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.
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.