Mr.Frugality

December 2019 – Passive Income Update

December 2019 was a record month as it relates to dividend income, which was $245.15. This is 2.32 more time than December of 2019. The $245.15 is the new minimum that I expect to receive in dividend income on a quarterly basis for the rest of my life. The future looks definitely bright on dividend income front.

My Robinhood statement it states that my estimated annual income from dividends is expected to be $1,708.46. At the account cost basis of $47,181.68, this equates to a dividend yield of 3.6%. My unrealized gain of $6,497.11 provides me a nice cushion for major stock correction. I do want to add that my total return since the inception is 22%.

I am glad that I started actively investing in January of 2017. If I had started to invest right now, I feel, I would have been late to the party at least for now because I was already late to the party in 2017.

Recently, I have purchased many positions that are low correlated or almost not correlated to the stock market, i.e: gold, bonds, and REITs, a few others. I am definitely in equities but I know me that I would have had a very hard time to see my portfolio drop in value 50%. So, I had to make a few adjustments.

The 50% drop in my portfolio value is no longer a possibility because of the noncorrelated assets that I hold. As of today, I am ready for a huge market correction. Once a market correction will occur, I will liquidate my none correlated assets and put them in various discounted equities. I will buy those colloquially speaking “apples” very cheap at the right time.

For now, I have to be very patient because it looks like the market is going to rise for a while. Also, pretty much everything is expensive right now anyways.

In 2020, I am financially ready to accumulate lots of savings and later invested wisely. The goal is to get Robinhood over an account value of $100,000 which will provide about $3,600.00 in dividend income. I will put 2020 goals in place just to keep me on track and busy in 2020.

Interest and Dividend income in December was pretty amazing as well coming in at $421.22. It looks like somewhere around $400.00 is the new normal for monthly passive income.

Securities Investments:

Only $560.75 was deployed in December. Mostly because I was paying off lots of large amounts that I was arbitraging through zero percent credit cards.

The following securities were purchased: GEO, VXUS, GLDI, CL, DBC, O, and BND.

Robinhood Investment Portfolio:

The actual change in account value outside of my invested funds in December was $1,328.52. As of December 31, 2019, the account value was $53,923.01.

This is a good place to compare the Robinhood account value as of December 31, 2019, which was $19,843.76. This means that the account value increased by $34,079.25. The increase was due to my contributions of $25,194.40, dividend income of $1,267.30, and gain $7,617.55.

I am definitely proud of myself of being able to save $25,194.40. I feel that I would have never saved that much money if I had not invested almost every single day.

The $245.15 of dividend income was 2.32 more from the previous month. The dividend income is working like a well-oiled machine. The $245.15 could definitely pay some real bills if I had the need to use it.

Contribution Amount/Change in Value, and Dividend Income Summary Table:

Do you see the bright green line? Yes, the dividend income is getting nice and thus the green line is getting fatter. Fatter in this situation is better.

Overtime Dividend Income Summary Table:

This is a nice visualization of how far I got so far, even though I feel that I just started. Definitely, first-year shows very little income. Maybe this is why in general people get discouraged with investing because there is very little income first year.

Another thought comes to mind. Would I have the courage to still invest if the overall returns were negative? Probably not, I would have been a scared just like everyone else of loosing my hard earned money.

Passive Income Summary:

Everything looks good. I have nothing to add.

The total passive income for 2019 was $3,696.49, which is about 3.2% based on account value. I say this is “okay” result, of course, I wished it was better.

In 2020, I will definitely be over $5,000.00 mostly because I have eliminated most of my liabilities and any income will be invested at appropriate times.

Thanks for reading.