Aggressively pursuing the dream of growing a stream of passive income to obtain financial freedom and independence is a joyous pursuit. Part of what makes it so enjoyable is how much I love tracking that growing stream of income! It feels like every month it grows in size and strength as compounding takes over and becomes a bigger part of that rolling snowball of financial goodness. With that, let’s dive right in and check out how my passive income looked in March!
Passive Income and Pageviews:
Blog Pageviews: After February was more than double the number of pageviews than January, I wasn’t sure what to expect with March. Fortunately, things continued to trend upwards with March, setting a new pageview record of 7,094 here at WYOR. My appreciation and thanks go to everyone who stopped by during the month, read my posts, commented, and to those who have linked my articles and shared my posts. My average daily pageviews for March was approximately 229 per day, an increase of 42 over February.
My secondary traffic goal for 2014 is to receive greater than 20,000 unique visitors. This stat must be looked at cumulatively, and for the year to date I’ve had 4,699 unique visitors.
Below is a snapshot of my March blog metrics from Google Analytics.
Lending Club: And I thought February was disappointing… March ended up being my toughest month to date since becoming fully invested in my Roth IRA Lending Club account almost a year ago. Just last month I touted my year-long streak of triple-digit net interest amounts, and that has come to an end just one month later with only $83.72 earned in March. Looking a bit further into the details, my taxable account had a phenomenal month, hitting $20.44, which is the highest it has been since I’ve tracked the account here on WYOR. Given the age of my Roth IRA, which contains the bulk of my Lending Club dollars, I am sure there will be further challenges ahead as my returns mature. This is entirely normal with peer to peer lending and completely expected given my risk tolerance.
As the end of March, my weighted average interest rates were 17.86% and 15.38% in my Roth IRA and taxable accounts, respectively, giving me the potential for high returns over the course of the next few years. Based on the notes I’ve been recently able to select, I would expect that those two averages continue to trend down as most of the notes I’ve been able to select are averaging in the 14-16% range.
For the month of March, my overall internal rate of return (IRR) was 7.48% across both accounts. Since inception, my IRR for both accounts are 11.60% and 10.79%, respectively. Lastly, since the start of 2013, my accounts have an IRR of 12.69% combined. Not bad for an alternative, passive income producing investment! Feel free to check out my detailed first quarter Lending Club update.
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 December and Year-End Lending Club update.
Prosper Marketplace: Unlike my Lending Club accounts, March was an exceptional month for my Prosper account after I experienced my first default account in January. After a record month in January, the dip in February, my Prosper account brought in $34.89 of net interest for the month. Ever increasing at this point, it is great to see that my account is now large enough to overcome a default and stay in the positive earnings category. One more reason staying diversified in any investment strategy is important.
At the end of the March, my average interest rate of the notes invested in is 20.37%. Since opening the account in May of 2013, my IRR has been 15.18% with the month of March alone returning 21.80%. It goes without saying, but a close to 22% return is not feasible, and I expect to be in the 13-14% return on an ongoing basis. Feel free to check out my detailed first quarter Prosper update.
Dividends: While March is typically the strongest month in a dividend growth portfolio, mine comes in second behind February. This is slowly changing as my portfolio mix changes over time, and I would expect March to ultimately be the largest month going forward. During March, I received dividend payments from eight of my holdings. Those holdings were Aflac (AFL), American Realty Capital Partners (ARCP), Digital Realty Trust (DLR), Lorillard (LO), McDonalds (MCD), Prospect Capital (PSEC), TAL International (TAL), and Target Corporation (TGT). My dividends received for the month totaled $124.37, an increase of $61.77 over the previous year and $8.27 over December’s total. The details can be found below:
- AFL: $11.30, reinvested into 0.178 shares
- ARCP: $14.91, reinvested into 1.011 shares
- DLR: $25.64, reinvested into 0.478 shares
- LO: $25.85, reinvested into 0.473 shares
- MCD: $2.12
- PSEC: $19.28, reinvested into 1.782 shares
- TAL: $25.14, reinvested into 0.595 shares
- TGT: $1.13
As with previous months, I am 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. For the dividends in my Loyal3 Portfolio, they will be selectively reinvested and combined with additional contributions monthly.
After starting a no-cost dividend growth portfolio with Loyal3 in January, I’ve made $300 purchases each month and plan to continue this through the end of the year. This past month, my March contributions were invested in two positions, Coca-Cola (KO) and Unilever (UL).
When factoring in the dividend reinvestments mentioned above and my additional investments, my forward 12-month dividends increased to $1,455.71 from $1,438.31, an increase of $17.40! 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. I’ve changed the chart below to track the growth since the start of 2013, and will return to a rolling chart once I have two years of data.
Passive Income Summary:
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. Of course, this won’t insulate me completely from swings, but should smooth things out nicely!
As with the dividend chart above, I am going back to showing this chart from the beginning of 2013. Once I get two years of data, I will then showing it on a rolling basis. The chart below shows both my three-month moving average and the individual income from each of the underlying investments:
I like to compare my “quarterly average” of passive income to reflect my growing stream of passive income. For March, this means comparing my three-month moving average to December’s three-month moving average. For March, I had a three-month moving average of $264.00, which is unfortunately a decrease in passive income by $11.97 over December’s $275.97. The primary reason for this decrease is my peer to peer lending accounts come down from an extremely productive fourth quarter in 2013. As my accounts mature, the income received is getting offset by late notes and defaults. Fortunately, this should smooth out over this course of the year and things should go back to increasing as the year goes on.
And with that, we’ve reached capped off another passive income update. Without a ton of time or energy my investments earned $242.98 of total passive income for me during the month of March!
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.