Dividend Lover

The Kings of Dividends, Rental Properties

2013-06-14T12:33:00.000-07:00

Owning Rental Property pays.

I have to admit, rental properties has been the real source of my personal wealth and primary means to financial freedom. Despite all the success I've had investing in stocks over the years. Rental Properties has been the hands down central pillar of my wealth.

I was lucky enough to get started in 2003 back then I was a fresh graduate from engineering school, living at home with my parents with literally no expenses. I was save more than 90% of my after tax salary into real estate deals requiring as little up front capital as possible.

I know the margins these days are not as fat. And yes unfortunately everyone is into buying real estate now. So the golden era is over, but there is still some good deals to be had. I'm writing this today as I close my 14th rental building.

Real estate is the cash cow that keeps on giving. The tax breaks, the leverage available to you. The eventual appreciation as fiat money inflates away. The negative real (inflation adjusted) interest rate on the mortgage melts it away. The cash flow that grows with every acquisition. Soon making your highly taxed salary insignificant. It is the ultimate dividend paying investment.

Are we in a Dividend Bubble ?

2012-03-03T17:30:00.001-08:00

There has been a lot of buzz around dividends lately, everybody is talking about yield, income funds, dividend ETFs have been popping up CDZ, CYH, HAL, HAZ, XTR, XDV. Every body is into dividends. People are more concerned about % yield than P/E ratios.

I am a big fan of REITs and I used to give them an over weight allocation in my portfolios even up to 50% These days are over. I cannot justify holding REITs anymore because the valuation is so high. Everything from REITs, Utilities, Telecoms, are trading at rich valuations. Everyone and his grandmother is chasing yield.

Today the only REIT I hold is DI.UN just because I think nobody has heard of it yet, that's why the valuation is still sane. Today my REIT allocation is at around 5% of my portfolios. I switched some of my REIT holdings to Convertible Debentures because the risk reward of REITs compared with their own debentures is becoming disconnected and your way better off holding the Conv Debt.

History has shown again and again that extreme bullishness is a contrary indicator.
Joseph P. Kennedy, Sr., father of President Kennedy, famously said that he knew it was time to get out of the stock market before the 1929 crash when he was getting stock tips from the shoeshine boy.

Am I saying we are in a dividend bubble? probably not, these companies are usually well run blue chips. They are not tulips or cash burning .coms with no business plan. However I do believe dividend stocks are set to under perform simply because the valuation is so high today.

Convertible Debentures

2012-03-02T20:36:00.000-08:00

As some of you may have noticed I am a big fan of dividend stocks. However I have reached a stage where I feel the need to diversify into some fixed income instruments. It is a shame to earn eligible dividends inside and RRSP, Then get taxed as income when I ultimately melt down the RRSP. I figured might as well make my RRSP portfolio more conservative and in the mean time stick it to the man by forgoing the double taxation.

Reasoning

I want to reduce my volatility, at the same time I get the feeling that REITS are over priced. How much more can they appreciate, when REI.UN is paying 5.2% what is the point of holding it when you can buy a safer corporate bond instead. The returns are getting too thin, too many people are chasing yield with REITS and dividends stocks.

Basics
A Convertible debentures is basically an unsecured bond, meaning bond holders get paid first, then Convertible Debentures, then stock holders. You might be wondering what the word Convertible stands for. well good question. It means you can convert your bonds into shares at a pre determined price. Similar to an option call. you can trade in your bonds for shares at a pre determined strike price.
lets look in detail at one of my picks.

Example

INN.DB.E

INNVEST REAL ESTATE INVST TRUST SUB UNSEC CONV DEBENTURE Maturity Sep 30 2017 Coupon 6.0000-CAD
This Debenture INN.DB.E pays you 6.27% in interest (today it is trading at $98.75 per $100) so it is at a slight discount. and is convertible at $8 a share.

Now consider this.
You could buy the common shares of INN.UN today at $5.44 and earn %7.35 yield.

But think is it worth it? will you risk your capital for an extra %1.08 a year? when you can get %6.27 with these debentures, your capital is safer, you will not lose a cent unless the company is bankrupt. your dividend is safe, because it is not dividend it is interest, The company cannot cut it otherwise they would be in default.

In this case the debenture makes a better investment in my opinion. Now the good stuff is not over yet. lets say the stock rises back to its pre-recession level of $10 well, you can convert your debenture at $8 a share and sell the shares. you get to participate in the upside too.

The financial post has a good list of convertible debentures.

Convertible Debentures are sold by face value, so you would buy say $25,000 face value of INN.DB.E for $98.75 per $100 you would pay $24687.5 for it plus commission plus accrued interest to the seller.

The debentures pay interest twice a year. on the same day-month of the maturity date and 6 months after. eg The debenture I mentioned would pay on sept 30 and march 30.

These were my picks
NAL is an energy company, it was my top pick The NAV (value of oil per share) is higher than the conversion price of the debenture so collect 6.25% interest don't risk your capital and hope for the stock market to let you convert the debenture for some extra profit.
INN.UN and SRQ.UN and RMM.UN are REITS, they are smaller ones, so they pay more interest. The principal is safe because it is backed by real estate. and if the REIT craze continues they will pay off.
I added STB in there because the interest rate was good and it came at a good discount. I wanted to get something non energy and non REIT and not economy related so I added it. Also the CIBC analysts 18 month price target was above the conversion price so there is potential for gains there too.

Fixed Income

Description

Quantity

Market
Price
per $100

Total
Market
Value

Market Mix %

SCOTT'S REIT CONV UNSEC SUB DEB Maturity Dec 31 2014 Coupon 7.7500-CAD

25000

$99.97

$24,992.50

NAL ENERGY CORPORATION SUB DEB CONV UNSECURED Maturity Mar 31 2017 Coupon 6.2500-CAD

25000

$100.00

$25,000.00

INNVEST REAL ESTATE INVST TRUST SUB UNSEC CONV DEBENTURE Maturity Sep 30 2017 Coupon 6.0000-CAD

25000

$98.75

$24,687.50

RETROCOM MID-MKT REAL EST INVEST TR. CONV UNSEC SUB DEB Maturity Jun 30 2018 Coupon 5.4500-CAD

25000

$98.00

$24,500.00

STUDENT TRANSPORTATION INC CONV SUB UNSEC DEBENTURE Maturity Jun 30 2018 Coupon 6.2500-CAD

25000

$95.7875

$23,946.88

Total (CAD)

$123,126.88

Now this part of my RRSP portfolio is less volatile. and I believe the ~6% interest it earns will beat inflation.

Nuvista Energy, Opportunity or Value Trap

2011-11-08T23:43:00.000-08:00

Okay This one does not pay a dividend, I have taken a rather big position in NVA, and I am very excited about it.

It is trading at a serious discount to its assets. and there is nothing wrong with it as far as I can tell.

The price is now $6.25
The CIBC analyst said this about the stock when it was trading at $9.15

NuVista trades at 63% of Risked NAV and 4.2x 2011E EV/DACF versus its peers at 75% and 5.5x, respectively. We believe investors are not paying much for significant upside that NuVista has in its asset portfolio, hence our Sector Outperformer rating

According to their math, the stock is trading now at 43% of risked NAV and %72 or core NAV.
This means if you value all their unexplored (probable) and undeveloped (proven) reserves at $0 then take the assets that are currently producing discount them by 28% you'll get $6.25 a share

RBC Analyst also thinks this stock is undervalued, it is rated as Outperform, and given a price target of $9.00

Ontario Teachers is invested in this company. They own 18% of the stock. They last bought shares at $9.50 in March 2011 so we are getting a 35% discount to what Teachers paid. Those guys have done their research and invested 8 months ago. This gives me more confidence in this stock.

Daylight energy
These guys operate in roughly the same areas daylight energy is operating, which gives more confidence to the NAV numbers, The Chinese bought Daylight at 1.2x risked NAV here we have a chance to buy at 0.43x risked NAV.

Management Team
The CEO who recently joined comes from Talisman Energy an oil major and has many years of experience and seems like a very qualified guy for the job. I've read good praise about the management team from CIBC and RBC.

Earnings are coming out on Nov 10th, The company gave an operational update in August saying everything is on track to meet the projections.

It is clear that this stock is undervalued, when will it appreciate is a different story. The only risk I see to owning this is that you could miss out on the other oil and gas stocks that are cheap right now while waiting for this one to appreciate.

Oil Stocks are Undervalued

2011-10-13T14:50:00.000-07:00

I Have been loading up on oil stocks lately because of record low valuations. Oil companies are a screaming buy right now. so cheap that the Chinese are willing to pay more than double the share price for Daylight Energy.

from CIBC analyst

We view the sector's risk/reward as extremely compelling. The large caps
are only 13% off their lows reached in the 2008/09 financial crisis and the
sector is discounting only ~US$70/Bbl oil LT. Our top large-cap picks are
SU, TLM, NXY, & CNQ

Summary on Suncor:

Suncor Energy Inc. (SO–$46.00 Target): Our top pick remains Suncor, which we believe is one of the best-positioned companies against downside commodity risk. We believe the stock has far more defensive elements than the market gives it credit for (most FCF generation and one of the best balance sheets at US$70/Bbl) yet it has been among the worst performers during the recent downturn. Even with the sell-off in oil prices, Suncor is being well supported by high Brent and SCO premiums and exceptionally strong downstream results. Given the company’s operational momentum throughout Q3, we should see record CFPS from the company this quarter. Furthermore, following the recent completion of its major turnaround in the oil sands in Q2, we believe the company is now poised for ~18 months of relatively uninterrupted operations.

Summary on Talisman

Talisman Energy Inc. (SO–US$23.00 Target): In our view, Talisman is better situated now than at any time in the past five-plus years, as the company can lay claim to a well-defined unconventional gas portfolio and is demonstrating substantial and sustainable growth. Additionally, Talisman brings a compelling mix of highimpact exploration that could further extend those five-plus years of international growth visibility. Although Talisman does not have the same defensive characteristics as Suncor in the US$70/Bbl case, we note that even if it did have to cut capex by ~$500 million from our current forecasts, we would still expect ~9% of growth next year – one of the highest growth rates in our group. Additionally, we note that its balance sheet remains very strong even at the US$70/Bbl level. Talisman is also one of the least expensive on P/NAV metric – trading at only 42% of risked NAV. Furthermore, Talisman offers more exploration catalyst potential than any other Canadian large cap, in our opinion, which will be the defining factor for the stock’s performance in Q4/11. The company has high-impact wells planned for offshore Indonesia (South Makassar Strait) and Kurdistan but it is Colombia that most interests us given the lower risk, large size and relatively short cycle times.

Worlds First Fiat Currency

2011-10-12T14:46:00.000-07:00

Fiat Money is Not New

The first time fiat money was ever used was in 11th century china, during the Yuan and Ming dynasties. Surprisingly this ended with hyper-inflation and the notes were discontinued in 1455.

That's a nice little fact, but then after more research it seems that every fiat currency ever used throughout history has ended in devaluation and eventual collapse.

Fiat Money Never Worked

From Louis IV to Napoleon to Post-World War I Weimar Germany .The Treaty of Versailles was essentially a financial punishment placed on Germany to make reparations. The sums of money to be paid by Germany were enormous. (Huge unpayable debt, sounds familiar?)

Can you look at this graph that shows gold in USD and tell me that inflation is around 2% and that we need looser monetary policy because we are at risk of deflation. All that while keeping a straight face?

How does one profit from this eventual collapse?

The general idea is to own leveraged hard assets. of course the best hard asset to fit this bill is real estate. If you don't own your own home go buy one. It is possible that the gold bullion ship has already sailed but you can still find some gold miners trading at some good valuations.

The US dollar is a fiat currency like many before it throughout history, why would it be different this time?

How to profit from the eventuality peak oil using dividend stocks.

2011-09-20T12:35:00.000-07:00

I was reading about the peak oil theory over at The Oil Drum and I came to the conclusion that peak oil ( the world reaching it's maximum oil production as in the highest production amount possible in barrels per day ) will likely happen in our lifetime. ( oil will never run out only become more and more expensive to increase / maintain production levels )

So how does one profit from peak oil ?
Simply put, by investing in oil companies, especially ones with large oil reserves and long life assets.

What does that mean ?

It means oil Juniors like BMO Junior Oil Index ETF If you like the conservative hands off approach and don't mind paying 0.50% in management fees. Investing in Junior producers or exploration companies is a risky business that is why an ETF is a good idea.

What about unconventional oil ?
Yes Oil sands, Cardium, Bakken, etc are all good investments because of the large reserves and long production life.

Do you have any picks ?
My top pick is SUNCOR ( SU ) with 50 year plus reserve life, and a nav of 54$ a share it is trading at a huge discounted valuation. my other picks are DAYLIGHT ENERGY ( DAY ), PENN WEST PETROLUIM ( PWE ) and PETROBAKKEN (PBN) all of which pay dividends.

What if peak oil does not happen ?

Even If peak oil does not happen, some other energy crisis or oil bubble will happen sooner or later. Either escalation of the situation in Syria, Yemen, Iran, The middle east will have another crisis sooner or later.

Disclamer I am long SU, DAY, PWE and PBN. I am often invested in the companies I mention. I believe they are good investments otherwise I would not mention it.

Successful People are Proactive

2011-07-24T19:11:00.000-07:00

Every hear you boss say the word proactive, or reaching out etc. These CEO buzz words used to make me giggle. I've met many Entrepreneurs and Business owners. What successful share in common is that they are proactive. They have an idea and they are relentless in going after it..

They follow through with it, by making phone calls assigning it to their employees etc. Then they keep following through by checking up on the progress and hounding the person working on it until the work is done. In other words they go and act on their ideas. They are proactive.

In my opinion being proactive is more important to success than being smart. How many people are smarter than their boss, many. If you look at technology companies you'll find very smart engineers working for some guy with either a business degree or sometimes no degree at all. These proactive dumb dumb's surrounded themselves with smart people and so do not need to be smart themselves. That is why being proactive is more important to success than being smart.

RIM is the next Nortel ? Nope, Not at all, Buy RIM now.

2011-07-24T13:13:00.000-07:00

I went to Future shop to check out the playbook. Though I would never spend 600$ on a gadget playbook or Ipad as you can see my previous post. Other people do buy such devices and pay a lot for it. I took a look at the device, played a game of tetris on it, watched some movie previews. it seems like perfectly good tablet.

I also spoke to my cousin, who is a doctor that does not know anything about investing his money other than buying high MER mutual funds. When I suggested RIM to him he said that RIM is going to go bankrupt like Nortel. so that makes me think that the sentiment is very very negative.

Now here are the reasons why you should invest in RIM at 26$

1. Each share has 5.48$ worth in cash.

2. The remaining 21$ of valuation is 4.3 P / E

For those who do not understand P / E it means assuming that RIM does not grow its earnings 1 cent more, even thought the smartphone sector is exploding. Each share will earn the remaining 21$ in 4.3 years.

This compares with 4.9 P/E for nokia ( RIM is now cheaper than nokia !!! ) and 11.8 P / E for Apple

Here is what The CIBC analyst had to say, with a price target of 65$ :

At these depressed levels, we continue to recommend buying the shares. Our view is that the product transition is now well advanced with delays
already anticipated in the share price. The product refresh will help restart
shipment growth later in F2012.

so to recap, go buy some RIM shares,
you have panic,
you have good valuations
you have experts calling it cheap
you have limited downside

Disclaimer I have a covered call position in RIM

Luck Favours the Prepared

2011-07-22T12:39:00.000-07:00

How often do you come across a great opportunity that you cannot take advantage of either because you were fully invested in something else. or because you were too slow to react because of the many distractions that eat up your time.

That is why I believe that being prepared to take advantage of these lucky opportunities that present themselves is just as important as the opportunities themselves. It doesn't matter how great the price of this property because the owner is an ignorant divorcee wife or the panic that is going on with RIM at the moment. If you are not prepared to take advantage of the situation you will not gain anything.

Many people got rich from the recession, Think about it, was it luck? The same opportunities were available to everyone. However only the prepared were able to take advantage of the panic. Now we call them Lucky.

How can you be prepared? It is simple. never be 100% invested. always keep some cash or credit available. you could tie it up for that 3 or 4% returns, or you can sit on it and wait even for 1 or 2 years for that great deal that will give you 20% or 30% returns.

How much money is sitting on the side lines ?

2011-02-27T22:06:00.000-08:00

I was reading a monthly report about Canadian asset management companies, I want to share this graph.

Bulls make money when the market goes up, Bears make money when the market goes down, and Pigs get slaughtered.

There is only 1 type of investor who holds money in a money market fund in an investment managed by an asset manager. The Pig. pigs invest in a money market mutual funds, instead of high interest savings accounts because they don't know better.

And this graph is telling us that the pigs have been deploying their cash. in fact they are holding less cash than before the recession.

CIBC 2011 Top Picks

2011-01-24T19:53:00.000-08:00

I wanted to share this, some of these are dividend stocks.

CIBC's did a good job with their 2010 top picks but ofcourse even a monkey picking stocks out of a hat would have made money in 2010 but I do give them get some credit for beating the index.

T1213 Request to Reduce Tax Deductions at Source for Year(s) _____

2011-01-23T15:11:00.000-08:00

Go download T1213, print, fill out, then mail this form to CRA.

also make sure you already gave your employer the correct TD1 , and if you are in Ontario TD1ON

why overpay your taxes, I'd rather pay what I owe when its due.

you don't over your credit card, or gas bill. why would you over pay your tax bill?

Jan 4 2011 RRSP and TSFA contribution day

2011-01-22T07:37:00.000-08:00

Now that the year is over, it is time to make a new contribution to the Dividend Lover RRSP and TSFA portfolios.

January 4th the first trading day of 2011 is a great day to make TSFA and RRSP contributions. It is a great day for contributions because you get the most the most tax advantaged growth time since it is the earliest day you can a contribution.

People who make their 2010 RRSP contributions on March 31 2011 have missed on 15 months of tax deferred earnings. since they could have done their 2010 RRSP contributions on Jan 4, 2010

I hold Canadian REIT's in my RRSP because enjoy the tax efficiency. i had already picked out HR.UN as the new investment in both accounts since it is offering the best discount to NAV among the large cap REITS

I always preach, make your contributions asap to maximize the tax advantaged growth time, especially when it comes to your TSFA. If you do not have enough money to contribute to both early contribute to your TSFA first

The New Year Resolution Crowd

2011-01-17T11:10:00.000-08:00

Today is the 3rd week of January, The peak time for failed new years resolutions.

Anyone who works out at a gym gets a front row seat to the new year resolution madness. by now we will notice the decline of these tubby new faces who started showing up at our gyms.

I believe that the reason why these new years resolutions fail is because the group of people who make these resolutions generally fail at most things they attempt. quite the bold statement I know.

If there is something that needs to be done, like going to the gym, or quitting smoking or saving more money or whatever new years resolutions tend to be. It is something that needs to be done and if you are the successful type, you go off and make it happen.

However a new years resolution person is not willing to do it. The new years resolution is just another excuse to talk about doing things. And right about now is when this group of people give up and we can have our gyms back.

November Dividend Income Report

2010-11-02T13:21:00.000-07:00

Dividend Lover NR     Portfolio: $19323      $2,770 increase
Dividend Lover RRSP Portfolio: $$10,478   $122    increase
Dividend Lover TSFA Portfolio: $1932.84   $13.81 increase

The increase in the NR portfolio was due to investing new funds into KMP, RCI,

The increase in the TSFA portfolio was due to 1 month of DRIP

The increase in the RRSP portfolio was due to 1 month of DRIP and reinvesting the accumulated change into SRQ.UN to get the drip on it working again.

This brings us to 31.73% of the 100,000 yearly dividend target a 2.9% increase

How I got a 12.1% GIC from RBC

2010-10-15T14:41:00.000-07:00

okay the title sounds like a scam, but it is effectively true.

RBC offers a multi-product discount. the GIC was the last product I was missing. and as I have made the evils of GIC's known in my previous post. buying a GIC from RBC allowed me to get the multi product discount and so my 1000$ was effectively earning a guaranteed 12.1% return.

The products you require from RBC in order to qualify for the multi-product discount are

1. chequing account
2. credit card
3. line of credit
4. mortgage
5. investment ( GIC ) self directed investments do not count

I have the VIP account with them which costs a whopping 30$ a month, I had to get this because it is the only account type that does not charge you when cheques you deposit bounce, (due to deadbeat tenants).

This account type also gives a free safety deposit box, free (annual free credit card) and 3 free chequing accounts and 1 US account

however with the multi product discount the fee is reduced from $30 to $22 a month. on top of that you get an unlimited number of free chequing accounts.

adding that GIC is going to earn $8 x 12 = $96 a year from the fees and $25 a year from interest = $121 a year or a %12.1 GIC

The multi product discount also applies to other account types, so even if you have a regular account it is likely worth trying to get it.

October Dividend Income Report

2010-10-14T13:52:00.000-07:00

Dividend Lover NR Portfolio: $16,553 $3,512 increase
Dividend Lover RRSP Portfolio: $10355.90 $58.9 increase
Dividend Lover TSFA Portfolio: $1919.03 $15.50 increase

The increase in the NR portfolio was due to investing new funds into Encana (ECA), bank of montreal (BMO) and Manulife Finanial (MFC)

The increase in the TSFA portfolio was due to 1 month of DRIP

The increase in the RRSP portfolio was due to 1 month of DRIP

This brings us to 28.83% of the 100,000 yearly dividend target a 3.59% increase

September Dividend Income Report

2010-09-15T08:29:00.000-07:00

Dividend Lover NR Portfolio: $13,041.00 $2 increase
Dividend Lover RRSP Portfolio: $10,297.00 $66 increase
Dividend Lover TSFA Portfolio: $1903.50 $15.50 increase

The increase in the 2$ increase in the main portfolio was due to 1 month of dividends used to deleverage by paying off some of the margin.

The increase in the TSFA portfolio was due to 1 month of DRIP

The increase in the RRSP portfolio was due to 1 month of DRIP

This brings us to 25.24% of the 100,000 yearly dividend target a 0.08% increase

I haven't invested any new money this month.

August Dividend Income Report

2010-08-16T14:58:00.000-07:00

I've started my new job, I will make a post about it soon, but it is taking up ALL my time.

Dividend Lover NR Portfolio: $13,039.00 $2173 increase
Dividend Lover TSFA Portfolio: $1,887.14 $18.54 increase
Dividend Lover RRSP Portfolio: $10,230.90 $124 increase
Total Yearly Dividend Income: $25,157.04 $2,315.54 increase

The large increase in the Non Registered portfolio was due increasing the leverage in the account.

The increase in the TSFA portfolio was due to 1 month of DRIP.

The increase in the RRSP portfolio was due to 1 month of DRIP.

This brings us to 25.16% of the 100,000 yearly dividend target.

Consumption Maximization

2010-07-13T12:37:00.000-07:00

Saving money is in a way deferring consumption. Money itself is an IOU from society to consume an amount of goods and services. when you put money aside you are delaying consumption.

You could consume something today, but if you instead save and invest these IOU's you could buy more, bigger and better items to consume later.

Now I'm going to claim that the ultimate goal of saving and investing is to maximize the amount of goods consumed throughout a person's life.

say you have these options,
1. Buy a $100,000 Porsche today in cash.
2. Invest the money and use the dividends to lease a new $600 a month car every 3 years for the rest of your life.
3. Invest the money for 10 years @7% then lease a $1200 a month Porsche every 3 years for the rest of your life.

Choice #1 gives immediate gratification.
while choice number 2 or 3 delay the consumption, there by maximizing the total consumption.

Good things come to those who wait

A disturbing fact in North American culture,
as soon as a kid gets his first job he moves out of the parents house.
when the kid makes more money, possibly cause he is done school or university, he buys a car.
he makes a little more money, he buys a house, or rents a better place, he is no longer a student after all.
the kid gets married, now there are 2 incomes and the 2 can share the house and possibly share one car, and maybe even start paying off student debt? that's great until the babies start coming.

In this sad yet typical story there is no delayed consumption. Any income made is spent right away. And so you are doomed to work for the rest of your life.

I personally think the single most important financially wise decision a young person can make is to live in the parents house for as long as possible at least until mid 20's in order to build some capital.

The second most important decision is to delay buying a car for as long as possible. take the bus / subway. and build your capital.

If I were to give any advice to a young person it would be build capital first.

Changing Jobs

2010-07-08T13:38:00.000-07:00

I recently accepted a new position at another technology start up company. I gave my current employer my resignation effective July 31st.

I was able to negotiate my compensation from a very strong position.

My first job was at an online advertising company. I joined this company at start up and it is now very successful, a world leader. The founders did not give any stock options, and I was young an naive enough to accept. 5 years later I was tired of making other people rich. I left to join my current position, a consumer electronics start up, a slightly different yet lucrative field.

A month ago I was contacted by a Venture Capitalist who offered my an opportunity to work at a company he was invested in. I was a perfect fit for them because of my prior experience. Something that is impossible for them to find here in Toronto.

I knew I had huge negotiating leverage,
1. They came to me.
2. I had a unique skill that is difficult for them to find in Toronto.
3. They were very much in need for someone with these skills and experience.
4. I already had a great Job.
5. I don't even need a Job.

So I agreed to meet them for lunch. I had lunch with 2 of the VC's and the CEO of the company, I made a good impression.

I got another call and we scheduled a meeting at their offices, where I met more of the company. Then they offered me something. which I turned down regardless of what it was.

The next day I was called again with a better offer, which again I turned down.

The day after that, I was called again with a better offer which I finally accepted.

I have an older cousin who is currently a partner in a private equity firm in Dubai. He works hard.
We had a conversation 5 years ago when I told him I am planning to retire by 30.
His response was, I used to think the same way, but when you get to 30 you realize that you are earning more money than you ever thought possible. and so you don't retire.

Book smarts does not equal buisness smarts

2010-07-07T11:19:00.000-07:00

I studied Engineering at school and every now and then I meet some of my nerdier class mates for a game of Settlers of Cattan. Last time we met I saw one of the nerds and I found out that he was working at a company that does not compete with my employer doing something my employer is willing to pay a lot for.

My current employer is a start up rich with venture capital and is stock option grant happy. It is also offering a $3,000 referral bonus to encourage employees to refer people they know. When I brought up the prospect of offering him a job with us, my college refused to even listen to my offer. so I assumed that he must be doing even better than I was at his current job.

After we were done our little game, my college was going to put on his back pack and take the bus to the subway to go home to his parents house. At the time my car was in for service and BMW had given my a 128i loaner car. When i offered him a ride in the car the reaction I got was Wow you can afford a car on your salary. that's amazing I wish I could make enough for a car.

Now we are professional engineers turning 30, and he is still living like a student. This guys is one of the smartest people I know. I used to ask him for help when I didn't understand something at engineering school.

However when it comes to business, he is an Idiot.

July Dividend Income Report

2010-07-06T14:36:00.000-07:00

This Time around I was on Vacation in Los Angeles. I spent the Canada day long weekend + 1 day off work. unlike my trip to Jordan this time I did spend a lot :( but it was worth it.

They had a store called Nordstrom Rack it is similar to Winners in the US except it is bigger and the discounts are better.

Dividend Lover NR Portfolio: $$10,866.00 $3,922.00 increase
Dividend Lover TSFA Portfolio: $1,868.60 $18.30 increase
Dividend Lover RRSP Portfolio: $10,106.90 $296.16 increase
Total Yearly Dividend Income: $22,841.50 $4,236.69 increase

The large increase in the Non Registered portfolio was due increasing the leverage in the account, as I wanted to take advantage of the opportunities the market is currently presenting.

The increase in the TSFA portfolio was due to 1 month of DRIP.

The increase in the RRSP income came from a 2,000$ contribution, since I got my NOA I was able to put in the correct amout in there, instead of the conservative estimate I put in on Jan 1st. with this 2,000 I've maxed this years contribution at $22,000

This brings us to 22.84% of the 100,000 yearly dividend target. a respectable increase from the last report

Newtons Laws of Dividends

2010-06-18T11:02:00.000-07:00

Newton related Distance, Velocity and Acceleration with each other to revolutionize the physics of the time.

I was putting together some spread sheets to track my dividend portfolio's. I wanted to make a column to show me the monthly increase in dividends. since more shares get added through the DRIP and new funds. when I realized the parallels that exist between newtons laws and dividends.

Distance is your Net Worth.
Velocity is your Dividend Income.
Acceleration is the change in your Dividend Income.

Adding more shares to a portfolio increases the Acceleration. not only is the Velocity increased once, it is continuously increased as dividend income gets reinvested.

Then add Time into the equations as The sooner you start your investment trip the larger the distance travelled.

Then I went further to add a column to calculate the monthly change in Acceleration. ( the change in the change of Dividend Income) This was the most interesting column. It shows how fast you are increasing your Acceleration. I'm going to polish up this spread sheet and post it.