Lazy Man and Money

Passive Income Update: June 2022

by 3 Comments

How is July going for everyone? We’ve successfully navigated the first half of 2022. My wife and I just celebrated 15 years of marriage. This is looking like a big month, but first, we need to close out with a look back at June.

June is always notable because the kids get out of school. The kids graduated into third and fourth grade with great report cards even by my tiger-dad standards. That was a month ago, so it already feels like it’s almost back-to-school time.

We started the month on a bit of a sad note. My son’s best friend moved to San Deigo – about as far as you can get from Rhode Island. We went bowling at the military base and had a great time. My son beat me though he had an advantage of guard rails.

We spent most of a week on Block Island as we’ve done for several years in a row now. It’s strange to escape island life for… another island, but we can get there in a couple of hours (one hour is a ferry ride) and it’s so remote that it’s easy to unplug. My last update was from Block Island and I couldn’t upload pictures with the poor internet connection. I found a glass float which is extremely difficult to do. The hunt for glass orbs on Block Island is covered well in this NY Times article.

We got back, had a weekend of a little beach time, and then went to Lake Winnipesaukee in New Hampshire. My family and my wife’s family used to go as little kids. (We didn’t know each other at the time.) The big draw for me was Jack Johnson’s first tour in five years. Zac Brown came out and did a few cover songs (Tom Petty, Steve Miller Band, etc.) with him. I’m not a Zac Brown person, but it was cool to have the extra star power and familiar songs.

While we were up in New Hampshire, we went to the World’s Largest Arcade. It has all the classic games. I put a quarter in Dr. Mario and a long, long, time later had the top score.


High Score! My wife may be pharmacist, but I’m the best two-dimensional pill dispenser in the family.

We also went to Santa’s Village, which is a small theme park that’s been around since 1953. I’m sure my mother has pictures of me there when I was a kid. There’s something awesome about celebrating Christmas in June.


Kids getting ready to go “You Tubing” at Santa’s Village. LOL!

To top off the month, the Newport Gulls, a famous summer league baseball team, called us up and asked if we get the kids to do a last-minute color guard for the national anthem. They had a cancellation, so we stepped up.


Scouts doing their flag thing for the next baseball stars.

In my spare time, I’m working on Kid Wealth. As part of that, I’m discovering new bloggers. If you love the “Lazy” part of my brand, you might enjoy, Don’t Work Another Day. It feels like that’s what I did through June.

That’s enough of the personal stuff… let’s start the Passive Income report. I used to call this the Alternative Income Report because some of this income has an active component to it. However, that idea isn’t catching on and everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math.

The way I calculate these numbers requires that little explanation – it isn’t intuitive. I do things a little differently to show the journey. For example, we don’t have real passive income from our rental properties right now. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where on that journey we are. Each month, you’ll see that the bank owns less and we own more. When we get to owning 100% there will be no mortgages and all that rental income can be used for living expenses. When it comes to calculating the percentage of rental income, I take the rent (minus estimated expenses) and multiply it by the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it with each of you splitting the profits at the end 50/50.

Lazy Man’s Passive Income

Passive Income Pyramid
My Passive Income Pyramid

I categorize our passive income into 3 main sources that are largely represented in my passive income pyramid. For this report, I ignore the bottom section, “career/job” – that’s not passive at all. (I do have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are a little passive because I can make money even when I’m not immediately tending to them. For example, I’m writing this while boarding 2 dogs right now. I leave real estate and investment income as their separate main sources of very passive income. This way if you want to only count those you can do that.

1. Blogging + Dog Sitting Income

June was a great month for blogging and dog sitting. I know that blogging and dog sitting is stretching the idea of passive-ish income, but June makes an argument that it is more passive than you might think. Despite traveling for nearly two weeks and having little internet connection for part of the time, I did okay.


Jake’s back to the beach on Block Island.

My dog sitting income was the third-best of the year. Summer tourism is always big in Newport, RI. So even with the partial month, we did well. Blogging was our second biggest month. I wish I could say it was something actionable, but it seems like that’s how the advertising Gods worked.

In May, “dogs and blogs” combined for a total of $5,079.36. In June, it was:

Total Blogging + Dog Sitting Income: $4,847.86

That’s 95% of the income with only about 66% of the work. I’ll make that trade any day.

My kids help with the dog sitting. My 9-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 8-year-old was a little slower to develop dog skills, but he’s carved out a household niche of catering to the smaller dogs – he just loves them. They are both doing vet camp at the local animal shelter.

Their help means that I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. Learn why you should get started with a kid Roth IRA as soon as possible.

(Note: The blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

2. Rental Property Income

For the first time in a long time, Zillow didn’t estimate our properties were worth more this month. Real estate prices can’t go up forever, especially with high mortgage rates.

We went from 76.53% to 76.84% ownership of the equity in our properties. That modest gain came from simply paying down mortgages. If we owned the rental properties with no mortgages (100% of the equity), we’d make about $4,000 a month after insurance, property taxes, condo fees, and estimated condo maintenance.


The fabled Block Island Glass Float

I like to use an “expected rent” as we’re currently trying to catch up from years of very low rents. We liked our tenants, so we’ve kept them at a discount. However, with housing and rents going up so much, so quickly, there’s a huge gap between what we could reasonably be bringing in and what we are bringing in.

If you multiply our expected net rent of $3,650 by the amount of equity we have, 76.84%, you get $2,805/mo. in estimated passive income. That’s a gain of $12 from last month.

When I started tracking this (January 2017), we only owned 36.4% of the properties and the properties had lower rents. The math worked out to $1,174 back then. So in 5.5 years, we’ve seen that number grow tremendously to $2,803. The forced savings of 15-year mortgages are extremely powerful.

When we get 100% ownership, we should bring in about $45,000 after expenses. Rent is inflation resistant as it’ll rise over time. That means that even though this is $45,000 in today’s dollars, we don’t have to worry about it buying fewer goods and services in the future.

Total Rental Property Income: $2,805

3. Dividend Income

For this section, I assume we will earn a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF. For example, HDV is currently paying about a 3.31% yield, but it has been less in the past.

There’s a chance we could do better than this. There are some income investing ideas here. We can also look at making passive income with Dividend Kings. If we wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get a 5% average dividend yield. (That link to the newsletter has a special discount rate and in full disclosure, I make a few dollars if you sign up for it.)


I’m always impressed by my 8-year-old’s art. There’s a lot going on here.

Of course, we may not convert everything over to dividend income at all, the 2.5% dividend is a conservative way to think of our investment portfolio. Many experts would suggest using a standard 3.5% or 4% withdrawal rate. The income would be much more if we did that.

The stock market went to hell again. Well, I’ve seen a lot worse. The drop means that this is going to be worse. We’ll continue to buy in at these low prices and when the market recovers we’ll enjoy new portfolio highs. Since all of this money is in our retirement accounts, we’ll be invested for at least another 15 years.

We continue to get a profit-sharing check since I bought (a lot of) a company. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.

Total Dividend-ish Income: $3,406

Last month, it was $3,548. A loss of $140 is a big move for a month. I don’t think we’ll be back up by end of the year, but the market often surprises me. When I started tracking this number in January of 2017 we were at $1,180/mo. It’s been a great last 5.5 years.

Our money has been working hard to multiply over the years. For a while, we stopped adding to our investments. Instead we had been focusing on saving money in cash for my wife to retire. Except that, now my wife got a new job and isn’t looking to retire. That’s a roller coaster of emotions. Some days she wants to retire and other days, it seems like she wants to work for many more years. Whatever she wants to do is fine with me. At least this new job is much better than the last one. She’s had time to bring the kids to school and do some things like that.


Brother sand burying

Getting back to the monthly update, this monthly $3,406 would be over $40,000. As with the rental income number above, we should be able to live on this by itself. However, because most of our investments are in retirement accounts, we can’t use much of this potential income for now. (We can use the profit-sharing check as it goes straight to our checking account.)

For the 20th month in a row (?), we’re looking into estate planning, but they gave us a lot of paperwork to do before we can move forward. I’m not making any progress on this.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If we had any royalty income from books, movies, or music, I’d include that as well. I’m too tone-deaf to have a rockstar music career, but I may write a book someday. This is important to separate from the dogs and blogs’ income at the beginning. That takes some active work to keep up. Rental property requires a little work, but not nearly as much.


I tried to teach the kids how to skip stones after dinner at the military base. It’s a work in progress.

We have a setback this month because of the stock market. It’s too big for real estate to overcome. I love having both rental property and stock market income working together for us. With the stock market dropping recently, our real estate is saving our net worth from dropping further. For much of the last decade, it was the opposite – real estate didn’t do much while stocks quadrupled. I think everyone interested in FIRE should consider having stock market and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most FIRE folks in the case of an unfortunate economic event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for a while. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Very Close to Passive Income: $6,211

This would be almost $75,000 a year of passive-ish income. We wouldn’t need to touch the investments themselves. We wouldn’t have to sell stocks or have a “withdrawal rate” – just live off dividends. We wouldn’t have to get a reverse mortgage on our home or the investment properties. Property maintenance and property taxes for rental properties are already factored in. We would still have all the underlying assets (property, stocks, etc.) and be able to pass these on to the kids for them to build on – unless we choose to draw them down for more fun, charity, or other spending.

This $75,000 passive income was my goal when I started this blog. I figured that would be winning the money game as it would be enough to cover all of our needs and many of our wants.


A local sailing group put on a 3D hologram story about saving the ocean from pollution. It was very, very awesome, even though it was only about 10 minutes long.

This $6,211 of “very close to passive income” has grown from $2,354/mo. in January 2017. So in 5.5 years, we’ve added almost $4,000 in monthly passive income. That’s nearly $50,000 – a lot more than the $34,000 I made as a software engineer out of college in 1998. This is one of the reasons why I went with the “Lazy” name, it shows that investing money can do more work (or somehow produce more value) than I did. It’s a crazy system. I’m just doing my best to work within it.

It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet (except for the profit-sharing check), because the money isn’t liquid. We can’t spend those retirement investments or the equity we have in properties. We don’t feel “rich” by any stretch of the word, even though we are relative to many people’s circumstances. We still have some day-to-day struggles with money. These are relatively minor compared to what most people experience I imagine. That’s one reason we are selling a rental property. It will help us feel a little more financial freedom right now. We’ll still have plenty working for the future.

I used to wonder if we can get to $8,000/mo. in passive income by the start of 2025. A year ago, it was a stretch goal… now it feels like we could make it. We’ll have to see where the numbers are when we sell off the rental property.

Final Passive-ish Income

When you add up “dogs and blogs” to the “very close to passive income” you get:

Passive-ish Income: $11,058.86

Last month it was $11,420.36. Considering we were on vacation so much and the stock market took a dive, it’s amazing we didn’t take big drops.

That’s over $130k a year. That (hypothetical) annual income for writing on a blog, taking care of dogs, investing, and landlording is very nice. For the year, we’re averaging around $135k from all these – which is more than for our necessary expenses for the next 45 years. Of course, those necessary expenses aren’t going to cover all our spending, but they are a large percentage of it.


We went to a church fair that had a petting zoo. We did this one for years before COVID. It’s good to get back.

None of the numbers here include my wife’s bread-winning day job as a pharmacist or the freelance work I’ve been doing over the last few years (which isn’t passive at all). When my wife retires we can count her vested military pension as more truly passive income. For now, those jobs (and the dog boarding) are the fuel that drives the passive income engine – it allows us to live well, pay off our mortgage, and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretch almost every dollar in much of our spending. It also gives me the flexibility to bring the kids to school and after-school activities.

I love two things about the graph below. First, there’s a solid trend of the numbers staying high for several months now. Second, it doesn’t dip down too far. It seems like it should be at least $8,000, maybe $9,000 going forward.

(Once again, the blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

Net Worth Update

My net worth updates aren’t very exciting as I don’t share the exact numbers. That’s why it’s just a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth can be useful.

We saw our net worth lose -2.52% last month. That’s a big hit for one month, but it’s a lot smaller than what I’ve seen from other bloggers. For the year, our net worth is up 1.74%. With bad markets, inflation, and all the big spending we’re doing I can’t complain.

Recently for something new, I decided to share our liquid cash growth (or loss). I’ve been tracking it for some time, but never thought to share it. Many other bloggers break down their income and expenses in great detail. I’m too “Lazy” for all that, even if my credit card reports can do a lot of it. Looking at our liquid cash is a way to roughly gauge the bottom line, income minus expenses.

This month, we lost around lost $900 in liquid cash. That’s not great, but we went on a couple of vacations and ate out a lot. We’ve been spending a lot this summer, but we’re doing a lot of stuff too. We saved a lot in the past (and we’re still saving now), so losing a little liquid cash isn’t too bad.

It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for almost 16 years. FIRE wasn’t a “thing” back in 2006. We naturally are further along in that journey than some younger readers who may be just starting. Some of those readers are saddled with huge student loans that we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. I decided that it does make sense to include it. She could have earned more in immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth. However, like most of the money mentioned in this article, this isn’t money we can spend right now.

How was your month? Let me know in the comments.

What Does a Recession Mean to You?

by 3 Comments

There’s been a lot of talk about a recession lately. For the purpose of this article, I’ll use an informal definition of “recession” as a “really bad economy.” After all, there are probably only 10% of Americans that know the real definition of a recession (decline in GDP in two successive quarters, blah, blah, nerdy stuff). If you ask me, I’d say we are in a recession (remember using the “really bad economy” definition) because everyone’s complaining about inflation. Also, the stock market seems to border bear territory depending on which day you look at it.

I have been avoiding writing about these market conditions recently. It wasn’t a conscious decision. It was only a couple of days ago that I realized why I hadn’t been writing about it much.

The recession hits different people in different ways. Some people aren’t largely affected by it. For example, if you have a steady mortgage, don’t drive much, and eat frugal foods inflation may not hit you too much. We check most of those boxes so the market conditions aren’t too bad for us. We aren’t drawing down on our investments, so we don’t have to sell stock at cheap prices. Instead, we continue to buy low. In 20 years, we should be able to sell these shares we are buying today at high prices.

However, there are a lot of people who are on fixed incomes. The rising prices create significant problems in their lives. These people may be drawing down on their investments and selling at the wrong time.

It’s difficult for me to write about it because it is so personal, and in this case, we’re not greatly impacted. That may change in the future. For example, advertising is one of the first things companies cut back on in a recession. Advertising from this website will likely suffer. Travel is another thing that people cut in a recession. When people don’t travel, my dog boarding business suffers. So while I may be impacted, a lot more of our money comes from my wife and her government is secure until she finally decides to retire.

It may be a case of “too little, too late”, but here are a few things that have helped stabilize us even if there is a recession. You may not be able to implement them today, but maybe consider them for the next recession:

  • Multiple Streams of Income
    I mentioned my blogging and dog sitting income above, but I also run the customer support for a small company that has a lot of international clients. The company isn’t recession-proof, but that’s three very diversified businesses.

  • Fixed Mortgage
    We bought our place in 2012. The rental estimate for the house is roughly $3300. That is $300 more than our 15-year mortgage. We could refinance that mortgage to an $800 monthly payment now. If we were in the market to buy the same house today, we would have to put 20% and make payments of $4000. There are some very good reasons to rent, but I’m very happy we have the payments that we do.

  • Paid Off Cars
    We bought new cars in 2012 and 2014 and we intend to drive them into the ground. We’ll have to buy cars again someday, but it’s nice to not have those payments.

  • Solar Panels
    We went solar about 7 years ago and we’re at the point where the panels have paid for themselves. With rising energy costs, we’re only paying for a little extra energy (we use more than we produce), which keeps our bills very low – usually less than $300 for the whole year.

  • Chest Freezer
    I’m sure our second freezer is one of the reasons why we use more electricity than our solar produces, but it allows us to stock up on sales when they happen. This has been very helpful in keeping food costs a little lower during this time of high inflation.

A lot of these boil down to the idea of being fiscally ready for disaster. Not many bloggers remember the dot-com bust of 2000, but it was a very bad time to be a software engineer coming out of school.

I hope that we come out of this financial situation soon and things rebound. I’m optimistic that the threat of recession will cause oil prices to go lower. Global banks are raising their interest rates to fight inflation. If all that goes according to plan, maybe it won’t be too bad.

I’ve rambled enough for one article. I’d like to turn the attention back to you. Please leave me a message and vent about your personal situation in this economy (even if it’s in generics).

Building a Million Dollar Blog: Getting Started (Part 1 of ?)

by Leave a Comment

I realize this series isn’t for everyone. I had the idea to create another blog, because of TINA – there is no alternative of COVID. It didn’t seem like there good investing opportunities with a high stock market and a fast rising real estate market. It seemed natural to me to invest in creating a business. Nowadays, the markets look a little different, but investing a business (in this case a blog) is a personal finance topic worth covering, right?

A few months ago, I started off this series with a blog post, Building a Million Dollar Blog: Introduction. I explained that I started Lazy Man and Money in 2006 and have made over $600,000. It will take some time, but I might get to a million dollars. However, rather than review the 16-year history of Lazy Man and Money, I decided to profile the start of my new blog, KidWealth.com.

I acknowledged that it would be an uphill climb for Kid Wealth to be a million-dollar blog. With that said, I have a few things in my favor to help make it successful. It’s a great brand (in my opinion), domain, and it has all the social media accounts. I know a lot of the bloggers in the personal finance space giving me a head start. I’m not working on a timeline – a million dollars could be over the next 20 years. I’m also willing to spend money. The big marketers often only preach about their revenue, not their costs.

Finally, I made the point that Kid Wealth isn’t about making money. It’s a lot of fun and hopefully, many families will benefit. I have a passion for personal finance and covering it from a kid’s perspective is fresh and exciting. Last week, I overheard my 9-year-old explaining to my 8-year-old what a loan was. A few days later, he offered to do a bunch of extra chores to earn money for a Pokemon card set that he saw at Wal-Mart.

Getting a Blog Started

The first thing I had to do was find my brand name. I had a few ideas such as KidMoney.com, but so many .com domains are gone. I found KidWealth.com was for sale on GoDaddy for $250. I decided to get a Gmail account with the name and then buy the domain. I purposely wanted to get the email first because then renewing the domain would always be with that business email rather than my personal email address.

Before buying, I also did a quick search on NameCheckr.com which tells you all the social media usernames that are available. Fortunately, almost everything was available. It took me about an hour to complete the purchase and sign up for all the accounts.

I already had some blogging infrastructure set up. For example, I use Cloudflare for Lazy Man and Money nameservers. I also had hosting with SiteGround. My software engineering days are far behind, but it gives me a headstart, especially combined with my experience at Lazy Man and Money.

SiteGround, like any decent host, makes it easy to install WordPress. I had a basic blog up and running.

That’s when I realized how much work I had left to do. I had some ideas of what articles I would write. After all, I had been writing a few articles on Lazy Man and Money. However, I didn’t have a design. I didn’t have a logo. I didn’t have any organization of how to categorize the articles I would write. I knew the people in the personal finance area, but kid financial literacy is almost an entirely different group of people. I had an idea of which WordPress plugins I would need, but the best plugins have changed since I last updated the Lazy Man and Money website. There were a lot of other sub-accounts that I needed to sign up for such as Google Analytics.

I started to organize by making a Kid Wealth directory on my hard drive. Inside that were some folders like Content, BizDev, and Design. I also included two more files at the root level – a text file called “ToDo” and a spreadsheet called “MasterPlan.” The MasterPlan spreadsheet is enormous and covers anything my ADHD brain could think of. I would create a spreadsheet for the Theme, Passwords, Marketing Ideas, Helpful Friends, Publishing Checklist, etc. I also had a page of content titles, keywords, and notes.

Unfortunately, the MasterPlan spreadsheet is disorganized. Part of my goal with this series is to refine some of the process and make it easier for others to duplicate. In future articles, I’ll drill down into specific areas, how I’ve implemented them, and what the costs have been.

The Personal Finance of The Simpsons

by 2 Comments

Sorry for the tumbleweeds around here. We always take a little family time at the end of the school year to recharge before summer camps. I’ll be settling back into the swing of being online over the next few days and should have fresh new articles for next week. In the meantime, here’s something that I’ve been drafting.

Recently, my kids have started binge watching The Simpsons. They are making the most of our Disney+ subscription. Some of the subjects are probably a little too old for them, but there’s a lot of education packed into 30-years of programming. It’s fun to go back and see the old episodes about stealing pay cable and see their clunky desktop monitors. I get to add historical context like VH1 pop-up video. See, it’s like it’s 1990 all over again at our house – and I couldn’t be happier about it. My kids finally are starting to understand all the one-liners I’ve used over the years. (Kids: “What’s for dinner?” Me: “Mostly circus animals, some filler.”)

It’s easy to forget that The Simpsons is still on television. I mentioned it on social media and a follower was like, “Huh? That’s still on television.”

There’s not a lot of talk about personal finance in The Simpsons. Whenever they have money problems they resolve themselves in 22 minutes.

Recently, NPR had a podcast about The Simpsons and how their finances stack up today. It was something that they addressed a year before, but it was time for an update. It seems that their critique caught the writers attention. They decided to address the Simpsons’ personal finance in last episode of the latest season, Poorhouse Rock. If you have Hulu, it’s worth a watch with your tween or teen kids.

There’s a tremendous song about how the economy has changed since when the Simpsons first went on the air. It goes by fast, so I had to get the lyrics from the transcript here:

1945, we won the war
Our boys came back to the factory floor
The good times rolled, and smiles were on our faces
With plentiful jobs for folks of all ages
Even dumb slobs made excellent wages
The country was booming
Though still pretty racist
Oh, and so it came to pass
With hard work and grit and brass
Bit by bit, we built
Our middle class
Nice little middle class
(Homer Singing) I need cash for food and gas
Black light posters, beer, and grass
Time for me to join the middle class
Oh, boy, that middle class
Go join that middle class
Well, I’m not smart, I’m not a go-getter
My drinking problem’s not getting better
What job could I possibly do?
Nuclear safety inspector

Whoo-hoo!
Your dad and his buddies had it swell
But gradually it all went to hell
Factories closed, unemployment would spike
Here to explain it is Robert B. Reich
The decline of unions, rampant corporate greed, Wall Street malfeasance and the rise of shortsighted politics all contributed to increased economic inequality, widespread real unemployment, wage stagnation, and a lower standard of living for millions of Americans.
They chopped salaries to raise stock prices
Cut up the pie and kept all the slices
Tax breaks went to CEOs
Never trickling down to average joes
And so it came to pass
Greedy rich men kicked our ass
Fiddling while they burned our middle class
Poor little middle class

(Bart singing) All right, thanks for the history lesson, nerds.
But what does any of this have to do with me?

You see, my dad’s still working, and I want to be just like him.
I’m sure you do.
But there’s something else you need to learn, and my friend here is happy to teach you.
Ugh, you.
For days, you’ve been dying to say something. Just spill it.
(Lisa singing) You want a job like Dad? Too bad, so sad
You’ll never have the life our flabby dad had
Yeah
What can he do that a robot can’t?
These Oreos taste like nuclear plant
(Bart singing) Yo, all I need is a foot in the door
And I’ll take Dad’s job when he dies at 44
(Lisa singing) That job you see now needs a PhD
While paying student loans leaves you in poverty
(Bart singing) What?
No brand-new car, no fancy house
No, cool
No hot dinners cooked by your stay-at-home spouse
Yeah
You’re gonna pinch every dollar and cent
And you’ll still have to choose
Between health care and rent

I’ll probably just buy a PlayStation 6.

You’re naive, but it’ll pass
They’ll repo your skateboard, you’ll grow up fast
Mm-hmm
He’s Jeff Bezos, we’re just bozos
Goodbye, middle class
These are facts, they’re not controversial
We can’t even afford what they sell in this commercial.
Okay, so, you’re saying maybe I’ll have a tough time getting a job like my dad’s.
No, no, I’m saying you’ll definitely never get a job like your dad’s, and you’ll have a tough time finding something significantly worse.
Thanks for the song and dance, but I think I’m gonna be just fine.

‘Cause there’s a lot of new ways a guy can make a dollar
I’ll ride the money train, make it rain, holla
I’ll buy and sell Bitcoin, build a new app
Do pranks on YouTube, I’m great at that crap
Film TikTok tricks on my sick motorbike
Your chances are slim
Go to hell, Robert Reich
Those aren’t careers, they’re a million to one
You ain’t that lucky and you ain’t smart, son
Who gives a damn? I’ll find my new jam
As an influencer on Instagram
If all else fails, I got backup plans
I can shake my cans on OnlyFans.
No. Just… no.
Okay, great. So I have no options whatsoever.
Smell you later, dude.
Isn’t it infuriating?
We’ll never live as well as they did.
Why doesn’t anyone do anything about this?
Well, there’s an answer to that, but it’s not one you’ll like.
Moe the bartender, serve it up on the mic
So, greedy politicians write bad laws
Throwing goodies to the rich like Santy Claus
They chew up us poors, who votes for these guys?
All my friends are dropping like flies
And where are these voters getting their cues?
Putin for president, next on Fox News
And that’s why our system is so out of order?
Cross-dressing dr?g fiends are crossing our border
We vote for gun nuts and climate deniers
Lunatics from QAnon and con men and liars
They shred our safety net and gut Medicare
But they get our vote
‘Cause we’re incredibly easy to scare
Cable news declares we’re doomed
And Facebook feeds our fright
They convince us things were great
When gas was cheap and men were white
So we rally round the crooks
And the creepy and the crass
The vengeful id of our vanishing middle class
So, as you can see, Bart…
Bart?
I get it, dude, abandon hope
We can’t escape our slippery slope
The future’s a sandwich made of poo
Just tell me, what do you want me to do?

Burn it.

That’s the end of the song as it transitions into the rest of the show. It’s quite a commentary on the state of class, the economy, and politics

Passive Income Update: May 2022

by Leave a Comment

Is everyone having a great June? We’re currently on vacation on Block Island. I love that it’s a good place to get away from technology. However, I needed to send some pictures from my phone for this article and the lack of internet connection is making it impossible. So the best I can do for now is publish this word soup.

If pictures did work you’d see kids playing with dogs and our old dog showing a rare bark. The kids were also in school plays, musical performances, and had an art show. The school does a lot at the end of the year to show off their work. My wife did a lot of traveling in May. She was running a conference of 6000 people and got back in time to fly to D.C. with my oldest kid to see the POTUS’ Memorial Day speech.

I’ve been working on Kid Wealth. As part of that, I’m learning about new bloggers. One that I’m really liking lately is Money Buffalo.

That’s enough of the personal stuff… let’s start the Passive Income report. I used to call this the Alternative Income Report because some of this income has an active component to it. However, that idea isn’t catching on and everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math.

The way I calculate these numbers requires that little explanation – it isn’t intuitive. I do things a little differently to show the journey. For example, we don’t have real passive income from our rental properties right now. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where on that journey we are. Each month, you’ll see that the bank owns less and we own more. When we get to owning 100% there will be no mortgages and all that rental income can be used for living expenses. When it comes to calculating the percentage of rental income, I take the rent (minus estimated expenses) and multiply it by the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it with each of you splitting the profits at the end 50/50.

Lazy Man’s Passive Income

Passive Income Pyramid
My Passive Income Pyramid

I categorize our passive income into 3 main sources that are largely represented in my passive income pyramid. For this report, I ignore the bottom section, “career/job” – that’s not passive at all. (I do have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are a little passive because I can make money even when I’m not immediately tending to them. For example, I’m writing this while boarding 2 dogs right now. I leave real estate and investment income as their separate main sources of very passive income. This way if you want to only count those you can do that.

1. Blogging + Dog Sitting Income

In May we took a step back in our dog boarding income. April had school vacations so many people were traveling leaving their dogs with us. Nonetheless, May was still our second best month of the year. We did have the benefit of Memorial Day which leads to some dogs staying the long weekend at holiday rates.

We averaged two dog overnights a day, which is only slightly more than average. We did a lot of day boarding though and that helped add to the income.

Blog income was slightly below average. This is to be expected when I’m more focused on dog boarding.

In April, “dogs and blogs” combined for a total of $7,664.90. In May, it was:

Total Blogging + Dog Sitting Income: $5,079.36

That’s about 20% above the average over the last year. By any measure that’s a good month.

My kids help with the dog sitting. My 9-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 8-year-old was a little slower to develop dog skills, but he’s carved out a household niche of catering to the smaller dogs – he just loves them. He’s started to recently take an interest in feeding them.

Their help means that I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. Learn why you should get started with a kid Roth IRA as soon as possible.

Someday, I want to get them more involved in blogging, taking pictures, and things like that. During school, they have too much to keep them busy. After school, there’s homework, becoming mini-ninjas, scouting, music, and sports to fill up their days. Being a kid is hard work!

(Note: The blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

2. Rental Property Income

Once again the rental properties appeciated $20,000 according to Zillow. We’ve seen this quite a few months now. Zillow is usually fairly accurate because our rental properties are condos with many similar properties for comparisons.

We’ve been trying to sell one of the properties, but the old tenant wouldn’t leave. So now we have to go through an eviction process even though the buyer should already be moved in. Until the situation resolves itself, I’ll have to continue this report with the assumption that we had a tenant who was paying rent.

We went from 75.85% to 76.53% ownership of the equity in our properties. That’s another month of good gains.

If we owned the rental properties with no mortgages (100% of the equity), we’d make about $4,000 a month after insurance, property taxes, condo fees, and estimated condo maintenance.

I like to use an “expected rent” as we’re currently trying to catch up from years of very low rents. We liked our tenants (except the one that wouldn’t leave), so we’ve kept them at a discount.

If you multiply our expected net rent by $3,650 by the amount of equity we have, 76.53%, you get $2,793/mo. in estimated passive income. That’s a gain of $25 from last month.

When I started tracking this (January 2017), we only owned 36.4% of the properties and the properties had lower rents. The math worked out to $1,174 back then. So in 5.5 years, we’ve seen that number grow tremendously to $2,793. The forced savings of 15-year mortgages is extremely powerful.

Before we decided to sell the property, it was looking like we’d have $45,000/yr. of income. I’ll have to recalculate this when the sale closes. Rent is inflation resistant as we can raise rents over time. So this income will grow as things get more expensive. This was looking like enough for us to live on once our own mortgage is paid off, but I’ll have to revisit that too. Of course, that’s just one part of the plan as you can see.

Total Rental Property Income: $2,793

3. Dividend Income

For this section, I assume we will earn a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF. For example, HDV is currently paying about a 3.31% yield, but it has been less in the past.

There’s a chance we could do better than this. There are some income investing ideas here. We can also look at making passive income with Dividend Kings. If we wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get a 5% average dividend yield. (That link to the newsletter has a special discount rate and in full disclosure, I make a few dollars if you sign up for it.)

Of course, we may not convert everything over to dividend income at all, it’s just a conservative way to think of our investment portfolio. If I used a 3.5% or 4% withdrawal rate, these numbers would be much bigger.

We saw a very slight gain in the stock market. For now, any kind of gain is a good gain. We’ll continue to buy in at these low prices and when the market recovers we’ll enjoy new portfolio highs. Since all of this money is in our retirement accounts, we’ll be invested for at least another 15 years.

We continue to get a profit-sharing check since I bought (a lot of) a company. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.

Total Dividend-ish Income: $3,548

Last month, it was $3,535. A gain of $13 isn’t a much. Maybe the markets will be more interesting by next month. When I started tracking this number in January of 2017 we were at $1,180/mo. It’s been a great last 5 years.

Our money has been working hard to multiply until this month. For a while, we stopped adding to our investments. Instead we had been focusing on saving money in cash for my wife to retire. Except that, now my wife got a new job and isn’t looking to retire. That’s a roller coaster of emotions. Some days she wants to retire and other days, it seems like she wants to work for many more years. Whatever she wants to do is fine with me. At least this new job is much better than the last one. She’s had time to bring the kids to school and do some things like that. Before they had a keyboard tracker on her.

Getting back to the monthly update, this monthly $3,548 would be over $42,000. As with the rental income number above, we should be able to live on this by itself. However, because most of our investments are in retirement accounts, we can’t use much of this potential income for now. (We can use the profit-sharing check as it goes straight to our checking account.) We started to see an estate planning lawyer last year, but they gave us a lot of paperwork to do before we can move forward. I haven’t had the time to convert our spreadsheet summaries to something they can use. I started the paperwork, but I don’t even know where it is now. Not great.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If we had any royalty income from books, movies, or music, I’d include that as well. I’m too tone-deaf to have a rockstar music career, but I may write a book someday. This is important to separate from the dogs and blogs’ income at the beginning. That takes some active work to keep up. Rental property requires a little work, but not nearly as much.

We made some slight gains this month. The stock market dropped and then recovered by the 8th when we took these numbers. (It has since crashed again, but we’ll see where that takes us next month.) I love having both rental property and stock market income working together for us. With the stock market dropping recently, our real estate is saving our net worth from dropping further. For much of the last decade, it was the opposite – real estate didn’t do much while stocks quadrupled. I think everyone interested in FIRE should consider having stock market and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most FIRE folks in the case of an unfortunate economic event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for a while. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Very Close to Passive Income: $6,341

This would be over ~$76,000 a year of passive-ish income. We wouldn’t need to touch the investments themselves. We wouldn’t have to sell stocks or have a “withdrawal rate” – just live off dividends. We wouldn’t have to get a reverse mortgage on our home or the investment properties. Property maintenance and property taxes for rental properties are already factored in. We would still have all the underlying assets (property, stocks, etc.) and be able to pass these on to the kids for them to build on – unless we choose to draw them down for more fun, charity, or other spending.

This “very close to passive income” has grown from $2,354/mo. in January 2017. So in 5.5 years, we’ve added about $4,000 in monthly passive income. That’s nearly $50,000 – a lot more than the $34,000 I made as a software engineer out of college in 1998. This is one of the reasons why I went with the “Lazy” name, it shows that investing money can do more work (or somehow produce more value) than I did. It’s a crazy system. I’m just doing my best to work within it.

It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet (except for the profit-sharing check), because the money isn’t liquid. We can’t spend those retirement investments or the equity we have in properties. We don’t feel “rich” by any stretch of the word, even though we are relative to many people’s circumstances. We still have some day-to-day struggles with money. These are relatively minor compared to what most people experience I imagine. That’s one reason we are selling a rental property. It will help us feel a little more financial freedom right now. We’ll still have plenty working for the future.

I used to wonder if we can get to $8,000/mo. in passive income by the start of 2025. A year ago, it was a stretch goal… now it feels like it could go either way. We’ll have to see where the numbers are when we sell off the rental property.

Final Passive-ish Income

When you add up “dogs and blogs” to the “very close to passive income” you get:

Passive-ish Income: $11,420.36

Last month it was $13,967.90. April was crazy with all the dog boarding and this was much more manageable. This was much closer to being passsive, but it still a lot of dogs

That’s over $135k a year. That (hypothetical) annual income for writing on a blog, taking care of dogs, investing, and landlording is very nice. If we manage $170,000 from all these sources we’d be doing quite well – given our necessary expenses for the next 45 years. Of course, those necessary expenses aren’t going to cover all our spending, but they are a large percentage of it.

None of the numbers here include my wife’s bread-winning day job as a pharmacist or the freelance work I’ve been doing over the last few years (which isn’t passive at all). When my wife retires we can count her vested military pension as more truly passive income. For now, those jobs (and the dog boarding) are the fuel that drives the passive income engine – it allows us to live well, pay off our mortgage, and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretch almost every dollar in much of our spending. It also gives me the flexibility to bring the kids to school and after-school activities.

I love two things about the graph below. First, there’s a solid trend of the numbers staying high for several months now. Second, it doesn’t dip down too far. It seems like it should be at least $8,000 going forward. I don’t want to see a big market collapse, it would hurt a lot of people, but I am curious how bulletproof all these sources of income are when they work together. If this month is any indication, it’s possible to hit all-time highs when the economy isn’t doing well.

(Once again, the blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

Net Worth Update

My net worth updates aren’t very exciting as I don’t share the exact numbers. That’s why it’s just a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth can be useful.

We saw our net worth grow 2.28% last month. That’s tremendous, but so much of it came from our the value of primary residence going up. That’s not useful for us unless we move or do a reverse mortgage. It reminds me that buying a home and locking in a mortgage in 2011 was a great idea. For the whole year, our net worth is up 3.89%. That’s really great when it seems like the economy is bad for a lot of people.

Recently for something new, I decided to share our liquid cash growth (or loss). I’ve been tracking it for some time, but never thought to share it. Many other bloggers break down their income and expenses in great detail. I’m too “Lazy” for all that, even if my credit card reports can do a lot of it. Looking at our liquid cash is a way to roughly gauge the bottom line, income minus expenses.

This month, we lost around lost $500 in liquid cash. We should try to do a little better in this area. It will have to wait another month or two because we just bought tickets for an expensive vacation later this year.

It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for almost 16 years. FIRE wasn’t a “thing” back in 2006. We naturally are further along in that journey than some younger readers who may be just starting. Some of those readers are saddled with huge student loans that we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. I decided that it does make sense to include it. She could have earned more in immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth. However, like most of the money mentioned in this article, this isn’t money we can spend right now.

How was your month? Let me know in the comments.