2016 Passive Income Recap

big-ben-new-years-2016-london

Happy New Year, everyone!

We’re only six weeks into our new Wednesday posting schedule and I almost missed one already.  Today, I want to give a quick recap of our 2016 passive income totals.

At the beginning of 2016, we set a goal to earn $6,000 in dividends (taxable accounts only) and $10,000 in private real estate lending.  So how’d we do?

I knew from the start our dividend goal was ridiculously aggressive and there’s was a good chance we wouldn’t make it.  From my point of view, there’s no reason to set easily attainable goals, so go big or go home.  

Our equity portfolio is a mix of individual stocks and Vanguard index funds.  The first quarter started off nicely and we seemed to be on track to at least beat 2015’s total of $3,538.56.  Then, the second quarter hit and two of our individual stocks, both in the oil and gas industry, slashed their dividends.  In hindsight, I probably got a little too heavy on one of the positions and I estimate it cost us around $650 in dividend payments over the last three quarters.  It should work out fine in the long run.  You live and learn.

Part of my initial projection included getting a nice dividend boost in the fourth quarter, using the proceeds from the sale of our house.  Unfortunately, that never came to fruition.  And I only have myself to blame.

Since selling our house in August, we’ve been sitting on a decent pile of cash.  I’ve been meaning to invest a good chunk of it ($20-30K), but between the move, not having internet for five weeks, the time difference between us and the US, and starting some freelance work, it’s simply fallen off my radar.  Plus, stock values seem a bit high and I’ve been hoping to take advantage of a nice dip.

No matter the excuse, I just haven’t logged into Vanguard and set up a buy order.  Even if I would’ve pulled the trigger and made a lump sum VTSAX purchase in early November, we’d be up a cool 10%.  I guess that’s what I get for trying to time the market.

Even with these setbacks, we managed to pull in $3,434.62 in dividends over the course of 2016.  That’s about $100 shy of 2015 and well behind our 2016 goal.  Still, it’s nothing to be ashamed of.

2016-dividend-totals

While we were a little disappointed with our dividend totals, our private real estate lending exceeded expectations.  As a baseline, in 2015, we closed out three loans totaling $106,000 and earned $7,726.99 in interest.  The loans were active for an average of 205 days.

In 2016, we only had two loans close out, but we have an additional four loans that are still active.  The two completed loans totaled $60,000, earned $7,001.51 in interest, and were active for an average of 316 days.  As of December 31, 2016, the four active loans total $120,000, have accrued $8,688.08 in interest, and have been active an average of 215 days.  Combined, that’s nearly $16,000 in accrued interest!

Two of our active loans should close out during the first quarter of 2017 when the renovations are completed and the houses are sold.  At this point, we don’t plan on increasing our total loaned amount anymore, and will instead bank the interest from each loan and reinvest the principle on new loans.

2016 Passive Income Recap

Goals

Dividends:               $6,000

Private Lending:  $10,000

Total:                       $16,000


 

Actuals

Dividends:               $3,434.62

Private Lending:  $15,689.59 (including accrued, but not realized interest)

Total:                       $19,124.21

16 thoughts on “2016 Passive Income Recap

  1. TJ says:

    It’s pretty cool that the real estate lending made up for the lack of dividends.

    I’ve been considering putting some $$$ into GroundFloor which is one of the only RE P2P lending services that doesn’t require accredited investors (millionaire or $200k income)

    GroundFloor wants to give me $100 to deposit $2,500 which makes me a bit weary and think they might be desperate for cash and it might not be the wisest investment.

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  2. Mr. SSC says:

    We did pretty good with dividend income this past year, and I’ve been looking into P2P real estate investing. I checked out Easy Street as it seemed fairly legit and easy to setup, but haven’t convinced Mrs. SSC to put anything in there yet. She seems to be wary of any real estate investing barring a wee bit in REIT’s. Go figure.

    It’s nice your lending covered the dividend shortfall. We too ahve been sitting on a pile of cash since last year due to job uncertainty for the both of us. I’m looking to put it into the market soon’ish, because like you pointed out, even if it had been in since November, it would’ve been worth it. Oh well. As soon as my company settles their reorg hopefully in a month or so, we’ll stick most of that cash somewhere.

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      • Ditching the Grind says:

        And I was about to look up Easy Street! I’ll probably end up putting some I’m an REIT and may experiment a bit with one of these P2P sites. The rest will go into one or more of our existing funds. I’m just a bit hesitant to pull the trigger with a lump sum right now.

        Hopefully the reorg goes well. At least you won’t have to deal with that kind of stuff for much longer!

        Liked by 1 person

  3. Ben says:

    Congratulations on your private lending income! I’m starting to try and build up my passive income but I’m only 22 so don’t have too much to invest right now but every little helps!

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    • Ditching the Grind says:

      Thanks, Ben! I have a 12 year head start on you so don’t be discouraged. You’re right, every little bit helps and you’ll be surprised how small amounts add up over time. Because you’re starting at such a young age, there’s plenty of time to see some nice growth!

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  4. Graham @ Reverse The Crush says:

    Thanks for sharing your passive income recap DTG!
    Looks like you had an amazing year despite some of the dividend cuts. Even with the cuts, $3,434.62 in dividends is no joke. You did incredible with the lending too. Hope the Freelance work is going well!

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    • Ditching the Grind says:

      Thanks, Graham! Yeah, it’s not too bad at all. If I put a greater focus on dividends, I could probably get another $1K, but I’ve been slacking hard on this lately.

      In the long run, I’m want to make work completely optional without drawing down on my funds. It’s getting there!

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  5. Going Gonzo says:

    Hi I am new to your blog and was wondering if you had a post or more information on the private lending? Congratulations on the impressive passive income for 2016.

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