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.
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
Private Lending: $10,000
Private Lending: $15,689.59 (including accrued, but not realized interest)