September 2022 Passive Income Update

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Igor Alecsander/E+ via Getty Images

Start the bus, it’s time for the kids back to school!

September, what a month. The market continues its downtrend and we sold off a ton of stocks midway through. Killed our income eventually, but so far it seems like a great decision. Almost every stock we’ve sold is down and it feels good to be debt free again. Feel free to read this post here.

Increase

After a few months without an increase, this month brought some nice ones.

  • Texas Instruments (TXN) started with a 7.8% increase. This adds $9.20 to this term income.
  • Fortis (FTS) (FTS:CA) got a 6% raise, adding $27.36 to that revenue.
  • Lockheed Martin (LMT) increased theirs by 7.1%, adding $17.60 to its dividend income.
  • Microsoft (MSFT) tipped the biggest raise, increasing its dividend by 10%. Increase our revenue by $7.20.

I love seeing 4 different increases north of 6%. This is how capitalization really grows and increases shareholders’ confidence in them. Microsoft and Texas are currently at the top of my stock buy list.

Together, these increases added $61.36 to our future earnings.

Total incremental income from dividend increases in 2022 – $381.47

September 2022 dividend income

13 companies paid us this month.

Shares September 2021 earnings September 2022 earnings
RIT ETF (RIT:CA) 65.54 (3 drops) sold
Canadian Public Services (OTCPK:CDUAF) (CU:CA) 94.12 (2 drops) sold
3M (MMM) $32.56 sold
IBM (IBM) $45.92 sold
MSFT $10.64 $18.60
Lockheed Martin (LMT) $46.80 $61.60
Stanley Black & Decker (SWK) $12.00
Home Depot $19.00
JNJ $45.58 $75.71
Couche-Tard (OTCPK:ANCUF) (OTCPK:ANCTF) (ATD:CA) 5.95 6:70 p.m.
Canadian National Railways (CNI) (CNR:CA) 59.04 79.84
Manulife Financial (MFC) (MFC:CA) 37.24 (1 drop) 138.93 (6 drops)
SmartCentres (OTCPK: CWYUF) (SRU.UN: CA) 32.84 (1 drop) 35.92 (1 drop)
Brookfield Renewable (BEP) 86.23 (1 drop) 114.12 (2 drops)
Suncor (SU) (SU:CA) 191.29 (4 drops)
Fortis (FTS) (FTS:CA) 0 120.91 (2 drops)
Enbridge (ENB) (ENB:CA) 239.65 (3 drops) 257.14 (3 drops)
Totals 804.02 1143.76

18 shares dripping in September.

$339.74 more than last year. A 42.25% year-over-year increase. Incredible but with all our recent sales, this number will surely drop in the next quarter.

Our drops (dividend reinvestment program) added $34.69 to our annual forward dividends this month. A beautiful thing.

September 2022 dividend income

Other income

Private investment Payment – $1000.00

1k per month, directly to HELOC.

Income from solar panels

In August (we still get paid a month later), our solar panel system generated 959 kWh. Since we charge a fixed rate of 28.8 cents per kilowatt hour, Hydro One (OTCPK:HRNNF) (H:CA) filed $271.05 in our checking account this month.

Last August, the system generated $287.43, so we are slightly down this month. Not bad considering the last two months have been higher.

Total income for 2022 – $1,897.57

System installed in January 2018

Total system cost —– $32,396.46

Total income received —– $11,782.79

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Amount to break even —–$-20,613.67

September 2022 Pie Chart

September 2022 Total Passive Income – $2,414.81

September 2021 Passive Income – $1,661.44

A 45.34% year-over-year increase. Even better considering that last year we had a $70 Questrade affiliate bonus. A bit crazy actually….

September 2022 Passive Income

Totals for 2022

Total dividends since the beginning of the year – $8,269.68Year-end goal – $25,000

Well, we’ve officially surpassed last year’s Total Passive Income with 3 months remaining. Tremendous! That year-end goal may be hard to hit now after being sold to pay off the HELOC, but you never know…

September Stock Buys/Sells

This month we made the difficult decision to completely deleverage the portfolio. We sold a ton of stocks. I just felt the risk/reward right now didn’t make sense. I explained my thinking and all my sales in this post – Deleveraging. It’s unfortunate because it totally killed our earnings eventually, but at the same time the math worked to pay things off and I just don’t see anything bullish in the market at the moment. So far, it has worked well as these stocks generally continue to decline and the Fed continues to say that it will continue to raise rates.

After this sale, we still made a purchase.

Stanley Black & Decker (SWK) (SWJ)

We recently added 12 additional stocks to our portfolio at around $78 per share. A dividend king who, let’s be honest, had a horrible quarter. The stock was completely killed because of this. The stock price is down 58.90% since the start of the year… It now shows a massive starting yield of 4.13%.

Morningstar gives it a fair value of $168.20 and it is currently trading at $77.53. That’s a lot of pluses! RBC actually thinks it is currently offering a 29% rate of return for the next 5 years based on its projected earnings.

Management has a plan to fix things and no lawsuit brings the company down. We can just keep putting money into this position at these levels. These 12 actions added $38.40 in future earnings.

Update of financial objectives

charities

  • We continue our monthly donation to the Nature Conservancy of Canada of $85.

Increase dividends by $4,285.81 this year. (bringing our projected dividend income to $13,000 per year)

Unfortunately, I’m going to ignore that now. While we could have been very close to achieving it, things have changed. I’m not that bullish on the market and with interest rates doubling in 6 months (and still rising) I decided to pay off all of our HELCO that we used to invest. As long as the term passive income is higher at the end of the year compared to last year, everything is fine!

Minimum monthly ETF purchase of $250

  • This month we added 9 additional units of XAW (XAW:CA) ETF.
  • Questrade* is great because it offers free ETF trading and stock trading options that are cheaper than most Canadian brokers. $250.00 per month would kill us if we had to pay high trading fees.

September 2022 Passive Income Conclusion

A good month. Another quick to be honest. Lots of changes on the investment front, but I feel good in the movements and I find that I sleep better. Worth it.

If I can’t do big things, I can do small things in a big way – Martin Luther King Jr

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Editor’s note: The summary bullet points for this article were chosen by the Seeking Alpha editors.

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