Secondary Income – December Update and Annual Review

Happy New Year!

I can’t believe it’s 2016 already.  December was a blur, yet we pulled in an above average month for our secondary income streams.  Without further ado, here are our December and 2015 totals.

Secondary Income Streams - 201512

My reserve pay led the way with a little over $17K.  Not too bad for being on orders for 55 days last year.  Since I’m very much enjoying my time as a reservist, this should be a sustainable income source for at least the next decade.  As I progress in rank and potentially pick up additional orders, this total should rise steadily.

Next, we made about $10K in realized capital gains from trading stocks.  While this is less than the previous two years and may fluctuate greatly from year to year, it’s still a nice source of fresh capital.

Moving forward, I’m really excited about the potential opportunity we have to grow our funds through private real estate lending.  In 2015, we had three projects close out.  Our average initial investment was $35K and each loan was active for roughly 200 days.  With an annualized return of 13.5%, this is a great way for us to diversify from the stock market.  We hope our business partner can continue to find profitable projects that we can both benefit from our current arrangement for the foreseeable future.

We brought in another $3.5K in dividends in our taxable accounts.  As I get away from trading and focus more on long term investments, this could become a bigger portion of our secondary income in early retirement.  The vast majority of our dividends were reinvested in their underlying holding, but this is an income source we could draw upon, if necessary.

Our rental properties brought in around $2K.  This is not that great, but in both cases our tenants are fairly low maintenance and they’re paying off our mortgages.  We did have a few minor expenses over the course of the year and that is to be expected.  Next year, however, we are anticipating a potentially large expense with one of our properties that is having some foundation issues and subsequent cracking.

The last category was just for fun to track any income we brought in through decluttering.  This is an ongoing process and we’ll probably make a few hundred dollars selling things we no longer need this coming year, as well.

As I look over these numbers, I see fairly reliable income sources that make us much less dependent on full time employment.  This should give us a lot more flexibility to take risks in the future, including an early departure from the 9-5 grind.

12 thoughts on “Secondary Income – December Update and Annual Review

  1. our next life says:

    Even though these numbers are roughly on par with what you’ve been sharing for a while, I’m still super impressed that you’ve built up such a robust secondary income framework. This for sure has to be boosting your savings rate!

    Hope you all had wonderful holidays!

    Liked by 1 person

    • Ditching the Grind says:

      Thanks and you too!

      The funny thing is, and you won’t believe it, for the first time ever we’re actually calculating our savings rate right now. We knew it was fairly high based on automatic investments, but never knew that exact amount. We’re almost done gathering all the values and it’s looking good, though not quite as good as what you just posted 😉

      Can’t wait to slash our top two expenses: mortgage and child care!


      • our next life says:

        I don’t know how anyone saves *anything* when they are paying for childcare. It’s so expensive! We fully acknowledge that our high savings rate is due mostly to high incomes and no children, not any awesomeness on our part. 🙂

        Liked by 1 person

        • Ditching the Grind says:

          At least our situation is improving and not quite as bad as some others with young kids. Even when we had 3 in daycare on base at roughly $600 each per month, we were still paying less than what it would’ve cost the general public off base.

          And yes, we’re fortunate now to make above average incomes which helps significantly.

          Liked by 1 person

  2. Howto$tuffYourPig says:

    Being an accountant, I can say that this balance sheet looks good. I like seeing the passive income, and with childcare being so expensive, it’s a relief that you are able to remain financially afloat. Must be all those great choices you make on how you spend your money. 😉 When you respect your money, the money respects you back!

    Liked by 2 people

    • Ditching the Grind says:

      And the thing is, there was a time when we were on a single income with a newborn while the Mrs was in school finishing up her undergrad. Even then, we were still doing fine. Sure, we didn’t have quite the savings we do now, but we were still following all the same principles and never felt seriously strapped for cash. Less than 10 years later, we’re in a really good spot financially. I guess good choices build upon themselves.

      Liked by 1 person

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