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 October, 2018. This report includes income from dividends, interest, mutual funds, and rental properties.
Dividend & Interest Income
We are entering into the final quarter of the year, which has historically been the best quarter for us from an investment income perspective. I’m hoping that this year is no exception. Unfortunately, the first month of each quarter is always a big let down from the previous month.
Related: Why I’ve switched from index funds to individual stocks
I always refer to the first month of the quarter as our sincome month, as a good portion of our dividends come from traditional “sin stocks”. Our single largest payer for the month was Altria ($476.54, 18.94% of total income).
We also had Philip Morris (tobacco) and Coke (sugar). Overall, a full 37% of our income for the month came from just those three stocks.
Total dividend income was a solid $1,617.28. Dividends for the month were up just 3.64% from October, 2017. This is the smallest year-over-year increase in our dividends since I started tracking this in Sept, 2016.
However, through the end of October our cumulative dividends for the year are up 3% over the same point in 2017. In fact, at the end of October we were just short of our total dividend income for all of 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 continue to pay off the repair/rehab costs for one of our properties. The good news is that it’s rented, but the bad news is that the rehab costs are going to end up costing about a year of profits on that property.
The rest of the properties performed great – they are all rented and there were no unusual expenses.
Total rental income was $898.95. Our rental income for October, 2017 was $1,636.07, so we are continuing the trend of underperformance for our rentals. In fact, by looking at the numbers it appears that we are down 48% year-to-date in our rental income.
Total investment income this month
Total (dividend + rental) income = $2,516.23
Our total income for October, 2017 was $3,196.48, which means we were down 21.28% YOY. This is entirely due to our single underperforming rental unit
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 $70,314.22. This is down slightly from last month, but in general 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. I think that’s going to be tough but achievable.
Our goal is eventually have $120k/year in investment income, so we are 58.6% of the way there!
Recap
October was a disappointing month. Dividends were fine, but rental income continues to disappoint. Of course, that’s what you get when you have a diversified income stream – you hope that your strong performers balance out the disappointing performers.
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?
It would be helpful to understand the numbers on your rental properties in detail and to understand your long term objectives for them. They don’t seem to performing well currently – are you hoping to increase rents and pay off mortgages? Or are you hoping for appreciation to make up the majority of the return? Perhaps you could write a post analyzing the purchase prices, rents and expenses, performance, and expectations for these properties that would explain their place in your portfolio.
Great question!
In fact, it’s so good that I’m going to make this the topic of my next blog post (to be published on Friday).
Thanks for sharing these income streams so openly, this is really helpful. Do you have any blog posts or advice on how to begin building up a dividend income stream ? You seem to buy individual stocks, but for a less experienced investor are there tracker funds that you would recommend ?
The basics of creating an income stream are simple – work to increase your salary while simultaneously reducing your expenses. Invest the difference.
As far as what to invest in, that’s a much more personal question, and it depends on the specifics of your situation. If you’re just starting out then I’d recommend you start with index funds. They are a simple investment that make it easy to invest small sums of money. Start researching investments and understand your appetite for risk, time horizon, etc.