Income Report – 2018 April

How has your last quarter been?  For me the first three months of 2018 have been very costly with multiple big ticket items to take care of. My emergency fund has been wiped out and this has impacted my ability to save.

I’m also conscious that I’m not tracking my savings rate as well as I could. The unpredictable nature of my income and expenses doesn’t make it any easier. I could have a 200% savings rate one month and then a -100% the next. It only makes sense to analyse on a yearly basis I think.

In terms of tracking my net worth, I’ve realised I’m not that comfortable displaying this online. This quarter it’s increased slightly, nothing like the last quarter which was pretty monumental, especially when taken in context of where I was just 2 years ago.

Let’s move onto reviewing the targets from the previous quarter.

Target 1 – Buy an investment property in readiness for student rental in July.

FAIL. My outstanding debts have made obtaining a mortgage pretty difficult. I had a suitable property lined up with a decent deposit and funds to renovate, but no bank willing to back me up with a mortgage.

Target 2 – Parlay my crypto “investments” into something more akin to a dividend and implement stronger security.

SUCCESS. A chunk of my crypto investments are now in tokens which generate income of sorts. I’ve bought some NEO, which will generate GAS. I also now have some RED MWAT tokens which will start paying a dividend of sorts in the form of an energy credit which you can use to power your home or sell on their trading platform.

Worth noting that for RED MWAT this is purely hypothetical at the moment. The whole crypto sector has taken a massive hit over the past two months. In early January I was contemplating my retirement and two months later I’m licking my wounds. All things considered I’m probably about 25% down on my initial investment. So nothing life changing happening here.

Target 3 – Complete my ISA funding for the year.

FAIL. With the big costs I’ve had in March I’ve been unable to fill up my ISA. I was intending to sell a chunk of my cryptos but they’re not worth enough! I managed to put another £700 into my ISA bringing the total to £16200 invested. Next year I’ll try to front load my ISA, this is probably more important given the uncertainty around my current employment.

Target 4 – Open a SIPP and deposit £5000.

FAIL. Again. I decided to leave the cash for my property investments. After checking out the fees and being faced with a few minor obstacles to get things setup I didn’t push this forward. I was looking forward to not paying tax on that chunk of money. I’ll do a proper analysis this year and create a blog post with my findings.

Dividends Received

Dividend income for the quarter = £220.46 (Prior quarter £157.18)

Average monthly dividend = £73 (Prior quarter £52)

The dividends came from seven companies.

  • Big Yellow Group = £21.11
    • My first dividend stock, increased it’s dividend by just over 40% from £14.90 to £21.11. Happy with that growth.
  • Severn Trent = £26.67
    • Interim dividend from the waterworks. This share has taken a hammering in the markets. I bought at 2543, its now at 1844. Hey ho, so long as the dividends keep rolling in I shan’t complain (too much).
  • National Grid = £32.22
    • Another stock that has taken a hammering since I bought it. The threat of nationalisation and the costs of upgrading the network to deal with electric vehicles seem the main things dragging it down. I’m considering buying more of this or Severn Trent, although I may stick to stocks outside of the UK. We’ll see.
  • Greencoat UK Wind = £52.44
    • Another quarter another chunky dividend. I’m hoping for an increase in the dividend at some point. This remains my biggest position.
  • AT&T = £34.88
    • Converted from USD and with a 15% haircut courtesy of US withholding taxes. Still, not too shabby.
  • IG Group = £33.92
    • A nice interim dividend. IG continue on their upward trend. They’ve done well from the Crypto boom over the last few months, although they anticipate this to contribute less in the future.
  • IBM = £19.22
    • Quarterly payer, just 88p short of a crisp £20 note..

The evolution of the monthly dividends is shown below. A lean 2017 is giving way to monthly dividends as the companies I’ve bought begin to contribute.  Last year my total dividend income was £312.53.  This year after three months I stand at £220.46.  Progress is being made.

dividend income 2018 04

Buying and Selling Shares

Cobalt Blue Holdings has jumped up a few times since I first bought it. I was keen to add another dividend payer to my armoury so I sold £1000 worth. This left me with a chunk of Cobalt Blue which has subsequently jumped up another 30%. I’ll leave those alone until the middle of 2019, at which point the cobalt mine should be operational and I’ll re-assess.

Combining the proceeds of the Cobalt Blue sale with the spare cash in my account plus £700 extra meant I could buy 3090 shares of Lloyds Bank Holdings at 64.75p each. This seems reasonably cheap, they’ve overcome the woes of the financial crisis and the business seems on a steady footing.  The main risk would be a massive post-brexit recession which prevents people paying their mortgages. I’ll take that risk.  At the moment they have a decent dividend of 4.7% which adds about £94 onto my projected dividend income for the year. This should hopefully nudge me past £1000 for the year as a whole.

 Aims for Next Quarter

Target 1 – Pay £8000 into my 2018 ISA for next year. I don’t want to get caught in a situation where I’m under-funding my ISA again. Not big not clever. I’m looking at ABB, Pepsi and Brookfield Renewable Partners at the moment as potential investments. I may pull the trigger on one or all of these in the next few months.

Target 2 – Commence negotiation with debt 1 and debt 2. These debts have kept my credit rating down and prevented me getting a mortgage for an investment property, this was a big disappointment with big implications.

Until next time…

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