Passive Income – November 2013 Update

Passive Income - November 2013 - Turkey

Getting closer and closer to being caught up! Can’t wait to get into 2014 and see what goals I can set for the New Year! 

My favorite post of the month is my monthly passive income update as it shows each month how I am getting a step closer in developing enough streams of passive income to supplement my working income and achieve financial independence. To help measure my progress I’ve set corresponding passive income goals to which I compare myself on a monthly basis. I’ve been steadily increasing my projected income, so let’s see how November actually turned out!

Passive Income:
 
November
Income
Year-to-Date
Income
2013 Goal
Percentage of
Annual Goal
Lending Club
$140.01
$1,316.26
$1,480
88.94%
Prosper
$24.44
$106.59
$120
88.83%
Dividends
$145.83
$911.65
$1,000
91.17%
Total
$310.28
$2,334.50
$2,600
89.79%

Lending Club: While October was a poor month for Lending Club, November was a nice bounce back, registering the third highest net interest amount of 2013 thus far! By earning $140.01 during November, I’ve set the stage where I will need a great month in December in order to hit my goal of $1,480 of net interest from Lending Club during 2013. Given my total through 11 months of $1,316.26, I will need to hit $163.74 in December. This would be just under the highest monthly total for me, which will be tough considering the increasing number of late and defaulting notes as my portfolio ages.

As the end of November, my weighted average interest rates were 17.91% and 15.36% 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 mid-17% range. For the month of November, my overall internal rate of return was 13.87% across both accounts.

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. If you haven’t yet, check out my full November Lending Club update.

Prosper Marketplace: I added $900 to my account between August and October, and as a result, my Prosper account is beginning to show the product of investing that money into additional notes. During November this resulted in $24.44 of net interest income, a jump of $6.43 over October’s net interest. Unfortunately, I am starting to see some issues with getting all of my contributions invested, and hope that this is a temporary challenge.

At the end of the November, my average interest rate of the notes invested in is 21.72%. I look to be in great shape to hit my 2013 goal of $120 in net interest from Prosper, and only need $13.41 in December to achieve that goal. If you haven’t yet, check out my full November Prosper Marketplace update.

Dividends: For many dividend growth investors, the March, June, September, and December months are the largest of the year. Given my current portfolio makeup, I currently receive the highest level of dividends during the February, May, August, and November period. So with that being said, during November, I received dividend payments from five of my holdings. Those holdings were American Realty Capital Partners (ARCP), Kinder Morgan (KMI), Omega Healthcare Investors (OHI), Oneok Partners (OKS), and Prospect Capital (PSEC). My dividends received for the month totaled $145.83, and the details can be found below:

  • ARCP: $7.21, reinvested into 0.544 shares
  • KMI: $49.81, reinvested into 1.414 shares
  • OHI: $22.56, reinvested into 0.698 shares
  • OKS: $47.42, reinvested into 0.890 shares
  • PSEC: $18.53, reinvested into 1.625 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.

When factoring in the dividend reinvestments mentioned above, and any dividend increases to my portfolio, my forward twelve-month dividends increased to $1,278.28 from $1,258.07, an increase of $20.21. Pretty spectacular to see how compounding increases my projected income on a monthly basis!

Passive Income Summary:

Just as October was a down month in part due to the cyclical nature of dividend payments, November was strong for the same reason. Nothing changed with the quality of my investments, but many companies do not pay out monthly. As I noted last month, in comparing to the previous “matching” quarter (November compares to August), I increased my passive income by $38.92. Not a bad quarter over quarter increase, although this can fluctuate to the nature of my peer to peer lending investments.

Again, as I highlight that monthly income swings are normal for those relying on dividends to produce passive income, creating the illusion of dips on a monthly basis; or in the case of November a bump of income. Because of this illusion provided by the inconsistency of dividend payments due to timing, I’ve added a trailing three-month average to the monthly passive income chart below. This average will smooth out and better reflect the growing stream of passive income I am generating with my investments.

2013 Passive Income by Month - November

Overall, November was a strong enough month to give me confidence that I can hit at least two of my three passive income goals for 2013. The only remaining concern I have left is for my Lending Club accounts. As of the end of November I need $265.50 of passive income, with $163.74 of it required from Lending Club. Here’s to hoping that December will be a strong month for Lending Club!

And with that, we’ve reached capped off another passive income update. Without a ton of time or energy my investments earned $310.28 of total passive income for me during the month of November! My three-month moving average increased a total of $12.98, going from $261.56 to $274.54.

What types of investments have you found successful in generating a consistent and increase level of passive income?

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 progress on my 2013 goals on the Goals page.

Flickr: OZinOH

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Comments

  1. Good stuff! Looks like you are on track of reaching your goals… can’t wait to see how you did in December. $2300 in passive income is sweet! Like you said, it’s fun when everything starts to snowball.

    btw, love the organization and chart!

    • Thanks FI! Been a crazy (good) year and I’m absolutely enjoying the snowballing! The advantage of something like peer to peer lending is how rapidly the compounding can be given the high rate of cash generating returns.

  2. w2r,

    Nice month! Great month of passive income, and the LC income is particularly impressive. Very nice!

    Looks like we’re gonna see you exceed your goals in the next (December) update.

    Keep it up!

    Best wishes.

    • Thanks DM! As you know, I am a big fan of P2P lending, and think that it provides a nice boost to the passive income and deserves consideration to be a small part of people’s portfolio.

  3. Congrats!. Looks like you may have topped $1k in dividend income for 2013 as well?!

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