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 my investment income rise!)
Here is our investment income for August, 2018. This report includes income from dividends, interest, mutual funds, and rental properties.
Dividend & Interest Income
August was a solid but unspectacular month. As always, our income in the second month of the quarter was disproportionately from a single source – OHI accounted for 63% of our dividend income. I’ve written about OHI before – they are a medical REIT that owns skilled nursing homes and similar facilities. I like the company and their prospects long-term, but I think it’s just too risky to have such a high percentage of my income coming from a single source. As a result, I am taking all OHI dividends in cash rather than reinvesting back into OHI. I don’t plan on trimming our OHI stake anytime soon. Instead, I hope to increase our income from other sources so that OHI is a smaller part of the total.
I added to my Apple stake earlier this year and the dividends from Apple are approaching a solid $1,200/year. The rest of our income came from a few smaller sources.
Dividends for the month were up 70% from August, 2017. Through the end of August our cumulative dividends for the year are up 40% over 2017.
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. That is, this is a true cash flow report for our rental properties.
Although all the properties are rented, we had some required repairs to a few of the properties. As a result, our rental income was just $725.70. While below the long-term average rental income/month of $825.42, it’s better than last August’s total of just $36.90.
Total investment income this month
Total (dividend + rental) income = $3,414.86.
Our total income for August, 2017 was $1,636.07. Not only was our dividend income much better this month, but the rental income was up as well.
Trailing 12-month investment income
Since I only started tracking these numbers in Sept, 2016, I only have actual 12-month totals starting in August, 2017. I’ve annualized numbers before that date (that is, if I had 6-months of income data then I would double it to get the 12-month number). In 2016 I only had a few months of data to work with, so small fluctuations would cause my projected 12-month number to jump around. This number will start to stabilize now that I have 12 full months of data to use in the calculations. And, in fact, if you look at the graph after August, 2017 you see a much smoother line.
Actual investment income over the last 12 months was $69,274.55. This number should continue to rise each month as dividends and rents are increased and new money is put to work. My hope is to have this number hit $75,000 by the end of 2018.
Our goal is eventually have $120k/year in investment income, so we are 57.7% of the way there!
Recap
August was good but not great, in large part due to the continued problems with our rentals. The properties should stabilize soon, in which case we’ll be able to get our overall passive income back on track.
I continue to hope for a serious market correction soon, as I’d love to put some of our cash to work. Absent a market correction I’m also investigating some foreign investments – valuations overseas are significantly more reasonable that valuations in the US market.
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?
Where overseas? 🙂
$70K a year in passive income is great! We currently only have around $20K in annual passive income. Although we continue to invest every month our focus over the next 11 months is paying off the remaining balance on the mortgage. But then we shift to hyper-focus on building up the passive income.
Dom
I think it’s a great idea to allocate money towards a guaranteed 3-4% return (by paying off your mortgage) rather than investing in an overpriced stock market right now.
The good thing is that we have another $15k-20k of potential passive income from the cash we are holding. If/when better valuations present themselves we’ll aggressively deploy the cash and increase our passive income.