Investment Income – December, 2016

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.

Dividend Income

The equity portion of our portfolio is roughly 50% index funds and 50% individual stocks. The mutual funds are from when I started investing about 20 years ago. At that time I was much more interested in simplicity and a low time commitment so I could focus my time on my career. Over the last few years I converted some of the index funds into individual stocks. Unfortunately, we’ve owned the index funds long enough that selling them would generate a substantial tax burden. As a result, I’ve decided to hold the index funds and direct all new investment money to our stock portfolio. Here’s how our portfolio did last month:


Ticker Name Amount
AFL AFLAC Incorporated $210.06
BP BP plc (ADR) $468.86
CVX Chevron Corporation $336.91
KO The Coca-Cola Co $136.49
COP ConocoPhillips $82.07
JNJ Johnson & Johnson $409.42
LMT Lockheed Martin Corporation $98.81
MCD McDonald’s Corporation $258.03
MSFT Microsoft Corporation $62.67
SBUX Starbucks Corporation $104.11
TGT Target Corporation $355.13
V Visa Inc $129.62
WFC Wells Fargo & Co $183.88
VMMXX Money Market $23.66
VEMAX Vanguard Emerging Markets Stock Index Fund Admiral Shares $374.94
VEUSX Vanguard European Stock Index Fund Admiral Shares $345.66
VIMAX Vanguard Mid-Cap Index Fund Admiral Shares $1,231.25
VSMAX Vanguard Small-Cap Index Fund Admiral Shares $1,206.48
Loyal 3 $62.64
401k $4,120.24
IRAs $740.83
Total $10,941.76

The last month of the quarter is always the highest for us. Our three largest holdings are Target, Johnson & Johnson, and Visa, all of which pay on the last month of the quarter. In addition, the index funds & my 401k pay on the last month of the quarter.

$10,941.76 in one month from dividends is just fantastic! This is our highest month ever.

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.

4 properties owned 50% $515.32
4 properties owned 100% $1,188.98
Total $1,704.30

Finally we have a month where all the properties are firing on all cylinders. We had no maintenance issues at any of the 8 properties and they are all occupied. This is the maximum monthly income we can expect from the properties at the current rents.

Total passive income

Dividend + rental income = $12,646.06

Annualized passive income based on last 3 months of income = $59,106.08

This was an absolutely fantastic month. Our goal is to have $120,000/year in passive income before I quit my job. These numbers put us halfway there. Even if we add no additional money to our investments I would expect to hit $120,000 in passive income in 10 years just from the growth of our investments. My hope is to hit that humber in 5 years by aggressively adding to our investments.

In my November 2016 Income Report I said that my goal for December was to have projected investment income of $55k-60k based on Q4 numbers. We came in at the high end of that range, which is great.

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

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