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 July, 2019. This report includes income from dividends, interest, mutual funds, and rental properties.
Overview
July was a good month for The Money Commando family. Summertime is a great time in Santa Barbara. There are multiple free concerts in parks around town, there’s a free outdoor movie series at the courthouse, and the weather is pretty much perfect every day. My wife and the kids have been having all sorts of fun and spending as much time outside as possible.
Without further ado, here’s what our investment income looked like for July, 2019:
Dividend & Interest Income
Total dividend income for the month was $3,043.09. This is up 78.25% from last July’s total of $1,707.23. That’s awesome growth, and is due to a combination of organic dividend raises plus new investments (primarily our new investment in Disney, which only pays dividends 2x/year).
Our cumulative dividends through the first half of the year are up 15% from last year.
Obviously a 15% annual growth is very solid and would put us on pace for about $64,406.89 in dividend income for the year.
Our dividend income was pretty diversified. Our single largest payer was Disney, followed by some tobacco companies (Altria and Philip Morris Intl.) Other sources include beverages (Coke), industrials (Illinois Tool Works), and apparel/sporting goods (Nike). We also had a small amount of interest from our cash holdings.
Rental income
This category includes net income from the 6 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.
July was a poor month for our rental income and we made just $864.99 in profit from the rental properties. Two of the properties needed some repairs. The result was that the properties we own with my mom were in the red for the month. Thankfully the other properties performed well so we were still overall in the black.
Our rental income is up 370% compared to the same period last year. That’s due to two things. First, our rental income was terrible last year. One of the properties was not only vacant for many months, but also required quite a bit of repair and improvements to make it rentable. Second, the addition of two new properties and the paying of one of our mortgages has resulted in additional cash flow going forward.
Total investment income this month
Total (dividend + rental) income = $3,908.08
It is just fantastic to see our passive income continue its upwards march.
In terms of total cumulative income through June, we are up 44% from this point last year. Look at our trailing 12-month total income you can see that our passive income has been doing exactly what we want it to do – it’s been trending up and to the right.
My goal for the year is to generate $85,000 in passive income, and we are currently on pace to hit $87,475.61. Whether or not this happens is almost totally dependent on how our rentals perform for the rest of the year.
Changes
No changes this month. We are still holding a bunch of cash, waiting to deploy it when we can find interesting opportunities.
Recap
July was a solid month. We are on pace to easily hit our passive income goal of $85,000 for the year, and I think we have a very good chance of hitting $100k in 2020.
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?
how much do you have to have invested to generate this investment income?
Thanks
Most of our passive income is from the stocks we own in our brokerage account, and as of July 1, 2019 those accounts were valued at $2,867,192.90. The rental income was generated from a total of 10 rental properties with a total equity of $710,616.24.
Awesome dividend growth! I am going the other way; last July $34,827.73, this July $13,317.03. I sold MO, PM, GPC and OXY (did not like their earnings reports and growth going forward) last November. Sold a bunch other stocks in early July to start the index route because I can not watch stocks anymore. Started buying muni bonds in December/January but had to stop because they are going nuts. Sitting 20% munis/10% equity index ETFs/70% Vanguard Prime Reserve.
Have basically done nothing since I sold 85 stocks in July. Just waiting.
Even after selling all those stocks you’re still left with some serious passive income.
I certainly understand the reasons behind selling. The market looks at least fully valued and possibly overvalued. I’m curious – do you have a trigger for when you’ll get back into the market? Are you looking for a specific PE ratio, or some other valuation metric?
Hello. Plan is to buy VIG, VYM and VV. It was getting really tiring to have unexpected tax issues because of stocks getting bought out or splitting. Last decade I sold all rental properties (to make things easier) and bought dividend stocks (now got rid of dividend stocks to buy dividend ETFs). To me it looks like we having a massive head and shoulders forming. https://stockcharts.com/h-sc/ui?s=spy I have no plans to buy anymore VIG, VYM or VV unless we have big down days. Big issue is stocks prices all ways follow oil and the inverted yield curve will start hurting financials that will bleed over to the rest of the economy. Good luck to you.
I didn’t understand this comment. You were tired of having unexpected tax issues because of stocks getting bought out or splitting. So you went ahead and generated maximum tax liability by selling all of your stocks? I guess that’s one way to eliminate unexpected taxes in future years… since you will pay them all in one year this year.
And then you intend to buy back into dividend producing ETFs which probably also hold many of the stocks that you just sold so that you don’t have future unexpected tax issues?
I’m curious about your rationale since you generated 34k in dividends in one month last July, which implies you are managing a portfolio of over $10 million.
It’s always fun to read your passive income reports. From an investment income standpoint we are sitting around $1,500/month in passive investment income (REITs, Stocks, and Hard Money Lending).
That said, my new business has the ability to generate passive income through residual commissions on software sales. Over the last 6 months, I have secured $50,000/year in recurring residuals.
This is going to be a game changer in generating passive income. The average initial contract duration is 3 years, but the average life of a customer is 10+ years because the switching costs are high.
Onward & Upward!
Dom
Residual commissions are the best. The idea that you can do something today and then receive income for the next ~3 years is mind blowing. It’s been my experience that most people in the software industry want all of their commissions up front rather than paid over time based on subscription revenue.
In my part of the industry the crossover point for upfront vs. subscription revenue is about 2.5 years. That is, getting paid upfront will result in more money for the first 2.5 years, but after 2.5 years you’ll have received more money from subscription revenue. Most people aren’t willing to defer gratification so they can reap the higher total commissions.
Every time you make a sale you’re just putting money in the bank. It’s going to be awesome to see what your passive income looks like in 3 years from all the recurring sales!