With March come and gone, it is time for my monthly passive income update. One of my primary reasons for starting this blog was to have a quasi-permanent record of my pursuit of creating passive income with my investments. March was a really good month on a whole, and I expect this passive income growth to continue throughout the year.
Passive Income Summary:
|LC - Net Interest|
Lending Club: March saw my net interest from Lending Club jump significantly as I doubled my year-to-date net interest income. With more and more of my IRA invested, my monthly repayments are expanding rapidly, with a current total of about $300 between both accounts. With this quickly increasing amount, it is easy to observe the effects of compounding as I reinvest the repayments into new notes. Currently, my average interest rates are 18.22% and 14.98% in my Roth IRA and taxable accounts, respectively. For March, my overall internal rate of return was 11.39% across both accounts.
I hope to receive between $140-150 in net interest per month by the end of the year; however, I anticipate accomplishing that as early as June or July. I calculate my 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 March Lending Club update.
Dividends/Trading Income: During March I received dividend payments from two of my holdings. Intel (INTC) paid their quarterly dividend of $0.225 per share, resulting in $29.25 of dividends. Unfortunately, after my switch to TradeKing with this particular account, I wasn’t able to get these dividends reinvested directly. I also received my monthly dividend payment from Prospect Capital (PSEC) of $0.11 per share, resulting in a reinvested $33.35 of dividends. This was reinvested into 2.978 more shares bringing my total up to 305.978 shares.
Just last week it was announced that Cisco Systems (CSCO) 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. As I mentioned when I originally sold a put on CSCO, which resulting in the acquisition of my 100 shares, they have plenty of room to grow dividends payments. As the second CSCO dividend increase in less than a year, this has resulted in a one year increase of 112.50%. This most recent increase provides me a 3.29% yield-on-cost.
With the reinvestment of my PSEC dividends and the increase in CSCO’s dividend payments, my projected 12-month forward dividends have increased by $15.93. Unfortunately, I had a calculation error of $2.60 on my INTC projected dividends, thus netting an actual increase of $13.33 over the prior month giving me a new projected 12-month forward total of $942.41.
I was very fortunate to be able to close a put I sold on INTC in just 11 days at the beginning of March. This quick turnaround net me $47.71 in option profit, 72% annualized return on the money tied up by option. This additional profit brings my annual total up to $100.70 of option income. Because of the demands on my capital in other area’s, I will not be doing a lot of options trading between now and the end of the year. I would fully anticipate not hitting my goal.
Quarterly Summary: Overall I had an awesome first quarter of 2013 for passive income with a total of $441.26. I can’t wait to check back in the quarters and years to come to see the progress I will have made from this first quarter.
That’s it for my March passive income update! Don’t hesitate to look around; you can find details on all of my equity investments under the Investments page, peer-to-peer lending on the Lending Club page, monthly updates under the Passive Income Updates page, and progress on my 2013 goals on the Goals page.