From Super Reits to Stupid Reits lol

Recently last month I took a gamble and purchased $150k worth of Reits on margin LINK

Ohhhhhhh how it has not been going to plan so far.

$152,669 has plummeted down to $146,045
That is a $6,624 loss so far or 4.3%. Wow that is a big drop for a time period of only 28 days in the so called safe investment of real estate.

Also I have paid $229 in interest for my (3%) margin account to borrow the money to invest.

On the bright side I have received $914 in dividends so far from just this play as they are all monthly payers but whats the point really to earn 7.5% in dividends a year when your investment goes down 10% lol.


In Conclusion

So far it has been a bad investment but I am not worried about it just yet. It is early as its only been a month. I will give it a close watch to see how things shape up in the coming months and continue to pay down my margin debt from dividends received. I will make periodic updates on just the REIT play to keep you people informed.

I

In a splurge purchase I have purchased a new phone which will not be here till mid next month. It is a lot of money for a phone. Sure I could get one subsidized from my carrier but I really dislike contracts as my last provider really took me to the cleaners as I tried to switch. I dont spend much on myself and its an item I use very often. Plus my last iphone 5 lasted me over 2 years now which is the longest I have ever had a phone without upgrading. I am hoping for this new phone to last another 2 years thus the apple care warranty. I am firmly against extended warranties but I feel justified with this one as phones are very accident prone and I will be running this one without a case so it can fit in my pocket still lol. This is the second most expensive phone I have ever owned. WHATTTT u say???? Yes In 1996 I spend over $1600 on a Motorola StarTAC. LOL How far have we come. The StarTac was the leap into the future at the time before texting was a thing and 50 cents a minute was the going rate for a phone plan.

Other News

I have been playing with about 100k in my US margin account. I have been selling Apple puts for a few dollars below market price and the 300 shares of Apple I do have I have been selling covered Calls for a few dollar above. Overall I am bullish on Apple and have been playing the stock to take advantage of it.

I still hold 600 shares in my retirement account I am not touching or playing options with. My max 100k play is to see what kind of money I can make options trading writing aggressive options.

In my coming posts in a few days I will give a Grandma Olga ETF update LINK
Also a project debt Ali update LINK








So how have your guys plays , buy,sells and options been? Also what is the most you have spent on a phone and what has been your favorite. I think my old time favorite was my Motorola black MicroTac elite phone. Was great with slim detachable batteries and looked very classy at the time.

$2,139,484 Net Worth Update September 2014

 

My Net Worth Update September 2014

     September 14 / 2014  : Updated every mid month

    ASSETS

Home 2014 assessed value                                  total                 $1,190,000

-Equity Investments

Tax free saving account TFSA -                 $33,601

Retirement saving plan RSP -                  $108,173

Canadian margin account -                      $302,693

US margin account ( Ex Rate 1.1076)-    $160,309
margin available $167,215
                                             Total equity    $472,839

                                                                               total:                 $642,800

-Rental Property

Warehouse Income Property 2014 assessed value

                                                         

                                                                               total:                 $384,000

-Start Up Company

Brewery start up share value

                                                                               total:                   $85,000

-Cash                  

Checking account                                        $558

Business account                                       $7,087

     

                                                                               total:                    $7,645

                                                                        Assets total :          $2,309,445

                                         

   Liabilities

US margin account     $19,732
(margin rate 3.75%) 

CDN margin account $149,187 

(margin rate 3.00%)

                                                                           Liabilities total :        $169,961

                        

                 August 2014 Grand Total Net Worth:      $2,139,484 

                                     Gain/loss from last month + $13,390


August 2014: $2,126,094 Details Link + $14,613
July    2014  : $2,111,481 Details Link  + $5,584
June    2014 : $2,105,897 Details Link   + $3,165
May    2014 : $2,102,732 Details Link

  Investment Yields

- Start Up Brewery : No expected return for a year

-Warehouse commercial property Income 

 $1,912 a month minus $678 expenses ( maintenance,tax) =  Per month: $1,234                                                      Yield on assessed value:  3.85%                Total year profits :$14,808

                                                              Forward Monthly dividends Avg:  $1,264

                                                              Total Forwards dividends yearly $15,599

    Grand Total Passive Forward Yearly Income :    $30,407

  (This passive total is a bit out of date but will get around to updating it soon)

                  Per month average total     :          $2,533

 In Summary-



Another 10k plus month. I am overall pretty happy with it. I will take 10k gains anytime I can. Primarily the gains were all market gains in equities. I had some good run of Apple stock recently and I have hopped in and out of it a couple times this past month. I have been buying the dips and reselling it higher. I plan to continue with this for a little while especially with blockbuster Iphone 6 numbers coming. I have rewarded myself by preordering an Iphone 6 plus 128gb in space grey. Time to sell off my 2 year old perfectly functioning Iphone 5. I dont have much indulgences and a couple gadgets here and there is all I need.

My 150k Reit gamble is not paying off so far. I am down a couple of percent on them so far. I did however sneak in a day before ex-div date so a .625% was expected but not 2%+. I will give more specifics in a later post. All my new trades and movement has made things hard to track and separate. In a coming post I will detail what I have going on. Passive income gets a few more steps to calculate when some trades are short term and adding interest per month from margin debt.

The Canadian dollar continues to fall which boosts my Canadian net worth total for which I can not complain. Sorry I have not been too active of the blog of late because I got quite a few things going on. I am working on some real estate deals, I am helping even more around the house especially with my oldest starting junior kindergarten as I often am looking after my 2 year old boy. Also My dad is having some medical problems and had to make a few hospital visits. Busy busy what better busy than nothing going on at all. In a few days I will have an update to my holdings and strategy.

How is your guys August and Sept shaping up??

Good Day and Grind On!

August 2014 Dividend and Monthly Report Update

August proved some changes in my Portfolio. From sneaking into Apple dividends with 1000 shares to buying over 150k Reits on Margin. but we cant forget the main reason for it all. THE DIVIDENDS! One day I will not have to make any moves at all and just live off my dividend income. Till then I will grind aggressively forward!


Here is my Dividend total for August


          2014 Running Total - $3861.82
                            *Aug - $1,482.38    Interest total  $87.79
                            *July - $1,239.74       
                            *June -  $608.62
                            *May -  $531.13

August 2014 Dividends Paid
 58.75 - REI.UN RioCan Reit
 39.37 - HR.UN  H&R Reit
105.00 - COS Canadian Oil Sands
 18.33 - SJR  Shaw Communications
 50.70 - BMO Bank of Montreal
 28.00 - D.UN Dream Office Reit
 22.92 - ENF Enbridge Income Fund
 52.65 - AX.UN Artis Reit
 46.00 - CPG Crescent Point Energy
 38.00 - PG  Proctor Gamble
 30.60 - CL Colgate
 60.31 - KMI Kinder Morgan
704.07 - AAPL Apple
 8.80  - DOL  Dollarama
 37.74 - CLX Clorox
 50.91 - VZ Verizon
 71.00 - RY Royal Bank
 59.23 - T AT&T
$1,482.38 - August Total

      $87.79 -August Interest Total

- Added new interest total for cost of borrowing on Margin- August interest total $87.79

- RY Royal Bank increases annual dividend by 5.6% from $2.84 to $3.00
- BNS Bank of Nova Scotia increases annual dividend by 3.1% from $2.56 to $2.64 making it its second dividend increase this year




In Summary

Highest total yet. Since I have started borrowing money at margin I will be paying interest charges that will eat up my dividend totals but as long as my dividends total outweighs my interest total it will all be good. Yes it is risky to borrow money to make money but it is not a significant portion of my net worth and I will be fine if things go sour.

Real Estate News

Not much too report but been pounding the pavement. I have been looking at rental income homes, Potential downsize homes and Lots for sale to build on. There has been a few interesting opportunities but not the right one yet for me to jump on.

Also helped my parents list a home of theirs for sale. Maybe an early inheritance soon coming for me. We will see how things pan out. I am not counting on or expecting anything from them but hey if they want to help me and fund my children's education I would be very grateful.



Market News

Portfolio is rebounding quite nicely from the other months late dip. I hope to report a decent net worth gain mid month if things stay on track.

As detailed before I made a big bet LINK on APPLE for 100k. Things worked out and my option was called for an overall 5k gain after all fees and borrowing costs. The last few days Apple has dropped hard due to the ICloud Scandal. I have to admit I browsed through the pics of Jenifer Laurence ( Thank U Intrawebs!!!) I have since jumped back into another 1000 shares of APPLE at $99.11 average cost which is so far down a $1. I plan on writing options again on it once the price rebounds on it. I am hoping for another 5-10k gain on this bet and will update its progress.

My Big REIT purchase  LINK is down a lil bit 1% overall. I am not worried because Bank of Canada just announced no change to interest rates and also I snuck in a day before the Ex-dividend date on the REITS so it naturally is down a few days after.







Brewery News

Not much too report but just some standard closing documents for share structure. Official possession of new building is next month but we have access to it now. Equipment has been ordered and building improvements have already begun. Hopefully by Christmas we will be pouring our first batch of brew.

Other News- In perspective of it all

School is in session. Oh not for me but my daughter. She is starting junior kindergarten. We have been looking into schools in the area and we have found a non religious private school close by. Yes it is very pricey but I want better for my children's education. I know for me growing up the school system failed me many times. I just skated by as a young punk in over crowded classrooms with teachers not giving a crap about you. For me school was not a safe place and the last few years of high school I carried a knife with me to school for my own protection and a couple occasions I had to use it. School was an extremely stressful time for me and I dont want my kids to have the same experience.

This was a one of reasons why I moved out from the big city. I am very grateful and lucky for what I have. That said I have been debating back and forth about private school for a few years. Yes it is an enormous cost. I have estimated it will cost me $450,000 just to put both my children through to grade 12 and that's not including post secondary. Insane huh. How can one justify this cost.

To me its all about sacrifice. I am willing to sacrifice A fancy home to live in more modest dwellings. I am willing to skip out on personal indulgences (New cars, Vacations, Man toys) for my kids education. This is why I have been looking at downsizing my current home primarily to tell you the truth. Its an investment in their future. As a parent I have learned to stop being so god damn selfish. I used to be Scrooge McDuck grasping my money tight. I was wealthy but miserable. My only purpose was to make money. Now I realize life isn't just about money but living a fulfilled life with purpose. My purpose is to be happy and take care of my family. Dont get me wrong as money places a close second behind my family.

So as my daughter just finished her first day at school I was very impressed with the school and happy about my decision. The amount of time teachers spend with students, the amount of staff on hand, the smaller classroom size,the increased amenities at the school, the extra curricular activities they offer. Its everything I never had at a school. Perhaps my daughter will be CEO of a a fortune 500 company or a hedge fund manager one day. You never know!  Even if my daughter wants to pursue a sports, arts career I am fine with it. Hell even if she wants to be a mechanic or a plumber as long as she has the opportunity to do whatever she wants to is all I can ask for.

This does not deter my end goal in life. My end goal is still to grind forward every year with an increasing net worth. I don't want to die penniless but hand down a legacy my kids can continue with as well grinding forward into the billions and trillions one day. I want them to become asset grinders always reaching for that next rung and challenging themselves in life.

So how was your guys August for investments? Any thoughts on private school?

I just bought $152,669 in REITs on margin.

So I have been kicking the idea around for a little bit and today I made the move to sneak in on ex-dividend dates on all these holdings since these Canadian Real Estate Investment Trusts (REITS) all share the same monthly payout schedule.

What are REITs or Real Estate Investment Trusts?
They are basically stocks that invest into real estate directly. They hold many different types of real estate like apartment buildings, shopping malls, office towers. Reits are highly liquidable and offer high yields but are prone to rising interest rates and real estate markets as well as occupancy problems. A good high quality Reit often will have long term leases with business such as banks or large chains like Walmart that provide very steady income.

First off this is a risky move and not recommended to any sane investor. Yes I am still crazy. Even worse I bought these all on Margin at 3% interest.

After much reading and analyzing certain REIT stocks I decided to jump in. REIT levels are still off their 2013 high and the trend is showing a good upswing. Interest rates are destined to be low for the next couple years as well. I plan on holding this for at least a year and see how it goes but hey you never know. Hopefully I will get some capital appreciation as well as some sky high yield with this play.

BTB-UN.TO	BTB REIT UNITS	4.90	6.90	8.52%	-	.42
HR-UN.TO	H&R Real Estate Investment Trust	23.23	19.69	5.79%	1.14	1.35
REI-UN.TO	Riocan Real Estate Investment Trust	27.14	11.65	5.18%	2.31	1.41
AX-UN.TO	Artis Real Estate Investment Trust	16.02	19.30	6.75%	1.02	1.08
CUF-UN.TO	Cominar Real Estate Investment Trust	19.58	9.89	7.50%	1.94	1.47
DRG-UN.TO	DREAM GLOBAL REIT	9.53	-	8.39%	-	.80
RMM-UN.TO	Retrocom Real Estate Investment Trust	4.48	-	10.02%	0.37	.45
D-UN.TO	Dundee Real Estate Investment Trust	29.06	-	7.70%	3.24	2.24

Average Yield                                          7.57%
Forward Yearly Dividends                 $11,562
Monthly Dividends                                  $963
Monthly Dividends after margin cost    $588

As you can see yield is quite high. Some are higher risk than others with some smaller Reits like RMM.UN $336.4 Million market cap ranging up to the largest in Canada with REI.UN with 8.3 Billion market cap. All these companies have a good history of payout as many have over 20 years in consistent monthly payouts.

So crunching some numbers these buys of $152,669 of Reits will bring in a 7.57% yield at $11,562 in forward dividends or $963.50 paid monthly but since margin interest is at 3% that I borrowed at I have $149,894 debt which will cost me $4496 a year or $374 a month. This should hypothetically leave me $7065 a year or $588.75 a month after margin interest costs.

I will continue to pay down my $152,669 at 3% margin rate account with the payout proceeds every month to increase the difference I take home.

I will update my holdings but I will keep this batch of Reit stocks away from my regular account as so it can be monitored separate.

So come join me and watch me lose all my money with these methods or watch me grind forward to a billion!


Disclaimer: Do not trade like me and lose all your money and cry to me after. I am no professional, I am just a regular guy that can hardly spell . Do your own research and dont follow anybody blindly on the internet because it a dangerous place and you might get hurt. Plus I dont take well to cry babies. Take your losses on the chin and man up and dont blame your own mistakes on others.

New Buy Qualcomm and Sells Chevron : August 2014

So after talking to my accountant to become a little more tax efficient I decided to make a few trades. Also my online broker was still offering me free trades as part of a promotion and there were only a few days left on it. I also took the opportunity to move all my Reits into taxable accounts and balance my American - Canadian stock ratio.

New Positions
HSE- Husky Energy
TRP- TransCanada Corp
QCOM - Qualcomm

Added Positions
RY - Royal Bank
CPG - Crescent Point energy
IDV - Ishares international Select Dividend ETF

Sells
CVX- Chevron
REI.UN Rio Can (Reduced position)

Opened a new position in Qualcomm. I like how they are valued right now and their long term prospects. They have a 2.19% yield , 35% payout ratio and dividend growth of 11 years.


Bought two small opening positions of HSE and TRP. Both Canadian energy stocks. Also added to my position of Royal Bank , Crescent Point Energy and a international dividend etf.

Sold off very small piece of Rio Can so whole trade would fit in my registered accounts. Unfortunately sold Chevron but my Canada energy plays kinda offset it since its in the same sector.

These moves put me up to $15,591 a year in forward dividends at an average of $1299 a month

QCOM	QUALCOMM Incorporated	76.77	17.46	2.10	3.98	1.68
TRP	TransCanada Corporation Common	51.63	23.09	3.80	2.17	1.77
HSE.TO	Husky Energy Inc	33.06	16.53	3.63	1.97	1.20

Other Stock News

Looks like my big Apple bet is going to pay off (Info Link). I expect for my 1000 share position to get called at $99 on August 29th. If all goes according to plan I will walk away with a bit over $5,000. This still leave me with a 600 share apple holding in my registered account which I am letting it ride out a bit. Needless to say its been having some great gains.


I have also bounced around an idea in my head. Buying high yield REITs on margin. Basically I would grab a few high yield Canadian REITs 6%+ and buy them on my margin account at 3% interest. Thus pocketing the difference of 3%+. There is quite a bit of risk involved as REITs could tank or margin interest rates rise affecting the Reits yield. Or the Reits can continue their rebound from 2013 levels and rise further. I have lots of margin room and not worried about markets tanking and getting hit with a margin call. Its a good short term outlook but I cant say its a good long term strategy which I am researching the pros and cons.

In theory I could buy 150k of Reits on margin with a projected yield of 6.5% and after paying 3% margin rate I would be left with 3.5% which is $5250 a year or $437 a month. It is a move I am seriously considering but I am still tentative on it. I will make the desicion in the next couple weeks and watch the REIT market closely.



Let me know what you guys think of my buys or my crazy new strategy idea? If you hate it let me know and why!