It is the middle of the month, which means I’m less late than usual in reviewing and writing about my alternative income for the last month. Many bloggers publish their monthly updates a few days after the month is over. One blogger recently shocked me by publishing his report before the month was over. (My crystal ball is in the shop, but I guess his is working at full capacity.)

As a landlord, I have to get all the checks and have them deposited before I can start to compile the numbers. That usually takes about a week. Then there’s usually a couple of days to get my wife’s numbers due to her schedule. (Yes we keep some accounts separate, simply because it is logistically tough to combine/share.)

This month’s excuse for an additional delay is that Monday was Victory Day. Most people haven’t heard of Victory Day, because Rhode Island is last state to officially celebrate it. My understanding is that it was a national holiday to celebrate winning WWII. Time appears to have healed many of those wounds and we don’t talk about it much anymore. I’m personally rebranding it as victory over MLM/pyramid schemes.

The Victory Day holiday didn’t mean much to you, but to me it meant that daycare was closed. I traded a day of writing and working for a day of cheap homeschooling. I’m never prepared for Victory Day, and this year was no exception. Victory Day is undefeated like Father Time. It is obvious by the name. I don’t know why I try.

That’s enough of the history lesson, let’s move forward…

Alternative Income Update: July 2017

For those that don’t know the term, “alternative income”, I invented it 11 years ago to be purposely vague. In general, it is income that comes from passive investment and side hustles. I think of alternative income as anything where you aren’t directly trading your time for money.

This report is about all my alternative income. To work my investments into that paradigm, I have to fudge the numbers a bit. You’ll see what I mean as we go along. Or you can see a more detailed explanation back in January.

If you’ve been following this series, I wasn’t happy with the way I’d been calculating rental income. Last month, I introduced two new calculations that I like better. This month, I’m choosing one as the new standard.

Last month, June, my alternative income added up to $8,094, which was less than a hundred dollars shy of a record for the year. June was a step down for dog sitting as we went on vacation. We had 15 days off with no dogs which isn’t going help the numbers. On the flip side… YAY vacation and quality time with my family! At the end of the day, that’s why we deal with this financial malarkey anyway, right?

When I’m on vacation, I’m not writing much and I’m not working on the blog. It’s a good dry-run for what most people would think of as retirement.

Let’s get to where the title brought us: July 2017

Lazy Man’s Alternative Income July 2017

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

1. Blogging + Dog Sitting Income

Some “real world” people ask me, “What do you do?” This is my best answer. I’m not a fan of the question… it’s simply rude. I feel the question is often used to pigeonhole someone. Maybe I’m over-analyzing, but my response of “software engineer” seems to be received differently than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do.

This month, based on my wife’s recommendation, I’m adding “male escort” to the list of the things I do. I escort some of the dogs I sit to weddings for pictures with the bride and groom. And yes, I’m paid an hourly rate for my time. However, I’m no Fred Garvin!

The best answer to the “What do you do?” question may be that I’m a stay-at-home dad. The kids go to school/camp/daycare for a few hours, but I usually have some other family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) to run during that time. It can take hours for me to just catch up on all email related to blogging. I don’t think most people grasp the concept of not having a full-time job, but still having a full slate of activity. I’m doing much, much more now than I ever did at a full-time job.

I think everyone assumes that Boss Lazy Man will tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. That’s not really how it works. People with standard jobs have a lot of insulation where they can say, “See, my boss says that I’m not available.”

Getting back to alternative income, I don’t break out the blogging income vs. the dog sitting income. One impacts the other. When I have a lot of dogs, I don’t have as much time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have too many dogs to sit.

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” This IS trading time for money. However, I don’t do it directly. Let me explain:

Sitting dogs itself isn’t a time-intensive job… at least with the number of dogs I have. However, there is considerably more overhead than you might think between booking dogs and meeting dogs for suitability. The important differentiation with dog sitting is that I can “double-dip” and earn money from another side hustle, such as blogging, at the same time. It’s different than being an Uber driver… the police tend to frown on blogging and driving. (Hmmm, maybe if I had a voice recorder and translation software I could compose some rough drafts.)

If you are interested in dog sitting, this month I wrote a very detailed article on the subject: Pros and Cons of Dog Sitting on Rover

Blogging is much more time-intensive. However, it isn’t directly trading time for money either. If I write an article for the blog today, I don’t necessarily get any money for it. The money I make from blogging now is a direct result of having built a reputation and a collection of nearly 2500 articles over 11 years of blogging.

July was a very good month on both fronts considering the circumstances. Even though I just finished mentioning the June vacation, we went on vacation in July as well! The June one was the kids were out of school and summer camps hadn’t started yet. This one in July was to celebrate our 10th anniversary. Sometimes the vacation times simply choose you.

Due to the vacation, dog sitting was a big zero for 8 days in the middle of the month. However, due to the July 4th holiday (yay holiday pricing!) there was a lot of demand. It was our best month dog sitting by far. Summer is always a busy time for dog sitting as many people take vacations. It’s a great fit for bloggers, because blog traffic tends to go down while those people are on vacations.

Blogging in July was a bit down. Between the summer slowdown and being on vacation, I wasn’t expecting a lot of traffic. Still it worked out to be an average month, so I can’t complain much.

[Side note: I highly recommend pesonal finance blogging. It helped me stay accountable. Here’s how to get started blogging with any type blog you might be interested in.]

In June, these two categories added up to $5,536.18. So for July it is…

… before I reveal the July number, I’d like to give a little preview of how August is going. I don’t know if it’s noticeable on the blog, but I’ve been writing less often. I’ve been doubling down on all the other to-do items to get to a point where my mental energy can be focused on projects that I want to do rather than the tedious ones I’m being forced to do. The dog sitting money is coming in fast and might challenge for the most of the year.

Total Blogging + Dog Sitting Income: $5,869.98

That’s nearly $300 more, which is remarkably consistent to June’s numbers. I’d really like to getting back to growing this number, but that growth is my 4th or 5th priority after the kids, supporting my wife’s military career, managing the rental properties, etc.

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are on 15-year fixed mortgages. This means that we don’t make money on them now, but we are quickly paying down those mortgages. In 10 years or so, we should be able to collect an estimated income of $38,000+ (in today’s dollars, after expenses) on them.

This is why I have to fudge the numbers. I think it doesn’t make sense to count them as zero income, because it would make me want to sell them and invest them differently to count for this. If someone offered you a million dollars in 10 years or $10 a year now, you’d probably wait for the million. It’s an extreme example, but waiting has value.

So how do I fudge the numbers? Here’s how:

I add up all the properties equity and values. (Zillow is very accurate for these condos as it has a lot of data points to work with.) I then calculate an equity-to-value ratio (which is the opposite of loan-to-value ratio). In short this is the percentage of the property value that we own. I then calculate the rents of all the properties if they were own free and clear.

Here are the numbers for July. We have around 42.1% of equity of properties with an estimated rent of $3200. That comes out to $1,359.33. At the beginning of the year, we only had a ratio of 36.4% which lead to $1174.74. As the years march on, this ratio will grow to 100% the rent, which should be more than $3200 (due to inflation). That’s what gets us to that $38,000 I mentioned above.

Last month the rental property income was $1323.88. At $1,359.33, we’re $35 better off this month in alternative income

Total Rental Property Income: $1,359.33

3. Dividend Income

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

We don’t focus on putting our money in dividend stocks, but I’m going to imagine that we do. Instead we have it in index funds (for the most part). Though the index funds do pay dividends, it’s not the core goal. Also, the money I’m talking about here is in our retirement accounts, so it isn’t something that we would tap as “income” anyway.

However, nearly 20 years of nearly maxing out retirement contributions is significant. It will be counted some day, right?

Just like the rental income, we can “pretend” what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn between 2.30% and and 2.70% in dividends on the portfolio.

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

Each month, I’ll pick a random number in that range to derive this number. Since it’s “pretend” dividends anyway, there’s nothing lost in being a little vague. The focus is on calculating something that could be accurate if we needed it to be.

The stock market has been doing very well, so the pretend income here has gone up a bit.

Total Dividend Income: $1,259.31

Final Alternative Income

This month I had $8,489 in monthly “alternative” income. That would be $101,863.44 a year. Last month, I had $8,094, which would be $97,128 a year. It’s kind of nice to imagine giving myself a $4 raise. It’s also nice to think this is with taking a vacation and focusing on the other priorities.

I’m still working on writing a book to boost my alternative income. I had always planned it to be an eBook, but if any readers out there know a publisher, I’d appreciate the hook-up. I think I can make a compelling argument for a book that you’d see in a bookstore… that is if bookstores still exist by the time I’m done writing it.

Net Worth Update

I had been calling this a bonus feature, but I’m going to make it a standard footnote to this report.

Since I don’t share real numbers of our net worth, this may not be very exciting. That stated, net worth is one of the most important numbers in personal finance. Showing relative growth should be of some value.

In July, our net worth grew exactly 1.12% which is still great for a single month. From the beginning of the year to now, we have increased our net worth around 12.29%%. That’s largely due to the stock market, real estate appreciation, and paying off debt. We live frugally as well.

These gains can’t go on forever. They why I recommend you read: Why (and When) You SHOULD Try to Time the Market. We’ll let the market forces roller coaster do it’s thing and enjoy the ride.

Until next month, think long-term my friends.

It is a little past the middle of the month, which means I’m a little late in reviewing my alternative income for the last month. Many bloggers publish their monthly updates a few days after the month is over. As a landlord, I have to get all the checks and have them deposited before I start to compile the numbers. That usually takes about a week. We tend to concentrate my our vacations to the summer time, so it took a little longer to get checks and cash them.

For those that don’t know the term, “alternative income”, I invented it to be purposely vague. In general, it is income that comes from passive investment and side hustles. I like to think of alternative income as anything where you aren’t directly trading your time for money.

To work my investments into the alternative income paradigm, I have to fudge the numbers a bit. You’ll see what I mean as we go along. Or you can see a more detailed explanation back in January.

If you’ve been following this series, I haven’t been happy with the way I’ve been fudging the rental income. This month, I’ve got two new calculations that I like better. I could use your help in the comments deciding between them.

Last month, May, my alternative income added up to $8,145, which was a record for the year. May was a big step forward for dog sitting (Memorial Day!) and the blog had a lot of other advertisements.

Lazy Man’s Alternative Income June 2017

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

1. Blogging + Dog Sitting Income

Some “real world” people ask me, “What do you do?” This is my best answer. I’m not a fan of the question, because it is difficult to answer. I also feel the question is often used to pigeonhole someone. Maybe I’m over-analyzing, but my response of “software engineer” seems to be received differently than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do.

The shortest answer to the question may be that I’m a stay-at-home dad. The kids go to school/camp/daycare for a few hours, but I usually have some other family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) to run during that time. It can take hours for me to just catch up on all email related to blogging. I don’t think most people grasp the concept of not having a full-time job, but still having a full slate of activity. I’m much, much more now than I ever did at a full-time job. I think everyone assumes that Boss Lazy Man will tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. People with standard jobs have a lot of insulation where they can say, “See, my boss says that I’m not available.”

Getting back to alternative income, I don’t break out the blogging income vs. the dog sitting income. One impacts the other. When I have a lot of dogs, I don’t have as much time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have too many dogs to sit.

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” This IS trading time for money. However, I don’t do it directly. Let me explain:

Sitting dogs itself isn’t a time-intensive job… at least with the number of dogs I have. However, there is considerably more overhead than you might think between booking dogs and meeting dogs for suitability. The important differentiation with dog sitting is that I can “double-dip” and earn money from another side hustle, such as blogging, at the same time. It’s different than being an Uber driver… the police tend to frown on blogging and driving. (Hmmm, maybe if I had a voice recorder and translation software I could compose some rough drafts.)

Blogging is much more time-intensive. However, it isn’t directly trading time for money either. If I write an article for the blog today, I don’t necessarily get any money for it. The money I make from blogging now is a direct result of having built a reputation over 11 years of blogging.

June was a very good month on both fronts considering the circumstances. For some strange reason, my son’s school ended 2 weeks before camps started. For most of those two weeks, I was 100% focused on full-time child care. We chose a few days to take a local vacation. It wasn’t an ideal vacation overall and (a small) part of that was that I had no real internet access. As I wrote in the preview last month, “Hopefully, I can cram a month’s worth of work into 10 days. If not, June may be a decent test of how passive this type of income is (or isn’t).”

Due to the vacation, dog sitting was extremely quiet in the middle of the month. The last week of the month was very, very busy. I’d like to say that lead to something unexpected, but it was essentially an average month. Summer is a busier time, so I’d be typically look for very good months, but I’ll take it.

Blogging in June also went well. I didn’t have time to write very much, so I wasn’t expecting much. It turned out to be an above average month. That might be due to the slow start I had at the beginning of the year with the change in theme design. The average month was really brought down there.

[Side note: I highly recommend pesonal finance blogging. It helped me stay accountable. Here’s how to get started blogging with any type blog you might be interested in.]

In May, the two categories added up to $6,272.43. So for June it is…

… before I reveal the June number, I’d like to give a little preview of how July is going. The first two weeks have been difficult because of Independence Day and my wife and my 10th anniversary. We took another local vacation (this time without the kids) to celebrate that. July is looking to mirror June a bit, but I think I can beat it if I hunker down a bit.

Total Blogging + Dog Sitting Income: $5,536.18

It’s down from May, but all things considered I have to be very happy with that number.

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are on 15-year fixed mortgages. This means that we don’t make money on them now, but we are quickly paying off the mortgages. I noticed that they aren’t appreciating at all this year, but they did well last year. In 10 years or so, we should be able to collect an estimated income of $38,000+ (in today’s dollars, after expenses) on them.

In previous updates, I imagined that we refinanced the properties to 30-year fixed mortgages so that we would make money on them now. There were two problems with that idea. As mortgage rates change (they are higher now), the idea of refinancing them actually becomes a penalty. Also as I pay off the mortgages, refinancing makes very little difference. If you are down to your last $5,000 in payments, refinancing means next to nothing.

As I wrote in the beginning, I have two new calculations for this update.

Method 1:

The first calculation is making the assumption that I sell the rental property with the most equity and use that to pay off the mortgages on the other two. Unfortunately, it’s only enough to pay off 1.5 of those mortgages. From Zillow, I could sell the first rental property for X and the other two properties add up to Y. Those Y rental property would likely bring in $1800 a month if we owned them free and clear. Unfortunately the sale of X is only worth only about 55% of Y. If you take 55% of $1800, you get $990. In reality, I could only buy one of the properties in Y free and clear by selling X, but I’d have some left over money unaccounted for. So my fudging here is to use that $990 number.

I don’t blame you if you didn’t follow that. I needed a spreadsheet to keep the numbers straight. I hope it does make some sense. This is an improvement over the previous model because as the properties gain value, they build more equity. Also every month, the mortgages on Y are getting smaller. It doesn’t rely on unpredictable mortgage rates.

Method 2:

For this calculation, I add up all the properties equity and values (Zillow is very accurate for these condos as it has a lot of data points to work with). I then calculate an equity-to-value ratio (which is the opposite of loan-to-value ratio). In short this is the percentage of the value that we own. I then calculate the rents of all the properties if they were own free and clear as this will be the alternative income when they are paid off.

Fudging the numbers, we essentially have that equity percentage of those rents/alternative income. So we have around 41.1% of an estimated rent of $3200, which comes out to $1,323.88. At the beginning of the year, we only had a ratio of 36.4% which lead to $1174.74. As the years march on, this ratio will grow to 100% the rent, which will be should be more than $3200 (due to inflation).

I prefer method 2 because it seems easier to understand. It also takes all the properties and their rents into account. The caveat is that it isn’t like we have this money as income now.

Which method do you like better? Either is better than the old refinancing method, right?

Total Rental Property Income: $1323.88

3. Dividend Income

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

We don’t focus on putting our money in dividend stocks, but I’m going to imagine that we do. Instead we have it in index funds (for the most part). Though the index funds do pay dividends, it’s not the core goal. Also, the money I’m talking about here is in our retirement accounts, so it isn’t something that we would tap as “income” anyway.

However, nearly 20 years of nearly maxing out retirement contributions is significant. It will be counted some day, right?

Just like the rental income, we can “pretend” what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn between 2.30% and and 2.70% in dividends on the portfolio.

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

Each month, I’ll pick a random number in that range to derive this number. Since it’s “pretend” dividends anyway, there’s nothing lost in being a little vague. The focus is on calculating something that could be accurate if we needed it to be.

The stock market has been doing very well, so the pretend income here has gone up a bit.

Total Dividend Income: $1,234.26

Final Alternative Income

This month I had $8,094 in monthly “alternative” income. Last month, I had $8,145. The methodology of how I calculate real estate bridged some of the gap of the blog/dog sitting earnings. At some point, I’ll go back and restate all the numbers with the new real estate methodology. That is, if I continue to use it. (And again, please, please, PLEASE give me your thoughts.)

Because I wasn’t able to do much work for half of the month, I’m going to categorize this as a big win.

I’m still working on writing a book to boost my alternative income. I had always planned it to be an eBook, but if any readers out there know a publisher, I’d appreciate the hook-up. I think I can make a compelling argument for a book that you’d see in a bookstore… that is if bookstores still exist when I’m done writing it.

Bonus! Net Worth Update

(Can I call this a “Bonus” when I’ve done it for a few months now?)

Since I don’t share real numbers of our net worth, this may not be very exciting. Still net worth is one of the most important numbers in personal finance. Showing relative growth should be of some value.

In June, our net worth grew exactly 1.34% which is great for a single month. With half the year over, we have increased our net worth around 11%. That’s largely due to the stock market, real estate appreciation, and paying off debt.

These gains can’t go on forever, but we’ll let the market forces roller coaster do it’s thing and enjoy the ride.

Until next month, think long-term my friends.

It is a little past the middle of the month. That means I’m a little later than I’d like in reviewing my alternative income for the last month. Many bloggers publish their monthly updates a few days after the month is over. As a landlord, I have to get all the checks and have them deposited before I start to compile the numbers. That usually takes about a week.

For those that don’t know the term, “alternative income”, I invented it to be purposely vague. In general, it is income that comes from passive investment and side hustles. I like to think of alternative income as anything where you aren’t directly trading your time for money.

Last month, April, my alternative income added up to $7,358, which was a huge step forward. April was a big step forward for dog sitting (school vacation!) and the blog had a lot of other advertisements.

However as my back in January.

Lazy Man’s Alternative Income May 2017

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

1. Blogging + Dog Sitting Income

Some “real world” people ask me, “What do you do?” This is my best answer. I’m not a fan of the question, probably because it is difficult to answer. I also feel it is often used to pigeonhole someone. Maybe I’m over-analyzing, but my response of “software engineer” seems to be received differently than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do.

The shortest answer to the question may be that I’m a stay-at-home dad. The kids do go to school/camp/daycare for a few hours, but I usually have some other family errands (shopping, cooking, dishes, laundry, etc.) to run during that time. It can take hours for me to just catch up on all email related to blogging. I don’t think most people don’t grasp the concept of not having a full-time job, but still having a full slate of activity. In a lot of ways, I’m doing a lot more now. It seems everyone assumes that Boss Lazy Man and tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. It may be hard to believe it, but people with standard jobs have some insulation where they can say, “See, my boss says that I’m not available.”

Getting back to alternative income, I don’t break out the blogging income vs. the dog sitting income. One impacts the other. When I have a lot of dogs, I don’t have as much time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have too many dogs to sit.

You may be asking right now, “Isn’t alternative income NOT trading time for money?” This IS trading time for money. However, I don’t do it directly. Let me explain:

Sitting dogs itself isn’t a time-intensive job… at least at the number of dogs I have. However, there is considerably more overhead than you might think between booking dogs and meeting dogs for suitability. The important differentiation with dog sitting is that I can “double-dip” and earn money from another side hustle, such as blogging, at the same time. It’s different than being an Uber driver because the police tend to frown on blogging and driving. (Hmmm, maybe if I had a voice recorder and translation software I could compose some rough drafts.)

Blogging is much more time-intensive. However, it isn’t directly trading time for money either. If I write an article for the blog today, I don’t necessarily get any money for it. The money I make from blogging now is a direct result of having built a reputation over 10 years of blogging.

May was a great month on both fronts. Dog sitting was quiet for the first half of the month. However, Memorial Day is a big travel weekend. We maxed out capacity and I actually had to refer a couple of dogs to some fellow sitters.

Blogging in May also went extremely well. It seems that the industry was willing to pay more for display advertising. Also I had more advertisers than usual contact me directly about putting an ad on my site.

Side note: I highly recommend pesonal finance blogging. It helped me stay accountable. Here’s how to get started blogging with any blog you might want.

In April, the two categories added up to $5,341.28.

Before I reveal the May number, I like to give a little preview of how June is shaping up. For the first two weeks I’ve been on nearly 100% childcare as school was out and camp hadn’t started. We used some of that time for a family vacation. While on vacation I obviously can’t do any dog sitting. I couldn’t even break away to do work as our hotel room lacked an internet connection (the wifi didn’t reach). Hopefully, I can cram a month’s worth of work into 10 days. If not, June may be a decent test of how passive this type of income is (or isn’t).

Total Blogging + Dog Sitting Income: $6,267.72

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are on 15-year fixed mortgages. This means that we don’t make money on them now, but we are quickly paying off the mortgages. I noticed that they aren’t appreciating at all this year, but they did well last year. In 10 years or so, we should be able to collect an estimated income of $30,000 (in today’s dollars, after expenses) on them.

We could refinance those mortgages at a 30-year fixed rate. I’d refinance through LendingTree to get the best rates. (I may be paid a few dollars if you click through that link and refinance.) Since we’d be taking the remaining 10 years and spreading it out over 30, our payments would drop. We’d then be earning alternative income from them. However, we don’t do this because I want to be closer to that $30,000… and interest rates are not particularly good.

For the sake of this section, I am going to pretend that I refinanced them all to 30-year fixed mortgages. Zillow has a very good refinance calculator that allows me to see how much money we’d make each month if I refinanced.

Yes, this section is alternative facts and fake news (except that I’m telling you it is fake).

Fortunately, I have all this information easily available in my free Personal Capital dashboard. (Again, I may be paid a few dollars if you click through and sign up for their free service.)

I made some assumptions and the result is: $644. Last month the same exercise lead to $702.

This doesn’t change from month to month as I thought it would. The big flaw in this exercise is that interest rates are more now than they were 5 years ago. Also refinancing from a 15-year to a 30-year term is a higher interest rate on top of that. Finally, as the mortgages get paid off there’s less to be gained from refinancing. Imagine if I had only $1000 left on each mortgage. Refinancing that, even if refinancing was free, would lead to minimal gains.

As I’ve said for many months now, this really needs to be reworked. I just have to figure out how and still make sense. I’d appreciate any suggestions.

Around 2027 all the mortgages will be paid off. The properties should then earn $36,000 a year or $3000 a month after expenses. Since real estate is relatively inflation-proof (rents will rise over time), I can think of it as $3000 in today’s dollars, which is about half of the blogging/dog sitting income, but typically a bit more passive. I wish I could just count that $3000/mo. right now.

Total Rental Property Income: $664

3. P2P Lending income

I’m discontinuing counting P2P income as it is less than $25 a month. I still believe you can get a good interest rate with P2P… I just don’t don’t have the money to put into it at this point. I’d rather max out retirement accounts.

4. Dividend Income

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

We don’t focus on putting our money in dividend stocks. Instead we have it in index funds (for the most part). Though they do pay dividends, it’s not the core goal. More importantly, the money I’m talking about here is in our retirement accounts, so it isn’t something that we would tap as “income” anyway.

However, nearly 20 years of nearly maxing out retirement contributions is significant. It will be counted some day, right?

Just like the rental income, we can “pretend” what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn between 2.30% and and 2.70% in dividends on the portfolio.

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

Each month, I’ll pick a random number in that range to derive this number. Since it’s “pretend” dividends anyway, there’s nothing lost in being a little vague. The focus is on calculating something that could be accurate if we needed it to be.

We took out a sizable TSP loan this last month to pay off our solar panels and our surprisingly big condo assessments. Due to the loan, the number that I use to put in here is lower.

Total Dividend Income: $1,213.50

Final Alternative Income

Last month, I said that I was hoping to hit more than $8000. Adding up all the numbers, it looks like we’d have $8,145 in monthly alternative income. WIN!!!

Bonus! Net Worth Update

(Can I still call this a “Bonus” when I’ve done it for a few months now?)

Since I don’t share real numbers of our net worth, this may not be very exciting. It’s still one of the most important numbers in personal finance. Showing relative growth should be of some value.

In May, our net worth grew exactly 2.00% which is tremendous for a single month. Annualized that’s 24% a year, which using the rule of 72 means we’d double our net worth in just 3 years. There’s always a danger in extrapolating one month’s gains to 3 or more years.

However, by the beginning of June, our net worth was up 9.58%! We are not too far off of that 24% pace. This can’t go on forever, and we’ve already started to see the stock market show some weakness with some tech stocks selling off. However, they seemed to bounce back as quickly as they dropped. We’ll let the roller coaster do it’s thing and enjoy the ride for now.

Until next month, think long-term my friends.