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!)
This report includes income from dividends, mutual funds, and rental properties.
Here is our investment income for June:
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.
Dividend & Interest Income
Our dividend and interest income is always highest in the last month of the quarter and this month was no different. We pulled in a solid $11,862.22 this month and this income was diversified across a number of streams.
Of the total, $3,916.55 was income from our retirement accounts (IRAs, 401k, etc.). Another $3,990.38 was income from our mutual fund holdings. Our single largest dividend came from Exxon. In fact, a total of 10.43% of our investment income ($1,282.12) this month came from oil/energy stocks (Chevron, Conoco Phillips, and Exxon). The Exxon purchase was just made a few months ago – I believe that Exxon is a best-of-breed oil major and prices for energy stocks looks pretty cheap.
I’m still working on closing out the remaining small positions left over from our Loyal3 account. You can see we received $.17 from Walmart, $.07 from YUM China, and $.24 from Intel. I’d sold out of all 3 positions, but apparently I sold after the ex-dividend date for all 3 stocks. I have set all dividends to be reinvested, which means that when I received dividends for the stocks they were automatically used to buy fractional shares.
Dividends for June, 2017 were $9,168.72, which means we were up 29.38% year-over-year. I’d be pretty happy if our income great that fast every 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.
After some vacancies for the last few months we finally have all the properties rented, which means our rental income should be back on track next month.
Rental income was $427.18, which was 3.48% of our monthly income. This down 70% from June, 2017.
Total investment income this month
Total (dividend + rental) income = $12,289.40
Our total income for June, 2017 was $10,624.43. This means our investment income for June was up 15.67% year-over-year.
Our total investment income for January-June, 2018 was $33,641.26 – this is up 8.2% from the same timeframe last year. Although this is solid performance, it could have been even better if we hadn’t had the vacancies in our rental properties.
Trailing 12-month investment income
Here’s what our trailing 12-month income looks like. 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 a projected 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. I think 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 $65,419.62. I would expect our income over the next 12 months to be higher as new investments are made, dividends and rents are raised, etc.
Our goal is eventually have $120k/year in investment income, so we are 54.5% of the way there!
Recap
June was a great month for our investment income and it could have been even better if our rental properties were performing they way they should. Regardless, $12,289.40 of income for doing no work is pretty amazing. What’s even more amazing is thinking that this will need to be a more or less average month in order for us to hit our goal of $120,000 of passive income in a year.
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?
Very impressive month. I especially like seeing the energy stocks in your portfolio. As someone who works in the commodities sector, I am quite bias towards them when it comes to investing. Sure commodities will take a good beating and has it’s fair share of cyclical downturns, but depleting resources are valuable.
With an ever-growing population and the human race having yet to really come up with another way to produce electricity, fossil fuels (commodities) will continue to pay dividends even in the down cycles.
Think about it, what kind of a world would it be if suddenly there were no lights on in your home? Or no A/C, no refrigerator? Exactly my point, electricity is something that will forever be required by humans. Utility companies are worth the investment. Some have even been paying dividends for 80-something, plus, years.
That is exactly my thinking. Energy is critical to our economy and way of life. Right now, oil & gas produce the vast majority of our energy, and I don’t see that changing any time soon. That, combined with the fact that the prices of the oil majors have taken a beating during the recession in oil prices, has lead me to increase my energy exposure.
That being said, I sure hope we find ways to get away from fossil fuels sooner rather than later. We’ve installed solar on our house and I’ve estimated we are getting about a 12% annual return on that investment.
Oooh, solar. I have never been able to pull the trigger because of the net cost vs the dollars saved. Cheapest price I have found here from a contractor likely to be in business in six months is $3.25 per watt. In the land of PG&E, electricity is expensive, but we don’t use a lot except for A/C in the summer. Would you mind sharing your numbers?
We ran the numbers and the economics definitely made sense for us. I wrote an article about it at the end of 2017 when we did the actual installation of the solar. At that time I calculated a 12.9% annual return.
Here’s the article: https://www.themoneycommando.com/investment-paying-12-9-per-year/
Looks like you paid $4.00 per watt. I was quoted $3.25 about two years ago. With the tariffs and higher labor costs, the price might actually be higher today, even using US-made components.
This roof is primarily east-west facing with an “L” that has some south facing roof. Because of fire safety setbacks, it’s hard to fit many panels facing south. West facing panels would be where most of the generation occurs. Since the heavy A/C use is 2:30 to 7:00 PM in the summer months, the sun angle would work for close to maximum generation from those panels during those hours. That would fit well with the newer PG& E TOU plan that shifts the highest rates to that time frame.
Like you, we are faced with an older roof made of tiles that are beginning to deteriorate. It might make sense to do everything at once, although that’s a breathtaking bill to pay.
Thanks for the information!
I should point out that the $$ we were quoted included some significant work on our electrical panel. That was about 10% of the cost.
Also, it turns out that the direction you face has a smaller impact than I imagined it would. For example, I asked our solar installer to calculate how much more efficient it would have been to face the panels due South (the optimal direction for max power generation). For reference, our array points 147 degrees (vs. 180 degrees for true South).
It turns out that pointing directly South would only generate 4% more power than our current direction.
However, your point about facing SW is a good one. Our solar guy brought this up to us as well – it’s best to maximize power generation during the times of PG&E Time Of Use (TOU) plan to minimize charges. However, given the angle of our roof we didn’t have the option to point SW, only SE.
I’m working on an update to our solar installation, which I hope to publish in the next few weeks.