Mr.Frugality

May 2019 Passive Income Update

May 2019 was a record month for interest and dividend income.

My investment accounts created an income of $415.28. This is the first time ever that I have achieved income above $400.00. Effectively this feels like a raise at work without sacrificing time or getting a promotion.

After all of the years of being diligent of saver and investor that my plan will work out just fine and the future of my family will be great. Since we don’t have a mortgage or car loans, we could very easily spend the money on whatever we wanted and next month will be just fine.

For now, the money will be fully invested mostly I don’t have the need to buy anything, plus the cash reserves are large enough to cover even extreme expenses.

Let’s get deeper into the amounts.

Securities Investments:

I deployed $3,610.06 by purchasing various securities. Since I use Robinhood, and I get free trades, I purchase different shares of different companies or funds with as little as one share. I like this method a lot because it allows me to be very careful and not to commit to one investment 100% of my capital. Additionally, I can average costs down or up.

Currently, I have over 100 positions in different companies and several funds. I want not invested in any more than 5% in any investments.

My account value as of May 31, 2019, was $36,197.51, which puts me only $3,490.01 for reaching my 2019 goal of having an investment portfolio of $39,687.52.

The market retreated in May and overall value in investments decreased by $1,547.93. I am not particularly concerned about the unrealized loss as I mostly buy and very rarely sell equities.

Cash Deployment Chart:

The chart above reflects a decrease in unrealized again. My contributions definitely helped with the decrease in value. May contributions were 10.59% of April’s account value, which means at this point I can cover the equivalent decrease of the account value. However, this won’t happen forever as contributions in the future will be a smaller portion of the account value.

Options:

I am still holding: VOO and gold options. I tried to sell the VOO options when the market took a dive because I was up 85% but no one was willing to buy it. I found that this to be strange. As of the writing of this memorandum, the market has recovered and I am back in the red. Therefore, I will likely take an inconsequential loss. I won’t do options until I will learn why they didn’t sell when I wanted to sell them.

Dividend Income Summary Table:

May dividend income was $55.87, which was 3.07 time more than the previous year, and 31.74 more than two years ago. My overall dividend yield is about 3.2%, I don’t want this to be much higher because it will mean that I am a sacrifsing risk of income overall all growth. In other words, I don’t want to fall in the trap of only investing in companies that give high dividends because of 20 years from now my account value could be zero. I read about this risk one of the books, so I am simply trying to avoid that risk. I find high yield dividend stocks to be very tempting of course because I want to live of dividends but I also must be mindful that I want this portfolio to be existing forever.

Based on these amounts, June is going to be north of $100.00, maybe $140.00, which will be pretty awesome. I simply can’t wait to scale these income amounts to cover all of our living expenses.

Passive Income Summary:

The new record amount of $415.28, was way above $300.00 that I was thinking of. I want to stay thank you to Peerstreet.com of providing me with $275.78 of money that I never had to earn besides simply existing.

I am closing Prosper.com account because of poor performance. Lending Club has been underperforming, I will give it a few more months to see if it will recover. If recovery won’t happen, I will close out the account as well. Groundfloor investments, I am reaching my $10,000 threshold. Once that amount is reached, I will be looking for at income amounts. If they will be good, I will invest more, if not, I will look for other investments.

I won’t be able to deploy as much as investments in June because I have to pay real estate taxes and house insurance on the house. Also, we are renting a very large RV for a few days to enjoy our summer. These are very expensed to rent.

I almost feel guilty of spending $1,500 plus on renting a very large RV because I am such a saver. This is one of those things that I have to force myself to spend money. This likely of the mindset of spenders versus savers. I don’t like to spend money on things that won’t give me a return. However, I want my family to enjoy life as well.

Thanks for reading.