Near Year. New Goals. The goals are large, the passion intense, and the moniker sexy. That’s right; this is now the PIMP update. Passive Income Made Perfect. What does that mean really? Passive income is what we all are striving for, money that’s being made without another hour of work. The effort is put in up front, but the rewards will last a lifetime. ‘Made Perfect’ is really a different take on this efficiency of passive income. Whether you’re a dividend growth investor or a good old fashion Boglehead, the point is your passive income is made perfectly, without another real ounce of effort on your part.
So, now that we’re in the PIMP mindset, lets’ see how February turned out.
February Passive Income and Pageviews:
Blog Pageviews: Continuing with the record setting ways, Write Your Own Reality again broke through the clouds and saw some impressive pageviews. This goal is really a credit to the great readers and blogging community members who’ve commented, shared, linked back to me, and all around inspired me to keep on trucking along.
I’m actually ahead of schedule with this goal, and realize I might have shot too low. I’m going to keep the goal where it’s at, given we still have 10 months left of this year, and hitting the traffic goal will likely be contingent on me continuing to post each month. This of course leads me to my second goal, the months with active posting. We’ve again had another month with active posting, so all is well with this goal!
This past month I was able to publish six posts, which are listed below. I received some incredible traction on the blog as a result of two posts, one here on my site (JNJ and EMR Purchase), and the other over at 1500 Days, a guest post regarding the use of P2P lending for short-term cash flow.
- Milestones and Memories, Passion and Determination
- Passive Income Made Perfect – January ’15 PIMP Update
- Using P2P Lending to Protect Against Short-Term Cash Needs
- Trades – Emerson Electric (EMR) and Johnson and Johnson (JNJ) Purchases
- Are You Planning On Knocking 2015 Out Of The Park? I am.
- Trades – February 2015 Loyal3 Portfolio Purchases
Interest Income: New this year is interest income from savings accounts my wife and I have. I figured I’d add it to my tracking since it really is passive income and something I’m comfortable disclosing. While you won’t ever see our full net worth or financial picture here, this is yet one more source of passive income for us, and puts us even closer to accomplishing our long-term goal of financial independence.
Moving forward, this will likely be a very steady number, with only larger macro-type events impacting it up or down. We are just about on pace to hit the annual figure for the year, with some additional savings needed to put things over the top.
Lending Club/Prosper: My P2P lending (also known as Marketplace Lending) accounts had a rough February. Both taxable accounts, one with Prosper and Lending Club, each returned a negative figure. While not ideal, this reflects a small trend I’ve seen in my accounts over the past couple years. Combined, they tend to do poorly during the spring, which I chalk up to people recovering from the holidays. Unfortunately, this does mean my streak of greater than $100 per month of net interest has been broken. As a result of this poor month, I’m well behind where I need to be to hit my goals this year.
Separate from my performance in this particular month, I’m in the process of reviewing my investment criteria to ensure I’m investing in notes that meet my personal risk/reward. I am still bullish on P2P lending, however, I am likely going to transition my investments to more predictable levels of risk, which will mean lower returns. From a macroeconomic perspective, we’ve been in a hell of a bull market run, and at some point things will flatten out or worsen. By positioning myself now, over the next couple of years my portfolios will have transitioned to a better risk level to accommodate any prolonged increase in defaults.
Dividends: I am very excited for the direction my dividend growth portfolio is heading. The first two months have been solid, but where things are really going to shine are in March and September. I will more than double my year-to-date totals by the end of the quarter. You can get a sneak preview on what I’m expecting from my dividend portfolio by checking out my 2015 Dividend Calendar.
My goal for the year is to receive $2,750 of dividends, which is quite a leap forward from the $1,539 received in 2014. During February, I earned $110.91 in dividends from seven different companies. Below is a list of all my dividends received by company and whether those dividends were reinvested directly. If you’d like a prettier place to view these dividends received, check out my 2015 Dividend Calendar.
- Apple (AAPL): $0.85
- Deere and Company (DE): $10.88, reinvested into 0.211 shares
- Kinder Morgan (KMI)
- Taxable: $14.30, reinvested into 0.340 shares
- Roth IRA: $43.62, reinvested into 1.039 shares
- Main Street Capital (MAIN): $11.48, reinvested into 0.374 shares
- Omega Healthcare Investors (OHI): $26.74, reinvested into 0.658 shares
- Starbucks Corporation (SBUX): $1.84
- YUM Brands (YUM): $1.20
As with previous months, I am directly reinvesting all my dividends until my annual dividend income falls between $2-3,000 per year in a particular account, allowing me to reinvest more selectively a few times per year. This of course is always subject to change. For the dividends in my Loyal3 Portfolio, they will be selectively reinvested as earned or combined with additional contributions monthly. You can read about the dividend reinvestment options with Loyal3 in my Snowball City – Loyal3 Dividends post. I’ve heard ‘rumors’ that once you receive $10 of dividends from one particular holding it will be reinvested. I’ll know for sure during March of this year as I receive in excess of $10 in a single payment from a stock.
When factoring in my dividend reinvestments, dividend increases/decreases, and stock purchases, my forward 12-month dividends increased to at $2,163.95. This represents an increase of $69.83 from January’s mark, and an increase of $725.64 from a year ago. Even cooler, my forward-12 month dividends average out to be $180.33 per month. Hitting my 2015 goal of $3,000 would bring that average up to $250 per month, so we’re inching closer and closer each month. Pretty exciting in my book!
The below chart reflects my dividends received, as well as my forward 12-month dividends since the beginning of 2013, when I started tracking things on the blog. I’ve switched this chart back to being a bar graph, as it more clearly shows the quarterly cycling of dividend income.
Passive Income Summary
During February, I received a record total of $225.01 of passive income, well diversified across my three different investment types, traditional interest income, dividends and peer to peer lending net interest. While $225 is a month not earth shattering in and of itself, just think about what $225 could buy you today? Perhaps a car payment? A portion of rent? All of your utility bills during these not-so-warm winter months?
You can find below my updated passive income chart showing my overall passive income for the last few years, since January 2013. My favorite part about this is the three-month moving average. While it isn’t fast, it is absolutely moving upward over time. I expect it to take a serious leap forward this year as my passive income grows based on the additions I’ve made over the previous years.
February, the shortest month of the year, wasn’t as strong as I would have liked, but I have high expectations that going forward, I will continue to make progress and build an ever growing stream of income.
Were you a PIMP this month, and if so, how did your passive income turn out?
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 the completely revamped Dividend Growth Portfolio. 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 2015 goals on the 2015 Goals page.