Monday, March 6, 2017

Passive Income Report: February 2017 (TERRIBLE!)

It is time again for my Monthly Progress Review, the second of the year, and what a terrible one it was.  

In each progress review I will list a summary of all dividends I received, the rental income I received, and any purchases I made from that particular month.

This monthly report covers February 2017.  

I hope you enjoy these posts and that we can learn how to grow our passive income streams and build real long-term wealth together! 

The worst part of this month for me is that I have to report -70.6% YoY growth. What a disaster.  

Part of the cause of this terrible YoY growth (or more appropriately I should say, decline) was portfolio based - transitioning one of my major holdings, MMP at 7% of my total portfolio, down to about 2%, and hence I received a much smaller dividend from this holding.  

I transferred these funds from MMP into the Vanguard REIT Index fund (VGSLX), which is a new holding for me that I am excited about, see my updated portfolio here, but I mention it now only to say that it will help my March passive income report's numbers, but that it made February's very small.  The other factor was that HCP, which usually also pays out in February, decided to payout in March this year as well.  Add to that some real estate expenses and you get negative 70% "growth".  But hey, sometimes months like this happen I guess. Ideally March will be much larger. Still, I hate reporting declines of any kind.  

For some good news I was able to make a bunch of purchases this month, which I will detail below, and is really the only silver lining for me during another very low income, expense-filled February 2017.

Read More to see how I earned my lowest total ever since PID was launched, $179 this month in passive income...

Dividends Received
In total, I received dividends from three companies this month.  February is such a light month for me in terms of dividends, and the more I switch to mutual funds the more I tend to only receive larger checks during the 3,6,9, and 12 months.

Anyway, listed below are the details for each:

*HCP will be reported in March

Rental Income Received
I currently have two rental properties, my Missouri Rental and my Colorado Rental.  Listed below is the cash flow they provided this month:

Rental property expenses strike again - this time in my Colorado property, which is relatively unusual and I'm somewhat ok with actually, despite my $4 'cost' for this property this month. These expenses lowered my passive income by several hundred dollars, but were nothing major, and I still lowered my mortgage by over $600 thanks to my tenant paying rent.

Therefore, with dividends and rental income, Total Passive Income Received: $179

Finally, something good to share! Purchases really have been, and will continue to be, inconsistent until we're done with our debt, but it feels great to have made these purchases nonetheless this month:

During February 2017 I added $2,875 total to my portfolio, spread across the following six funds:

VTIVX - Vanguard Target Retirement 2045
VFIAX - Vanguard 500 Index
VWELX - Vanguard Wellington
VGSTX - Vanguard Star
VEMAX - Vanguard Emerging Markets Index
VGSLX - Vanguard REIT Index 

Over $2.8k added is great, and I am very thankful.  I still think the future is very bright, but we are not there yet by any means.  Yes, we're still tackling debt aggressively as well.  This particular purchase came only because of one reason - our tax refund (...thank goodness!..and is another benefit of real estate, mortgage interest deduction).

Thoughts on This Month
The passive income this month is woefully lower than the pace that I need to be at in order to achieve my passive income goal. I anticipate that the back half of this year will really be the determining factor as to whether or not I make $13k in passive income.  I'm still straddled with debt, so until the debt is gone the pace of contributions is pretty slow.

That said, I had a YoY growth of -70.6%.  Ouch.

With the addition of this month's income to my Progress Tab I now have earned $556.18 in total this year in passive income.  Wow, I am off pace for my Passive Income Goal But the journey is long and sometimes months like this happen! It's "all about moving forward..."

Thanks for reading, and I always appreciate any comments,

Passive Income Dude 


  1. While that was a very steep decline year over year you still managed to bring in a respectable amount well over $100 passively from dividends and rent. Nothing wrong with that. I mentioned last time that I once held APU a while back and sold that off and I also considered MMP too but have never pulled the trigger. It's a nice current yield though I think you don't want to become too reliant on a handful of stocks for the majority of your passive income. Probably smart for you to sell some off. Thanks for sharing your results.

    1. Thanks Keith; you're an encouragement! I think APU and MMP are both great dividend companies and will continue to hold my smaller positions. My problem is that all of my excess $$ the last few years has gone to Real Estate and debt. The only bits that are left go to our ROTHs and I think mutual funds are the way to go with that. If I can hit $13k this year, I'll be happy. Thanks for stopping by!!

  2. Hi PID,
    Congrats on the new purchases to build up future income. And even if the rentals broke even, they're still paying off debt as you mention. Definitely a good use of your tax refund - I hope I'll get something back too so will find out later this month.

    I personally like the convenience of mutual funds and think that they're "good enough" in terms of investment performance than what I would end up with from individual stocks. I am curious though if you have any particular target allocation between stocks & bonds in mind or how you decide where to add new money.

    Best wishes and keep up the great work!

    1. Hey Dividend Life, thanks for the encouragement. I think March should be much better, but you never know! :)

      As to your allocation question, I think the two good rules of thumb are 110-age or 100-age if you are less aggressive. And to be clear that is "110 minus your age" to determine what your stock allocation should be, with the rest in bonds. So for me 110-31=79, so I should have 79% in stocks, 21% in bonds. Currently, I tend to be at a 90/10 split and think that is as high as I can go with bonds, until things change. Bonds are definitely going to struggle for awhile, but having no bonds is also not smart. ALL investment theory on asset allocation proves that you can improve your sharpe ratio with at least some bonds. However, it also depends on your particular, unique, situation. For example, if you know you will have bond-like income such as a pension, then you can allocate less towards bonds...what I am currently doing. I love asset allocation (and could talk about it for awhile!) but I hope that helps.

  3. While the income in this month is down I imagine for March it will be much higher due to your selling and buying so if these to months it will either be a wash or a win.

    1. Thanks Dividendsandhobbies! I think March should be a decent amount higher, but I also realize that I am off to an EXTREMELY slow start for 2017. lol

  4. We all have bad or slow months. Mine was the same but it will pick up next month. Nice to see you being able to add so much new capital though. I am a fan of the vanguard funds. The ones I hold have been performing pretty well. Debt payment is a long process too but is an investment in itself just for paying it off. Keep it up. I look forward to seeing gains next month.

    1. Thanks Daze. I tell you, I'm tired of things going slowly! :) They've been moving slowly for the last year and a half! haha. Thanks for the confidence and here's to a big MARCH!

  5. Hey Dude, thanks for stopping by over my way, it seems we definitely feel each other's pain! It's alright though, so far I never expect much from the 2nd month of the quarter anyway! March should be more fun.

    1. Thanks Stacker. Yea March will ideally be better but it is hard to tell with Rental Properties. I know what my income SHOULD be, but then things always come up :)