Investment income – October, 2017

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

This report includes income from dividends, bonds, mutual funds, and rental properties.

Here is the breakdown of our investment income for October:

 

Every month I’ve been tweaking (and hopefully improving) the format of my income report. Please let me know if you have any suggestions on how I can make it even better.

This was an interesting month – our income was pretty much split 50/50 between our dividend income and our rental income.

Dividend & Interest Income

This is the “sin month”. Approximately 26% of our total investment income came from tobacco and soda stocks. The single largest payer was Altria followed by Phillip Morris.

The interest income is from our California Muni bond fund and interest on our large cash pile.

I LOVE getting dividends. It just feels like free money. I love the idea of getting a cut of profits from major US corporations because of an investment I made a few years ago. Dividends are definitely my favorite type of income.

Total dividends received were $1,560.41, which was 48.8% of our monthly investment income.

 

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 (those numbers show up in the net worth report).

However, this income is net of all mortgage, tax, and insurance payments.

This was an excellent month for the rental properties. There were no repairs or expenses for any of the units. This is pretty much the best case scenario for our properties.

Total rental income was $1,636.07.

Total investment income this month

Total (dividend + rental) income = $3,196.48

Here’s what our monthly numbers have looked like since I started publishing them on my website:

 

As expected, the graph has a peak at the end of each quarter, when dividend income is at its highest. Dividend income has been much more stable.

 

 

December has always been the largest month of the year for dividend income, and I don’t expect this December to be any different.

 

Trailing 12-month investment income

Investment income over the last 12 months = $60,118.24

This is not a prediction for the next 12 months – it is the actual investment income received in the last 12 months. Our goal is eventually have $120k/year in investment income, so we are 50.1% of the way there!

I would expect the next 12 months of income to be higher than the last 12 months as dividends are increased, rents are increased, and new money is put to work.

 

Recap

October was a good month. Our dividend income has been consistent and our rental income was about as high as it can be.

We have approximately $1M in cash ready to be deployed. If we were to put that to work at a 3% return then we’d expect to receive at around $90,000 in investment income next year, which would be 75% of the way to our goal. My hope is that if/when some more interesting opportunities present themselves I’ll be able to invest at lower prices.

 

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

Are there any investments out there trading at reasonable valuations that I should be looking at?

4 thoughts on “Investment income – October, 2017

  1. “I always love reading blogs about other investors’ investment income. Watching other people’s investment income rise is my second favorite thing”
    I wholeheartedly agree and your income reports always make me so jelly.

  2. love your articles..you inspire me ! I have a question I have a cute little studio downtown Chicago..I only make $ 150 monthly on it, but I have 60,000 equity in it. My husband says sell it because not much cash flow, but I like it, its easy and I get professional people..what is your take on it ?? Thanks

    1. Let’s do some quick math – if you net $150/month, that’s $1,800/year. Dividing your yearly cash flow by your equity gives you a 3% yield, which isn’t too bad when you compare to stocks, bonds, or savings accounts today. And, depending on how long you’ve had that property, it’s possible that the money will be tax-free (assuming your depreciation expenses and other expenses are greater than your profits). Assuming you’re in a tax bracket that would pay 15% on capital gains/dividends, this would be the equivalent of getting a 3.53% yield on a dividend paying stock.

      What do you think the future of the property looks like? Is it in a good area that’s likely to continue to appreciate and demand higher rents? Does it require much upkeep/maintenance? How much of your time is needed to keep up the property?

      And finally, how does the property investment fit into the rest of your investment portfolio? Do you have any other real estate investments? How much of your total net worth does the studio represent?

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