356)
• House value / total assets: 0.530 (down from 0.538)

I've paid some attention to my credit cards this month, starting to pay down a no-interest financing plan that will come due this summer. I plan on paying it off and closing that account in July at the latest.

Summer is coming, and with it the continuation of our home renovations. We will be replacing another set of windows this year, an expense of about $3 500. I am also continuing our landscaping project in the back yard, but that is more work than money -- only a few hundred dollars worth of expenses there. There will also be some scraping and repainting of the sidings of the house -- again a lot of work with some some expenses.

All-in-all, life is good. :o)

RRSP Purchase: Procter & Gamble

This week, I added to my current position in Procter & Gamble (NYSE: PG) within my RRSP, doubling my ownership in the company from 50 to 100 shares. My initial position was purchased in June 2009 for $52.50 per share, while my resent purchase was at $62 (both prices are in USD). Because of the 10% rise in the CAD vs the USD, however, the difference in the prices between my initial and my new purchases is only about half of what it is in USD.

Why did I add to my stake in the company? It had just reported its 3rd-quarter results, and the earnings per share were down by a minuscule $0.01 from last year's ($0.83 vs $0.84). Sales rose, but so did expenses (notably in the form of marketing and taxes). And there was a charge due to retiree health-care payments. The stock took a dive, going down by 2-3% on the news.

One has to wonder where have those sellers been living for the last year, to react so drastically to the news. The company has repeatedly said that it was ramping up marketing and adjusting product mix to recapture customers that moved to lower-priced products during the recession. To me, such a small decrease in EPS is quite a feat from the company.

On top of that, the commpany has announced a 9.5% dividend increase just a week ago. Although a dividend increase is not a reason to purchase a company, it does show that management is confident that things are on track. Furthermore, the dividend is quite secure with a reasonable 58% payout ratio.

So, for me this was a classical "buy on a pull back" situation. I expect to hold my shares for a long time, enjoying my dividend increases for years.

Johnson & Johnson Increases Dividends

Another dividend increase announcement, this time from by Johnson & Johnson (NYSE: JNJ), the well-known health company.

The increase is from $0.49 to $0.54 per quarter, a 10% boost. This comes as the markets are nervous about the pharmaceutical sector due to the recently-annouced U.S. health care reform. To me, such nervousness is the time when the company is on sale. I own JNJ in my DRiP portfolio, and I am gradually buying more shares using the share purchase plan.

Ensco Announces Major Dividend Increase

On April 21, Ensco plc (NYSE: ESV) announced a major increase in its quarterly dividend, from $0.025 to $0.35 -- the new dividend is 14 times what it used to be!

The company is an offshore driller, with a fleet of ultra-deepwater semisubmersible and premium jackup drilling rigs and well-trained employees. It keeps its fleet recent by selling older rigs and purchasing newer equipment, which helps it command good prices for its services.

Management is good and has kept the company from becoming debt-ladden, a trap that many other drillers fell into. This has positioned Ensco well to survive the drop of oil prices (and the corresponding drop in offshore drilling). It recently announced solid 1st quarter earnings of $1.11 per share (diluted). That means that even with the increased dividend, the payout ratio remains quite manageable at 31%. And it leaves the company with plenty of money to expand its operations. Its strong financial position also means that it is always ready to take advantage of opportunities

When I purchased this company last September, I cited its small debt load and strong cash flow as strong points (to help it survive the recession), its valuable expertise, the fact that the drilling industry was currently depressed and bound to come back eventually.

I also mentioned that the dividend was minuscule -- which is no longer true with a yield of 2.9% -- a fair value between $55 and $63 and an investment timeline of 5 years. I would sell only if the share price was to rise significantly (more than 10%) above the fair value without good reasons.

I hold a small position (50 shares) in my RRSP.

Procter & Gamble's Dividend Increase

Another dividend increase for me as Procter & Gamble (NYSE: PG), maker of countless household products, announced a 9.5% increase to its quarterly dividend (from $0.44 to $0.4818).

A quarterly dividend of $0.4818 per share? Who decided on such a weird number?

Nonetheless, that is good news for me, as I own a small stake in the company within my RRSP. Ok, ok. Since I have only 50 shares, that will only mean a small increase of $2.09 per quarter. But you know the tales, by now -- any small increase is cumulative and means a lot over the long term. Cheers!

Net Worth Update

As of April 1st, my net worth was $115 128 (up 3.3% from $111 420). If I exclude house-related assets and liabilities, my net worth was $77 165 (up 4.7% from $73 707). Most of the gain was from the stock markets, which is always nice. However, my liquidities were still tight this month as I slowly get back into my normal mode. My taxes are done and sent, and I should get back some money soon on that front. Enough to restock my emergency fund back to normal, so that quite good.

Assets ($178 923, up 2.3% from $174 853)

• Bank Accounts $2 889 (up 19% from $2 428)
• Emergency Funds $1 257 (slightly up from $1 256)
• RRSP Accounts $53 732 (up 4% from $51 654)
• Non-Registered Investments $24 141 (up 6.7% from $22 627)
• Home $96 330 (stable)

Liabilities ($63 794, up 0.6% from $63 433)

• Credit Cards $5 104 (up 13% from $4 518)
• Mortgage $58 367 (down 0.4% from $58 618)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.356 (down from 0.363)
• House value / total assets: 0.538 (down from 0.551)

Credit card load was still a little higher this month, as there was some Spring spendings done (including a new BBQ). Nothing that worries me, the amount outstanding on my credit cards should go down substantially by the end of April. I am also transferring some shares from my DRiP portfolio to my TFSA this month. This won't be visible on my net worth, since those are both under my "non-registered accounts" heading. The transfer is for about $6 000, and will shelter about $260 of income from the tax-man. I plan on doing another transfer later in the year to fill up my TFSA room, again from my DRiP portfolio.

PepsiCo Increases Dividends

Another dividend increase for me as PepsiCo (NYSE: PEP), the well-known maker of snacks and drinks, announced a 7% increase in its quarterly dividend (from $0.45 to $0.48).

I had mentioned the high probabilities of a dividend increase in January, when I upped my position in the company within my RRSP. This increase will translate into $12 more in dividend for me. On top of that, the price of the shares moved up quite a bit following the announcement, a difference of about $2 per shares compared to the week before the announcement. That was only an increase of about 3%, so I think we can reasonably expect the price to keep moving up -- markets tend to evaluate stable companies based on their dividend yield. But even that increase in the share price means that my position is now worth $200 more than before the announcement.

That's the joy of dividend growth -- you get more money paid up to you everytime there is an increase, but you also get the capital gain to go with it.

My Recent Dividend Increases

In the last couple of weeks, I got a three more raises in my DRiP portfolio.

First, on February 4th, toy-maker Hasbro (NYSE: HAS) announced a 25% increase (from $0.20 to $0.25) to its quarterly dividend. My current position in Hasbro is quite small, since I only added that company to my portfolio last year, but it's nice to see the trend here.

Second, on February 19th, health company Abbott (NYSE: ABT) announced a 10% increase (from $0.40 to $0.44) to its quarterly dividend. Again, my stake in Abbott is quite small (set up my DRiP late in 2009).

Finally, on February 23rd, energy infrastructure company TransCanada Corporation (Toronto: TRP) announced a small 5% increase (from $0.38 to $0.40) to its quarterly dividend. Even though this rise was the smallest, I've had TransCanada in my portfolio for longer and as a result my stake in the company is bigger. So this increase will have the largest impact on my dividend income for 2010.

Still, together those increases will only impact my income by about $4 for this year. Nothing to write home about, but I'll be getting that money this year... and next... and the next one...

You get the picture: it adds up! Cheers!

Net Worth Update

As of March 1st, my net worth was $111 420 (up 1.3% from $109 990). If I exclude house-related assets and liabilities, my net worth was $73 707 (up 2.8% from $72 528). I was a bit suprise by this, as I had since big cash items this month (municipal taxes and car repairs), but the markets was generous to me in February. Still, I was a bit tight on liquidities at the end of the month. Nothing dramatic, and I didn't have to dip in too much on the emergency funds for those last-minute RRSP contributions. Still, I'll have to rebuild it a bit in the next couple of months.

Assets ($174 853, up 1.3% from $172 640)

• Bank Accounts $2 428 (down 44% from $4 312)
• Emergency Funds $1 256 (down 44% from $2 255)
• RRSP Accounts $51 654 (up 8.1% from $47 773)
• Non-Registered Investments $22 627 (up 4.8% from $21 597)
• Home $96 330 (stable)

Liabilities ($63 433, up 1.25% from $62 650)

• Credit Cards $4 518 (up 30% from $3 482)
• Mortgage $58 618 (down 0.4% from $58 868)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.363 (unchanged)
• House value / total assets: 0.551 (down from 0.558)

The car repairs were put on a no-interest 12-month payment plan, which explains the rise of credit card debt. As I mentioned, I dipped a bit ($1 000) into my emergency fund to transfer money (another $2 000, same as I did in January) to my RRSP before the end of the season. This should guarantee me a small tax return come April. Overall things are going well.

Work-wise, I am on a new contract, with more limited connectivity to the outside world. So any blogging I do has to be from home, in the evening. And I usually don't have as much drive to spend time on the computer during the evenings after spending the whole day in front of one. But I'll try to keep it up. :o)

January Purchases in RRSP

In January, I made 3 purchases in my RRSP, using cash generated by the sale of Harvest Energy in December, plus some money I added to my account.

First, I established a position in Kraft Foods (NYSE: KFT). Who doesn't know Kraft? There is uncertainty due to the Cadbury acquisition, which is driving down the share price. I see this as an opportunity to initiate a position in the company, so I bought 100 shares. Kraft is a solid dividend grower -- the company started paying a dividend in 2001, and has increased every year except 2009. The average increase is 9% over the last 5 years. Current dividend yield is 4%.

Second, I made a small move on Brookfield Assets Management (Toronto: BAM.A). I like what I see in this company, which invest in long-life assets (properties, renewable power and infrastructure assets) throughout the world. Management has a long-term mindset that I like, and the company has a solid cash position that it is using to purchase assets from distressed companies that were not as conservatives as Brookfield. So I purchased 100 shares (a small position) and plan on purchasing more in the future. The company pays a US$0.13 dividend every quarter (even though this is a Canadian company), for a 2.4% yield.

Finally, I doubled my position in PepsiCo (NYSE: PEP). I first purchased 100 shares of PepsiCo in May 2008, before all the market turmoil began. I sold half of those shares in September of the same year, but held the remaining 50 shares through all the madness that was 2009. I felt that now was a good time to add to my position in the company, averaging down. The time when the company usually announces its dividend increase is coming (last time was in May) and I'm confident that shareholders will get another raise this year.

3M Company Increases Dividend

Another company in my DRiP portfolio, the well-known maker of PostIt, 3M Company, announced yesterday that it was increasing its quarterly dividend from $0.51 to $0.525 -- a small 3% increase. This is the 52nd consecutive year that 3M has increased its dividend.

This will have a very small impact on my dividend income for 2010, since my position in 3M is quite small at this time.

Net Worth Update

As of February 1st, my net worth was $109 990 (up 1% from $108 935). If I exclude house-related assets and liabilities, my net worth was $72 528 (up 1.1% from $71 722). A more modest risethis month, as the markets have coller down a little.

Assets ($172 640, down 0.1% from $172 843)

• Bank Accounts $4 312 (down 36% from $6 761)
• Emergency Funds $2 255 (up 0.1% from $2 252)
• RRSP Accounts $47 773 (up 5.7% from $45 200)
• Non-Registered Investments $21 597 (down 0.5% from $21 708)
• Home $96 330 (stable)

Liabilities ($62 650, down 2% from $ 63 908)

• Credit Cards $3 482 (down 22.2% from $4 477)
• Mortgage $58 868 (down 0.4% from $59 117)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.363 (down from 0.370)
• House value / total assets: 0.558 (up from 0.557)

Less cash in in the bank account and lower credit card debt this month, as I paid off my credit cards for the Holliday shopping. I also made a lump transfer of $2 000 to my self-directed RRSP, and I plan on doing another transfer in February. The first municipal taxes tax payment is also programmed for February, so available cash may be tight at the end of the month. I may end up dipping into my emergency fund, but will put back the money into it within two months if I do.

Fortis Increases Dividend

This week, I got my first raise in 2010 from one my companies, as Fortis has announced it was raising its quarterly dividend from $0.26 to $0.28 -- a 7.7% increase.

I own my stake in Fortis in my DRiP portfolio, where the increase will have an impact of $4 to the amount of dividend income I will receive in 2010. Of course, I won't actually touch that money at all since it will all be reinvested in additional shares of Fortis. This will keep compounding for years, until I need the money.

2009 Review: Financial Goals

With 2010 now well under way, it is time to review what happened to my finances in 2009. I'll begin by reviewing my 2009 goals to see how successful I was in meeting them, as well as setting goals and objectives for 2010.

First, a reminder of some definitions:

• A goal is the statement a desired result.
• An objective is a quantifiable measure to evaluate progress.
• A mean is a way that is used to reach an objective.

Financial Goal 1: Increase my Net Worth -- Success

My objective here was to increase my net worth from $70K (at the end of 2008) to $85K at the end of 2009. As of January 1st, my net worth was $108K, which means I completely fulfilled this objective. Even if I ignore the increase in the value of our house, which accounts for $8K of the total increase, I still doubled my objective. I had a lot of help from the markets' recovery, but I think my basic plan was sound.

So for 2010, my objective is now to reach a net worth of $125K.

The means remain pretty much the same -- regular deposits to my RRSP and to my DRiP portfolio, keeping an emergency fund, continued debt reduction (mostly house-related, since I have little personal debts remaining).

Financial Goal 2: Increase my Dividend Income -- Partial success

My objective here was to grow the dividend income from my DRiP portfolio from $700 to $850 through additionnal purchases in the portfolio. I almost made it, since my total dividend income was $840. The shortfall is partially due to smaller purchases at the beginning of the year, when I focused on debt reduction, and from the investment mix I selected -- I purchased more corporations (with lower yield) at the beginning of the year than income trusts, since I saw the recession as an opportunity to load up on quality dividend growers. The move paid of in terms of net worth, but this meant slightly lower dividend income for 2009. I can live with that.

For 2010, I would like to see my dividend income grow from $1115 -- which is what I will receive if I make no additional purchases and get no dividend increases -- to about $1300. That's a steeper objective than last year, because I expect more dividend increases than last year. I will account for dividend income from both my DRiP portfolio and my TFSA brokerage account.

Financial Goal 3: Reorganize my Investment Accounts -- Done

My objective was to evaluate my current brokerage accounts to see if they still fit my needs, and open/close accounts accordingly. In June I closed my Canadian Shareowner Investment account. And in October I began the process of opening a TD Waterhouse account to host my TFSA equity investments. I moved out my emergency funds from my TFSA at ING Direct, since I'll benefit more from having better-yielding investments sheltered by a TFSA. I also decided to keep my account with Disnat, since the service I can get there for signature guarantees are quite handy for dripping.

There is no need to renew this goal into 2010.

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What are your financial goals for 2010?

Cheers!

Net Worth Update

As of January 1st, my net worth was $108 935 (up 3.6% from $105 161). If I exclude house-related assets and liabilities, my net worth was $71 722 ( up 5.2% from $68 196. Again a nice increase in my net worth, although this time a significant part is this one was because December was a 3-pay month.

Assets ($172 843, up 2.7% from $168 279)

• Bank Accounts $6 761 up 52% from $4 452)
• Emergency Funds $2 252 (up 10% from $2 041)
• RRSP Accounts $45 200 (up 1.4% from $44 587)
• Non-Registered Investments $21 708 (up 7.9% from $20 123)
• Home $96 330 (stable)

Liabilities ($ 63 908, up 1.3% from $63 117)

• Credit Cards $4 477 (up 29% from $3 481)
• Mortgage $59 117 (down 0.4% from $59 365)
• Line of Credit $0 (stable)

Ratios

• Debt / assets: 0.370 (down from 0.375)
• House value / total assets: 0.557 (down from 0.572)

So, more cash in the bank account (that third pay in December) but also higher credit card debt (Holliday shopping). At the end, more money came in that went out, so things are good. I'll have to be careful at the beginning of the year, since withholding contributions to the RRQ (that's Quebec's basic retirement plan) and employment insurance will be starting again (I maxed out on the contributions in September). This will reduce my net pay by about $300 per month, so there will be a little less cash coming in. There's also the municipal taxes coming soon. So I'll make sure to keep a solid cash position.

I will be doing a year-end review of my finances in one or more as separate posts, to analyze different areas of my 2009 finances.