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Passive Income Update: December 2020

January 12, 2021 by Lazy Man 2 Comments

Passive Income Pyramid
My Passive Income Pyramid

We made it through 2020. Too bad 2021 is worse so far. I hope we can get through the next couple of weeks without too many incidents. I look forward to things being boring for a while.

Before I fully switch into 2021, I need to finish off the financials for 2020. As always, I’ll add some personal anecdotes, so you don’t fall asleep with the boring financial writing.

December was filled with birthdays and Christmases. Instead of doing Four Christmases like we usually have to do, we only had to do a couple. It’s hard to find silver linings in the pandemic, but running to a couple of different states and getting back after 1 AM is tough.

(Traditionally, we read a few Christmas books before bed to get nice and tired for Santa.)

To help with the rising cases after Thanksgiving, Rhode Island had a “pause” and scaled back some businesses at the start of December. The kids’ school didn’t shut down and while some other grades were sent home, they continued without an actual case. (They only sent a grade home if there had been a report of a “close contact.”) The pod set-up seems to be working well. So far (through Jan 12th), we’ve only missed a total of 5 in-person days (replaced by 4 at-home days) between both kids. I don’t know if I’d say that there’s a light at the end of the tunnel for them (since vaccinations are far off for 8-year-olds), but as we get to better weather and vaccines things will be better for them as well.

When things opened up, The kids got to eat some Pikachu pancakes, before doing to a Launch trampoline park. It’s hard when a kid can’t do a birthday, so this was a substitute. I think it worked better than the car parades of last year that were so depressing.

Pika! Pika! Don’t Eat Me! Nooo!

We also a staycation at a local hotel. One of the great things about living in a summer resort town like Newport, RI is that everything is built for the influx of people in the summer. So in the winter, restaurants and hotels are empty. We had the whole pool to ourselves for a couple of hours. Later we hid objects around the room and played “Hot or Cold.” It’s good to switch things up if you can do them mostly safely during the pandemic.

This normal-looking nautical lamp amazed this future engineer.

That’s enough lead-in… let’s start the Passive Income report. I used to call this the Alternative Income Report, but everyone loves passive income better. While I transition to the new terminology, there may be some “alternative income” mentions including the FAQ. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions.

We didn’t have much snow over the last couple of years but got an 8-inch storm in December.

The way I calculate these numbers requires that long explanation – it isn’t intuitive at all. The reason why I do things a little differently is that this catalogs a journey. For example, we don’t have passive income from our rental properties while we are paying down their mortgages. Instead, I calculate the percentage of equity we have to show where on that journey we are. Each month you 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.

Lazy Man’s Passive Income – December 2020

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 “somewhat active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

December was a very bad month for blogging income. I usually get a lot of advertising inquiries a month, maybe 8-10 or so. I don’t remember getting a single one in December. I’ll need to figure out how I can do better. For now, I’ll just have to deal with it.

We found the Christmas Star! Maybe when the next 800-year event happens we’ll remember to bring our telescope (and have a good one – ours is fairly cheap.)

Additionally, COVID has killed the need for dog sitting this year. We got a couple of stays in December and due to holiday rates, it wasn’t horrible. I think dog sitting is going to be down until summer. I’m hopeful COVID will be down with vaccines and everyone getting more time outside. Summer is a big vacation and tourist season for us, so if that happens I can make some money again. If not, it’s no big deal.

In November, dogs and blogs combined for a total of $1,021.93 – the lowest in years. In December, it was:

Total Blogging + Dog Sitting Income: $1,036.52

That’s really poor, but at least I didn’t have to do too much work for it. If I tried to calculate an hourly rate it would be really, really good. Just as importantly, I enjoy writing this blog. The dogs that we are sitting are regular customers… and great dogs. It’s a good combination.

When there is some dog sitting my kids can pitch in to help. My 8-year old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. My 7-year-old is good too. This help means that I can pay them a legitimately earned income (a small 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. I want to get them more involved in blogging, taking pictures and things like that, but it’s going slow. They get a lot of school work and home 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

We recently sold a condo and bought a new one that’s closer to us. It’s much easier to manage. We got new tenants in January, so finally we’ll start getting money from it. I’m very excited about the tenants that we got. They volunteered to paint the whole place and do other improvements. We weren’t expecting this, but it looks great now. We’re giving them a big discount on the rent – it’s the right thing to do.

Santa comes down every street in our town over a couple of weeks. It’s hard to get a good picture of him, because he’s so busy, but I was able to catch this.

As for December’s numbers, Zillow’s estimates of our properties were up – always a good thing. We paid down the mortgages as we always do. We gained around $60K in equity in 2020, just like we did in 2019. It is difficult to deal with tenants, but I like to think of those equity gains as a $60,000 salary. We can’t spend the money, because it isn’t liquid. Still, the “work” for that $60,000 is pretty minimal.

This month we went from 60.71% to 61.55% ownership of the equity in our properties. That’s a really nice move forward. Previously, I calculated that, after insurance, property taxes, condo fees, and estimated maintenance we’d make $3,325 a month. That number represents our net gain. I recently updated this with the new property and it looks like we’ll be at $3,387.50 – a minor difference.

Bored kids are imaginative kids, I’m told. Here they build a fort in our living room, which carried on up in their bedrooms.

If you multiply our expected net rent $3,387.50 by the amount of equity we have (i.e. where we are on our journey) 61.55% you get $2,085 in estimated monthly passive income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 47 months, we’ve seen the number grow $911/mo. That’s good passive growth in 4 years.

As the years march on, the ratio will grow to 100% of a rent that should net $3,387.50 monthly after expenses. Since rent is inflation-resistant, we can raise it as costs of living go up. We don’t have to factor in inflation like other investments. So we can think of it as $40,800/yr. of income in today’s dollars buying the same value of stuff in the future. That should be enough money for us to live on with our own home paid off (plus our solar panels, frugal shopping habits, and military healthcare.)

In the previous report, the rental property income was $2,056.

Total Rental Property Income: $2,085

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 or from simply holding strong companies that have a long history of dividend growth. There are some income investing here. We can also look at making passive income with dividend kings. If I wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get closer to a 4% 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.

The market has been doing great – it’s just been a big bull market. Some of the stocks that I picked have done really well. I wouldn’t have expected Snapchat, Pinterest, and solar panels to be up 5x, but they have. Once again, our portfolio is at an all-time high. We’ll see if investments can continue to grow. The stock market economy doesn’t seem to care about COVID because it’s looking to the future with vaccines.

We continue to get a profit-sharing check since I bought (a lot of) a company. The business is doing well. It’s actually almost ideally positioned in this pandameic due to its virtual nature. The investment income from this is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend-ish Income: $3,441

Last month, it was $3,323 and we jumped up again. We are now far past the pre-COVID number highs. This number rarely goes up much (since it’s a small percentage of our nest egg), but this was another month of extreme gains.

Kids at the Launch trampoline park. It’s kind of weird to social distance while bouncing around, but it was mostly empty for a lot of the time we were there. The kids said it was the best time they’ve had in forever… which may be 2 days in “kid time.”

Annualized, this monthly $3,441 is $41,296. If our mortgage was paid off, we might 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’ll let this investment continue to compound for another 15 years until we are 59.5. Then we’ll have to see if we want to tap it or let it continue until we are required to take some of it at age 72.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some 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 maybe I’ll write a book someday.

Kids love Just Dance on the Nintendo Switch. I like a video game that gets them moving.

The stock market goes up and down fast, even more so nowadays. That makes the dividend calculation fluctuate a lot more than it normally would. We don’t know if companies can reliably pay dividends anymore. Without customers and profits, many companies have cut their dividends. However, the stock market is looking ahead to summer 2021 with a lot of vaccine and outside time.

The rental property income typically keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen. We haven’t seen any kind of crash… instead the housing market is booming.

For a few years, I’ve been saying:

I love having both types of income working together for us. I think everyone interested in FIRE should have stocks and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most people 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 awhile. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Finally, our 8-year-old stayed up for the New Year. His younger brother had to the good sense to go to sleep hours before.

We are almost a full year in of a ginormous unfortunate economic event (it’s worse outside of economics, but for the sake of this article, I’ll stick to economics). Stocks went down a lot, but then went back up. Real estate has held steady. Overall, the plan keeps rolling along, even during COVID-19.

While the stock market is doing well, the real economy is very bad. It used to be terrible, but some people are getting back to work and some jobs are coming back. We’re finally getting a president who won’t ignore COVID and hope it disappears. We’re also getting a president who is going to start to reverse the climate change disaster that sees so many natural disasters ravage the United States. Even if you are a heartless soul who doesn’t care about the people losing everything in fires, you should be able to agree that American business works best when it literally doesn’t have to put out fires.

Very Close to Passive Income: $5,526

Last month it was $5,379. The $5,526 extends our all-time high.

This would be over $65,000 a year of almost completely passive income. What’s better is that there would be no need to touch the investments themselves. We wouldn’t have to sell stocks or get a reverse mortgage. 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. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet (except for the profit-sharing check). We’re just about at four years of tracking this number, and we have gained more than $3,000 in passive-ish income. I wonder if we can get to $8,000/mo. in passive income by the start of 2025 (which will be another 4 years). I think that would be too aggressive, but it would give us something to hope for.

Final Passive Income

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

Passive Income: $6,562.52

Last month it was $6,400.93. I’d like to see this get closer to $8,000 in 2021, but I need a plan to add something new – it doesn’t look like dogs and blogs is going to get me there. For now, I’ll just be happy that with four different income streams (and two consistent ones), there isn’t much room for everything to drop.

This $6500+/mo income is $78,750.24 a year. That largely hypothetical annual income for writing on a blog, taking care of one dog, and investing is really nice. In the long term, $78K would be a lot more income than we’d need – given our necessary expenses for the next 45 years. Of course, those necessary expenses aren’t going to cover all our spending, but it’s a large percentage of it.

As 2020 has proven, you never know what bad news is lurking around the corner. This preparation gives us the financial flexibility to fight it.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last couple of years (which isn’t passive at all). That’s the fuel that drives the passive income engine – it allows us to live well and invest. My income doesn’t match my wife’s, but I’m good at stretching a dollar in almost all our spending.

As always, I’m still hoping to write a book someday. That would add some more passive income. My wife will probably get her book out first. She’s had an incredibly interesting life until she met me – I am so boring. I may tip my toe into self-publishing sometime this year. I would love to talk to a real publisher, but I don’t want to take on the “job” of writing. That’s probably a deal-breaker. If you know someone who I could talk to contact me.

My favorite thing about the graph below is that it doesn’t dip down too far. It’s been above $6,000 for a while now. Though we are getting close to dipping below that $6,000 mark. If it dips below $6000 and touches $5000, we’ll have to examine some things.

(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.

Like most investors in December, our net worth did extremely well. We saw it jump 3.58%. For the year overall, our net worth is up 26.01%. If you didn’t know better you might think 2020 was another boring, great financial year – a typical saving and investing plan for us. In fact, growing our net worth 26.01% in a year might be above average. With the Rule of 72, we’d double our net worth in around 3 years.

Diversification helps a lot in bad times. Even when the stock market was way down, we were still grounded with our real estate. We can’t control the market, but we can be happy that the amazing river of compound interest has been working well for us over the years.

I feel it’s important to acknowledge that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 15 years. FIRE wasn’t a “thing” back then, but it’s in the news a lot now. We naturally are further along in that journey than some younger readers who may be just starting out. 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 11 of blogging (year 13 of early retirement planning). Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 10-15 years.

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask whether to include a pension in your net worth. I decided that it does make sense to include it. She could have earned more direct monetary compensation 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. In the end, it seems my wife’s pension may be worth $2.3 million. However, like most of the money mentioned in this article, this isn’t money we can spend right now.

Because the pension would dominate our net worth, I’ll note two separate numbers in my personal spreadsheet. I don’t share the numbers anyway, aside from these hints, so I don’t think it should matter much to you. It’s not like I’m suggesting that you might want to make a financial-based decision on a pension.

I always end this article by asking how your last month went. I know that COVID-19 is making everything difficult. I hope that some of it is getting easier. I’m sure that for many the kids going back to school, in whatever form, represents new challenges and anxieties. Feel free to use the comment space to vent, I try to give a thoughtful reply to every comment I get.

Filed Under: Alternative Income Tagged With: alternative income streams, passive income

Passive Income Update: November 2020

December 24, 2020 by Lazy Man 4 Comments

Passive Income Pyramid
My Passive Income Pyramid

It’s a little before the middle of the month, so it’s time to review November’s passive income. I usually do all the math on the 5th of the month so that tenant checks have been cashed and our mortgage payments are paid.

Before we get to the financial stuff, here’s a little life update.

It’s been a slow blogging week (or more) for me. The realization that Christmas isn’t really happening combined with unending rain hasn’t put me in the best of moods. Even my 8-year-old said, “What’s the point of decorating for Christmas if no one is going to see it?”

I’ll get into December next month. This article is about November. The big memory I have is about Thanksgiving. We were planning to have one family over as the guidelines allowed. During the week of planning, the governor’s message got mixed to the point that the two days before, I felt like we need to call it off. My wife (who has been running some of the COVID response for the state) politely overruled me (she’s the most tactful person I know) and we did have Thanksgiving with the other family. I was too nervous about everything to really enjoy it.

November is also usually a time for Black Friday shopping. I love finding deals online. This year, I didn’t find much that we needed. I didn’t end up doing much shopping at all. Most personal finance blogs would applaud this, but this is a year where a few good material things may lift our spirits for a while. We have the money for those things because we’ve saved on travel and restaurants.

On the bright side, the kids completed another month of in-person learning without much incident at the school. The school sent home a few grades in the pod for a day or two while close contacts instances are tested. So far we’ve only missed one day for one kid. It’s a big highlight to have the kids in school. It feels so important for my 6-year-old who is just starting to explode in his reading abilities.

We also spent much of the month cleaning out the new rental property and getting it ready for move-in. One of the pictures below is of the kids getting ready to help out. We paid them minimum wage for two hours of work and I threw in a pack of Pokemon cards and a dessert that they like. The kids loved the 2-bedroom place, so I made sure to get a video of them explaining all their hopes and dreams of living in it together. We’ll see if they still feel the same way 15 years from now.

I have fewer pictures to share this month. It’s been that kind of month. What I do have to share though is uplifting, so we do have that.

My 8-year-old found this at a yard sale. It was 25 cents well spent. I liked the message of recycling trash into art.

That’s enough lead-in… let’s start the Passive Income report. I used to call this the Alternative Income Report, but everyone loves passive income better. While I transition to the new terminology, there may be some “alternative income” mentions including the FAQ. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions.

The way I calculate these numbers requires that long explanation – it isn’t intuitive at all. The reason why I do things a little differently is that this catalogs a journey. For example, we don’t have passive income from our rental properties while we are paying down their mortgages. Instead, I calculate the percentage of equity we have to show where on that journey we are. Each month you 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.

Lazy Man’s Passive Income – October 2020

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 “somewhat active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

November was a very bad month for blogging income. I don’t remember it ever being so bad, but that’s been the way that blogging business has gone for the last decade or so. I expected better because it included a big shopping season which is usually when I can make some extra money referring products. I didn’t see too many deals worth referring though.

Additionally, COVID has killed the need for dog sitting this year. I think this is going to be down until next summer. I’m hopeful COVID will be down with vaccines and everyone getting more time outside. Summer is a big vacation and tourist season for us, so if that happens I can make some money again.

In October, dogs and blogs combined for a total of $1767.85. In November, it was:

Total Blogging + Dog Sitting Income: $1,021.93

While it is depressing to see the number continue down, I have to remember that a lot of it is still COVID. I should be able to make double that. Also, for the number of hours worked, that hourly rate is very, very good. I have some ideas on how I can improve each area, but I’m focusing on getting more done around the house. I can see the direct improvements and that is more uplifting than hoping the extra blogging work turns into something.


My 6-year spent a day and a half building a Nintendo Labo for the Switch over the Thanksgiving break. Once you build your robot, you get to be one in a video game smashing things with your feet and punching your arms. It’s an amazing toy, but it seems hard to find now.

When there is some dog sitting my kids can pitch in to help. My 8-year old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. My 6-year-old is good too. This help means that I can pay them a legitimately earned income (a small 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. I want to get them more involved in blogging, taking pictures and things like that, but it’s going slow. They get a lot of school work and home work. We’ll see what happens during the winter break.

(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

We recently sold a condo, and closed on the condo in November. We spent some time cleaning it up and it looks like it is ready to rent. We had hoped to get it rented for December 1st, but it looks like it will be January.


In this picture the kids are dancing more than cleaning, but actual cleaning happened, I swear.

As for November’s numbers, Zillow’s estimates of our properties were a little down. We paid down some of the mortgages. In the end, it was mostly a wash. That’s the third straight month that we haven’t had gains here. We’ve gained around $50K in equity this year, so this pause is fine. I expect that early next year, we’ll continue to grow equity by paying down the mortgages and hopefully seeing some growth in the value of the properties.

This month we went from 60.64% to 60.71% of the equity in our properties. Again, it wasn’t much, but we’ll take it. Previously, I calculated that, after insurance, property taxes, condo fees, and estimated maintenance we’d make $3,325 a month. That number because it represents our net gain. I recently updated this with the new property and it looks like we’ll be at $3,387.50 – a minor difference.

If you multiply our expected net rent $3,387.50 by the amount of equity we have (i.e. where we are on our journey) 60.71% you get $2,056 in estimated monthly passive income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 44 months, we’ve seen the number grow $882/mo. That’s good passive growth in almost 4 years.

As the years march on, the ratio will grow to 100% of a rent that should net $3,400 monthly after expenses. Since rent is inflation-resistant, we can raise it as costs of living go up, we don’t have to factor in inflation like other investments. So we can think of it as $40,800/yr. of income in today’s dollars buying the same value of stuff in the future. That should be enough money for us to live on with our own home paid off (plus our solar panels, frugal shopping habits, and military healthcare.)

In the previous report, the rental property income was $2,054.

Total Rental Property Income: $2,056

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 or from simply holding strong companies that have a long history of dividend growth. There are some income investing here. We can also look at making passive income with dividend kings. If I wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get closer to a 4% 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.


The kids are reading a Pokemon Sword and Shield guide book that I found on sale. It’s hardcover and around 300 pages, but they’ll still spend an hour or two looking up stuff.

On the last snapshot, November, the market was doing great – it’s just been a big bull market. Our portfolio is at an all-time high. We’ll see if investments can continue to grow. Last month I wrote, “with COVID cases continuing to rise, there may be another shutdown in the future.” We’ve seen California shut down and my state of Rhode Island is “on pause.” It was supposed to be 2 weeks, but it’s extended to 3 now. The stock market economy doesn’t seem to care about COVID because it’s looking to the future with vaccines.

We continue to get a profit-sharing check since I bought (a lot of) a company. The business is doing well. It’s actually almost ideally positioned in this pandemic due to its virtual nature. The investment income from this is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend-ish Income: $3,323

Last month, it was $3,143. We are now far past the pre-COVID number highs. This number rarely goes up much (since it’s a small percentage of our nest egg), but this was fairly extreme.

Annualized, this monthly $3,323 is $39,871. If our mortgage was paid off, we might 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’ll let this investment continue to compound for another 15 years until we are 59.5. Then we’ll have to see if we want to tap it or let it continue until we are required to take some of it at age 72.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, I’d include that here. I’m too tone-deaf to have a rockstar music career, but maybe I’ll write a book someday.

The stock market goes up and down fast, even more so nowadays. That makes the dividend calculation fluctuate a lot more than it normally would. We don’t know if companies can reliably pay dividends anymore. Without customers and profits, many companies have cut their dividends. However, the stock market is looking ahead to summer 2021 with a lot of vaccine and outside time.


Towards the end of the month, the kids helped decorate our Christmas tree with ornaments from over the years.

The rental property income typically keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen. We haven’t seen any kind of crash… instead the housing market is booming.

For a few years, I’ve been saying:

I love having both types of income working together for us. I think everyone interested in FIRE should have stocks and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most people 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 awhile. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Here we are in month 9 of an unfortunate economic event (it’s worse outside of economics, but for the sake of this article, I’ll stick to economics). Stocks went down a lot, but then went back up. Real estate has held steady. Overall, the plan keeps rolling along, even during COVID-19.

While the stock market is doing well, the real economy is very bad. It used to be terrible, but some people are getting back to work and some jobs are coming back. We’re finally getting a president who won’t ignore COVID and hope it disappears. We’re also getting a president who is going to start to reverse the climate change disaster that sees so many natural disasters ravage the United States. Even if you are a heartless soul who doesn’t care about the people losing everything in fires, you should be able to agree that American business works best when it literally doesn’t have to put out fires.

Very Close to Passive Income: $5,379

Last month it was $5,197. The $5,379 extends our all-time high.

This would be ~$62,000 a year of almost completely passive income. What’s better is that there would be no need to touch the investments themselves. We wouldn’t have to sell stocks or get a reverse mortgage. 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 to the kids for them to build on – unless we choose to draw them down for more fun, charity, or other spending.


This is a sample of my 6-year-old’s homework. Everything he does with school work is like this. He’ll change the problem to something else and solve that instead. It makes me laugh. Fortunately, he does the problems correctly, so I know he gets the concept. I’m jealous of his creativity.

This “very close to passive income” has grown from $2,354/mo. in January 2017. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet (except for the profit-sharing check). We’re just about at four years of tracking this number, and we have gained $3,000 in passive-ish income. I wonder if we can get to $8,000/mo. in passive income by the start of 2025 (which will be another 4 years). I think that would be too aggressive, but it would give us something to hope for.

Final Passive Income

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

Passive Income: $6,400.93

Last month it was $6,964.85. I’d like to see this get closer to $8,000 in 2021, but I need a plan to add something new – it doesn’t look like dogs and blogs is going to get me there. For now, I’ll just be happy that with four different income streams (and two consistent ones), there isn’t much room for everything to drop.

This nearly ~$6400+/mo income is ~$76K+ a year. That largely hypothetical annual income for writing on a blog, taking care of one dog, and investing is really nice. In the long term, $76K would be a lot more income than we’d need – given our necessary expenses for the next 45 years. Of course, those necessary expenses aren’t going to cover all our spending, but it’s a large percentage of it.

As 2020 has proven, you never know what bad news is lurking around the corner. This preparation gives us the financial flexibility to fight it.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last couple of years (which isn’t passive at all). That’s the fuel that drives the passive income engine – it allows us to live well and invest. My income doesn’t match my wife’s, but I’m good at stretching a dollar in almost all our spending.

As always, I’m still hoping to write a book someday. That would add some more passive income. My wife will probably get her book out first. She’s had an incredibly interesting life until she met me – I am so boring. I may tip my toe into self-publishing sometime next year. I would love to talk to a real publisher, but I don’t want to take on the “job” of writing. That’s probably a deal-breaker. If you know someone who I could talk to contact me.

My favorite thing about the graph below is that it doesn’t dip down too far. It’s been above $6,000 for a while now. Though we are getting close to dipping below that $6,000 mark. If it dips below $6000 and touches $5000, we’ll have to examine some things.

(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.

Like most investors in November, our net worth did extremely well. We saw it jump by 3.95%. For the year overall, our net worth is up 21.65%. If you didn’t know better you might think 2020 was another boring, great financial year – a typical saving and investing plan for us. In fact, growing our net worth 21.65% in a year might be above average. With the Rule of 72, we’d double our net worth in a little more than 3.33 years.

Diversification helps a lot in bad times. Even when the stock market was way down, we were still grounded with our real estate. We can’t control the market, but we can be happy that the amazing river of compound interest has been working well for us over the years.

I feel it’s important to acknowledge that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 14 years. FIRE wasn’t a “thing” back then, but it’s in the news a lot now. We naturally are further along in that journey than some younger readers who may be just starting out. 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 11 of blogging (year 13 of early retirement planning). Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 10-15 years.

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask whether to include a pension in your net worth. I decided that it does make sense to include it. She could have earned more direct monetary compensation 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. In the end, it seems my wife’s pension may be worth $2.3 million. However, like most of the money mentioned in this article, this isn’t money we can spend right now.

Because the pension would dominate our net worth, I’ll note two separate numbers in my personal spreadsheet. I don’t share the numbers anyway, aside from these hints, so I don’t think it should matter much to you. It’s not like I’m suggesting that you might want to make a financial-based decision on a pension.

I always end this article by asking how your last month went. I know that COVID-19 is making everything difficult. I hope that some of it is getting easier. I’m sure that for many the kids going back to school, in whatever form, represents new challenges and anxieties. Feel free to use the comment space to vent, I try to give a thoughtful reply to every comment I get.

Filed Under: Alternative Income Tagged With: alternative income streams

Giving Thanks…

November 29, 2020 by Lazy Man 1 Comment

The annual Thanksgiving article has always been a difficult article one for me. I mulled this one until it’s almost too late to post. While I feel it’s important to reflect on all the things I am grateful for, each of them is very personal. I don’t think you gain much by reading my ramblings about how privileged I’ve been over the last year. When I give thanks for something, I realize that someone else reading it may not have that. That’s not much fun for anyone to read.

Because of that, I usually skip writing a Thanksgiving article. But here we are in 2020.

(And because it’s 2020, I can break all my English teachers’ rules about which words not to begin sentences with. Or even how not to end them.)

We are globally united by a common foe. Everyone’s experience with COVID is unique, but no one’s is good. There are a lot of people who have very good reasons to not be very grateful this Thanksgiving. I can give thanks that I’m not one of those people. There are about a billion ways that any of this could have personally worse for us. Fortunately, none of them happened. I only have minor nuisances to complain about (in comparison).

One of those complaints was teaching two curriculums, kindergarten and first grade, at the same time, on different floors of the house. We got through it, and the kids almost (almost!) seem to have grown because of the experience. In a normal world, learning to read and writing emails come in a different timeline. We learned some important life skills like cooking. A couple of times the 6 and 8-year-old surprised us with breakfast (usually cereal, but that’s because we like to supervise watching the stove being used).

The kids’ school has opened up this fall and so far everything has gone smoothly. The school had a planned, whole week off for Thanksgiving. The idea was to give teachers and kids a chance to recharge their batteries. With rising COVID cases, the timing couldn’t be any more perfect. With my wife still working, it was a long, long week. When the kids don’t have school, they feel like they should do nothing but sit and watch TV all day. Oh, they’ll fit in some video games too. I get frustrated by that, but they haven’t had much TV/video game time since school started in September. We always seem to have an activity like Boy Scouts or Karate. Both of those are paused for the rest of 2020 though.

Money Thankgiving

Because this is a money blog, I should write about money, right?

This is a tough year financially for so many people. It’s impossible for me to single each occupation out. I wouldn’t know where to begin.

My dog-sitting business has been terrible. I’m thankful that we don’t rely on that income. As much as I appreciate it, the money feels like a drop in the bucket. Our investments, like the stock market, are skyrocketing. It’s hard for me to write about money articles that aren’t around investing nowadays.

In February, I moved some of my retirement savings from stocks to bonds. It simply felt that after a 10-year bull market, I should try to preserve my investment gains. It was perfect timing. Sometimes it’s better to lucky than good.

As the markets dropped, I sold some of those bonds and bought more stocks. So now my retirement accounts are up 23% for the year. I was nervous about the stock market jumping back then. I’m at a complete loss on what to do now. Part of me wants to just sell everything. However, I know I have years until I can access the money, so it’s best to just let it sit and grow.

Final Thanksgiving Thoughts

With COVID cases rising and more things shutting down, I’m hoping the kids can get through a couple more weeks of school. After that, the winter break will kick in anyway. It’ll give the kids the carrot stick they need to put in those two good weeks. After the break, it will be 2021 and we can try to put some of 2020 behind us. By that time, vaccines may be able to start helping some of the spread. We get a good spring and summer maybe start to put COVID-19 behind us.

[The hope this week is to get back with a fresh personal finance article by Tuesday or Wednesday.]

Filed Under: Announcements Tagged With: thanksgiving

Are You Better Off than Four Years Ago?

November 17, 2020 by Lazy Man 13 Comments

It seems like that is a famous question from the 1980 election when Reagan ran for president against Jimmy Carter. It’s easy to see it as political, given those roots. Also, coming t this time of year with the four-year term of a United States’ President, it’s easy to see it that way. I don’t know if someone in Japan would tie it to politics. Maybe they’d use another number like five.

I don’t tie “Are You Better Off than Four Years Ago?” to myself. I first heard the question from Retire by 40, not from any of the politic-heavy news sources that I typically read. (You should click through that link, if for no other reason than to learn a new phrase like “quadrennial checkup.”)

Hopefully, with the presidential election in the rearview mirror, we can think of the question a little more literally. I like to think about it as kind the opposite of the famous interview question, “Where do you see yourself in five years?” However, because we are looking back, it’s a lot easier.

Being “better off” is a difficult question. It’s a very personal decision. Four years ago, I had a 2 and a (just-turned) 4-year-old. I had a big lawsuit because I wrote I neutral review of an at-home water purification company that was using a test designed to trick consumers. They didn’t like that the neutral review exposed the trick and it ranked in Google, so BAM! lawsuit for me.

My wife’s work was (and it still is) moving the goalposts on promotions and that was causing additional stress. The suicide rates skyrocketed and others died from falling asleep while driving. It was a bad time. I haven’t heard of that happening lately and working from home for everyone helped a lot I think.

That wasn’t a great time – raising kids is difficult. This year has been easier because an 8-year-old and a 6-year-old can do more. They get themselves dressed. They can sort and put away laundry. A couple of times, I woke up and they already made themselves breakfast (cereal). It’s a big difference from having to wipe their butts. It’s all so gradual that it can be hard to notice it unless you take pause and reflect on it.

Four years ago was unique 4 years of my life. Life is a series of unique slices. Four years before that I was just learning how to be a father. Four years from now, there will be new experiences. Those experiences will come with new difficulties. Everyone has difficulties, right?

Let’s break down the last four and give some grades:

Finances

We’re better off financially than we were four years ago. Things have been almost “too good”, so I’m exploring ways to invest more conservatively. On my to-do list today is too look at reblancing into more bonds as stocks have hit new highs once again.

Fortunately, I can say that for the four-year slice before that and the four-year slice before that. I can keep on going back throughout my entire life and almost confidently say that I’ve improved my “fiscal status” over the last four years. I did have a rough patch when the dot-coms busted. I had to scramble for any programming job I could get. One of the core reasons why I started this blog is that I never wanted to be in that space again.

I was fortunate that I was taught early on how compound interest worked. I started investing when I was 16 and that created good financial habits. It really helps over the long term.

I hope that most people can say they are better off financially over most slices of four years. Most readers are hopefully investing… and that’s done well for 10 years now. If you are young, the skills you learn can hopefully grow your income. If you are retired and spending down your nest egg maybe you aren’t better off financially. I think that’s about the cycle of life you are in… again, just a personal thing.

Grade: A

Health

I had a knee problem four years ago. I couldn’t drive for more than 30 minutes. I saw a doctor and he gave me a couple of exercises. My knee got better almost right away.

Earlier this year, I had a molar tooth split lengthwise. The dentist had no choice but to pull it.

Overall I’m pretty good. My health could be a lot worse. I’m four years older (44 now). I got a few more pounds since the pandemic started. I have to grade it on that curve.

Grade: B

Mental/Happiness

I like not worrying about stuff. The last four years have been terrible for that.

I felt like I need to babysit the government… because honestly, my 6-year-old could make better decisions. For example, you don’t put someone whose career is based on destroying the environment like (Scott Pruitt in charge of the protecting the environment. You could ask any kindergarten class if that’s a good idea and they’d unanimously say “no.”

Then when half the country is on fire, these people simply say that they don’t believe the scientists. The sad thing is that they probably make a lot of money despite being so stupid.

Life was much better when the government mostly hired qualified people (even if there were occasional grifting and scandals). I liked the days when I could laugh at the news for making a big deal over a white iPhone or some Kardashian gossip. I was able to be a lot more productive. I talked with some friends and they feel the same way.

Grade: D-

Final Thoughts

The biggest thing for me now and going forward is COVID. We have new leaders who are putting the scientists in place to help with that. We got our second excellent vaccine news yesterday. There are some positives, but the COVID cases still feel like they are doubling every week or two. It is the best of times and the worst of times.

It sounds like it will be less than four years before we can look back at 2020 and say that COVID time was a really unique slice of our lives. Maybe it allow me appreciate the end of 2024 more with whatever life’s difficulties then are.

Filed Under: Introspection Tagged With: best life

Passive Income Update: October 2020

November 10, 2020 by Lazy Man 6 Comments

Passive Income Pyramid
My Passive Income Pyramid

It’s a little before the middle of the month, so I’m a little earlier than usual to review October 2020’s passive income. Many other bloggers get their review published on the first day or two. I can’t do that. I like to wait until the tenant checks have come and our mortgage payments are deducted from our accounts. Around the 5-7th of the month, our checking accounts seem to stabilize with all the typical big bills paid off.

Everyone knows that this year’s Halloween was a little different. As you’ll see in the pictures here, the kids still had a good Halloween even though it was socially distant. Most all the neighbors left out bags of candy. The Navy base had a walkthrough of Halloween displays with chutes of candy. The kids got to go on a Cub Scout overnight. They had a karate duel. We had the first snow of the year. We went to a farm for cider donuts and then learned to make them at home with a Raddish monthly kit (review coming eventually). I introduced the kids to Stratego, one of my favorite games growing up. I like the vintage game, which says it’s good for 10 to adult, but I think most 6-year-olds can probably handle it.

As for the adults, we were focused on completing the 1031 exchange, buying our new investment property. My wife was “virtually deployed” to help with the COVID response. I picked up a little more contract work. I did more work cleaning and decluttering the garage and basement. At my current pace of a few hours a week it may take all winter (or longer), but I don’t mind. I like having something that I can see slow, steady progress with.

I find myself taking more pictures of events so that when I review the month, I can realize all the things we did. The individual days go by very fast. Typically the morning is rushing the kids to school. The early evening is picking them, making dinner, getting their homework done, doing karate/boy scouts, etc. I think most families are like that though. There’s a lot of routine, which works well for us. On the weekends we add a lot of random events in.

That’s enough lead-in… let’s start the Passive Income report. I used to call this the Alternative Income Report, but everyone loves passive income better. While I transition to the new terminology, there may be some “alternative income” mentions including the FAQ. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions.

The way I calculate these numbers requires that long explanation – it isn’t intuitive at all. The reason why I do things a little differently is that this catalogs a journey. For example, we don’t have passive income from our rental properties while we are paying down their mortgages. Instead, I calculate the percentage of equity we have to show where on that journey we are. Each month you 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.

Lazy Man’s Passive Income – October 2020

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 “somewhat active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

This just hasn’t been the year for dog sitting. People aren’t traveling so they need me to sit their dogs. We’re getting a few customers each month. That’s very good considering COVID and most families are working and schooling. We’ll have to lower our expectations for 2020. When I get some time, I’ll make some business cards.


We went to a cider donut farm. They were the best donuts I’ve ever tasted until…


The September cooking kit from Radish had cider donut molds and a recipe. Better than the cider donut farm. It seems perverse to talk about “silver linings” to this pandemic, but the kids learning to cook is nothing to sneeze at.

My blog income continued to recover. The core advertising that we consistently have is up, which is very good news. We also got above-average one-time advertisers.

In August, dogs and blogs combined for a total of $1329.27. In October, it was:

Total Blogging + Dog Sitting Income: $1767.85

That’s still below average, but we’ll likely have to live with it until COVID ends or I can create a new income stream. I have some ideas on that new income stream, but it will be January before I get very far with that.


One of my favorite games growing up, Stratego. They had one of the best games I can imagine – the kids’ third game against each other. One had almost all his pieces left, but no miners. The other had his own #1 and #2 and defeated his brother’s spy, #1, and #2 with a flag surrounded by bombs. The brother with almost all pieces had to sacrifice them all until he had no movable pieces.

With dog sitting starting to come back my kids can get back to work and pitch in to help. My 8-year old is so good with dogs at this point. He can feed them, let them out, and play with them in the yard. My 6-year-old is good too. This help means that I can pay them a legitimately earned income (a small 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. I want to get them more involved in blogging, taking pictures, and things like that, but it’s going slow. I have a plan for them to be able to help with an article or two by the end of the year. They’ve also helped clean an investment property. It’s not a lot of work, but it all adds up.

(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

We recently sold a condo, but couldn’t close on the replacement purchase in October. It didn’t… our bank created a mess because we were an investment property LLC. Maybe this is a spoiler for next month, but we did close on it a few days ago.


My wife found an awesome ketchup costume for Halloween. The kids reminded me that ketchup is Pikachu’s favorite food. We decided to flip the script for this picture and create Pikachu’s nightmare – fitting for Halloween, right?

As for October’s numbers, we stayed exactly the same as we had in the past. The condos lost a little value and we continued to pay them off.

That moved us from having 60.64% of the equity in our properties to 60.63%. Previously, I calculated that, after insurance, property taxes, condo fees, and estimated maintenance we’d make $3,325 a month. That number because it represents our net gain. I recently updated this with the new property and it looks like we’ll be at $3,387.50 – a minor difference.


Our mattress, at 12 years old needed replacing. We tried a Zinus mattress (that we found for cheap), but it was terrible. We ended up using our old mattress, the Zinus mattress, and a feather bed to create a “Frankenbed.” It lasted a couple of weeks before we broke down and bought one good, albeit expensive mattress. The kids loved Frankenbed and had a night on it to themselves while my wife and I happily traded for their more comfortable beds.

If you multiply our expected net rent, $3,387.50, by the amount of equity we have (i.e. where we are on our journey) 60.63% you get $2,054 in estimated monthly passive income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 44 months, we’ve seen the number grow $880/mo. That’s good passive growth in almost 4 years.

It looks like the formula still works with the property switch.

As the years march on, the ratio will grow to 100% of a rent that should net $3,400 monthly after expenses. Since rent is inflation-resistant, we can raise it as costs of living go up, we don’t have to factor in inflation like other investments. So we can think of it as $40,800/yr. of income in today’s dollars buying the same value of stuff in the future. That should be enough money for us to live on with our own home paid off (plus our solar panels, frugal shopping habits, and military healthcare.)

In the previous report, the rental property income was $2,054. Hopefully, we’ll start putting this number in the right direction as we get a renter in the property.

Total Rental Property Income: $2,054

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 or from simply holding strong companies that have a long history of dividend growth. For that we’ll look at making passive income with dividend kings. If I wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get closer to a 4% 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.


At this Cub Scout overnight, the kids accomplished much of the year’s requirements. Unfortunately, I missed much of it to take care a dog (as well as our own.) It was an income of around a $75 and a savings of $75.

On the last snapshot, October, the market was doing great. There was a little dip, but that has mostly recovered. Our portfolio is at an all time high. We’ll see if investments can continue to grow. With COVID cases continuing to rise, there may be another shutdown in the future.

We continue to get a profit-sharing check since I bought (a lot of) a company. The business is doing well. It’s actually almost ideally positioned in this pandemic due to its virtual nature. The investment income from this is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend-ish Income: $3,143

Last month, it was $3,010. We are past the pre-COVID numbers. We aren’t far above it, but it’s amazing that we are even close.


The kids continued to advance their karate career. Their sensei pulled out foam noodles for some “combat” training. They quickly learned that they could defend themselves by making their making their target area small (crotching down). That made them go low with their noodly strikes. The 6-year-old executed a perfect jump on a swipe at the legs from his older brother and scored a hit. It was straight out of the movies – I almost fell out of my chair!

Annualized, this monthly $3,143 is $37,721. If our mortgage was paid off, we might 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’ll let this investment continue to compound for another 15 years until we are 59.5. Then we’ll have to see if we want to tap it or let it continue until we are required to take some of it at age 72.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, I’d include that here. I’m too tone-deaf to have a rockstar music career, but maybe I’ll write a book someday.


We had an October snow! Not much of it stuck on the ground, but that didn’t stop the kids from playing.

The stock market goes up and down fast, even more so nowadays. That makes the dividend calculation fluctuate a lot more than it normally would. We don’t even know if companies can reliably pay dividends anymore. Without customers and profits, many companies have cut their dividends.

The rental property income typically keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen. We haven’t seen any kind of crash yet.

For a few years, I’ve been saying:

I love having both types of income working together for us. I think everyone interested in FIRE should have stocks and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most people 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 awhile. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Here we are in month 8 of an unfortunate economic event. Stocks went down a lot, but then went back up. Real estate has held steady. Overall, the plan keeps rolling along, even during COVID-19.

While the stock market is doing well, the real economy is very bad. It used to be terrible, but people are getting back to work and jobs are coming back. It looks like we’ll finally get a president who won’t ignore COVID and hope it disappears. We’ll finally get a president who is going to start to reverse the climate change disaster that sees so many natural disasters ravage the United States.

Very Close to Passive Income: $5,197

Last month it was $5,064. The $5,197 is tied for an all-time high that we hit a couple of months ago.

This would be more $62,000 a year of almost completely passive income. What’s better is that there would be no need to touch the investments themselves. We wouldn’t have to sell stocks or get a reverse mortgage. Property maintenance and taxes are already factored in. We would still have all the underlying assets (property, stocks, etc.) and be able to pass these to the kids for them to build on – unless we choose to draw them down for more fun, charity, or other spending.


Halloween 2020 wasn’t what we thought it would be, but it was great nonetheless.


A trip to the church’s Pumpkin Patch fundraiser. Normalcy is rare, so we’ll take this slice of it and make the most of it.

This “very close to passive income” has grown from $2,354/mo. in January 2017. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet (except for that profit-sharing check). In a few months, we’ll get to four years of tracking this number, and we may have gained $3,000 in passive-ish income. I wonder if we can get to $8,000/mo. in passive income by the start of 2025 (which will be another 4 years).

Final Passive Income

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

Passive Income: $6,964.85

Last month it was $6,393.27. Things were going in the wrong direction last month, but we’re back up to around our average. I’d like to see this get closer to $8,000 in 2021, but I need a plan for something new. For now, I’ll just be happy that with four different income streams (and two consistent ones), there isn’t much room for everything to drop.

This nearly ~$7000+/mo income is ~$83K+ a year. That largely hypothetical annual income for writing on a blog, taking care of one dog, and investing isn’t half bad. In the long term, $75K would be a lot more income than we’d need – given our necessary expenses for the next 45 years. Of course, those necessary expenses aren’t going to cover all our spending, but it’s a large percentage of it.

As 2020 has proven, you never know what bad news is lurking around the corner. This preparation gives us the financial flexibility to fight it.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last couple of years (which isn’t passive at all). That’s the fuel that drives the passive income engine – it allows us to live well and invest. My income doesn’t match my wife’s, but I’m good at stretching a dollar in almost all our spending.

As always, I’m still hoping to write a book someday. That would add some more passive income. My wife will probably get her book out first. She’s had an incredibly interesting life until she met me – I am so boring. I may tip my toe into self-publishing sometime next year. I would love to talk to a real publisher, but I don’t want to take on the “job” of writing. That’s probably a deal-breaker. If you know someone who I could talk to contact me.

My favorite thing about the graph below is that it doesn’t dip down too far. It’s been above $6,000 for a while now. Though we are getting close to dipping below that $6,000 mark.

(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, I think.

Like most investors in October, our net worth did very well. We saw it jump by 2.41%. For the year overall, our net worth is up 17.03%. If you didn’t know better you might think 2020 was another boring year – a typical saving and investing plan for us. In fact, growing our net worth 17% in a year might be above average. With the Rule of 72, we’d double our net worth in a little more than 4 years.

Diversification helps a lot in bad times. Even when the stock market was way down, we were still grounded with our real estate. We can’t control the market, but we can be happy that the amazing river of compound interest has been working well for us over the years.

I feel it’s important to acknowledge that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 14 years. FIRE wasn’t a “thing” back then, but it’s in the news all the time now. We naturally are further along in that journey than some younger readers who may be more towards the beginning of their journey. 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 11 of blogging (year 13 of early retirement planning). Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 10-15 years.

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask whether to include a pension in your net worth. I decided that it does make sense to include it. She could have earned more direct monetary compensation 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. In the end, it seems my wife’s pension may be worth $2.3 million. However, like most of the money mentioned in this article, this isn’t money we can spend right now.

Because the pension would dominate our net worth, I’ll note two separate numbers in my personal spreadsheet. I don’t share the numbers anyway, aside from these hints, so I don’t think it should matter much to you. It’s not like I’m suggesting that you might want to make a financial-based decision on a pension.

I always end this article by asking how your last month went. I know that COVID-19 makes everything difficult and that cases are going in the wrong direction. I have more hope as I publish this than I have had in a long time. Feel free to use the comment space to vent, I try to give a thoughtful reply to every comment I get.

Filed Under: Alternative Income Tagged With: passive income

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