My Mom’s Portfolio : October 2017 Dividend Income Report

Here’s our October Dividend Income Report for my mom’s portfolio. Did my mom travel in October ? No, she did not…I guess she spend enough money travelling. That doesn’t stop her from going out with friends and continue to help out in social volunteer work.

Did you see the headline of 4th November Financial Newspaper De Tijd ? Savings accounts are losing 5 BILLION BUYING Power !! Thanks to an increasing inflation and low interest rate, the Belgian saver loses money every day… I have written numerous times about this stupid behavior of Belgian people.

What’s new in October 2017 ?

On the 5th of October, there was an article about the “Belgian and his saving account”. Today there is 260 billion parked on savings accounts. A survey revealed that 75% of people who save money, do this on a saving accounts. 45 % also does pension saving. (Layer 2 in our Financial Strategy.) Only 15% of Belgian people invests a part of his money in the stock market.

But most Belgian people save with their head in the sand. The financial crisis has proven that putting all your savings money in one bank is not ideal for your mental health. Neverthelesss says 47% to be loyal to their bank. 4 out of 10 has their savings money spread over two banks. What do you do?

It becomes worse when the survey asked the Belgians about the interest rate on their savings account… Only 1 out of 5 people could say the interest rate and money they received.  More than 37% admitted honestly they really had no clue. Two out of three Belgian savers also said their saving behavior is not influenced by the low interest rate. Even if another bank would offer 0,2% more on a savings account, only a few would consider changing bank. Whether that is smart is another question.

Who saves today 10.000 euro on a savings account during 5 years at an interest rate of 0,11%, sees his money increase to 10.055,12 euro. At a savings account of 0,50%, the capital increases to 10.252 euro or a difference of 200 euro – an extra that doesn’t cost you a thing !

But most Belgians don’t care. Too much hassle to change my savings money to another bank is the most heard argument. It does take only a few mouse clicks to change your bank and transfer the money tough. The other argument is ” I am happy with the service of my bank”. End of discussion… but what service do you need for a savings account?

This laziness is caused by financial illiteracy the survey proves. Only 10% knows exactly how to calculate the interest money over several years and knows why the interest rate is so low. The fact that inflation eats away your capital is only known by 47% of the people. That is really astonishing as that means people don’t know that you can buy less with 100 euro this year compared to last year…. well …we can only show our cash flow results month after month. It should be the trigger to invest in the stock market if you don’t do it today.

Now you can read our Dividend Income October 2017 Report Out for my mom’s portfolio.

Dividends received in October 2017

During the month of October 2017, we received 434,23$ dividend income. We hit the 200$ objective thanks to our quarterly paying ETFs.

Here you find the overview of all dividend payouts during the year 2017 compared to 2016.

Portfolio management

Last month we purchased GM shares. We did not take our profit at 46,5$. On 30th October, Goldman Sachs came out with a SELL rating with a price target of 32$. The stock took a dive down and we got out breakeven.

GM stock is now providing an excellent pullback setup for would-be buyers afraid to chase at lofty heights. The stock was up some 31% over the previous two months with nary a whiff of selling. I am now interested to sell puts on GM.

Currently, the 50-day moving average rests at $41 and is a logical level for buyers to emerge – if we even drop that far. And then, below that there’s the major resistance zone around $39 that should morph into significant support. I personally might even sell puts below 39$ dependent on the premium.

Click to Enlarge Source: OptionsAnalytix

The further GM shares fall from here the more confident I am that a snap-back will materialize. So we can use a strategy that gets us longer the stock the lower it goes. A cash secured put could do the trick. Sell the Dec $40 put for 55 cents. The initial margin requirement is around $580 so if you end up capturing the profit of $55 it will be approximately a 10% return on investment.

The worst case scenario occurs if GM falls below $40 by expiration. In that case, you will have to buy the stock for a cost basis of $39.50. Based on the hefty amount of support in that area I think it’s a great price to initiate exposure. Learning options investing has teached me a new way to earn money.

Dividend Income Growth

My mom’s dividend income has grown above the 2000$ mark. Nice !! We have now a total of 2011,23$. As you can see in below summary, we only missed in February 2017 our 100$ monthly dividend objective.

We have now 168% of our yearly objective.

Going forward

We still have cash available for new purchases and we continue to look for new opportunities. We can now also put our cash at work using cash secured puts. Another way to earn money. Stay invested is key in today’s bull markets but keep cash available for making money when markets turn around.

How was your month of passive income? How do you generate money for your retirement? Let us know….

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