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 January, 2019. This report includes income from dividends, interest, mutual funds, and rental properties.
Overview
I’ll be honest – it’s hard to get excited about the first month of the year. December is always a blowout month from an investment income perspective and January is always poor by comparison.
There’s no good reason that December should be better than the last month of any other quarter. Rents don’t go magically up or down for the months of December or January. Dividends are paid quarterly and are usually only changed once per year. Unfortunately, the variation in investment income can be traced to one source – mutual funds. Most mutual funds pay dividends 2x/year – a smaller payout in June and a larger payout in December. This makes for a great December but the lack of predictability is frustrating.
Related: Why I’ve switched from index funds to individual stocks
Here’s what our passive income looked like for January, 2019:
Dividend & Interest Income
I’d characterize our income this month as solid but unspectacular. Our $1,761.75 of dividend/interest income was pretty broadly diversified, with no one source accounting for more than 14% of our income for the month.
Last January our dividend income was $1,538.80, so our dividend income was up 14% over the same month last year. This is especially surprising given that last January I received $137.85 from 4 stocks that we no longer own (Dr. Pepper Snapple Group, Lockheed Martin, Pepsi, and Walmart). These were all smaller positions that I’d held in my Loyal3 account. I sold all my positions smaller than $10k in an effort to simplify my investments and reduce the number of companies I track.
It’s fun to see our dividend income over the years. A combination of new investments plus dividend raises has resulted in our January, 2019 dividend income being 46% higher than it was just 2 years ago. I would be very happy if that growth rate continued for the rest of this year.
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.
It looks like we’ve put the underperformance of 2018 behind us and our rental income is starting strong in 2019. All properties were rented and there were no repairs or maintenance issues. Total rental income was $1,829.89, which was down 8% from our rental income in January, 2018 of $1,978.70. This decrease is due to higher property taxes and insurance costs, which we haven’t yet passed on to our tenants in the form of higher rents.
This month was only the 6th time in the last 2 years that our rental income was higher than our dividend income for the month.
Total investment income this month
Total (dividend + rental) income = $3,591.64
This is only 2% higher than our total income from January, 2018, due to the aforementioned sales of some of our dividend paying stocks and the lower rental income.
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. This graph is doing exactly what I want it to do – it’s trending up and to the right.
Actual investment income over the last 12 months was $69,052.13. In general this number should continue to rise each month as dividends and rents are increased and new money is put to work.
My goal for 2019 is to have total passive income of $85,000. That would be a huge 23% increase over 2018. Our peak 12-month passive income was $70,994.47 in the 12 months ending in September, 2018. I think we will easily surpass that number in the next few months.
Our goal is eventually have $120k/year in investment income. That should be at or close to the amount we need to live on.
Recap
January was a solid but unspectacular month. Dividend and rental income were both good, and our income streams were well diversified.
Looking back over the last few years, our income in February has been about 50% higher than our January income. Hopefully that trend will continue this year.
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?
Hello MC, This is my first time today reading your blog. Hats off to you, for sharing such wonderfully practical information with others. I am very impressed and have become a regular follower of your blog. I am also impressed by that fact that you made a move from Engineering into Sales. Would you mind sharing little more about this with me. Reason for asking this is I myself want to do this and I am an introvert turned into extrovert and still I love listening to my customers and delivering to them. I work in a multinational company as problem solver for all sorts of levels and issues. Would love to get your insights.
The first thing I’ll tell you is that there are a number of ways to be successful in sales. You don’t necessarily need to be an extrovert. I’m not. In my opinion, the most important qualities for success in sales are:
– be an expert in the industry you’re selling in
– be trustworthy & honest
– work hard
I made the move from engineering into sales in part because I wanted a new challenge, and in part because I wanted to have the opportunity take more money (and have my income be based on my results).
When people ask me how to get into sales I tell them that their first sales task is to convince their management that they are ready to get into sales.
The other thing to consider when getting into sales is that any available sales territory is likely to be less than stellar. After all, if the territory was a high-producing territory, it wouldn’t be available. So be careful with what territory you’re being offered. After all, even the best salesguy can only sell so much ice to Eskimos. If you’re selling ice you’d rather than Mexico as a territory than Siberia.
Sales is a high-risk/high-reward profession. If you are successful you will make a ton of money. If you are not successful you’ll make very little money and probably get fired.
Hello MC, This is my first time today reading your blog. Hats off to you, for sharing such wonderfully practical information with others. I am very impressed and have become a regular follower of your blog. I am also impressed by that fact that you made a move from Engineering into Sales. Would you mind sharing little more about this with me. Reason for asking this is I myself want to do this and I am an introvert turned into extrovert and still I love listening to my customers and delivering to them. I work in a multinational company as problem solver for all sorts of levels and issues. Would love to get your insights.