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, bonds, mutual funds, and rental properties.
Here is the breakdown for July:
|Altria Group Inc||$363.36|
|The Coca-Cola Co||$155.39|
|Deere & Company||$168.86|
|Dr. Pepper Snapple||$9.28|
|Illinois Tool Works Inc.||$128.99|
|Philip Morris International Inc.||$268.50|
|Vanguard California Muni fund||$15.67|
|4 properties owned 50%||-$550.04|
|4 properties owned 100%||-$1,238.69|
|Total passive income||-$209.59|
|Average monthly income over last 11 months||$4,857.79|
|Annualized passive income based on last 11 months||$58,293.47|
This was a poor month for our passive income. Our dividend income was relatively low and our rental properties experienced a perfect storm, with multiple properties being hit with repair bills at the same time.
Dividend & Interest Income
The first month of a quarter is what I like to call the “sin month”. We have profits from tobacco (Altria & Philip Morris), and junk food/sugared drinks (Coke & Pepsi). However, I like to tell myself that the income from Medtronic (medical), Nike (fitness), and John Deere (food) somewhat counterbalance the sin stock income.
We also got a bit of income from our money market and the Vanguard California Municipal Bond fund. I’m interested in the latter because, given our high income this year, we’ll be paying 23.8% tax on our dividends for this year. At this tax rate it makes sense to try to maximize tax-free income.
Total dividends received were $1,579.14.
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 (those numbers show up in the net worth report).
This was an absolutely TERRIBLE month for the rental properties. The units are all rented and all tenants paid on time, but 3 of the units had issues that required repairs. On top of that, in one of the properties we are replacing the worn-out carpet with tile, so part of that expense was due in July. The upside is that the tile replacement should result in lower long-term maintenance costs – carpet wears out every 7-10 years but tile should last 20+ years.
Total rental income was ($1,788.73). Yes, that’s right – we ended up being cash-flow negative on our properties this month. We’ve been negative on individual properties before, but this is only the second time our total real-estate portfolio was in the red for the month.
Total passive income this month
Total (dividend + rental) income = ($209.59)
This is definitely the first time we’ve been cash-flow negative across all our investments for an entire month.
Here’s what our monthly numbers have looked like since I started publishing them on my website:
As you can see, there’s a BIG jump during the last quarter of each month, as that’s where most of our dividend income comes in. As a result of this uneven income over the course of a quarter I’ve also started calculating our quarterly income. This smooths out the ups and downs throughout a quarter.
This is what I like to see – our income is increasing from quarter to quarter, even without much in the way of new investments in the last year or so. If and when we can finally find some compelling valuations in the market we’ll aggressively deploy our cash and hopefully see this number rise.
Annualized passive income based on last 11 months of income = $58,293.47
To compute this number I just take the last 11 months of income and project that for a full 12 months. 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 of if we are on track to achieve our saving/investing/income goals for the year.
I use 11 months because that’s how long I’ve been tracking and posting my monthly investment income. Starting in August, 2017 I’ll be able to calculate and post my trailing 12-month income.
We are around 50% of our way to the goal of $120,000/year in passive income. My hope is that if/when valuations finally improve we’ll be able to deploy our cash into investment that will massively improve our investment income.
How did everybody else do with their passive income this month?