Tuesday, January 10, 2017

Income/Expenses: December 2016

One of my favorite posts of the month! It's very personal and helps keep me extremely accountable!

I think it takes a little bit of guts to share your income and expenses openly with the world. But that said, I think there is value for both of us in reading this post. I will do a similar post every month.

General Thoughts on this Month: This was a great month for income, thanks to a record in Passive Income, in which all dividends were reinvested, which really makes everything else look good as well (savings rate, % of expenses covered by passive income, etc).  In reality, it was pretty normal month if dividends are removed.  

As usual in December, it was pretty expensive due to the Holidays, but that happens every year and we are ok with it actually.  In fact, if you remove housing, rental property mortgage costs, and gifts/donations, our total expenses actually came in under $2,000 this month.  But when you add back in those three categories, expenses balloon to over $7,000!

All of that said, listed below is a detailed display of all income and expenses for the month of December 2016.  

General Thoughts on INCOME:
1) Income appears to be very high numerically, but when you consider the fact that all dividends were reinvested and that everything else went towards paying down debt, it really didn't "feel" like we made a lot this month. 

Once there is actual 'excess' and not everything is plowed back into investments and debt repayments, we then should see the difference between our income and expenses.  Still, I strongly believe that your "system" is what is actually important (not your numbers), and I think our family's financial system is right.

2) Lending Club sales continue to offer around $100 or so income per month, which is nice.  Here is a detailed description from June's report, explaining this number, as I unwind my Lending Club investment as quickly as I can.  This number will eventually go to zero.

3) Dividends were a record, and I wrote about them in depth, here, and so I won't add anything additional in this report.

General Thoughts on EXPENSES:
1) Expenses were relatively high, but we expected that and prepared for it relatively well. As I mentioned in the introduction, when you remove our three largest categories, we really are doing well, in which this month we spent only about $2k for a family of four in the US.  So I'm thankful for the situation we've created.

Post Takeaway - I always think December does a good job of showing how close we are to FI (financial independence).  I would agree that in the aggregate we are probably around 35% of the way there, which is what our chart above reveals.  You can do the same evaluation for whatever month or metric works for you.  For us, with about 11 years to go until I turn 42, I think we are on pace. 

In conclusion, I am very excited about 2017 as we transition away from debt repayment and more towards investing in the second half of the year.  Stay tuned.

What do you think? I'd love to hear your thoughts below.

Thanks for reading!

Passive Income Dude


  1. Hi PID,
    The results look great to me! Rental pays for itself and a bit extra, your salary and investment income is twice your living expenses. All great stuff and you should be very pleased with the results!

    I've always been skeptical of peer2peer lending so it's interesting that you're getting out. I never got in but I figured I didn't miss much.

    Best wishes,

    1. Hey Div Life, thanks! I actually am not wholly against P2P lending and have been happy with my results. I just need to money elsewhere. lol DEBT!

  2. Pretty awesome passive income stream. Cheers, 10 :)

    1. Thanks Greg! Nothing compared to yours though! You're the standard!

  3. Nice dividend income. It's great that it all goes back into the fund. The snowball is building.

    1. Yea it is! Albeit extremely slowly to be honest. So much debt still! :)

  4. Thanks for sharing! Excellent dividends and rental income. I meant to ask you about your Lending Club "sales." Why are you trying to unwind those investments? Did you talk about this on another post? I ask because I contributed $2000 to try it out a couple years ago and have just been reinvesting the interest and principal payments back into additional notes since then. I've debated about unwinding as well and using the proceeds for dividend stocks but at this point this is my only fixed income (bond-like income) so I've kept it around so far. Appreciate any comments you can offer.


    1. Hey Scott, nice meeting you and thanks for the reply. I have talked a little about it in old articles and comments on posts, but really my only reason is because of how illiquid it is. I need the money elsewhere - to pay off debt and fund my IRAs. I think lending club is a great investment idea for a small portion of your money, and I've experienced decent returns, but I need that cash back, lol. Take it easy,

  5. Nice job with building your waterfall of passive income! That is a lot of cash!

    I'm sure you are going to retire extremely comfortable between your dividends income, rental income and (eventually & hopefully) Army pension. I have friends that will be retiring from the Army soon-ish on half pay. But I think their "sweet deal" has been ratcheted down now. What are you expecting in the way of military retirement benefits?

    Keep up the great work & now that I found your site, I look forward to following your journey.


  6. Wow, awesome passive income for the month! It looks like you are making great progress towards financial independence - you have a little over a third of your expenses covered! Great job and thanks for sharing.