Investment income – October, 2016

chart-clipart-k9589268When I read other financial blogs one of my favorite type of post to read is the breakdown of investment income. Watching other people’s passive income rise is my second favorite thing (the only thing better is watching my own passive income rise!)

This report includes income from dividends and my rental properties. Although I don’t own any now, if I 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. I was much more interested in simplicity and a low time commitment so I could focus my time on my career. As my investing philosophy as evolved over the last few years I converted some of my index funds into individual stocks. However, I’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 my stock portfolio.

Here’s how my portfolio did last month:

Ticker Name Amount
MO Altria Group Inc $363.36
KO The Coca-Cola Co $136.49
ITW Illinois Tool Works Inc. $128.99
MDT Medtronic PLC $147.68
NKE Nike Inc $63.87
PM Philip Morris International Inc. $268.50
VMMXX Money Market $27.37
Loyal3 $20.75
Total $1,157.01


A few notes – first, as mentioned above, about 1/2 our investment are in 4 index funds. Unfortunately, these funds don’t pay out a regular amount of money, nor do they pay on a regular schedule. When the index funds DO pay dividends, it’s in the last month of the quarter. This tends to make the last month of each quarter significantly higher than the first two months. Dividend income this month was roughly 1/5 of what it was last month!

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.  We bought these properties in 2012 and 2013 because real estate prices were ridiculous low. I did the math and projected these would be cash cows, and so far that’s proven to be correct.

Note that this number is just the cash flow from the properties (rents minus all expenses, including management fees, mortgage, insurance, repairs, etc.) This number does not include appreciation of the properties or the decrease in the mortgage balance.

Total rental net income = -$474.39

This number is not only negative, but quite negative this month due to repairs and vacancies. We paid the second half of the roof repair cost for one property and another property was not vacant the entire month. The good news is that it was rented on Nov 1, so the next report should look better than this one.

Total passive income

Dividend + rental income = $682.62

Annualized passive income based on last 3 months of income = $33,812.76

This was a poor income month all the way around . The rental properties didn’t perform well and dividend income was low.

The next 2 months should be better. The last month of the quarter always has higher dividends, rental repairs are done, and none are vacant. My goal at the end of the year is to have projected investment income of $55k-60k based on Q4 numbers.

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

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