2019-04 Passive Income

Symbol

Apr_2019

YTD

iShares Core MSCI All Country World ex Canada Index ETF

XAW

0

2003.40

iShares Core S&P/TSX Capped Composite Index ETF

XIC

0

4067.96

BMO Discount Bond Index ETF

ZDB

297.06

1029.61

Vanguard Growth ETF Portfolio

VGRO

24.05

24.05

Amgen

AMGN

0

480.67

Dividends- Corporate

321.11

7605.69

Interest- Corporate

15325

33450

Passive Income- Corporate

15646.11

41056

RRSP- Hubs

VGRO

503.56

503.56

RRSP- Mine

VGRO

97.14

97.14

TFSA- Hubs

VGRO

303.12

644.34

TFSA- Mine

VGRO

331.44

667.44

Dividends- Personal

1235.26

1912.48

Interest- Personal

835.91

6988.74

Passive Income- Personal

2071.17

8901

Total

17717

49957

This is the year I start caring about passive income. I think it’s called the zero hour work week for a reason. That has never been what I had been searching for but it has a snappy ring to it.

The concept that your money needs to work hard for you makes sense to me. I had been a bit too complacent with it for years. We are likely about ten years away from a normal retirement age so this has become more pertinent.

I currently receive dividends from four ETFs and 1 stock. I still own Amgen which is a legacy holding before the small business deductions kicked in. I also still hold some Berkshire but that doesn’t pay any dividends.

I own the 3 Couch Potato portfolio ETFs- XIC, XAW & ZDB. I am gradually building up our VGRO ETF portfolio which is the only ETF I plan to keep aside from our two legacy stocks.

My current corporate owned GICs are gradually maturing and I will not be renewing them. I plan to keep the cash in 90 days terms which currently pay 1.7% interest in our local credit union. This will keep it relatively liquid until I have it fully invested.

The GICs in our RRSPs are also regularly maturing. At last count we had about 45 strips. Oh my goodness. That is too many.

I had originally wanted to buy the GICs quarterly or even (gulp) monthly. I cured myself of that silliness and have decided to buy the GICs only in January each year.

Even with an excel spreadsheet keeping track of the GICs, it has become unwieldy to monitor. So I plan to decrease the complexity by holding one GIC strip per year in each RRSP account.

Interest rates have been bouncing around but that is the nature of the investing game. I have no idea what direction any financial instrument will perform in the short term. But I can continue to implement my plan.

I am not really sure where our passive income will consistently land. But with this new tracking, it will be clearer to me after a couple of years.

The government will be limiting the small business deduction in our CCPC when one reaches 50K of passive income. We may likely breach this threshold during the year. We are 82% of the way there and it is only May.

The benefit is that my husband plans to happily work less. They have hired some new colleagues and this is a perfect time to start helping them start their practices. This is the cycle of life I suppose.

I have certainly seen many instances where doctors tend to “eat their young”. I think this small business deduction limit may have healthy side effects for our profession. Doctors as a group tend to attract very competitive and hard driving types.

Making them see that working harder effectively throws them backwards may help to wake some of them up. That may have the unintended consequences of improving our colleagues’ family lives and mental health.

Perhaps when many doctors begin to take their foot off the gas pedal, they may start to think about their optimal practices and lifestyles. No one else will be thinking about this for you. There is no human resources department you can run to when things start to derail.

Many times just remind yourself that keeping yourself healthy will make you better at EVERYTHING else. It pays to slow down just a bit to catch your breath.

Passive income will not matter if you end up broken just to get there. Furthermore, money is a tool.

Tools are only useful when you know what you want to build.

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