FFtF Passive Income Report – May 2018
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Welcome to the first monthly passive income report. To be honest, I’m more focused on growing our net worth, so my passive income isn’t very high.
A practical example of trading passive income for growth is buying growth stock (think Facebook or Netflix) versus buying a value stock (think Coke or GM). Growth stock has the potential to grow my net worth while value stock dishes out a passive dividend every quarter. In fact, I’m so focused on net worth, that I’ve begun dabbling in some angel investing.
Our goal to retire in 9 years so I need to start focusing on my passive income. In 9 years I’ll be 50 years old and my first child will be entering college. From ages 50-60, we will have all 4 kids go through college. While I’m looking to build my passive income sources, I don’t know how to predict our expenses at that time. My goal is to increase my passive income month-over-month. Here are our current sources of passive income, so these reports will help me track my progress. Enjoy!
Passive Income Sources:
Rental Real Estate – I have one rental property worth about $200,000. I bought a townhouse in 2003 as my starter home, but after getting married in 2005, we moved to a different state for my wife’s residency. I kept the property and started renting it out for $1500/month. I’ve had several tenants over the years and have been able to increase the rent. The current tenants now pay $1700/month, but I pay about $450/month in taxes, $145 in an HOA, and about $85 for insurance so my net income is about $1,000. The house is fully paid for, so this is truly passive income (outside the occasional phone call from the tenant).
Stock Dividends – I have a Betterment and Wealthfront brokerage account which spit out dividends every quarter or so. I’m not including dividends paid out in any of our retirement accounts. I’m currently in the process of transferring funds out of Betterment into Fidelity because we’d like to donate a bunch of appreciated stock to our donor-advised fund.
Real Estate Crowdfunding – I’ve been using the Fundrise and Realty Mogul platform since 2016. I haven’t yet bought any individual assets, but have poured money into their private REITs. I give up a little bit of return, but I’m able to spread my risk out across many more properties. I’ll continue to evaluate this option, but I’ve made $197 in the month of May.
Here is how much we made so far in 2018:
|2018||Dividend Income||Rental Income||Real Estate Crowdfunding||Total Passive Income|
|Jan-18||$ 1,616||$ 1,000||$ 526||$ 2,616|
|Feb-18||$ 39||$ 1,000||$ –||$ 1,039|
|Mar-18||$ 39||$ 1,000||$ 195||$ 1,039|
|Apr-18||$ 889||$ 1,000||$ 612||$ 2,501|
|May-18||$ 38||$ 1,000||$ 197||$ 1,236|
|2018 Total||$ 2,621||$ 5,000||$ 1,530||$ 8,431|
There are a lot of other passive income sources, but many require a lot of upfront time and resources including writing a book or buying a business and having someone else manage it.
I hope you enjoyed the first of many reports. Would love to hear any suggestions you have. Again, please do subscribe to get more details on the passive income report as well as my net worth report…I promise not to flood your inbox!