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 December, 2018. This report includes income from dividends, interest, mutual funds, and rental properties.
Dividend & Interest Income
Our dividend income in December was fantastic. The last month of each quarter always pays the highest dividends, and in December our mutual funds pay their distributions as well.
Related: Why I’ve switched from index funds to individual stocks
This month was a new high for both dividend income and total income! It’s hard not get fired up about $13k+ in dividend income and $15.5k in total passive income.
Last December our dividend income was $11,771.19, so our dividend income was up 17.6%.
For the year our total dividends received were up 30% over last 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.
All properties are rented and the repair costs for one property have finally been paid off. As a result, we had our best month for rental income since January, 2018.
Total rental income was $1,731.67. Our rental income for December, 2017 was $1,447.79, so we are up 19.6% over last year. Unfortunately we are still down substantially over last year – our total rental income for 2018 was down 68% over last year!
Total investment income this month
Total (dividend + rental) income = $15,571.74
And despite our terrible rental income for the year, our total income for 2018 was up by 10% over 2017. If we can continue that trend for another few years we should hit our goal of $120k/year in passive 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 $68,977.98. 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 was is to have this number hit $75,000 by the end of 2018 and we came up short. However, if our rental income had just matched last year’s rental income we would have hit $76,000 in total income.
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
December was an awesome month. It’s really hard to believe that we made over $15,500 in a single month just based on money we made, saved, and invested at some point in the past.
December was also an awesome month from a net worth perspective (I’ll be publishing that report soon). My company had a liquidity event and I was able to cash in some of my stock options at a higher amount that I’d expected, resulting in a nice windfall. The hope is to take that money and invest it to further increase our future passive income.
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?
Impressive work. That investment income is like having an additional employee working for you day and night. Very inspiring stuff.
HH
No doubt! $15k is somewhere around 1/4 of the average annual salary in the US. The fact that our investments threw off that much money in just one month is incredible.
Very nice! I look forward to reading your net worth Report to read all about the liquidity event you mentioned.
We made our way into the double comma club in December but I still have a long way to catch you.
You made it by the end of 2018! Congrats!
Have you calculated how long it will take you to hit the triple comma club? After all, they say the first million is the hardest…
LOL! I’m not sure I have a shot at the triple comma club. But $10M still looks very achievable by 48 or sooner. I project the next million will only take 3-4 years and each million after taking less and less time.
It’s amazing how fast your net worth can increase when you have a $1M net worth and you continue to have a high savings rate.
Because we’re friends I did some quick calculations for you. If you have $1M today and continue saving $100k/year, then you’ll have $1B in 40 years if you can just manage Warren Buffetish 17.5% annual returns!
Or, with the same numbers, you can hit $1B in 65 years (when you’re approximately 100 years old) at a very achievable 10.03% annual return.
Triple comma club here you come!!!
“Are there any investments out there trading at reasonable valuations that I should be looking at?”
Let me know if you find any of those unicorns…
I’d like to put some of those little green employees to work on a new income stream, but it still looks like paying off the next rental mortgage will be the investment for 2019.
For the last year I’ve been torn about whether we should use our cash horde to pay down debt or continue waiting until a reasonably priced investment(s) come along. The problem (if you can call it that) is that most of our debt is at 4% interest or lower, so the returns from paying off the debt would be fairly small.
For now we are going to continue to build cash and wait for something interesting to come along.
Paying off rental mortgages is a no brainer for me. I have two from the early 2000’s that are at near 6 percent rates with balances under $100k each. They were not conforming Freddie/Fannie loans, so they could not be HARPed in 2010-2012. Yes, there’s some tax benefit but reducing leverage when we are likely to see a recession soon, and therefore decreasing rents and increasing tenant issues, is appealing.
I’m hedging by substantially increasing the principal payment on the smaller mortgage and dumping what is not allocated elsewhere into cash savings. Going to do some capital improvements and probably two or three tenant turns this year as well. Will reevaluate as the year goes on.
Agreed – at 6% interest it’s absolutely a no-brainer to pay down the mortgages.
Just found your website. Very impressive passive income – I’m inspired.
Thanks! I’m hopeful that once are able to deploy some of our cash we’ll see our passive income jump by around $20k/year.