Firstly, Happy New Year folks! Here’s hoping 2022 brings you all the happiness and success you wish for. This is my first update in a while. As I mentioned in my September update, I’m switching to a quarterly format for the foreseeable future. Although a monthly update was an easy way to provide regular content, I was finding it difficult to carve out the time each month to run the numbers. Let’s see how the quarterly reviews go, which will follow roughly the same format as the monthly updates but provide a little bit more reading material.
If you aren’t familiar with the Income Portfolio, check it out before you read on. This series is primarily focused on
monthly quarterly portfolio updates.
If you are interested in seeing how the portfolio performed over the first 12 months of its life, that is detailed here. Overall Q4 2021 was hugely positive in terms of personal finance and progressing toward my goal of financial freedom. As I mentioned in September, I had a number of different job opportunities present themselves. Thankfully, I was successful with one of the applications and have signed contracts to begin the new position in Q1 2022. More on the new position and its implications in the following section.
I didn’t invest as much as I would have liked in the Income Portfolio at the end of 2021 and this was down to a couple of factors. Christmas was one, and the additional strain on finances meant I had less money to invest. The primary reason I did not invest as much as I usually would (€500 per month), is that I made my first private equity investment in November / December. Although it was a relatively paltry €1,000, it meant I cut back on the Income Portfolio contributions. I plan to write a future post to cover this in more detail so stay tuned.
Drum roll, please. The first big development in Q4 was that I secured a new job. Although it is a similar role to the one I currently have, it is in a different industry and at a higher level. Aside from the financial impact, I’m looking forward to working in a different industry. I have been involved in my current industry for 7-8 years, and although the role I will be occupying will be similar it will be at the opposite end of the spectrum to what I currently do. A change is as good as a rest as they say.
Now the fun part, the financial impact. There are slightly different benefits for each position but in terms of salary, the new position will pay me an extra €27,500 per year. Adding in an increased bonus, I should receive an additional €35,000 per year or so. Nothing to be sniffed at. The salary should increase should equate to having somewhere in the region of €1,000 extra after-tax income per month (thanks Irish tax system). I have not decided what I am doing with the additional money yet, but extra savings and investments will make up the majority of it.
The raise also pushed my base salary above €100,000 for the first time. I’m not sure why a six-figure salary is so idolised, but it’s nice to have reached it.
Crunching the Numbers
Savings: €0 saved. This will change once the new job starts.
Income Portfolio: $1,552.75 contributed in Q4. This is lower than usual as I did not deposit the usual amount of funds in December. Figures for the income portfolio will be stated in USD as that is the primary currency the stocks are denominated in. Currency risk will play a role in the returns for this portfolio but as we know from our risk post, that can work both ways.
Passive Income: In Q4, I added an estimated $99.92 in future yearly dividends.
Below is a nice summary from Track Your Dividends, although there is $2.70 missing from the annual income meaning the Yield on Cost is closer to 5.50% in reality. Dividends are not guaranteed so this is just a guide, but useful nonetheless.
The Income Portfolio Returns
Since I was pointed to Portseido, tracking returns has become infinitely easier. Rather than tracking on a manual spreadsheet, Portseido automates the calculations (although I do have to log trades manually). Q4 was a positive quarter for both the Income Portfolio and the S&P. Over the quarter, the Income Portfolio performed fractionally better but nothing worth getting excited about.
These figures are based on the money-weighted return (MWR) which takes into account the deposits and withdrawals during the period. I believe it is the most accurate way to display the performance of the portfolio.
This is an income portfolio, so the cash flow element is hugely important. Below are the dividends received in Q4 2021. This is the gross dividend received and before any withholding or income tax.
- ALCO: $2.00 received.
- CIX: $1.20 received.
- CRWS: $17.85 received. ($5.60 regular dividends, $12.25 special dividends).
- CSCO: $2.59 received.
- EDUC: $1.60 received.
- EVR: $0.68 received.
- GOLD: $0.92 received. ($0.36 regular dividend, $0.56 return of capital).
- HNNA: $1.51 received.
- HVT: $9.00 received ($1.00 regular dividend, $8.00 special dividend).
- JNPR: $1.35 received.
- KBAL: $0.72 received.
- MPX: $0.36 received.
- MSM: $2.25 received.
- MTEX: $8.50 received.
- NC: $3.36 received.
- NEM: $4.40 received.
- PFE: $1.56 received.
- RGR: $6.32 received.
- SCCO: $6.00 received.
- SIMO: $1.01 received.
- SPTN: $1.40 received.
- STLD: $0.52 received.
- TAIT: $2.16 received.
- TX: $7.20 received.
Total Dividends Received: $84.46. I’m looking forward to this amount hopefully growing in Q1 2022, at the moment the forecast is for somewhere in the region of $140 in dividends.
Stocks Added in Q4
Rather than listing the stocks that have been added in the period as I did with the monthly updates, for the quarterly updates I will list all the stocks purchased in the quarter along with the quantity. Tickers in bold are new to the portfolio.
- ALCO – 3 shares
- AUY – 10 shares
- BHP – 5 shares
- CIX – 2 shares
- EDUC – 9 shares
- ETD – 5 shares
- GFI – 10 shares
- GGB – 3 shares
- HVT – 2 shares
- MPX – 4 shares
- NEM – 1 share
- RGR – 3 shares
- RIO – 3 shares
- SCCO – 3 shares
- TAIT – 23 shares
- TX – 3 shares
Four new names were added to the portfolio in Q4. Unlike the monthly updates, I will not be sharing my stock list for the following period. The stocks I select change on a monthly basis and I can’t give an indication of what may meet the criteria two to three months down the line. If you want to see what is added in Q1 2022 you will have to check back in April!
Other Interesting Items
Three months is a long time, so I’ll try to keep this short.
I always look forward to Christmas, it’s a fun time of year. This year was slightly different as the family and I all caught COVID at the same time resulting in most of the Christmas break being spent cooped up inside. Thankfully, none of us were seriously affected but it did put a damper on the festivities this year. Hopefully, by the time I do the Q4 2022 update, COVID will be a thing of the past! Because of the holiday period and the illness, I have been neglecting my physical fitness, but that will turn around in Q1.
As I have mentioned in a few previous updates, I enjoy reading. Over the last few months, I haven’t read much. but I’m consciously trying to incorporate reading back into my routine, particularly before bed. On a separate media-related note, we just finished watching The Witcher season 2 which I thoroughly enjoyed (I always have been a fantasy geek at heart).
You will know from some of the previous posts that I have dabbled in crypto, DeFi etc. over the last year or so. I tend to get excited about crypto, explore an area for a month or two, get bored (or lose money) and move on. I have never been part of a project at an early enough stage to reap the associated rewards, but I feel like I’m approaching another crypto exploration cycle. With that in mind, I have been exploring The Worldwide Webb recently which is a Metaverse/game in early development. It’s not super early with all of the apartments being minted long ago and currently selling for 1 Eth at the floor, but the game itself is still in Alpha testing. I’m going to stick with it for a few months and see how it plays out. I don’t have any particular expertise or insight into the Metaverse side of things but the game is fun so far!
As always, this post is not a recommendation to buy the above list of stocks. It is for informational purposes only. Before investing your hard-earned money, make sure you do your research.
The Stoic Trader