Passive Income and Pageviews – January 2014 Update

 Passive Income Update - January 2014 - Money Growth

Would you look at that, a passive income update before the end of the next month! Victory is mine!

There is something special about starting a brand new year, chasing new goals, and pursuing the dream of growing a stream of passive income to obtain financial freedom and independence. As a result, I love tracking that growing stream of income more than anything else! Every month it grows in size and strength as compounding takes over and becomes a bigger part of that rolling snowball of financial goodness.

Unlike in previous months, I am no longer going to write Lending Club and Prosper updates on a monthly basis. Given the temporal nature of those accounts, I am reducing those updates to once a quarter. If I find that I no longer like the new method, I will revert back to writing monthly updates. Feel free to let me know your thoughts on whether you found the monthly updates helpful. With that, let’s dive right in and check out how my passive income looked in January!

Passive Income and Pageviews:
 
January
Year-to-Date
2014 Goal
Percentage of
Annual Goal
Lending Club
$149.31
$149.31
$1,950
7.66%
Prosper
$29.63
$29.63
$400
7.41%
Dividends
$78.00
$78.00
$1,650
4.73%
Total
$256.94
$256.94
$4,000
6.42%
Blog Pageviews
2,525
2,525
100,000
2.53%

Blog Pageviews: Having never set a blog goal before, there seemed to be no better place than to stick it right in with my monthly passive income post. With that being said, January got things started off quite slowly, but I’m hopeful for the rest of the year given consistent writing and networking efforts! Below in a nice snapshot of my January blog metrics from Google Analytics.

Passive Income and Pageviews - January 2014 Blog Pageviews

Lending Club: Coming off the high that was a record setting month in December, I reverted towards the norm in January; it was not a bad month by any stretch, just not record setting! My two accounts combined to earn $149.31 of net interest during the month. Unfortunately, my taxable account actually lost value as a default outweighed the net interest earned by $2.59. Regardless, a net $149.31 is a strong number and gets me started on my path towards my 2014 goal. I would anticipate 2014 being the year that my Roth account really matures, seeing defaults and charge-offs somewhat regularly as the average age of notes in the account crosses over the one year mark.

As the end of January, my weighted average interest rates were 17.97% and 15.40% in my Roth IRA and taxable accounts, respectively, giving me the potential for high returns over the course of the next few years. I would expect that those two averages continue to move towards one another as the loans I’ve been able to select are averaging in the 16-17% range. For the month of January, my overall internal rate of return (IRR) was 18.04% across both accounts. Since inception, my IRR for both accounts are 11.98 and 10.56%, respectively. Lastly, since the start of 2013, my accounts have an IRR of 13.16% combined. Not bad for an alternative, passive income producing investment!

Important to understand, I calculate my monthly net interest amount to be interest received less any charge-offs, defaults, and services fees in the given period. Feel free to check out my 2014 Lending Club Investment Criteria!

Prosper Marketplace: After a heck of a great 2013, Prosper got the year started off right with yet another increase to my monthly net interest earning $29.63 for the month. However, headwinds are brewing with the two late notes in this account. I would anticipate them going bad any time now considering how long they’ve been late.

During January, I was able to get fully invested, so I hope that over the course of the next month or two those investments start to return gains and will overcome any defaults or issues I have with underperforming loans.

At the end of the January, my average interest rate of the notes invested in is 20.90%. Since opening the account in May, my IRR has been 16.29% with the month of January alone returning 18.56%. Once a default or two hits the account, these numbers will trend back down towards reality. Feel free to check out my 2014 Prosper Investment Criteria!

Dividends: January was a great month for my dividend growth portfolio even while being an off-cycle payout month for most equities. During January, I received dividend payments from five of my holdings. Those holdings were American Realty Capital Partners (ARCP), Cisco (CSCO), Digital Realty Trust (DLR), Philip Morris International (PM), and Prospect Capital (PSEC). My dividends received for the month totaled $78.00, an increase of $38.62 over the previous year and $14.29 over October’s total. The details can be found below:

  • ARCP: $7.54, reinvested into 0.573 shares
  • CSCO: $8.82, reinvested into 0.385 shares
  • DLR: $23.74, reinvested into 0.462 shares
  • PM: $19.00, reinvested into 0.226 shares
  • PSEC: $18.90, reinvested into 1.662 shares

As with previous months, I plan on directly reinvesting all my dividends until my annual dividend income falls between $2-3,000 per year, allowing me to reinvest more selectively a few times per year. This of course is always subject to change.

In addition to having a nice start to the year receiving dividends, three of my holdings raised their dividends. The first, ARCP, was a position I doubled down on in January, purchasing an additional 80 shares in the beginning of the month. A very timely dividend increase indeed! The other two increases came from Omega Healthcare Investors (OHI) and Oneok Partners (OKS). Lastly, I started my no-cost dividend growth portfolio with Loyal3 and invested in my first two positions there, McDonald’s (MCD) and Target (TGT).

When factoring in the dividend reinvestments mentioned above, the dividend increases to my portfolio, and my additional investments, my forward 12-month dividends increased to $1,386.00 from $1,285.19, an increase of $100.81! An investment here, a dividend raise there, and boom, compounding at its finest! I’ve added the below chart to show the both the dividends I’ve received each month and the increases in forward 12-month dividends. This charge will continue to track on a rolling twelve-month basis instead of from a starting point.

Dividends Received and Forward 12-Month Dividends - January 2014

Passive Income Summary:

As I’ve done recently, I like to examine the cyclical nature of my passive income due to timing. Smoothing out the trends of income is important to me, so finding a good means of doing this was something I worked on before deciding to do a three-month moving average. This will allow me to see my growing passive income stream while helping to erase the swings in timing from dividends and the somewhat choppy nature of peer to peer lending. As with the dividend chart above, I am now showing this information on a rolling 12-month basis. The chart below shows both my three-month moving average and the individual income from each of the underlying investments:

Rolling 12-Month Passive Income - January 2014

I like to compare my “quarterly average” of passive income to reflect my growing stream of passive income. For January, this means comparing my three-month moving average to October’s three-month moving average. For January, I had a three-month moving average of $292.07, an increase in passive income by $30.51 over October’s $261.56. I am quite pleased with my continued progress and look forward to tracking this metric as time goes on. As we move forward, each month and quarter will not be as consistent in the progressing, but over time, my gains will be noticeable.

And with that, we’ve reached capped off another passive income update. Without a ton of time or energy my investments earned $256.94 of total passive income for me during the month of January!

Don’t hesitate to look around; you can find details on the various aspects of my passive income pieces under their respective pages, Lending Club, Prosper, and Dividend Growth. Additionally, you can find all of my monthly updates under the Passive Income Updates page, and all my monthly updates and incremental progress towards my 2014 goals on the Goals page.

Flickr: susivinh

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Comments

  1. Congrats on a great month! You’re getting closer to a $300 per month rolling average which is some serious passive income. And great work with the blog too.

  2. Congratulations W2R. That’s some nice passive income you’re generating. You should have no problem reaching those income goals. Having just upgraded and relaunched my site, maybe I should have a page view goal as well. Have a great day
    -Bryan

    • I’m hoping I won’t, but I know it will be close depending on when I can start getting some serious additional capital into play.

      Best of luck with the new site and thanks for stopping by!

  3. W2R,

    Great job! You had a very solid month of passive income there.

    You’re very close to $300/mo. And that kind of income can pay for my mobile phone, gas, and utilities for the rest of my life! :)

    Keep up the great work.

    Best regards.

    • It can pay for your bills? What about mine! ;)

      I’m thrilled with the level I’m at already and can’t wait to see what the next couple of years bring for me. Thanks for stopping by DM!

  4. Close to $300 per month in passive income is awesome. Right now, the majority of it is coming from P2P lending. Do you plan to continue that trend going forward or will you be focusing more on building the dividend stock portfolio?

    • No, that trend will slowly reverse itself as I contribute additional capital to my dividend growth portfolio. Of course from a passive income standpoint, it can look a bit deceiving given the higher yields of P2P lending investments.

      Thanks for stopping by GMS!

  5. Great job so far! I just bought a 16 port Linksys switch, so that should help your CSCO stock.

    • Thanks Eric for stopping by and supporting CSCO! :) I’m looking forward to reading all your RE posts from a landlord perspective! Your comments over at FI Fighter are tremendously insightful.

  6. Thanks for the update. I don’t have near as much capital invested in my P2P accounts, but I like seeing the little amounts that I do get every month. Your updates give me hope that when I do have more capital, I can reach similar passive income streams!

    • The first and foremost thing I’d recommend is bring your P2P Lending accounts up to the point where you have 100 or so notes per company (if investing in both). This will give you the appropriate level of diversification to carry you through any loan underperformance. From there, your account will be big enough to really start snowballing and compounding on a regular basis.

      Thanks for stopping by!

  7. Wow, good job W2R,

    I think the most blogger calculate their income with ads + dividends.
    I have also google ads, but only 1 click per day…
    But Ok, I´m new and have a lot to learn and more to work on the blog.

    I hope I´ll receive also 300 USD (EUR) in one month in the next future…

    Best regards
    D-S

    • Some do include their blog revenue, but that isn’t my focus right now. Perhaps down the road it will be something I focus on but primarily I am concerned with quality content and true passive income.

      I’m sure you’ll hit your goals soon! Just keep marching forward! Thanks for stopping by DS!

  8. Congrats on a great month! That’s some serious interest from Lending Club. As you might know, here in Texas I’m not able to contribute and buy notes without using the secondary market. I am however, giving the secondary market a try to see how my returns are. So far it still looks good but I don’t have near the amount of filters as if I was able to participate in the initial offerings of notes.

  9. Congrats on the passive income (especially increasing your forward 12-month dividends by almost 10% in a month), and I have to say that I love your charts! Also, I’m a bit envious of the P2P lending opportunities you Americans have – seems like a good opportunity for some excellent income.

    • Thanks McSavey! I love the charts too and enjoy messing around with Excel and graphs constantly! Congrats on starting your own blog!

      As for P2P Lending, I think it will spread globally as the industry grows. There is a major presence in Europe already, so I would imagine between Europe and the US seeing success, Canada can’t be too far behind.

  10. Solid update this month! Great find on the no cost dividend portfolio. I have this as something to investigate further. Cutting out your transactions costs makes it pretty cost effective to average in as many times as you want!

    • Definitely enjoying the no-cost portfolio option. There are a reasonable number of dividend growth stocks so that you can leverage the platform and earn some credit card rewards at the same time.

      Thanks for stopping by Integrator!

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