Alternative Income: January 2017

I never thought I’d write that title. If Vegas took odds on bloggers’ titles… they wouldn’t on this one.

But here we are.

When I started this blog back in 2006, I wrote about my plan for passive income and setting goals to pay for my necessary expenses. Another example of a post back then is this article. (The comments on that post are amazing to read. It’s weird to read your thoughts 10 years ago.)

Early on, I made the transition from “passive income” to “alternative income.” Blogging is far from passive, but it does have passive qualities to it. I wasn’t required to post an article yesterday for example (but I did!). Also, at the time, I had a full-time software engineering position at the time, so this income would be an alternative to my main salary.

In that October 2006 article, I had a whole $17 for the month in alternative income, which was some money from P2P Lending, bank interest, and blog income.

I kept chronicling my alternate income until I got to around $2000 and then I stopped. The reason I stopped is because most of the money was coming through the blog. Also Prosper.com was a dumpster fire with many, many defaults (so many that I’m still getting checks from the class action lawsuit). I simply didn’t think it was an interesting story to say “I make money through a blog.” That wasn’t the point of the blog at all. It wasn’t the point of documenting my alternative income.

So here we are 10 years later. How does my alternative income look today?

Lazy Man’s Alternative Income January 2017

It’s hard to quantify what alternative income is. The article I reference above attempted to cover it, but there’s more than 49 shades of grey when it comes to defining it.

In looking at our income, I think I can break it down to 4 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

This is the best answer to the question “What do you actually do?” However, it ignores that I’m mostly a stay at home dad. The kids go to school for a few hours, but I usually have some other family errands to run. If you list a couple items on Ebay to make a few extra dollars, this is somewhere between that and working a full-time job.

I’m not going to break out the blogging income vs. the dog sitting income, because I find that one impacts the other. When I have a lot of dogs, I don’t have the time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have many dogs to sit.

January was a rare month where I didn’t make much from blogging or from dog sitting.

In my 16 months of dog sitting, January has been the lowest dog sitting demand – by far. There are no school vacations and it isn’t tourist season like the summer.

At the same time, blogging income reached its nadir. The reason is that my new blog design doesn’t have nearly as much advertising as before. The new design was a long overdue change and I’m still working to improve it. I didn’t look at advertising, because I’m working with a company who is going to take it over any day now. Living up to my Lazy name, I didn’t want to do a lot of work and then have it undone by them a few days later.

I expect this grow. In fact (spoiler alert), February is tracking to about 25% higher and I have done less blogging than usual.

Before I do the “reveal” on the number, I need to clarify some points about the “alternate” part of the income. Blogging is “work”, for some a full-time job. Dog sitting is also “work” (at my scale, not a full-time job). As the greatest coach in sports history, Bill Belichick, has said many times about coaching, “It beats working.”

When you love what you do, it isn’t “work.”

Blogging gets boring sometimes and I miss interaction with people in the real world. However, I love to express my thoughts. I’d much rather type some words on a keyboard than toil in a coal mine.

Dog sitting takes that a step further. I can’t believe that I’m getting paid to get loved by perhaps the greatest thing the Earth has to offer. The time commitment is fairly minimal (again, at my scale).

Total Blogging + Dog Sitting Income: $2476

2. Rental Property Income

Here is where I start to play games with the numbers. Sorry.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are on 15-year fixed mortgages. This means that we don’t make money on them now, but we are (relatively) quickly paying off the mortgages and enjoying some appreciation (not a lot).

However, if we wanted to, we could refinance those mortgages to 30-year fixed and earn alternative income from them. Fortunately, we don’t need to do that. For the sake of this report, I am going to pretend that I refinanced them all to 30-year fixed mortgages. Zillow has a very good refinance calculator that allows me to see how much money we’d make each month if I refinanced.

I made some assumptions and the result is:

Total Rental Property Income: $712

3. P2P Lending income

I still have money in both Prosper and Lending Club. Both companies are operating much, much better than Prosper did in 2006. I don’t have a lot of money in there, but I’m leaving what I do have to see how it goes.

Taking a conservative estimate, it appears we could bring a little more than a Jackson each month. I might eliminate this in the future because it is essentially a round-off error, but I’ll take free Netflix and Amazon Prime.

Total P2P Lending income: $22.82

4. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers.

We don’t have our money in dividend stocks. Instead we have it in index funds (for the most part). More importantly, the money is in retirement accounts, so it isn’t something that we would tap as “income” anyway.

However, nearly 20 years of maxing out retirement contributions is significant.

Just like the rental income, we can “pretend” what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn between 2.20% and and 2.80% in dividends on the portfolio.

I am purposely keeping a wide range because I honestly don’t know what kind of dividends to expect. Also, it conveniently makes it difficult for people to reverse engineer and figure out our retirement portfolios (not that it is a big secret).

Each month, I’ll pick a random number in that range to derive this number. Since it’s pretend dividends anyway, giving an idea is the focus.

Total Dividend Income: $1232.14

Final Alternative Income

Adding up all the numbers it looks like we have $4,439.62 in monthly alternative income. I’m hoping I can raise that at least couple of thousand dollars in the upcoming months by plucking the low-lying fruit in improving blog and dog sitting income.

I’m also looking at adding more streams of income to this list. I’ve been looking to write a book or do some money coaching on the side. For now, I’ll work on maximizing on what I have.