Passive Income Report – Quarter 4, 2018

I posted the last income report, just days before the markets took a tumble in early October. Since the end of the last quarter, the S&P 500 has declined more than 14% (measured using the ETF SPY). And the FTSE 100 has fallen 12.5% this year. This has created lots of buying opportunities.

passive income

Q4 2018 Dividend Growth Stock Sales

Nothing this quarter.

Q4 2018 Dividend Growth Stock Purchases

56 shares of Kraft Heinz (KHC) on 24 October 2018 for 4398.56 pence per share

13 shares of Broadcom (AVGO) on 08 November 2018 for 18350.97 pence per share

52 shares of Altria (MO) on 13 November 2018 for 4717.32 pence per share

20 shares of Raytheon (RTN) on 31 December 2018 for 12017.88 pence per share

Dividend Income for Q4 2018

38 dividend payments were distributed in Q4, 2018 (a decrease of 3 compared to Q3, 2018)

1454.89gbp (dividends from Q4) has accumulated in my broker account (post withholding tax and broker fees).

Hence, there’s a decrease of 346.08gbp for dividend income in Q4 (compared to Q3, 2018).

The average dividend yield is 5.25% (taken from the ranking system), an increase of 0.66% from last quarter.

Total return from the dividend portfolio is estimated to be 0.02%, since inception  (capital gain/-5.23% + average yield/5.25%).

passive income q4 2018 - dividend income spreadsheet

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.

5,652.20gbp of dividends were distributed in 2018.

Compared to 2017, the dividend income has increased by 2,604.26gbp. A year over year growth of 53.9%.

Dividend Reinvestment

AT&T (T) has been identified as the highest ranking stock, using the dividend ranking system.

1. AT&T (T)
2. British American Tobacco (BATS)
3. Kraft Heinz (KHC)

However, as a rule, I never reinvest dividends into a previous high ranking stock (more than twice). Otherwise, I become too overweight. I’ve already reinvested in AT&T twice.

So, British American Tobacco is my next high ranking stock. It was tied second with Kraft Heinz. But since I hold less stock (less weight) in BATS, I therefore reinvested in BATS.

Hence, I deployed 1000gbp (just over 1000gbp in accumulated dividends sitting on account).

I purchased 39 shares of BATS at 2497.125 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 Q4,2018.

There’s been a capital loss of 14,039.181gbp for the dividend capital this quarter (dividend buys, dividend re-investment and a good sharp correction in the market).

Investment ISA (Scottish Mortgage Trust (SMT))

There’s been a loss of 4,887.76gbp/ 32.15% for the ISA/ SMT fund this quarter.

Compared to 2017, the investment ISA/ investment trust made a capital gain of 989.44gbp/ 4.01% in 2018.

Rental Income

Total rental income this quarter is -1446.64bp after management, internet, repair and utility fees.

Q1 = -479.58gbp

Q2 = +2542.87gbp

Q3 = +3072.76gbp

Q4 = -1446.64gbp

3,689.41gbp of rental income was received in 2018 (after management/ letting fees, repairs, communal fees and utilities).

The short term rental income has dropped 2502.74gbp this year, hence a very poor performance. The number of guests have increased, as have my prices. However, unforseen circumstances with the floor and electricity meter skewed my return.

passive income q4 2018 - ranking metrics short term rental

passive income q4 2018 - scorecard

P2P Lending

mintos p2p lending - passive income q2 2018

No additional cash contributions were deployed into the Mintos fund this quarter.

The Mintos account has increased 323.35 Euros this quarter.
The Net Annual Return has decreased by 0.08%.

Compared to 2017, the Mintos account made a capital gain of 1721.26e in 2018 and the net annual return has decreased by 0.07%.

Next year, I shall wind down my peer to peer lending. I’ve had a great run, but I want to simplify my FIRE fund going forward. Watch how long it takes me to exit…

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

Crowdinvesting

The full 1000 Euros that was deployed into the Envestio crowdinvesting fund, is now fully invested in 13 investments (an extra 3 projects from last quarter).

Spread evenly at 100 euros per investment (9 are currently active).

Compared to 2017, the Envestio account made a capital gain of 99.89e in 2018.

For more information on Envestio and Crowdinvesting, click here.

SIPP (Pension)

There’s been a loss of 9.21% re the SIPP this quarter.
I still had the Vanguard Lifestrategy 60/40 this time last year, so I won’t compare gala apples to golden delicious. However, since switching to the Vanguard Lifestrategy 80/20 in Q2 2018, I incurred my biggest loss this quarter, which is a loss of 9.21%.

State Pension

After much deliberation, I decided to top up my state pension earlier this year. I already had 16 years accumulated, much to my surprise. Thank goodness for those long days behind the deli and till in Spar and all those other part-time jobs.

16 years is estimated to provide 85.22gbp per week/ 4,431.44gbp per annum. However, after talking to the state pension department, I managed to top up my missing 7 years (with the new rules, you can top up missing years by more than 6 years).

They were class III contributions for me. But, if you’re a sole trader or PAYE then you’ll only need to pay class II contributions.

So, this missing 7 years equates to 4,618gbp of missed payments. I didn’t have to pay it all at once. However, to lock in the low costs I though it was best to pay upfront.

Thus 23 years of state pension contributions is estimated to provide 114.62gbp per week/ 5960gbp per annum (index linked) for my State Pension (according to my official new State Pension Forecast). For me, this is a great deal. That’s if the rules don’t change.

To collect 5960gbp in annual payments, I would need a fund of around 150K (based on the 4% rule).

Takeaway

Dividends = 5652.20gbp
Rental Income = 3689.41gbp

ISA/ Scottish Mortgage Trust = 1061gbp (using the 3.5% rule)
Peer 2 Peer Lending (Mintos) = 1721.26e = 1547gbp

Total passive income for 2018 is 11,949.61gbp/ 13,305.36 Euros

This is an increase of 2,358.84gbp/ 2,626.59 Euros from last year and the first year I’ve broken the 5 figure passive income barrier 
Note: This doesn’t include the SIPP/Pension (can legally withdraw when I’m 58+). Nor, the state pension (can legally withdraw when I’m 68+).

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