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

June through Mid-July Goal Update

Alright folks its been a little bit for this one so let’s get to it. When we last left off I was getting my shit rocked by the amount of work I was doing outside of work in terms of our training program and my other obligations. Since then I have been doing better rearranging my schedule to manage my time (working out at night now) and trying to get everything done. I also went on vacation and started taking days off here and there. Nothing too crazy but I was realizing the 11-day work benders I was doing was affecting my performance.

For June I went back to the full month goal schedule, at that point in time I was still overwhelmed with trying to get everything done. As you can see in the photo below I was very ambitious and thought I was going to absolutely kill it. Increasing my net worth by $6k, 30 sales, banking tons in lending club and my Discover savings account and restructuring my robinhood account to grow dividends.

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As you can see below, we got our shit kind of rocked, I did hit some goals but anything money related was not achieved and then as always, I struggle to post enough on the blog.

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This is a great segway into this current goal update. I went back to biweekly thinking that I push very hard at the end of the goal term (student effect/procrastination) so the more frequently I have deadlines on these goals the more frequently I will push to get them done. Another part of this goal session was the vacation, now its been a very long time since I’ve been on a vacation like the one I went on and I thought I could get a lot done. I was very wrong about that, if I made it a priority to get a lot done I could have but I failed to do so. As a result, this week has been very stressful from the fast paced intense 16-18-hour days I’m putting in with very little down time or breaks, as well as the mounting pressure to finish the summer strong as its rapidly coming to an end and I’m failing to meet my goals.

As you can see below we didn’t quite finish where I wanted to. Close on some, barely advancing from the previous goal session on some. Overall a failure in my mind and a great motivator to achieve more and taking massive action to achieve these goals. I’ll rethink where I want to end up and how I’m going to get there tonight and what steps I need to take to achieve that. We will continue to go with biweekly goals however there will only be 2 left before the end of my summer, its the red-zone, and the clock is ticking. I can post and tweet and write to my hearts content while I am at school, but I can’t sell roofs when I’m at school so that will be my primary focus.

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As always thanks for reading and supporting my efforts on the various social media platforms and all. Let me know what you think!

B^2

 

Premier Roofing Week 2 and 3

Sorry to keep you guys waiting on the update for my internship. I was out of town for the holiday weekend so my week 2 and 3 were discontinuous so I decided to group them together as best as I could. Overall week 2 went alright, I was out on my own going door to door and managed to make 2 sales that week while still putting a lot of time and effort into my training. I was still without WI-FI so that was rough, but my roommate also arrived in town so at least I wasn’t alone anymore. Week 3 is where I hit a stroke of luck. I managed to get 2 more sales and I sold a group of 6 rental properties bring my total up to 8 for that week! I was awarded the “Ace of the Week” for premier roofing and earned my rookie stripes (10 total sales). In addition to 8 sales I also had a PFYNR (prepare for your new roof meeting) where the customer and I discuss the two estimates and pick shingle colors etc. That earned me a little bit more for that pay period! That impressive performance and a little bit of luck that week earned me $1000 and some cool Knick knacks from the company.

As I am coming to the end of this week’s pay period (Thursday at midnight) I am not really looking at a big week like I had before. I have several potential sales in the pipeline and a PFYNR scheduled for Thursday afternoon. As of now it looks like I’ll be under my draw ($500) this week unfortunately. This may work in my best benefit however because this next pay period is looking quite juicy, several PFYNR’s, several sales in the pipeline, a sale already scheduled for Monday etc. I may be trading a poor week for a stellar week. Unfortunately, I still have plenty of ground to make up, as of this paycheck on Friday I will be $1500 short of what I was making last summer, granted that is to be expected in your first couple weeks as you aren’t making nearly the sales or the higher commission portions of the process in your first 2 weeks. I would like to see this next pay periods paycheck north of $2,000 though as I have investments to make, money to save, bills to pay, and necessities to buy. If you’ve been keeping up with my Instagram posts you can see I have some ambitious goals to tackle this June and I am trying to fire at all cylinders always to achieve that. To name a few, $25k net worth, $1000 savings, 30 sales and 200 notes for lending club. We’ll see what I can do to achieve that, I believe that since this is my last week of time consuming training for work that I will be able to better invest my time into passive income efforts, this blog and making wise investment choices.

As always feel free to leave a comment below!

B^2

Aspiration|Summit checking account

I just recently opened another savings/checking account through Aspiration. Aspiration has been in the news lately with its Glassdoor reviews and recent awards. I am using this new savings/checking account as my emergency fund. Aspiration is known for its high interest rates specifically, 0.25% APY for accounts below $2500, and 1.00% APY for accounts above $2500. My short-term goal is to reach the $2500 amount by the end of 2018. In the future I would like to use their IRA, and investment account options. Another perk of Aspiration is that they will allow you to use any ATM and they will pay the transaction fees. This proves extremely useful in the context of an emergency account. That along with the high interest rate gives Aspiration the dynamic duo I was searching for.

I will provide further review as I become more familiar with the platform and explore some of its other features and investment potential.

I encourage you to take a look at this great banking option.

Aspiration Referral Program

Every time a friend or loved one opens an account using your invitation link (linked below), you both will receive $25 Do Good dollars to donate to the charitable cause of your choice. So lets start the new year off right!

https://my.aspiration.com/app/token/referral/42IC50VR6ON2QX0B