Monday, April 24, 2017

Our 3rd Rental Property Has A Tenant!

For those of you who have followed this blog over this past year, you'll know that my wife and I are moving again this summer, and as a result, our North Carolina property is quickly going to turn not into our home anymore, but into our 3rd rental property.

Well, I am happy to report that we just had a very nice couple sign a two year lease, at our asking price, with them moving in only 5 days after we move out! What an absolute blessing!

I've written about this before, but I was as concerned that this property would not be able to get our asking rental price, and I was also concerned that it would sit vacant for awhile.  With a very large mortgage, even one month of vacancy can seriously hurt your cash flow. And when you have several other properties, multiple vacancies for multiple months can put you in hot water in a hurry! I've said it before, but just because you've got a good investment doesn't mean that you can survive the short term liquidity problems. This very thing happens to many businesses and forces them into bankruptcy!  And so to have a tenant locked in now, at our asking price, for not one but TWO years, with only 5 total days of vacancy at the start, is about as good as I could have hoped.

As such, I wanted to provide a few of the financial details behind this investment, now that things are going from "projected numbers," to actual numbers starting on 01 June.

Sunday, April 16, 2017

Income/Expenses: March 2017

Happy Easter! He is risen!

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: Overall a pretty standard month for our family. Unfortunately I fell short of my Savings Goal this month, but part of the reason for that was due to some flight expenses for my wife and I that I've spread across two months, and also because of lower than usual 'job' income.  

I have money being automatically deducted from my paycheck in order to pay back my TSP loan (another one of my goals, goal #10), and so once that debt has been repaid it should be easier to hit my monthly savings target.  That said, I've updated my all-time Savings Rate page here.

Listed below is a detailed display of all income and expenses specifically for the month of March 2017.  Every penny in and out, recorded!

Thursday, April 6, 2017

Passive Income Report: March 2017

It is time again for my Monthly Progress Review, the third of the year, and what a great 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 March 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! 

General Thoughts on This Month: March was awesome for passive income, as it usually is since it falls on the 3,6,9,12 months, which offer my largest payouts of the year.  The better news is that even despite having some real estate maintenance costs, I was able to achieve a growth rate of 13.2%.  

Awesome. BUT one thing we have to remember about growth rates is that they do not take into account magnitude. They only focus on 'relative' gains instead of 'absolute' gains. Do not miss this point! Growth rates do not take into account magnitude.  I'll clarify this with a quick made-up example: If last year your passive income was $100 and this year it is $200, your growth was 100%! Incredible.  But we need to remember the absolute gain was $100. Whereas if last year your passive income was $1,000 and this year now it is $1,200, your growth was only 20%.  What happened!? Did you have a rough year? Did you stop investing? NO.  Your absolute gain was in fact double what it was from the first example but your growth rate ended up being much smaller. This is a simple example that we often forget when we only obsess about year-over-year growth.  It is much easier to grow a small pie than a large pie.  Even expert economists forget this fact!

Anyway, I'm happy with how this month turned out.  Read More to see how I earned $960 this month in passive income...