2019 Financial Goals: $30,000 in Passive Income

First, let’s see how our financial goals served us in 2018. We set them here.

In 2018:

We received $7,808 in dividends, beating our goal by $808. It might be that we were too conservative in setting that goal in 2017.

From investing in private mortgages we profited by $4,971. We planned on receiving $5,906.

Income from rental property was $3,559; we missed our goal of $4,100. Our second condo completion date was late, and profit from it was relatively smaller than from the first condo. For 2019 our expectation from rental properties has been set accordingly.

From investing in Lending Loop we received $1,590, a greater return than the $1,200 we expected.

Our spending paid us back $883 through credit card cash back programs. Our total cash back of $828 included a $130 deduction for two Scotiabank Momentum VISA card fees and a $185 rebate from Capital One (primarily used at Costco).

Our total 2018 passive income was $18,811. It is a bit more than the planned $18,206 a year ago. Without credit cards cash back that was not taken into account when setting financial goals last year we would still be close to our projections.

Our passive income covered 18% of our expenses.

Towards 2019:

Dividends $10,500:

Our current projected income from dividends is $8,905. That number does not include dividends hikes in 2019. I am assuming that some of our holdings will increase their dividends despite uncertainty in the market now. Along with DRIP I would estimate the organic increase as of $200 in 2019.

We are going to maximize our TFSA contribution in the coming year. The TFSA limit is $6,000 in 2019, so the combined limit for my wife and me is $12,000. Receiving a conservative 3.5% profit on $12,000 would yield $400.

To compensate for receiving income from rental properties, we will deposit $10,000 into our RRSP accounts. By doing so, we would avoid paying taxes on the income from rental properties. At a rate of 3.5% that would add about $350 to dividends.

As a result, all anticipated dividends in 2019 would total $9,855.

We will challenge this goal through a stretch goal of $10,500 in dividends. It is achievable through allocation of additional capital toward dividend-paying companies.

Rental Properties $4,000:

Profit from renting our two apartments should be around $4,000. We have not refinanced the second property yet. It means that we will have additional capital borrowed at the cost of a mortgage to be invested in higher-paying assets as private mortgages. That means we anticipate an additional $3,000 in profits.

Private Mortgage $12,660:

Our expectation for profit from our current investments in private mortgage is $9,660. That number might be slightly affected if borrowers repay in full, which would require investment in a new deal. In that case we would not get paid for a month or two. Another $3,000 is expected from additional capital that comes from rental property refinancing.

Lending Loop $2,040:

Without investing more in Lending Loop, we expect to profit $2,040 from it. 

Credit cards cash back $800:

Assuming our spending will be at the 2018 rate it is reasonable to predict cash back of about $800.

We plan receiving passive income of $30,000 in 2019.

At least 25% of our family expenses should be covered by our passive income streams.

Random Thoughts

Our goal of finding additional income sources has not materialized in 2018. But we will continue towards that goal in 2019.

An exciting year seems await us. Mr. Market has already started creating opportunities. Shares of Bank of Nova Scotia (BNS) are cheaper today than three years ago when we bought them. The lower share price the higher dividend yield and we like dividend yield.

We rent our primary residence and are always keeping eye on the real estate market. Who knows? perhaps a downturn in real estate, following an overall economical downturn, will provide an opportunity to buy a property to use as our own home. If that happens, money received from refinancing the second condo would go toward a down payment for property.