Passive Income Update 4-11-19

Disclaimer Been trying my best on bring content to everyone this week unfortunately the ground I’ve made up in writing and posting I have lost in reading so I may be silent these next couple days while I catch up on my reading goal for 2019.

Haven’t updated my passive income in quite awhile so I’ll let you know where I am at now and where I am heading. I finished 2018 off with $830 in passive income for the year which translates to just shy of $70/month. My goal for 2019 is to earn $2500 in passive income which equates to $208/month earned. I’m sure you all know that passive income is critical to reaching financial freedom and I would like my passive income to exceed my active or earned income sometime in the future. If you are unfamiliar refer to this article. Until then we’ll be growing the passive income incrementally and aggressively. I calculate my passive income currently as my dividend income, interest earned through savings accounts, and interest earned through Lending Club. As of today, I have earned $101.25 in dividend/stock interest/savings account interest and $205.90 in Lending Club interest, add that together and we are sitting at $307.15. I’ll be conservative and say we have completed 3.5 months of the year which brings the monthly average to $87.75.

divs 4.11.19

LC 4.11.19

 

That’s not too shabby and I’ll explain why. It’s obviously not the $208/month I’m shooting for and I wouldn’t expect it to be, most of my passive income will be made up in the fall after I start working full-time this summer. With aggressive savings my emergency fund (also my sacred account) will be paying out 2.1% monthly and any other funds I can spare will go into Stash (for my ETF’s), Robinhood (for my stocks), or Lending Club (for my interest payments). I won’t have to pull any more money from my profits in my various accounts so I can get back to compounding my money.

While it isn’t very exciting now these next few months should become more interesting and passive income should start pouring in. My Lending Club performance peaked in November and has been steadily declining ever since which has hurt the passive income performance significantly. I have also sold off several large dividend payers and one being my go-to monthly dividend stock, Realty Income. Pending market conditions, I’ll pick up more dividend stocks as I see fit and as my income warrants.

As always, I am looking towards the future and pending how everything goes in 2019 and pending if I buy real estate before 2020, I’ll be looking at $500-$750 in monthly passive income for 2020 which is $6,000-$9,000 for the year. Not quite a 10X goal but aggressive, nonetheless.

Thanks for reading along, I’d love to hear what you guys are doing to generate passive income, how many passive income streams you have, and what your goals are! If anyone has a suggestion for a side hustle let me know as well, I’ll be working towards that here soon.

Thanks, B^2

Lending Club Update 4/4/19

I know this is long over due and I normally like to get these done every 3 months however March was a busy month and I finally carved out some time for this, so let’s get started.

To refresh everyone on the update from December found here, I had 274 active notes after investing another $1500 into the platform. I had a rather even split of notes with an average weighted rate of 15.88% and had collected $717.29 as of then.

LC notes snip 12.13.18note details 12.13.18

I began pulling money out of the platform about November or late October and have been pulling money out ever since. I plan to keep pulling money out until I begin work full time in June and shortly after that I will begin reinvesting back into the platform as well as putting new money into assuming I have extra money left over after the 40% rule. For those of you that are joining for the first time or forgot the backstory, I am a college student with no income for 9 months of the year, I invested in Lending Club to receive a great yield (6-9% generally) and keeping my money liquid with monthly payments to pay for my expenses during school. In early April my portfolio looks like this.

lc 4.4.19lc pie chart

Had some defaults and some fully paid notes along the way but not looking bad, we earned another ~$260 in interest in the last 4 months so far although it is slowing down.

Below we will compare the non-adjusted and adjusted account values with December data first followed by April data.

LC interest non adjust

lc adj 4.4.19

The account value has decreased dramatically due to pulling out hundreds of dollars every month to live off of.

LC interest 12.13.18lc non adj 4.4.19

The April adjusted value has taken a big hit due to the numerous late notes I am currently holding. Even if they default I still should be in good shape overall and will just need to ride out the storm the next few months until we can get some new money into the account and breathe some life into it.

lc table

Above is a table I populate nearly every month on various aspects of the account including the immediate return taken from dividing the adjusted account value by the (total deposited into the account – the total withdrawn). This is taken over the course of 2 years now so the 10% isn’t all that great however as with all of my accounts they have grown dramatically over the years and I have made wiser investing decisions as time has gone on usually. Also returns were so low in October due to the influx of new capital into the account and the notes hadn’t started payments yet essentially making them dead money at the time.

The final table I will show you guys today is a simple interest table by each month.

interest lc

You can see the dramatic uptick with the $3000 I put into the account this summer as we entered Fall and now its on the downswing again.

That just about wraps it up for me, I hope you all learned something today in regards to Lending Club and how I keep track of its performance. I can’t recommend the platform enough assuming it fits your investment criteria. I mentioned earlier my need for liquidity while making a decent return and getting paid monthly to cover my expenses and this platform does just that. I can’t beat the return with what I am getting either and I look forward to putting some more money into it in the future and being able to compound my returns rapidly. I should be able to purchase 8-10 notes a month at my current rate and with additional funds I could compound interest and reinvest in notes every 2 days on average in the future (15 notes a month or $375 in interest and principal every month).

As always let me know if you have any questions!

Thanks,

B^2

Dividend Update 3/5/19

Hey, it’s B^2 coming back with a dividend update, if this is your first time checking this out welcome and feel free to look around! To date I have 73 blog posts covering a multitude of topics so hopefully you can find a topic you would like to hear more about or just use that infinite scroll on the home page and see where that gets you. I realize a lot of my posts are just me blabbing on about where I’m at and where I’m trying to go and I want to change that. I want to add more value for my readers so if there’s something you want to learn more about please feel free to drop a dm to me on Instagram or comment on this blog or on Instagram.

Continuing, I last left you guys on November 2, 2018 which seems like forever ago, and I had just recently raised my portfolio up to $11,500 with the forward dividend table below.

Ticker cost avg percent yield dividend/share share # year equivalent
CEFL $16.55 15.65% $2.59 20 $51.80
LB $32.00 7.50% $2.40 11 $26.40
T $31.89 6.27% $2.00 10 $20.00
STAG $25.85 5.49% $1.42 20 $28.40
F $10.52 5.70% $0.60 115 $69.00
CAT $113.68 3.03% $3.44 2 $6.88
O $55.78 4.75% $2.65 27 $71.55
PG $74.40 3.86% $2.87 2 $5.74
AAPL $157.51 1.85% $2.92 1 $2.92
CBL $4.09 7.33% $0.30 40 $12.00
Total forward dividend $294.69
Yield on portfolio 2.56%

 

To be honest this was my highest total dividend ever. It has dropped a bit since then for a few reasons.

  1. I am trying to reduce my portfolio size down to $10k (currently at $10,750) because I need the money and I think I can take the profits and cut the fat out of my portfolio and be alright.
  2. I sold my largest dividend producer at the time, O, Realty Income.

I sold O, because I felt there were great deals in the market at the time (I sold December 20, 2018) which was an absolute shit storm in the markets if you remember, and I needed the money to purchase those deals. O, was also at its 52 week high and I honestly didn’t know if it could sustain it, so I sold it and made a 22.5% ROI and $303 profit on the position in its entirety. Now those of you that are familiar with O might see that it has surpassed that and is currently trading at almost $70 and while if I had held that I would be up about $125 and some dividends I also ran the numbers for the purchases I made from that sale shown below.

IMG_3369

I calculated that with the purchase price on December 20th to today and I made $610 from those purchases not including potential dividends of some of those purchases.

Those wondering (CHK @ $1.92, ROKU @$28.98, ULTA @ $236.69, JD @ $19.85, F @ $8.31, FB @ $132.14, BABA @ $133.98, T @ $28.77, BPMX @ $0.1066)

$610/$125 is a 487% return due to that sale! Overall, I believe it was the right move, who knows what O or my other purchases might do in the future. I did cash in $245 in profit from Roku, which was largely due to that purchase I made in December and I believe I will make even greater returns in the future on my other positions. You will notice that I am constantly torn between value investing, dividend income, and growth stocks that make massive returns fortunately I have time on my side and the future to find out what works best for me!

Below you’ll find my current forward dividend table as of 3/5/2019.

updated: 3/5/2019
total RH account $10,750.00
Ticker cost avg percent yield dividend/share share # year equivalent
CEFL $16.55 9.24% $1.53 20 $30.60
CBL $3.12 9.62% $0.30 85 $25.50
T $30.89 6.60% $2.04 15 $30.60
F $10.00 6.00% $0.60 150 $90.00
STAG $25.85 5.53% $1.43 20 $28.60
LB $31.32 3.83% $1.20 13 $15.60
CAT $113.68 3.03% $3.44 2 $6.88
AAPL $157.51 1.85% $2.92 1 $2.92
a year in dividends $230.70
percent of total 2.15%
goal 3% +

 

As shown, I am significantly down on forward dividend and forward dividend yield. I have increased positions in Ford (F), CBL, and AT&T (T), however that has not made up for the huge lose I took selling Realty Income.

If you haven’t noticed by now, passive income is one of my top priorities and a large part of my 2019 goals. My goal of earning $2500 this year in passive income will not come easy without an extra push and the sooner the better. I have a large sale coming up assuming all goes according to plan. Ulta Beauty (ULTA) is my 2nd largest position (6 shares, $240 cost average) it is currently hovering around the $310-$315 share price. I plan to sell my entire position in it at $325/share which would bring the total sale to $1950. I would immediately pull out $750 to bring my account size and I need that money (Spring Break is expensive) and I would invest the other $1200 in dividend stocks. The plan as of now is 15 shares of AT&T (T) ($30.60 forward dividend) and 6 shares of Walt Disney (DIS) ($10.56 forward dividend) which would put me at $271.86 forward dividend on the year. I would also have some spare change left after those purchases for picking up some more CEFL or CBL to help bring that dividend up. Ideally, I would end up around 2.75% yield on the entire portfolio and look for some appreciation as well.

I choose AT&T for the high dividend yield, the Time Warner acquisition and the dismissal of the court case regarding it. I believe the market has undervalued it and investors are sleeping on the income and appreciation it could bring in the future. I choose Disney for its dividend which has plenty of room to grow as well as its streaming service to come out soon. I think Disney has been a safe and stable stock for years and with its expansion and solid fundamentals now would be a great time to lock in some shares.

Below is a table of dividends from 2018 and 2019 for comparison.

Dividend tracking 2017 2018 2019
January $0.00 $12.86 $17.66
February $0.00 $28.19 $19.42
March $0.00 $33.18 $28.78
April $0.00 $15.35
May $0.00 $17.72
June $12.54 $28.21
July $6.39 $14.32
August $5.55 $18.42
September $20.68 $35.56
October $17.86 $25.08
November $23.12 $22.27
December $28.13 $68.30
$114.27 $319.46 $65.86
Goal: $125 $500 $1,000
Total: $499.59
yearly avg $195.89 $319.46 $263.44

 

My February performance was rather weak this year in comparison to 2018. I believe the absence of Realty Income will play a strong role in the performance of my dividend’s month to month. Check out December 2018 though, holy cow those were some big numbers! These dividend figures also include interest from my savings account (2.10% APY) and my ETF dividends from Stash App. Both of those accounts pay dividends monthly and should help fill the void from O.

I do have an extremely lofty goal of reaching $1,000 in interest and dividends collected in 2019 (not including Lending Club), I plan to use Grant Cardone’s 40% rule to save over $1500 a month (at my savings account rate of 2.1%) when I begin working in June and any additional funds I can save will be contributed toward stash app, and robinhood. Assuming all goes well, and I can live frugally and generate side income as well as passive income I believe I will be able to ramp up the interest and dividends in the 2nd half of 2019 to make up the ground I am losing currently.

If this is your first time reading my blog, I hope you enjoyed, I will do my best to keep the content coming however the month of March is the busiest of my school year due to mid-terms, St. Pat’s and spring break. If there is anything you are particularly interested in or want me to write about please let me know!

B^2

IG @ Bsquared.website

Blog @ Bsquared.website

Email @ Bsquared.web@gmail.com

 

Passive Income update 11-4-2018

I’m back at it with another update on my passive income. Two months have passed, and we’ve made progress since I last filled you guys in. To remind everyone I currently receive passive income in the form of interest payments from Lending Club, my savings account, stock dividends, and stock interest payments.

I have invested more money into my Robinhood portfolio, stash app and my lending club account since I last touched on this subject and the results speak for themselves. Two months ago, I had received $233.74 YTD in Lending Club payments, now I am at $343.72. Stock interest and dividend payments have also increased from $186.37 to $260.89. Overall that puts me at a YTD passive income of $604.61 or $60.46/month. This is in comparison to my September numbers of $420.11 YTD and $46.68/month. This shows a 29.5% increase in monthly passive income! Below is a screenshot of my Lending club interest payments by month as you can see we have a dramatic uptick through the fall as funds were added in late summer and early fall showing the strong passive income performance described above.

LC interest snip

Unfortunately, I do not think I will make it to my goal of $1,000 of passive income YTD. The progress I have made will continue to help grow my passive income year after year with the goal of my passive income exceeding my earned income one day.

My lending club portfolio has been driving much of this passive income growth and it has not shown its full strength yet. This month all my notes will be issues and generating income and we will see what kind of profits that machine can churn out. My stock portfolio has been extremely volatile during the month of October as many investors have experienced the wild ride with me. I am optimistic of my portfolio and believe I will be making some sales in the future and picking up dividend stocks and profits along the way. My Stash portfolio also grew with considerable size over the last several months and it is likely that some of those positions will be rewarding me in the future as well.

Exciting things are soon to come as the end of 2018 approaches! Expect another passive income update at the end of 2018 or beginning of 2019 to recap the full year and see my future and ambitions for 2019. With graduation, relocating, and adulting there are sure to be some interesting topics to talk about and interesting plans in my future.

I will also be using this post to apologize for my horrendous lack of posting in October, as highlighted in my November goal picture on Instagram I have been off my game to say the least and will be using this first half of November or so to get back on track. For those of you who are curious I only had 1 blog article posted and lacked on my Instagram game as well. This article is already my second of November and many more are to come!

Do you ever get in a rut like I did? If so, leave a comment on how you got out of it or what you did to wake yourself back up. I’m sure myself and everyone reading this could get some benefit out of your words of wisdom!

Thanks,

B^2

 

Passive Income overview 9/5/18

Passive Income is all the rage these days, with ecommerce blowing up, YouTube, podcasts, blogs, investing etc. there are lots of reason why it should be something to think about. Let’ s dive into it and see what it is all about!

Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it. (Wikipedia)

That sounds amazing! Minimal to no effort and receiving cash from it, but its not quite that simple. Passive income often requires either initial upfront energy, effort, and time or initial upfront cash.

My expertise is with the initial upfront cash portion, so we’ll get into that. I have been collecting data on my passive income for over a year now. I currently receive passive income in the form of interest payments from Lending Club, my savings account, stock dividends, stock interest payments, and I guess money saving apps as well. I won’t go into that last one in depth as I am saving that for an article in the future. Hopefully if you’ve been following me for awhile or are at all familiar with investing you understand what a stock dividend is. Essentially you own a dividend paying stock a every quarter or for every month you receive a little gift from the company in the form of a monetary payout for being their stockholder. I also receive some interest payments from my stocks when people short the stocks I own. Between my savings account interest, stock interest, dividends from both Robinhood and Stash I have received $186.37 this year. Not too shabby most would say, but this does come at a price to the tune of ~$12,500 invested in the above-mentioned platforms. The other vehicle I use for passive income is Lending Club. Currently I have received $233.74 in interest payments this year through that platform and that is to the tune of about $4,000 ish invested. A little calculator work later and we are at $420.11 this year in passive income, or about $46.68 per month.

I’m proud of that number to say the least but there’s more to come and in fact my goal for 2018 was to make $1,000 in passive income this year. There is still along way to go to reach that $1,000 mark and less than 3 months till the ball drops and we are standing in 2019.

My plan to get there is already in the works, I have a sizeable position building in Lending Club, in fact there is quite a lot of notes (loans) that haven’t paid me yet because they are so new. When that all comes clicking together and I continue to add to that platform I expect my interest payment payouts to sky rocket. I think I’ll put in another $1,000 into that platform or so and will be reinvesting the principals and interest payments to snowball that passive income stream and make it larger.

The other side of the coin is my stocks and etf’s I own. I have added around $750 into my stash positions and most of those pay dividends. I’ve also added $1400 to my robinhood portfolio and a decent chunk of that has gone to dividend stocks. I plan to continue to add to both and make profits on my positions to reinvest into dividend stocks as well as reinvest the dividends back from where they came from.

The goal for this is to reach financial freedom. There are various definitions to this but for my purpose it is to create passive income streams that are greater than my active income (the money I make from working). When you reach this and assuming you account for inflation, cost of living increasing etc. you can effectively retire. Now of course I don’t plan to retire super early and go live on a beach or anything like that, my mission is much bigger than that, however that is the ultimate plan.

You might be taking a look at this and scratching your head like, “Brandon, you’ve got a long way to go to replace your standard income if you aren’t even at $1,000 a year yet” and you are absolutely correct. My stock portfolio currently yields around 3%, for a modest $40,000 a year to live on my portfolio would have to be around $1.3 million at that same yield to produce that. That’s a lot of motherfucking money to reach financial freedom if you ask me.

That’s why I am looking into investing in real estate when I build my capital up. With real estate’s monthly cash flow and leverage assuming a modest 5% return not accounting for increasing rents or refinancing or anything like that an $800,000 property would yield $40,000 a year and with a 25% down payment of $200,000 you could control that. That looks much more attainable to me.

Using Grant Cardone’s 40% rule, profits from my investments, and existing passive income streams that will grow that should be attainable within a few years if all goes right.

As Warren Buffett said, “If you don’t find a way to make money while you sleep, you will work until you die.”

Now are these passive income streams passive, no. I actively invest in the stock market, I do research on the positions I take, I check lending club frequently and hand pick my loans that I invest in etc. But all in all they are pretty passive. Real estate on the other hand isn’t very passive until you get to the big leagues and can afford a property manager.

Grant’s new real estate investing book is in route to my door in STL and I will be giving that a read very soon and I plan to implement his plan and to go big on my first deal. We’re talking 24-32 units costing $1.4- 2.0 million requiring a down payment in the neighborhood of $500-700k. Like I said large upfront capital or large up-front work, time, energy.

I should also mention what I am doing right here follows that other method that I haven’t gone over. This blog while it does not produce any income and actually never has produced any income for me may be able to one day. Consider how much time I’ve spent (10 months, 60 blog posts, advertising, Instagram etc.) to get it to this point and still haven’t made a dime with it. That’s what I am talking about in terms of up front time, energy, and effort.

It will not be easy whatever passive income route you choose, but with a good strategy and the work you need to put into it the prize is pretty frickin nice.

Let me hear your passive income journey!

B^2