Passive Income – Quarter 1 2019

This year, I’ve added an extra section to the foot of my passive income reports.  I’m starting to simplify my investments/ life and wind some operations down…

investment income

Q1 2019 Dividend Growth Stock Sales

Nothing this quarter.

Q1 2019 Dividend Growth Stock Purchases

83 shares of Lazard (LAZ) on 03 January 2019 for 2936.15 pence per share

60 shares of Verizon (VZ) on 29 January 2019 for 4077.57 pence per share

87 shares of Comcast (CMCSA) on 01 February 2019 for 2810.33 pence per share

151 shares of Tanger Factory Outlet Centers (SKT) on 21 February 2019 for 1644.63 pence per share

76 shares of Archers Daniels Midland (ADM) on 07 March 2019 for 3216.33 pence per share

72 shares of Legget and Platt (LEG) on 07 March 2019 for 3388.47 pence per share

18 shares of Fed Ex (FDX) on 11 March 2019 for 13372.09 pence per share

42 shares of Eastman Chemical Co (EMN) on 22 March 2019 for 5839.74 pence per share

Dividend Income for Q1 2019

45 dividend payments were distributed in Q1, 2019 (an increase of 7 compared to Q4, 2019)

1332.10gbp (dividends from Q1) has accumulated in my broker account (post withholding tax and broker fees).

Hence, there’s a decrease of 122.79gbp for dividend income in Q1 (compared to Q4, 2018).

The average dividend yield is 4.5% (taken from the ranking system), a decrease of 0.75% from last quarter.

Total return from the dividend portfolio is estimated to be 11.56%, since inception (capital gain/7.06% + average yield/4.5%).

passive income q1 2019 - dividend income

I’ve taken a screenshot straight from my H&L account, to show some transparency. Please see the bar chart below to show my progress.

passive income q1 2019 - bar chart dividends

Dividend Reinvestment

Walgreens Boots Alliance (WBA) has been identified as the highest ranking stock, using the dividend ranking system.

S&U (SUS) was tied second. I have a new rule now, to make the system more robust. If that highest ranking stock has debt that is not well covered by operating cash flow, then I oust it.  And that’s why S&U never made the cut.

WBA’s debt is well covered by operating cash flow (34.6% greater than 20% of total debt). As a side note, WBA’s interest payments on debt are well covered by earnings (EBIT is 9.7xcoverage) as well.

After the fall down of Kraft Heinz, I’m even more alert about the health of a company.

Also, as a rule, I never reinvest dividends into a previous high ranking stock (more than twice). Otherwise, I become too overweight.

I had around 1400gbp sitting on account (accumulated dividends), hence I deployed 700gbp into Walgreens Boots Alliance (WBA) and 700gbp into Target (TGT) which was the next highest ranking stock after S&U.

I purchased 16 shares of WBA at 4119.62 pence.
And 10 shares of TGT at 6237.49 pence.

For more information on how I reinvest my dividends for maximum return, click here.

Dividend Funds Overview (Capital)

The download from my Hargreaves and Lansdowne (broker) account below shows the state of play after Q1,2019.

passive income q1 2019 - dividend stocks overview

There’s been a capital gain of 38,324.32gbp for the dividend funds this quarter/ compared to Q4 2018 (dividend buys, dividend re-investment and good old-fashioned compounding).

Investment ISA (FAANG Fund)

There’s been a gain of 3052.70gbp/ 19.36% for the ISA/ SMT fund this quarter.

passive income q1 2019 - scottish mortgage investment trust

Rental Income

Total rental income this quarter is 42.12gbp after management, internet, contents insurance and repair fees.  It’s low season.

P2P Lending

No additional cash contributions were deployed into the Mintos fund this quarter, as I’m winding it down.

passive income q1 2019 - p2p lending mintos

Hence I’m not keeping track now.  As you can see above, it’s still making money. It will take time to exit with the longer loans as you can see below on the ‘Remaining Term (m)’ bar chart.

Up to 3 years! Will start investigating how to sell my notes on the secondary market…

passive income q1 2019 - p2p lending loan term

For more information on Mintos and Peer to Peer Lending, click here.

Crowdinvesting 

I’ve been pleasantly surprised with Envestio and crowdinvesting in general. And I’ve made some generous returns (16%+) on my initial 1K (testing the waters).    

However, I think it’s time to wind this operation down and plough back into the market.  The fact I’m unable to auto-invest and the lack of investment projects will impact my return in the long term.  

passive income q1 2019 - envestio crowdinvesting balance

passive income q1 2019 - crowdinvesting envestio

SIPP (Pension)

There’s been a gain of 7.39% re the SIPP this quarter.  It was in the red at the end of last December.

passive income q1 2019 - sipp

**

Simplifying and Optimising My Life 

Winding Down Bank Accounts

Early this quarter, I wound down my Singapore business bank account.  I don’t see myself conducting business in Asia again due to lifestyle choices.  And I lived out my ‘Singapore dream’, as I’ll summarise in another post.

Why Singapore banking in the first place?

1. During the great financial crisis in 2008, I had a private Irish ltd company and Irish business bank account.  I was close to losing a considerable amount of money in my account, due to the poor deposit guarantee scheme at the time.

“The Irish Government has increased the amount of money it guarantees in deposit accounts from €20,000 to €100,000 in a further effort to instil confidence in the State’s banks.

Minister for Finance Brian Lenihan announced the move at a press conference today making the Republic’s limit in such deposit protection schemes one of the highest in Europe.”

It got me thinking.  I want to store my money in a country where it’s never suffered a bank run.  I want that warm, fuzzy feeling my money is safe and near bulletproof from recessions.

2. 99% of my business banking is fee free.  This saves hundreds of euros per year.

3. The customer service is so much better.  You are treated like royalty rather than a commodity.

4. The foreign exchange aspect/ functionality is structured much better.  If I have a Singa/ Euro business account, then I want to pay my salary/ dividends to a Singa/ Euro personal account? Didn’t work that way for one of the UK’s wealthiest banks.  These foreign business accounts never had the functionality to make outside transfers, so I was forced to wire into my Sterling business account.  Hence the move to Singapore banking.

5. No, it’s not the new Swiss bank account.  Tax details must be lodged with the CRS (common reporting standards).  If you are that way inclined, you can bank in Cyprus or the Caribbean. I’m not really into Russian roulette.

Is Singapore banking worth it? Absolutely.  The currency moved in my favour slowly during my time in Asia.  After Brexit was announced, even more so.  I sold close to 8 months worth of Singa dollars and bought pounds, Sterling.  One of those rare opportunities.

Ultimately, I will wind down the Singapore Sterling and Euro business accounts and leave the Singapore personal multi-currency account intact. This will be my emergency fund account. 

I’ve come to realise, it’s dangerous to rely on one government or one country for all your affairs. So, I’ve been spreading my wealth/ operations/ status throughout the world in the last few years. 

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