30 % more Dividends

When I started the blog My Financial Shape back in 2016, documenting the journey of our family of four towards Financial Independence by 2024, my wife and I set a strong focus on increasing our Savings Rate in order to invest on a regular basis.

We had been building a dividend portfolio for a few years before and been tracking all cash inflows we got from our investments.

It’s vital to establish different Passive Income Streams and diversify them over time.

We wanted to bring ourselves in a position where we would never “need a job” again.

So, we worked hard to shape our finance, cut costs in order to achieve a savings rate of at least 60 %, building a nice cash pile and invested regularily into dividend paying stocks. We focused on solid businesses that provided us with a reliable stream of dividend income. Companies like Nestlé, PepsiCo, Heineken, Coca Cola etc. were constantly on our watchlist and whenever markets fluctuatied, we took advantage to enter into many stock positions.

Our path as Dividend Growth Investors has paid off handsomely so far. It’s amazing, how slowly, but surely, our Dividend Income has been marching up over the years (all numbers are in Swiss Francs CHF), which correspondes to around USD 1.1; all numbers are always net after taxes).

But then, in 2020, during the COVID-19 Pandemic cash generation from our investments has been hit quite substantially. Even wonderful businesses like Disney, French luxury giant LVMH or British soft drink makers Britvic, Nichols and Ag Barr completely scrapped their shareholder payouts. Many others businesses in our stock portfolio drastically reduced their shareholder payouts which led to a 13 % lower dividend income compared to 2019.

Interestingly, one year later, our Dividend Portfolio is recovering quite nicely.

Compared to April 2020, our Dividend Income jumped by 33 % from CHF 1’800 to almost CHF 2’400. This increase was mainly due to organic growth and the fact that several companies resumed their dividend payouts such as British bank HSBC, LVMH.

Our second Passive Income Machine consisting of Peer to Peer and Crowdlending Investments generated significantly lower interest income compared to the previous year (currently CHF 49 versus CHF CHF 413). This was due to substantial cash withdrawals we have been during 2020 to build up our Tech Portfolio.

So, we are quite happy with our total April Passive Income in the amount of CHF 2’400 which brings the number to CHF 4’520 resp. to CHF 1’130 on average per month.

For the full year, we want to achieve at least CHF 15’000 in Passive Income which currently looks quite achievable.

What about you, fellow reader, how was your April in terms of passive income?

Disclaimer
You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

Hey there fellow reader, welcome to my monthly update regarding our income streams from stock- and Peer to Peer investments.

The first quarter 2021 ended quite nicely with USD 1’215 in passive income generated in March, which is 30 % higher than in that same month one year ago.

This increase was due to a combination of organic dividend growth, the contribution of new stock positions (Microsoft, BB Biotech which both were added in 2020) and witholding tax reinbursements on our German stocks (2019 dividends).

For the whole year, we target at least USD 15’000 in Passive Income (net after taxes) which looks quite achievable. Over the first three months, more than USD 2’000 have been generated, resp. more than USD 650 per month on average.

The second quarter traditionally is the strongest one, with many of our European stock holdings paying out their annual dividends.

In the last three months, my wife and I held our savings rate well above 70 % which gave a nice boost to our wealth accumulation process.

In addition Stock Performance had a positive effect: for instance holdings in Facebook and Alphabet in particular have been marching up quite nicely. Currently, the market value of our total Stock postions stands at around USD 440’000 (see our Dividend Stock Investments and our Tech Portfolio).

Disclaimer
You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

Hey there, fellow readers.

With my February Passive Income being more than overdue, I will quickly run through the numbers and share with you also our latest Stock Buys and Sale of Share Positions.

USD 426 versus a loss of USD 2’053 one year ago

Last year in February, our Passive Income was heavily negatively impacted by the collapse (scam) of two Peer to Peer/Crowdlending Platforms I had invested in (Kuetzal and Envestio).

I had to write-down the amount of USD 3’100, which in addition to several dividend cuts in 2020 amid the COVID-19 pandemic led to a Big Earning Miss in 2020. Total Passive Income has been significantly lower with under USD 10’000. Initially, my wife and I had targeted USD 20’000 in passive income for 2020.

It’s good to see, to be on track again, with a robust February Passive Income result.

We work towards total Passive Income for 2021 to be at least USD 15’000 which is roughly 50 % higher than in 2020, and 7 % on top of what our total investments generated in 2019.

Aggresive investment shift has paid of nicely

Since April 2020, my wife and I have invested heavily into Tech Companies, financed to some degree by cash withdrawals from our Peer to Peer and Crowdlending investments and underpinned by our increasing savings rate (we cut spendings amid the pandemic and shaped our cost structure).

Over the last weeks, I sold out stocks with a total market value of almost USD 15’000 and reinvested a portion of the sale proceeds (roughly USD 5’000) into new stock holdings and two new Crypto Positions.

And still, due to a Strong Performance of our Dividend Stock Portfolio and our Tech Holdings, the total Market Value of our Share Holdings easily jumped over USD 400’000 (compared to roughly USD 300’000 one year ago).

Over the last weeks, I had acquired stocks of following companies (for a total of roughly USD 5’000):

• Mc Donalds
• L’Oreal
• Pernot Ricard
• Total
• Paypal
• Adobe
• Zoom
• Nvidia
• Nio
• Sea Limited

Furthermore, I invested around USD 1’000 in Bitcoin and Ethereum.

Over the last twelve months, tech investments had shown a performance of almost 45 %, driven by positions like Facebook, Square, Tesla (see post Tesla is more than just cars), Amazon and Shopify etc.

But also our much less dynamic Dividend Stock Portfolio had a very nice run-up over the last weeks, mainly driven by positions like the Walt Disney Company, LVMH, Porsche, BMW, SIXT etc.

Cyclical stocks recovered very well, in particular oil and commodity shares (Rio Tinto, BHP Billinton, Royal Dutch Shell etc.) and chemicals such as BASF and Covestro.

Amid the very strong performance of many stock positions in our Tech and Dividend portfolios, we decided to put some money off the table and exit following holdings:

• British American Tobacco
• Imperial Brands
• Altria
• Massimo Zanetti
• 3M
• JM Smucker

Furthermore, we sold off all our shares in tech company Slack, which will be acquired by Salesforce. This move was profit-taking from our side and I am sure, that I will be able to enter into a position of Salesforce at more attractive conditions lateron.

I wrestled some time with selling 3M, which is a dividend king and a very well positioned company. On the other hand, we are already well positioned in several of its industries through Henkel, Reckit Benkiser, BASF, ABB, Victrex etc.

I exited all tobacco positions (Altria etc.) as these holdings definitively don’t fit with our investment strategy anymore.

Massimo Zanetti and JM Smuckers are classic “consumer defensive, coffee stocks”. We are already very heavily positioned in various consumer staples names such as Nestlé, Unilver, Heineken etc.and I preferred taking a stake in Mc Donalds, we also had taken a stake in the world largest chocolate producer Berry Callebaut back in 2020 as well as in Danone and drink companies like Fevertree, Campari etc..

Disclaimer
You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.