Author: Financial Shaper

November and December 2021 Financial Update

Posted on January 16, 2022 in Investing, Personal Finance

Hey there, fellow readers, I wish you all a HAPPY NEW YEAR!!

First, I have to apologize for my late monthly Passive Income Updates. The last few months have been incredibly dynamic.

I have started my own business

In December, I made the jump and resigned from my job.

Currently I am building my own consulting business and am also working part-time for my former employer in order to ensure a smooth hand-over to my successor.

It’s a win-win I guess, as I have still a few months where I get paid while at the same time I can get my business going.

It’s super exciting and so inspiring, but also a lot of work! I’ll certainly keep you informed about how things are developing.

A brief look at the financial numbers

More than USD 100’000 wealth accumulated in 2021

The previous year has been an amazingly strong one in terms of wealth creation.

Our savings rate hit almost 70 % in November and December and over the year, total market value of our investments surpassed USD 550’000 with USD 600’000 in liquid assets plus corporate bonds. Unfortunately, once again, due to the COVID-19 pandemic we have not been able to realize our major real estate project abroad and deploy our cash pile.

Very strong performance of backbone stock positions

On the back of very strong performance of my largest positions such as Nestlé, Roche, LVMH, SIXT, L’Oreal etc. but also of medium-sized holdings such as Campari, Ferrari, Pernod Ricard and Diageo my dividend portfolio grew handsomely.

As I have always been quite heavily invested in insurance businesses (Swiss Life, Zurich Insurance, Swiss Re, Aviva, Legal & General, Axa, Allianz etc.) and still have some exposure in bank stocks (HSBC, UBS etc.), my investment portfolio has been a beneficiary of rising interest rates.

Positions in oil supermajors and miners (Shell, BP, Total, Chevron, BHP, Rio Tinto, Glencore etc.) did particularily well in the past months while my tech portfolio came down quite a bit. There is clearly a secor rotation going on which is fine, as this always provides nice buying opportunities.

December passive income + 345 % YoY

While November 2021 passive income was pretty in line with the same month in 2020, I finished December with a big jump: Swiss francs (CHF) 1’239 resp. almost USD 1’400 which was roughly 3.5 times higher than in the previous year.

Main December passive income contributor has been our “parking money”, some portions of our relatively large cash pile we put into corporate bonds and on savings accounts to generate interest income.

A total of USD 14’330 passive income in 2021

For the previous year, I had set a goal of USD 15’000 which we slightly missed.

But still, it’s significantly higher than the USD 9’721 in 2020, we are speaking here of a + 47 % passive income jump YoY.

The main reason for the “earning miss” was the fact that I sold off my tobacco stock positions (Altria, Imperial Brands, British Tobacco) early in 2021. Without these disposals, the USD 15’00 passive income target would have been easily achieved.

But what clearly showed as a drag in terms of passive income generation has been great in terms of wealth accumulation as with the free cash from stock disposals I had bought shares of L’Oréal, Pernod Ricard, Ferrari and French oil supermajor Total early in 2021. All these investments had an excellent run so far and I am very confident in the growth potential of these stocks.

So, despite the “passive income earning miss”, 2021 has been an excellent year and I am looking forward to what the new year will bring.

What about you, fellow readers, did you achieve your financial goals in 2021? Thanks for sharing your thoughts below in the commentary section.

Disclaimer
You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action

Steps To Protect Your Finances When Leaving An Abusive Relationship

Posted on November 30, 2021 in Guest Posts

This is a guest post.

The author, Camron Hoorfar is an attorney and the spokesperson of DebtConsolidationCare – the Internet’s get out of debt community.

Domestic violence has been prevalent in romantic relationships for a long time, and the problem continues to grow year after year. Every fourth woman in the US has experienced physical violence inflicted by an intimate partner, and this shatters their dreams of having a beautiful and perfect
relationship. Moreover, women aren’t able to speak out against this issue, mainly because they are stigmatized, and society tends to sweep such things under the rug.

When two people are in a relationship or living together, they tend to consolidate their lives, including their belongings, accommodations, preferences, plans, and finances as well. However, as soon as the relationship turns into an abusive one and it is time to leave, things can get quite complicated, especially since you have to untangle your lives from each other.

This article covers everything you need to do to protect your finances when you are leaving an abusive relationship.

Ways to safeguard your finances when leaving an abusive relationship

No matter how deep your relationship is, you can’t put it to the test when your partner starts to exhibit signs of violence on you. Not only does it harm you physically, but it also leaves mental scars that take a lot of time to heal. Therefore, the best you can do is to take everything belonging to you and walk away.

Let’s have a look at the steps you should take to keep your finances safe in case you need to end the relationship.

Always have a secret contingency plan

The moment you experience the first signs of abuse, you should start preparing for your escape. The chances are that your partner won’t let you just walk out the door with all your belongings and finances, and this is one problem most women in an abusive relationship face. Experts also call this financial or economic abuse.

Therefore, you should have a contingency plan for escaping whenever you need to, and it should include financial preparations and resources that can sustain you for a few weeks, especially if you have to find a place to stay or get off the grid for a while. There’s no telling how your partner will react once they find out that you have decided to leave, which is why you should keep your plan private.

Keep your financial situation in check

Often, women try to make things work as soon as their partner starts getting violent, and it mostly results in things getting worse. By the time things escalate, you don’t have any backup plan, or your finances aren’t even in check. You may have gotten a mortgage on the house or a loan for any other purpose with your partner.

If the loan or mortgage is under your name, then you would be stuck with paying it for a long time, and you would also be under debt. This would derail your plans of leaving the abusive relationship.

Therefore, it is best to take stock of your financial situation at the right time so that you don’t have to endure the mental trauma. Moreover, if you are stuck with a huge loan that needs to be paid, you may also have to think of ways to get out of debt . If you know your financial situation well, you will be able to take action early on.

Set up independent bank accounts

Usually, people in relationships get joint banking accounts and consolidate their finances, mainly because both of them think they are in it for the long haul. However, when things don’t seem to be perfect, and one of them has to leave to protect themselves, their funds are tied up in a joint account,
and their partner would neither let them or their money go.

Therefore, you should make it a point to keep your accounts separate, no matter how close or intimate you may be with your partner. If you can’t do this, you can set up an independent account secretly when your partner starts becoming abusive. Moreover, you can designate a family member or friend to look after the account or keep it hidden unless you really need it.
If you don’t have any money set aside, this would mean that you will have to stay in the abusive relationship a little longer while you gather everything you need for your wellbeing and escape. Taking care of these things proactively will save you from a lot of physical and mental trauma.

Get individual insurance policies

Another thing that partners often do is that they get joint policies for health insurance, car insurance, home insurance, etc. While this is a wise decision for couples who stay together for a long time, it isn’t beneficial for women who have to leave their abusive partners immediately. Most of the time, you are covered through health insurance that your partner gets from his workplace, which means that if anything happens to you after leaving, you will have to pay hefty medical bills.

To avoid this from happening, make sure to review all your insurance policies before you leave so that you don’t end up with zero insurance once you leave your violent partner’s house.

Summary

This brings us to the end of our guide on how to protect your finances when you are leaving an abusive relationship. Always remember that you don’t have to endure any sort of domestic violence, even if you
love your partner dearly. Therefore, you can save your money and take it with you as you walk out the door.

About The Author

Camron Hoorfar is a licensed attorney with experience in consumer debt, litigation, bankruptcy, tax, business laws, criminal laws, and non-profit organizations. He is also the spokesperson of DebtConsolidationCare – the Internet’s get out of debt community.

October 2021 Passive Income Report

Posted on November 7, 2021 in Investing

Boum! With October in the books, just two months to go to complete an amazing year.

So, time for my monthly update where I share my cash inflows on my stock holdings plus peer to peer investments plus additional passive cash income. I will also share my latest stock buys.

Let’s first right dive into the numbers.

A cool 25 % Passive Income Jump Year over Year.

Last year, October showed CHF 578 or approximatively USD 630 in passive income, so there is a pretty nice uptick this October to Swiss francs (CHF) 725 resp. almost USD 800.

For the whole year, we’ve targeted USD 15’000 in Passive Income and over the last ten months, USD 12’500 have been collected. So, around 17 % still to go in the last two months to hit our annual goal!

Cash flows from dividends have been particularily strong in October.

British soft drink maker Ag Barr has resumed shareholder distributions which had been cancelled last year amid the pandemic.

British car insurer Admiral even made a special dividend in addition to the regular shareholder distribution and mining business South32 (a spin-off of BHP Ltd.) paid out significantly more than last year (USD 7 versus USD 1).

There have been some changes in terms of dividend payment dates, for instance last year in October I received the distribution from Porsche Automobil SE which this year has been made in July. This change on the other hand has been more than offset by a very strong dividend by British insurer Aviva, which boosted its shareholder payout quite nicely (last year, it paid me around USD 136 in September on this year in October USD 180).

Whenever possible, I try to reinvest dividends into the same business and in the case of Aviva it really shows the strenth of the compound effect.

The same by the way in the case of British alcohol giant Diageo (Guiness Beer, Vodka Smirnoff, Johnny Walker etc.).

Interest income streams from Peer to Peer Investments via platforms such as Mintos, Bondora, EvoEstate, Twino and Iuvo have been quite robust but significantly lower than last year, as I withdrew almost two thirds of my P2P investments over the last 18 months to invest heavily into tech stocks which had paid off quite nicely so far.

My stock investments are near all time high and I keep adding

October has shown an amazing stock bull run and both, my Dividend Portfolio as well as my Tech Share Holdings are near all time high.

Our dividend stock portfolio as well as tech holding portfolio plus our P2P and Crowdlending investments and Crypto positions are well over USD 500’0000.

Following positions have been particularily strong in October, pushing overall performance higher:

A strong boost also came from tech business such as Cloudflare, Shopify, Etsy, Microsoft etc. (see here company snapshots on my tech holdings).

But of course, as always, there has also been some very severe underperformer, like Peloton for instance which has litterally see its stock price cut in two amid weaker growth dynamics. The position however is rather a small one, for instance in Peloton I had invested “just” USD 500, in contrast in the case of my Nestlé or LVMH for instance we are talking about a market value of over USD 20’000 and over USD 15’000.

Cloudflare has been remarkable. I’ve put around USD 2’000 into that company and that position now has a market value of almost USD 11’000.

Despite the market having been heading from All time High to All Time High, I added quite significantly in October as I saw prices temporarily coming down quite a bit on some businesses.

I invested almost USD 14’000 in October

You can find here my article on my investments in Geberit, Schindler, Emmi, Ems Chemie and Eckert & Ziegler in the total amount of roughly USD 8’000.

But I didn’t stop there and added following positons to my tech portfolio:

  • USD 2’200 in Dutch semiconductor business ASML and
  • USD 3’000 in Latin American e-commerce and fintech company MercadoLibre

ASML Holding N.V.  manufactures the machines that are used in the production of computer chips. In these machines. ASML controls about 90% of this market, having a significant role in the semiconductor industry, and its top customers include the world’s top companies like Taiwan Semiconductor Manufacturing, Intel and Samsung.

MercadoLibre is an Argentine company operating online marketplaces dedicated to e-commerce and onine online auctions. MercadoLibre not only has the largest online commerce ecosystem but also the largest payments system in in the region with Mercado Pago.

What I wanted to do was further strengthening my exposure to e-commerce and fintech (I already hold stocks in Amazon, Shopify, Etsy, PayPal, Square etc.) by adding MercadoLibre shares.

And as the chip sector is crucial for so many electronic products, it made a lot of sense to me not only to have a stake in NVIDIA but also in ASML.

What about you, fellow reader, how was your October in terms of Pasive Income? Did you made some investments recently? Thanks for sharing your thoughts in the commentary section below.

Disclaimer
You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action

Campari Group a hidden stock gem

Posted on October 23, 2021 in Investing

2020 was the year when I made significant changes to my investment portfolio.

I almost invested USD 70’000 into company stocks, mostly to build up a strong Tech Portfolio which since then contributed strongly to my overall performance.

But in 2020 I also invested in dividend paying shares

  • in the insurance sector (Swiss Re, Swisslife, Allianz, Admiral),
  • in oil and gas producers and mining companies (British Petroleum, Fresnillo etc.) and
  • I put money into my favorite sector Consumer Staples by investing in strong businesses like British producer of premium drink mixers Fevertree, Swiss chocolate maker Berry Callebaut and last but not least in Italian spirits maker Campari Group.

Campari Group is one of my favorite alcohol company position in my stock portfolio, along with Pernod Ricard, Diageo and Heineken.

In this article I want to give you some information on Campari Group, which due to its relatively small side is not necessarily on the radar of investors.

Business Snapshot

Davide Campari-Milano N.V. (Campari Group) is an Italian company which is active since 1860 in the branded beverage industry.

The company produces spirits, wines and also soft drinks.

Certainly, the most known products in its brand portfolio is Campari Bitter, an alcoholic liqueur.

But over decades, the Campari Group extended its product range with over 50 brands, including

  • Aperol
  • Appleton
  • Cinzano
  • SKYY Vodka
  • Forty Creek Whisky
  • etc.

Compared to its larger rivals such as Diageo (Johnny Walker, Vodka Smirnoff, Baileys etc.) and Pernod Ricard (Havana Club Rum, Absolut Vodka etc.), we have with the Campari Group a sweet niche-player with annual profits that compare favorably with Brown-Forman of around EUR 1 Bn. resp. USD 1.2 Bn.

But Campari Group is more evenly diversified over its 50 brands and has an astounding global reach for such a small company.

US competitor Brown-Forman for instance has over 40 brands but is highly focused on its two flagship brands Jack Daniels and Forrester. Brown-Forman’s annual net sales are in a range of USD 3.5 Billion and an operative income of above USD 1 Bn.

With sales of roughly USD 14 Bn and an operating income of roughly USD 2.5 Bn, British giant Diageo is much larger than Brown-Forman and Campari Group.

But Diageo also has lower operating margins than Campari Group or Brown-Forman. Diageo has a different product portfolio and another strategic approach with a strong focus also on beer brands (such as Guiness beer) which have lower margins than spirits.

Campari Group came out of the pandemic stronger than ever

Looking at the stock price dynamics, it is obvious what an exceptional wealth creating factor Davide Campari stock must have been for its long term oriented shareholders.

Campari Group has been on the stock exchange for 20 years and has increased its market capitalisation 15 times to EUR 13 billion which means that we are speaking here about returns of 16 % since the company IPO. Now, that is a significant outperformance of industry peers such as Brown-Forman and Diageo etc.

During the pandemic in 2020, Campari Group worked hard strengthening its competitive position, having an eye on cost discipline and on deleveraging while at the same time ensuring future growth mainly through bolt-on acquisitions.

For instance in June 2020 Campari Group acquired a 49 % interest in Tannico, a leading e-commerce platform for wines and premium spirits in Italy. The investment amounted to around EUR 24 Mio. and is an interesting move given the fact that the world was in lockdown amid the COVID-19 pandemic and most businesses focused on preserving cash to survive. Not so Campari Group. Also in June 2020, the company acquired French Champagne Lallier for over EUR 48 Mio.

In February 2020, before the pandemic hit, Campari Group had already acquired the Baron Philippe de Rothschild France Distribution S.A. for EUR 60.

What’s also interesting, is that amid heavy investments to grow the business, Campari Group also managed to cut debts.

The first half 2021 results highlights show how nicely Campari Group recovered from the pandemic.

Quote:
• “Strong business momentum confirmed, driven by the consumption bounce back in the on-premise channel
upon its gradual reopening in Q2, sustained home consumption driving the off-premise channel, and a favourable comparison base.
• Reported net sales of €1,000.8 million, +37.1% organic growth vs. the first half of 2020 (+30.2% on a reported basis), and +22.3% organic growth vs. the first half of 2019.
• EBIT adjusted of €223.2 million, +88.7% organic change, +640 basis points accretion (+33.3%, +190 bps margin accretion vs. the first half of 2019).
• Group net profit adjusted of €156.8 million, up +101.9% excluding the net positive adjustments of €2.8 million.
• Net financial debt of €1,064.8 million as of June 30th, 2021, down €39.0 million vs. €1,103.8 million as of December 31st, 2020. Recurring free cash flow at €141.6 million, up +117.7% vs. H1 2020 and +64.2% vs. H1 2019.”

Now, Campari Group is not a dividend aristocrat such as Brown-Forman with a more than 25 years long streak of rising dividends. And given the fact that Campari Group stocks almost always trade at a market premium (most of the time over 35 Price Earning Ratio), investors have to be prepared to enter into a modest starting yield of around 1 to 1.5 %.

Campari Group held its dividend payout stable through the pandemic. The company has been paying out dividends since 2001 and there has not been an increase every year. But still, over the years the dividend has grown by 120 % over the last 20 years. Campari clearly gives the preference to growth and acquisitons.

Campari Group has a healthy dividend payout ratio which has been in a range of around 30 % on average since 2001.

As a fast growing niche player, Campari Group has plenty of opportunities to increase its top- and bottom line over time which should find its reflection in attractive dividend growth over time.

Disclaimer
You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

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October 2021 Crypto Portfolio Update

Posted on October 9, 2021 in Investing

Having been a Dividend Growth Investor since 2009 with a strong focus on acquiring high quality income generating assets, it took me quite a while to take a stake in Crypto Currencies.

Taking exposure to Cryptos is not investing per se. It’s a combination of speculating but also a way of participating in the underlying technologies and applications.

As a long term oriented investor I want to be positioned for the future. I want to have a stake in winning businesses and technologies.

That’s why I also started my Tech Portfolio back in 2020. My Dividend Portfolio is set to generate around USD 15’000 in passive income and my Tech Portfolio not only brings dynamic and growth to my overall investments, but I am also positioned in the future dividend payers. For instance, I wouldn’t be too surprised to see Alphabet pay out dividends in the not so distant future.

Cryptos are still at a very early stage. And there are fantastic opportunities, so I consider it as less risky to invest a few thousand USD to have some exposure instead of remaining completely at the sideline.

So, I have “skin in the game” in the amount of around USD 4’000, invested in following Cryptos:

  • Bitcoin
  • Ethereum
  • Cardano
  • Ripple

You can find here some background information on the specific Cryptos and the underlying technology and applications:

Currently, I have roughly USD 4’750 in these four Crypto Positions (Bitcoin, Ethereum, Cardano, Ripple).

If you put that amount into context to our other investments:

  • Our Dividend Stock Portfolio plus Tech Portfolio have currently a market value of around USD 500’000.
  • Our Peer to Peer Lending Positons make up for around USD 15’0000 and
  • we have roughly USD 35’000 invested into corporate bonds.

So, our Crypto Portfolio represents less than 1 % of our total invested capital (around half a million USD).

As of writing this blogpost, my Crypto Portfolio shows a book gain of around 28 % resp. USD 750.

From May to October, my Crypto Portfolio fluctuated a lot:

Clearly, Cryptos are extremely volatile and there is inherently a significant speculative element which you have always to bear in mind when taking a stake in that kind of asset.

On the other hand, Bitcoin, Ethereum, Cardano and Ripple are connected to very interesting applications and technologies which have huge potential to completely transform our economy and the way we interact. That’s the main reason I want to have a stake in them.

What about you? Are you invested in Cryptos as well? Have you made any moves lately?

Thanks for sharing in the commentary section below.

Disclaimer
You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.