2023 – Looking back on our year of progress

Hi to all

It’s time to sit back and see what happened to our portfolio in 2023. We’ve had a great year, but there’s still room for improvement. I still chase value over quality at times and would like to increase our dividend growth. But this is a long-term game and luckily for us there is plenty of time to improve things.

New Capital

Including the drops, we put $43,460.72 of capital into the market. It’s a ton of money, no doubt about it. Especially if you think combined, we probably make about 160k before taxes. (not including passive income – all tax-free or tax-deferred)

Living in Ontario, Canada we would lose about $47,192 of that income to taxes alone. (without rrsp contributions, donations, etc.) So we would have about $112,808 to live on with a family of 4. We also brought in $24,294 in passive income last year (tax-free or tax-deferred), so we had about $137,102 to live and invest with.

Overall our savings rate was about 31.69% Pretty crazy when you do the math and see it all on paper.

We see all these news articles that you need an income of around 90k to live on your own in gta, but if you manage your money well, I disagree. It sure helps in a 2 income household though. Housing is an important issue in Canada.

I think we live our lives pretty well. Going on vacation twice a year, it’s the wonder season and tons of camping. Our children are involved in sports and they are in the agent. (which is definitely not cheap) They attend after school care which adds up as well.

So we definitely spend money, but I can tell you a few things that we don’t do that save us a ton of money that a lot of people do.

Car payments – The stats are in and the payouts are absolutely insane. According to the Globe and Mail in July 2023, the average new car payment for Canadians was $880 per month, with 30% of buyers paying over $1,000 per month. This is in my opinion one of the biggest wastes of money people make.

That’s a ton of money and it’s statistics for 2023, what would it be today? Our cars are paid off and are both 2013 models, over 200,000 each. Based on these numbers if we both had new cars we would be throwing away over $1700 a month or 20k a year in payments…..not to mention higher insurance rates..I’ll say that again $20,400! wtf. These are 3 great family vacations..

Uber Eats – There is clearly a demand for this stuff, but the markup is astronomical. Every time I go to a fast food place there are a lot of people collecting uber eats etc. I’ve been doing it weird, mostly while having a bunch of drinks. 2 schwarmas that should be like 25 bucks would be over 50 bucks with tip.. So you get that hangover and that financial hangover…dammmm! haha Do it once in a while but don’t make it a habit.

Obviously there are lots of little things we do like make our own coffee etc but these things stand out to me as major wastes of money. We all value certain things differently but I think we all need to be honest with ourselves about things we spend too much money on.. Mine might be fish =)

The original Rich Barber book still gives me the most important information I’ve ever learned about investing – pay yourself first. Get into this habit and your lifestyle will “giggle” around it.

Portfolio moves 2023

We made 2 sales in 2023.

We sold our small position of 27 shares of stanley black and decker for a small profit after realizing it was not a position I really wanted to continue to grow.

We also sold 8 shares of microsoft when it hit 370 per share and was over 8% of the portfolio. Clearly the inventory has continued to run, but we put that revenue at home depot under 300 and they did very well as well. Maybe it’s just a reminder to just let your winners run, but the trade has worked either way.

All proceeds from these sales went back into the market.

Shopping in 2023

• 7 Microsoft
• 53 bp
• 23 BC
• 80 td
• 10 txn
• 25 Nutrient
• 58 couchard
• 208 telus
• 19 hd
• 31 bangs
• 12 national bank
• 3 lmt
• 9 cr
• 46 costco cdr
• 280 allied property ret
• 26 bam

We have a decent mix of growth and income. Moving forward, I would like to get more growth in the portfolio. Lower initial yields but higher dividend growth and stock price appreciation = higher total return

Dripping in 2023

• e.g. – 10
• aecon – 39
• tc energy – 8
• cisco – 3
• telus – 4
• xaw etf – 4
• aqn – 60
• td – 2
• general mills – 3
• suncor – 14
• bep – 10
• fortis – 6
• enbridge – 15

In total, our drips added $4,660.51 in value to the portfolio at the time of purchase. I’m a big fan of the drip program as it buys stuff regardless of price if you have enough money for stocks. This can be a huge boon when stocks fall. This is where Aecon stands out. I was actually debating raising our position to $8 or $9 a share, but I just couldn’t pull the trigger, here we are north of $14.50. I’m glad the drops lowered our price average.

Dividend Increases

Brookfield Asset Management and Aecon were the only 2 stocks we own that didn’t announce a dividend increase in 2023. Although Bam was basically restructured so that one gets a pass. We expect Aecon to announce a raise this year as profits rise now that pandemic jobs are ending. (Their prices skyrocketed in jobs they already mentioned)

Algonquin is the only one that announced a cut in 2023. Let’s be honest, they had investors against the ropes and they threw everything they could at us. wonder if this year might be the time when Bob Seger – Turn the Page. Time will tell, but they better preserve these water assets.

Overall, the dividend increases were quite low, over $200 on a €10k portfolio, but without this cut it would have been better at around 4.5% on average. Couchetard comes out victorious once again with the largest increase of 25%. That’s a big reason we’ve added so much to them once again. We should always reward these big increases with more of our money.

Wrapping

The portfolio had a good year but underperformed the market with a 5.51% return in 2023. Lots of interest rate sensitive stocks are here and we only own one of the great 7 stocks. But at the end of 2022 we had forward dividend income of $8,350.93. As of December 31, 2023, we had forward dividend income of $10,551.29. An increase of $2,200.36 per year over the year. Math is Mathing as Braden Dennis from the Canadian Investor podcast would say.

I’m happy to put it all on paper and see the numbers more clearly. Moving forward into 2024, I plan to increase the high-growth, low-yield positions and increase the overall dividend growth rate. I also plan to increase our financial sector as our 2nd lowest sector in terms of portfolio allocation before reits which I don’t necessarily care about. (low growth and div growth)

So there you have it, another year in the books and we’re already 8% into 2024. Time flies. What are your thoughts? What could we do better and how did you do last year overall?

Cheers!

Hi, I’m Rob, creator of Passive Canadian Income.

In 2011 my wife and I had nearly $60,000 in debt and a negative net worth of $7,000. Through hard work and financial education we paid for all this. We are now focusing on growing our passive income streams to make money work for us. Feel free to follow the journey by clicking the social media links below or sign up to receive notifications of new posts in the sidebar.