Saturday, October 1, 2016

Passive Income Report: September 2016

It is time again for my Monthly Progress Review.

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 September 2016.  

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! 

This was a CRAZY month for passive income, both positively and negatively, which I will explain in my article. 

With only three months remaining to reach my goal of $10,000 in passive income this year, it is going to be extremely close. I'm not sure what will happen to be honest and it's frustrating when rental property expenses throw a wrench in your plans! :) There were some definite highs and lows in this month for sure!  Read more to see specifically what happened and how I would have earned $904, but instead earned $369 this month in passive income,

Dividends Received
I received dividends from five stocks and three funds this month:

Pfizer, Spectra Energy, American Electric Power, Duke Energy, Prospect Capital, Vanguard 500 Index, Vanguard Wellington, and Vanguard Emerging Markets Index.  Listed below are the details for each:

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:

No purchases this month, as all available income continues to go towards paying down debt.  I CANNOT wait to be out of debt and watch this 'snowball machine' move into the next gear of acceleration, when I can make consistent purchases. I think it is going to be an incredible 2017!...but more to come on that as we progress each month and I update my goals for for the upcoming year.  In this case, patience is required.

Thoughts on this Month
This was a very good month for dividend income that was unfortunately completely offset by my Missouri rental property! The 3, 6, 9, and 12 months are always very large for me in terms of dividend income, since the majority of my portfolio is in mutual funds and they pay out on that schedule.  In fact, December happens to be an extremely large payout month for most funds, and it is always a nice bonus knowing December will be your biggest passive income month of the year prior to the new year starting. In sum, I am very pleased to have broken over $500 this month for dividend income.

However, the giant elephant in the room from this month was the -$471 I received, (or more accurately stated, paid!) for my Missouri rental property.  This month I decided to do two things that really hurt my cash flow: 1) I paid $300 to have the entire house pressure washed.  The home is now five years old, and it's the first time this has been done.  So that reduced my rental income received by $300. 2) The tenant just resigned their lease for another year, and so I decided to get the entryway steps repaired.  We had originally used some weird paint that really ruined them, and so it really was time for this repair to be done. See the picture below, before the work was completed: 

This repair cost $235, which again, reduced the total rental income I received by that amount. So, when you still make a mortgage payment, but receive $535 less in rental income, sometimes your cash flow is actually negative, which turned out to be what happened to me this month. Now, I could have 'smoothed' these expenses over 12 months or done something crazy to not make it look as bad for this particular month, but hey, I paid for these repairs in this month, so this better reflects 'the true economics' of what happened over the last 30 days.  

But in general, believe it or not, my projected cash flow from my Missouri rental is expected to be POSITIVE $18/mo this year.  A very paltry sum per month perhaps, but considering I have $0 of my own money left in this investment, I will take it as an infinity cash-on-cash return.  I also am slowly getting equity each month as well, which is not reflected in the $18 amount.

Also of note, from the two above rentals, I thankfully still experienced a 'mortgage debt paydown' total of $936, which as I mentioned is not accounted for in the above cash flow numbers.  This is another reason why rental properties are incredible investments!  Huge equity "earnings" or 'mortgage debt-payoff' that is paid for completely by your tenants (except in this month, partly by me!).  But in general, this benefit just quietly grows each month.

In conclusion, and somewhat of a tangent but still relevant, it is very tiring to always feel like you never have any money, despite earning $369 in passive income! (I think they call that 'house rich and cash poor'), for those of you who do not believe yet in rental properties. I personally will call it 'temporarily asset rich and cash poor.'  :) Still, it can get tiring! 

Looking holistically, I know the system I have established for passive income is 'right' and should actually explode in the next few years, but it sometimes is very easy to get discouraged if you don't maintain the right perspective on things.  This is another reason why it is so important not to make money the 'god' of your life.  Anyways, I think that's it for September.

Therefore, for this month, Total Passive Income Received: $369

Overall this was a good month for my passive income portfolio. Could have been much higher at over $900, had I received my full rental income, but that's ok! With the addition of this month's income to my Progress Tab I now have earned $5131 this year in passive income. I have three months remaining to reach $10,000. I am completely uncertain about whether or not I will achieve my primary passive income goal.  Here's to a huge last few months!

As always, I appreciate your thoughts and insight. 

Thanks for reading,

Passive Income Dude 


  1. Even with expenses you still made more than $350 dollars. Pretty impressive in my book.

    1. Hey IH, thanks for your kind words. I think it's a combination of still having a decent amount of debt and then seeing what this month could have been that got me a little discouraged. But you are definitely right, $350, is such a blessing, one that I am not by any means taking for granted. The continued hard work and diligent savings, planning, etc, is what I need to focus on. Thanks. Looking forward to seeing your new Options site. I'm taking a financial derivatives class currently, and man is it hard! When you are trying to create synthetic forwards, that's rough!

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  2. Congratulations on your solid dividend income for the month. The negative cash flow on the rental property is too bad, but in time you'll find that owning property is a great long-term investment!

    FerdiS, DivGro

    1. Thanks Ferdi. I agree that the benefits of owning property compound over time. I just needed a big month to reach my goal (I think), so that was disappointing! :) But it's all good. Thanks for stopping by. Loving what you're doing at DivGro.

  3. A five year old home had stairs that looked like that??? Looks like it was painted with acid. At least you remained in the black for the month despite added expenses for your rental property. That's the beauty of having dividends roll in. Even with added expenses from a rental, you can still be positive for the month when dividend income is factored in. Thanks for sharing.

    1. Haha, yea Keith I know! It apparently happened to a bunch of homes that used that paint. It was messed up, for sure, but now it should be fixed going forward. And you're right, having multiple sources of income lowers your overall risk for the exact reasons you said. Had my repairs been a little cheaper, they would have been covered by my Colorado property. I'm looking forward to having my NC property rented to even further offset things like this. Let's hope it doesn't increase them! Thanks for stopping by,

  4. 369 is still an awesome month. As long as the month is positive it is awesome

    1. Dividendsandhobbies,

      You are absolutely right bro. Having the right system in place, and then having the diligence to stick with it is what counts. I've been at this for about 12 years now and am excited for the next few years, as I mention in my article. Thanks!

  5. That's still a great month considering the investments you made in your rental properties. Hopefully that's the last you have to do with those in the near term and can get back to positive cash flow on both! Good dividend month too!

    1. Thanks Timeinthemarket. My Missouri rental is not the best investment in the world, but it is actually better believe it or not than a lot of other options out there.

      The fact that I've got more 'tenant paid equity' than what I personally paid in total to live there for a year, coupled with the fact that it throws off a little cash as well each month, to me is still a good investment. I actually have $0 of my own money in this investment now, so I'm thankful. And if the Missouri market ever improves, I should be able to raise rents and see some better cash flow as well. Thanks for stopping by,

  6. Hi Passive Income Dude,

    I have add your site in my bloglist. I would be happy if u could add mine :). Thanks a lot from Sweden..

    1. Thanks WorldofDividends, I appreciate it. I've added you to my blogroll. Keep in touch,

  7. Congratulations on your achievements.I wish i have the guts to invest in rental properties.

    1. Hey Pellrider,

      To be honest, I only started with real estate investing in 2013 (turning my first home purchase into a rental), so I've only been at it a few years. I had been doing only dividend investing from 2008-2012, and I realized that it takes FOREVER to get real wealth with just dividends. That is what caused me to try real estate. The returns are much larger....just my opinion and experience! Let's talk more about what the steps are,

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