Passive Income – April 2013 Update

05-18-13 Passive Income - April 2013 Update - St Johns

Is it really past the halfway mark of May? This month has been absolutely filled to the max and has led to the most irregular posting of my short blogging history. More on some of why this has been so busy in future updates! For now, let’s check out how my overall passive income shaped up in April!

Passive Income Summary:

2013 Goal
Percentage of
Annual Goal
LC - Net Interest
Options Trading

Lending Club: April saw my net interest from Lending Club continue to move up as my Roth IRA account became fully invested. Currently, my expected monthly repayments and interest have grown, with a current total just shy of $400 between both accounts. As a result, my funds are currently turning over and being reinvested into approximately 16 notes per month. My weighted average interest rates are 17.95% and 14.96% in my Roth IRA and taxable accounts, respectively, giving me the potential for high returns over the course of the next few years. For the month of April, my overall internal rate of return was 12.89% across both accounts.

I said last month that I hoped to hit $140-150 per month in net interest by June or July. Given the current rate of growth, I actually believe I have an outside chance of hitting the $140 mark in May. Important to note, I calculate my monthly net interest amount to be interest received less any charge-offs, defaults, and services fees in the given period. If you haven’t yet, check out my full April Lending Club update.

Dividends/Trading Income: During April I received dividend payments from three of my holdings. BP PLC (BP) paid their quarterly dividend of $0.54 per share, resulting in $16.20 of dividends from my 30 shares. Unfortunately, because of the ADR nature of BP, I wasn’t able to get these dividends reinvested directly, as reinvestments must come in whole share amounts. As a result, I have since sold this position as I am currently focused on holdings that will be about to be directly reinvested.

I also received my monthly dividend payment from Prospect Capital (PSEC) of $0.11 per share, resulting in a reinvested $33.68 of dividends. This was reinvested into 3.195 more shares bringing my total up to 309.173 shares.

As I mentioned last month, Cisco Systems (CSCO) announced it would be increasing their dividend from $0.14 to $0.17 per share. This is an increase of 21.4%, and comes in time for their April dividend. With that increase, I received $17.00 in dividends, which was reinvested in 0.830 additional shares, giving me a total of 100.83 shares.

With the reinvestment of my PSEC and CSCO dividends, my projected 12-month forward dividends have increased to $1,050.71.

That’s it for my April passive income update! I am now seeing an acceleration in income that is now has me earning at a rate that should allow me to surpass my overall 2013 goals. I will do a total goal update at the halfway mark and make revisions as necessary!

Don’t hesitate to look around; you can find details on all of my stock investments under the Equity Investments page, monthly updates under the Passive Income Updates page, and progress on my 2013 goals on the Goals page.

If you haven’t yet, be sure to follow me on Twitter, and like me on Facebook!

Flickr: Rennett Stowe

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  1. Way to go! Unfortunately, I’m not too big on dividends, so I don’t enjoy the kind of passive income you do.

    • Nothing wrong with that Troy! Each person certainly is entitled to their own style of investing. My goal is to set up and develop various passive income streams over the next 15-20 years so that I am in a position where I have the freedom to retire or pursue other goals without worrying about income for the rest of my life.

      Thanks for stopping by!

  2. Pretty nice passive income last month. I think you’ll hit your current annual goal for sure :) I’ve been looking at buying either some Cisco or IBM shares, but haven’t decided which one is more attractive yet.

    • Thanks Liquid! I agree that I should be able to hit my annual goal in aggregate, but I have since slowed/stopped my options trading as I am committing capital in other ways currently. That being said, my Lending Club investments and dividends look to be in a position to far exceed the $700 dollar goal I set myself. I plan on revisiting and revising my goals after the halfway mark of the year.

      As for Cisco or IBM, my personal preference would be Cisco. They have an unbelievable amount of cash, tremendous room to grow their dividends, and a strong commitment to that growth. IBM is just a bit to overpriced for such a low yield. They would have to be growing their dividend payment tremendously for me to justify purchasing at today’s price.

      Thanks for stopping by!

  3. Nice results R2W! Looks like your LC account is speeding up. I like it.
    But what about your options? Are you fully invested or consolidating? In my account I had two covered calls expired this Saturday and on Monday I will be selling new calls increasing my income from options. Do not let this great money making machine idle!

    • Absolutely the LC account is picking up! Loving the compounding that is just starting!

      I’m currently on hold with my options trading as I allocate capital elsewhere. With the big rise in the market I could probably sell a nice call on my CSCO holdings, but I’m not particularly interested in dropping that position should it get assigned.

      Thanks for stopping by Martin!

  4. Hey there. First time I found your page (from reddit, I assume you’re our mod?)…mind if I ask you a few questions?

    Why do you use dividends for passive income? You use up a lot of capital for a small return and you could lose a fair amount of money on the company compared to LC (which offers easy diversification thus less risk).

    Options are scary. Have you ever made money on the covered calls but lost on the underlying security and ended up with a loss? I love the idea of passive income, but I’d be scared to use options to do it. I hope it works out for you!

    • Thanks for swinging in Steve and ask anything you want! As an aside, I’m not a mod on Reddit, just a passionate fan of peer-to-peer lending!

      As for investing with a dividend growth perspective, it is a matter of overall portfolio diversification with multiple asset classes. For as much of a fanboy as I am for Lending Club and other peer-to-peer lending sites, I will not put all my eggs in one basket. I plan to have a three-part plan of sustainable, income producing assets; dividends, peer-to-peer lending, and rental real estate. In addition to those assets, I add exposure to the broader market via index funds, both international and domestic. My focus of this blog is to track the income producing portion of my portfolio.

      No, I have not had that happen with any of my options trades. Long-term, I plan on using options to affect my cost basis on acquisition through the selling of puts. Once I have stabilized my dividend/options portfolio, I will utilize naked puts in order to create an additional stream of income. My general rule of thumb with options is to only sell them when I am looking to buy or sell the underlying security and want to ensure a given purchase price or gain.

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