Investment Income – April, 2017

I always love reading blogs about other investors’ investment income. Watching other people’s passive income rise is my second favorite thing (the only thing better is watching our passive income rise!)

This report includes income from dividends and our rental properties. Although we don’t own any now, if we have other sources of passive income in the future (CDs, bonds, etc.) I’ll include them here as well.

MOAltria Group Inc$363.36
KOThe Coca-Cola Co$144.29
ITWIllinois Tool Works Inc.$128.99
MDTMedtronic PLC$147.68
NKENike Inc$140.54
PMPhilip Morris International Inc.$268.50
VMMXXMoney Market$22.37
Loyal 3$32.16
Rental Properties
4 properties owned 50%$296.04
4 properties owned 100%$1,421.83
Total passive income$2,965.76
Annualized passive income based on last 6 months$60,907.19

Dividend Income

The first month of the quarter is always a bit of a disappointment compared to the previous quarter (the third month of each quarter is always by far the largest). This month we had a total of $1,247.89 in dividend income, all of which was in our taxable accounts (and all of it was from individual stocks).

Our top two dividend payers this month are tobacco stocks (Altria and Philip Morris). The rest of stocks are much more diversified, with dividends coming from the following sectors: consumer staples, consumer discretionary, industrial, and medical.

April is probably the last month I’ll be showing Loyal3 as a separate entry. As many of you know, Loyal3 is (or was) a platform for making free trades in a select group of stocks. It was perfect for what I used it for – dollar cost averaging ever month. Unfortunately they are now moving to a monthly fee, which will substantially increase the costs (and make it impractical for the small portfolio I have built). As a result, I will be transferring those stocks over my Merrill Lynch Edge account. I have 30 free trades/month in that account. Given that I make 1-2 purchases each month on average that is more than enough for me.

I have the rest of my stock and mutual fund investment at Vanguard. Vanguard is great and I have nothing but good things to say about them, but I just don’t think it’s a smart idea to keep all of my investments with a single broker. First, SIPC insurance only covers $500,000 in investments per account. Opening another account with a different broker means we’ll have a total of $1M in protection. Even if we didn’t need the insurance, if something happened at (or to) Vanguard it might take a while before we could access our money again. Spreading our investments out across two brokers lessens that risk.

Overall this was a solid month from a dividends perspective.

Rental income

This category includes net income from the 4 rental properties that my wife and I own, plus 50% of the income from 4 rental properties that we own with my mom.

This number does not include appreciation of the properties or the decrease in the mortgage balance.

This was the third month in a row where all the properties are firing on all cylinders. All the properties are occupied and we only had 1 minor maintenance issue on one of the properties we own with my mom.

One thing I haven’t pointed out in past updates but is very relevant when examining our various passive income streams – due to the large number of deductions and depreciation on our properties we haven’t had to pay a single penny in taxes on any of the real estate income since we started acquiring our properties in 2012.

It will likely be at least another 2-3 years before we have to start paying taxes on this income.

Total rental income: $1,717.87.

Total passive income this month

Dividend + rental income = $2,965.76

Annualized passive income based on last 8 months of income = $60,907.19

I calculate the annualized income because it smooths out the differences in income from month to month. This is not a prediction for the next 12 months, as it is backward looking rather than forward-looking. However, it’s a good metric to give me a rough idea if we are on track to achieve our saving/investing/income goals for the year.

This was a solid month. It’s amazing how fast things start going once you get that snowball rolling downhill. The goal is to hit $120,000 in passive income by December, 2021. Our annualized income this month puts us 50.8% of the way there. We’ll need to grow our income by 12.3% per year to hit our goal. I expect to hit this through a combination of dividend raises and additional investments.

How did everybody else do with their passive income this month?

7 thoughts on “Investment Income – April, 2017

      1. Sure, it’s a long story though, that’s why I created a blog.
        But in couple of words: We came to the States 4 years ago (I can’t believe it’s been 4 years already), shamefully for me I couldn’t speak English and was stupid on steroids, and after just one year we were $50K in debt. Our actual net worth was negative $50K.
        Thanks God we got a wake up call (my wife was laid off) and we started looking for another way to live the American dream, which is still alive. So, 3 years after the wake up call our net worth is $102,000 and growing.

    1. Thanks Doug. It’s definitely not disappointing…it’s just significantly less than last month.

      But hey, I got paid almost $3k this month because the Money Commando from some time in the past decided to make some investments. That does not suck.

  1. What satisfaction to accompany this passive income growth.

    I fully agree with the risk of brokers. In Brazil there is also a kind of ‘SIPC insurance’. However, it is extremely bureaucratic to have access to the securities when a brokerage firm ‘goes bankrupt’.

    It happened recently that a brokerage case was settled by the Brazilian Central Bank, and the investors had the values of the deposit accounts frozen until today. Terrible and absurd.

  2. The risk of a broker failing is small, but the impact is huge (either you lose all your money or you can’t access it for a while) and the cost to address the risk is small (you just need to check 2 accounts instead of 1), so it seems like a no brainer to just set up accounts at two different brokerages.

    For how long did the Brazilian investors not have access to their accounts? Weeks? Months? Years?

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