We’ve got a few more days of the “summer hole” that I’ve mentioned in the last couple of posts. Come the 18th, the kids have camp and I’ll start to focus on making money again. In the meantime, we’re enjoying an extremely relaxing vacation. One could mistake it for retirement, but even in retirement there’s a need to tend to some “life stuff.” For a few days, all that is getting put on hold. I hope to share some stories and pictures next week when I catch up.

In the meantime, it’s the time of the month where I review last month’s alternative income.

May should have been a typical month and maybe it was. We started off with several social commitments where we usually have very few. I also focused my attention on other life “to do” things that weren’t “money makers.” Those were things like cleaning the clutter and organizing around the house. For example the cleaning before Mother’s Day was several days. Around the middle of the month, we got a surge of dogs to sit. By the end of the month, we were focused on the kids graduating school and some more organizing. (I’ve fallen in love with IKEA Kallax to store the kids toys. They really didn’t have storage before.)

In other words, there was a focus on “life” in the “work/life” balance. Also, I watched a LOT of the Bruins and Celtics postseason runs. It wasn’t unusual to have three Boston-based games on a night. I also binged 13 Reasons Why and caught Black Panther on Redbox. I’m usually not a big television watcher, but for one month I was.

Enough about my non-financial may, let’s dig into the money details!

Alternative Income Update: May 2018

For those that don’t know the term, “alternative income”, I started using it 11 years ago to be purposely vague. I needed something to cover blogging income. Blogging income can be very erratic, but there’s a residual nature to it as well. Some popular bloggers are still struggling to categorize it. I think alternative income was more passive back in 2007 before social media, podcasting, and video. Today it seems like every blogger talks of hustling (as in moving quickly, not grifting people) and by that they mean “being everywhere.” I feel like the only one dumb enough to just keep writing blog posts… blog posts that often don’t have cool “pinnable” images.

In general, I call alternative income everything that comes from passive investment and these side hustles. The best way to think of it is income where you aren’t directly trading your time for money. This report is about all my alternative income. To include 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, 2017.

The last month I reported, April, my alternative income added up to $5,934.46. (I know I really need to set up a chart. I am certainly living up to my Lazy name here.) April was a strong dog sitting month, which often leads to less than stellar blogging month, which I will get into later.

In any case, April is ancient history now, so let’s move on to more recent history… May.

Lazy Man’s Alternative Income – May 2018

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

My “real world” friends have asked me, “What do you do?” I’m not a fan of the question… because it’s simply rude. I feel it’s used to size up or pigeonhole someone. My responses of “software engineer” has received very differently reactions than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do. What are those things:

I suppose the best answer is that I’m a stay-at-home dad. The kids go to school for about 6 hours a day. So my “non-Dad stuff” is 30 hours a week. That gives me time to do some basic family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) and dog sitting and blogging fills in the gaps.

At blogging conventions a popular question is “Are you a full-time blogger?” I say yes, but then explain that I spend very few hours 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. If you really cared to read much more this gives you even more on that. 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.”

I’ve spent too many words on it, but if you want to read more of what I’m doing check out my “Now” page.

I don’t break out blogging income vs. 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… and there isn’t some other great catastrophe going on. (Sometimes it feels like life is a series of catastrophes. Fortunately, for me, they’ve been minor. I’m sure I’m not alone in feeling that it’s just one thing after another derailing your progress.)

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” Isn’t dog sitting and blogging TRADING time for money? That’s a solid point. 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 typically 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 very 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. Nah… I’m sure clients wouldn’t want to climb over my kids’ child seats. Also the recent MIT report shows that Uber drivers make far below minimum wage.)

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

Blogging is much more time-intensive than sitting dogs. However, it isn’t directly trading time for money either. If I write an article for the blog today (such as this one!), I don’t necessarily get any significant 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 12 years of blogging.

May was a slightly below average month for sitting dogs. That’s typical since it isn’t a big family travel month with school in session. There were times where there were no dogs (Mother’s Day) and times where there were many dogs. It almost averaged out.

Blogging income was its worst of the year in May. Ugh! I’m a kidding a bit there. After years of blogging, I realize that’s how the cookie crumbles some months. With the benefit of almost half of June in the books, I can say that things are going in the right direction again.

While on the topic of blogging, I’d like to add that it isn’t about the money. I highly recommend personal finance blogging. I wouldn’t aim for creating the greatest blog in the world. Instead, I’d think of it as a way to keep yourself accountable. That’s worked for me. Here’s how to get started blogging with any type blog you might be interested in.

In April, these two categories combined to a total of $2,992.54. But for April it is…

Total Blogging + Dog Sitting Income: $2,047.30

That’s far below what I’m used to earning, but again, June is already looking up and I’ve only had the “summer hole” time where I’m either 100% kid care or on vacation (which is also kid care). In addition to this, I’m adding some part time work that won’t be included in this mix as it is mostly regular income.

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 all on 15-year fixed mortgages. This means that we don’t make money on them now, but we are paying down those mortgages more quickly than most people. In 9 years, we should be able to collect an estimated income of $40,000 (in today’s dollars, after expenses) on them.

So here’s why I have to fudge the numbers. For the purposes of this report, I think it doesn’t make sense to count the properties as zero income. I don’t want this report to push me towards a bad decision. It might make me sell them and invest the money differently to make it better. If someone offered you a million dollars in 10 years or $10 per year right now, you’d wait for the million (I hope). It’s an extreme example, but it shows how the short-term plan should be pushed aside for the benefit of the long-term plan. If I don’t fudge the numbers, the $10 is the better deal.

Here’s how I’ve decided to fudge the numbers.

I add up all the properties equity and values. Zillow is fairly accurate for these condos as it has a lot of data points to work with. Next I calculate an equity-to-value ratio. In short, this is the percentage of the property value that we own vs. the bank. I then calculate the rents of all the properties as if they were owned free and clear. Thus we can say that we are “banking” (in a completely fudgey sense) a percentage of the rent that we would expect to have in the future.

If you are confused (and you probably are), this article on calculating cash flow of cash flowless real estate explains it in more detail.

Here are the numbers for May. We have 47.28% of equity in our properties with an estimated combined rent of $3,325. (This number is after insurance, property taxes, and condo fees.) We were able to raise the rents earlier this year a little bit as the rental market has been good and we turned over to new tenants.

If you multiply $3,325 by 47.28% you get $1,572 in fudged monthly alternative income. At the 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 17 months, we’ve seen the number grow around $398/mo. As the years march on, the ratio will grow to 100% of the $3,325 month rent. That’s what gets us to that annual $40,000 I mentioned above.

In the previous report, the rental property income was $1,533. This number usually moves slowly, but a $39 jump is significant. This number only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. I don’t control the housing market, so I can’t change much here. Tenants are typically locked in for at least a year. The monthly paying down of the mortgages creates some equity each month.

Slow and steady wins this race. My hope is that by the end of this year, we’ll be looking at having 50% of the equity with $3,325 in rent or $1662.50 a month in fudged alternative income. It should be close as we’ve moved from 43.32% at the beginning of the year to 47.28% in 5 months.

Total Rental Property Income: $1,572

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers. You can decide if the game is fair. I always appreciate comments!

We don’t focus on putting our money in dividend stocks, but I’m going to imagine that we do for sake of this exercise. In reality we a vast majority in index funds, but I do some stock picking with a small percentage of our portfolio. Though the index funds do pay dividends, it’s not their core goal. I’m also fudging the numbers in another way. The money I’m referring to here is in our retirement accounts, so it isn’t something that we would tap as “income.”

Even though all this money is in retirement accounts, we could pull the money out and use it. We’d get tax penalties so we won’t do that. However, like the mortgages on the rental property, there’s real value here that I feel should be accounted for. My goal here is to capture the nearly 20 years of mostly maxing out retirement contributions.

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 2.50% in dividends. Most people estimate a 4% safe withdrawal rate, but withdrawal is not our plan here. We are only thinking about the cash that these investments could yield to pay for our living expenses.

May was another tremendous month for our portfolios. I have written about buying Twitter stock back in 2014. I grossly overpaid back then, but I kept dollar cost averaging as it went down and bought a lot under $18. With it around $44, I’m up nearly 100%. So the stock picking is working, but the general markets are doing tremendously too.

Total Dividend Income: $1,497

Last month, it was $1449, so we gained $48 of theoretical monthly money from theoretical dividends. That’s the biggest gain of the year, so it worth celebrating.

Very Close to Passive Income

Most people consider rental property income fairly passive income. It’s not, because you have to deal with tenants. However, when things are going well, there might only be “work” every couple of months. For sake of argument, I think we agree it is “more” passive than writing blog posts and sitting dogs. I spend a lot more time on the later than the former.

Of course dividend income is completely passive, so I don’t need to argue much there.

This “very close to passive income” category is a combination of “rental property income” with “dividend income.” (Yes, that’s a lot of quotes.)

It’s interesting to me that these two numbers are so close. It’s like the stocks vs. real estate debate, but for our personal finances. I think of it as putting them in an arena to fight out which is the strongest. The dividend income started out the year with a big, nearly $50, lead. In March it fell behind real property income by more than $100. It’s closed the gap and now there’s only it’s only an $75 advantage for real estate.

The stock market goes up and down which makes the dividends fluctuate as well. The rental property income keeps going up, because the mortgages are always getting paid down every month. The stock market can more a lot faster than the housing market. In any case, I like having both of them working for us.

April’s Very Close to Passive Income: $3,069

Last month it was $2,981, so it’s time to celebrate crossing the big $3K! That’s grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these sources to $36,832. Investing (in this bull market) is awesome! It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, looking forward to 9 years from now when the investment properties are paid off and how the stock market might grow (assuming a conservative 4%), this number could reach 80K a year. I estimate our long-term expenses to be around $35,000 a year, so we should be firmly in the positive side of things.

Final Alternative Income

Adding up “dogs and blogs” to the “very close to passive income”, this month we on the investment stuff had $5,116.30 in monthly “alternative” income. That would be $61,395.60 a year. It was trending towards over $100,000 last year, so seeing this go down is a little depressing. The dogs and blogs aren’t pulling their weight while I focus on more family things. On the other hand, by adding that other income opportunity, things could move back up.

Also, $61,000 a year on investments, writing on a blog, and taking care of dogs is nothing to complain about. In the long term, we can get by on half of that income, and it doesn’t include any of my wife’s bread-winning pharmacist income or her potential military pension if she retires next year.

Just like every month, I’m still hoping to 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. Seriously… it seems everyone in personal finance is getting a book deal except for me. 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

Since I don’t share real numbers of our net worth, this isn’t very exciting. 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 is still fun.

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try. For full disclosure, I might make a few dollars if you do.

In May, our net worth grew 2.28%. That’s even better than April’s great gain of 1.73%.

Our net worth for the first five months of the year is 6.88%. If it continues, that would be 16.5% for the year. We’ll take that any year!

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

Hmmm, this originally got published under April of 2019, but I reviewed my editing document that I cut and pasted from and it was 2018. WordPress also decided to strip some article tags. It seems like my installation here has been possessed by a goat.

It’s that time of month again. All the rent checks are deposited and all our finances are tallied.

April was the first “normal” month we’ve had this year. We weren’t sick with colds/flus or traveling with kids during a two-week spring break. So everything was set up to be extremely productive in side income right? Not exactly.

My wife’s online master’s class was very writing intensive and time consuming. We had a few weekend plans with the kids, a birthday party and an amazing Candyland event at the local Navy base. We also signed them up for their first sport, soccer.

I admit that I was distracted by the great start of the season by the Red Sox, as well as the playoff runs by the Celtics and Bruins. I usually don’t watch that much sports, and I’m often reading or working while I watch them. Still, there would be nights where I DVR’s 2 games and watched one… then watch the ones on DVR. That isn’t a recipe for peak productivity.

Let’s dig into the details:

Alternative Income Update: April 2018

For those that don’t know the term, “alternative income”, I started using it 11 years ago to be purposely vague. I needed something to cover blogging income. Blogging income can be very erratic, but there’s a residual nature to it as well. Some popular bloggers are still struggling to categorize it. I think alternative income was more passive back in 2007 before social media, podcasting, and video. Today it seems like every blogger talks of hustling (as in moving quickly, not grifting people) and by that they mean “being everywhere.” I feel like the only one dumb enough to just keep writing blog posts… blog posts that often don’t have cool “pinnable” images.

In general, I call alternative income everything that comes from passive investment and these side hustles. The best way to think of it is income where you aren’t directly trading your time for money. This report is about all my alternative income. To include 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, 2017.

The last month I reported, March, my alternative income added up to $6,580.70. (I know I really need to set up a chart. I am certainly living up to my Lazy name here.) March was a boosted by a big advertiser invoice from last year that took forever to get paid. Though due to our vacation we had to turn down a lot of dog sitting opportunities.

In any case, March is ancient history now, so let’s move on to more recent history… April.

Lazy Man’s Alternative Income – April 2018

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

My “real world” friends have asked me, “What do you do?” I’m not a fan of the question… because it’s simply rude. I feel it’s used to size up or pigeonhole someone. My responses of “software engineer” has received very differently reactions than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do. What are those things:

I suppose the best answer is that I’m a stay-at-home dad. The kids go to school for about 6 hours a day. So my “non-Dad stuff” is 30 hours a week. That gives me time to do some basic family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) and dog sitting and blogging fills in the gaps.

At blogging conventions a popular question is “Are you a full-time blogger?” I say yes, but then explain that I spend very few hours 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. If you really cared to read much more this gives you even more on that. 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.”

I’ve spent too many words on it, but if you want to read more of what I’m doing check out my “Now” page.

I don’t break out blogging income vs. 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… and there isn’t some other great catastrophe going on. (Sometimes it feels like life is a series of catastrophes. Fortunately, for me, they’ve been minor. I’m sure I’m not alone in feeling that it’s just one thing after another derailing your progress.)

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” Isn’t dog sitting and blogging TRADING time for money? That’s a solid point. 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 typically 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 very 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. Nah… I’m sure clients wouldn’t want to climb over my kids’ child seats. Also the recent MIT report shows that Uber drivers make far below minimum wage.)

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

Blogging is much more time-intensive than sitting dogs. However, it isn’t directly trading time for money either. If I write an article for the blog today (such as this one!), I don’t necessarily get any significant 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 12 years of blogging.

April was an above average month for sitting dogs. Usually April is crazy busy with many families going on school vacations. I’m going to choose to be happy about above average business instead of disappointed about it not being amazing like last year. I’m more comfortable with fewer dogs anyway.

Blogging was just slightly below average in April. One-off advertising requests have fallen off a cliff as of late. Oh well, when one area doesn’t perform another one seems to step up.

While on the topic of blogging, I’d like to add that it isn’t about the money. I highly recommend personal finance blogging. I wouldn’t aim for creating the greatest blog in the world. Instead, I’d think of it as a way to keep yourself accountable. That’s worked for me. Here’s how to get started blogging with any type blog you might be interested in.

In March, these two categories combined to a total of $3,640.70. But for April it is…

Total Blogging + Dog Sitting Income: $2,953.46

That’s almost exactly the average for the year. Unfortunately, it’s still a good deal below last year’s pace. I’m going to ask you to pick up the slack and spread articles through social media and get clicky on my site. Oh and sign up for lots of Personal Capital accounts. It’s free and I can make a little money by referring you. I’m joking… I think.

Looking forward, May’s numbers don’t appear very promising. However, it looks like I’ll be adding another major income stream to the mix. This would be a part-time position in a customer support role. While it doesn’t fit into the alternative income paradigm, it has a near perfect mix of pay, flexibility of hours, and location (from home).

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 all on 15-year fixed mortgages. This means that we don’t make money on them now, but we are paying down those mortgages more quickly than most people. In 9 years, we should be able to collect an estimated income of $40,000 (in today’s dollars, after expenses) on them.

So here’s why I have to fudge the numbers. For the purposes of this report, I think it doesn’t make sense to count the properties as zero income. I don’t want this report to push me towards a bad decision. It might make me sell them and invest the money differently to make it better. If someone offered you a million dollars in 10 years or $10 per year right now, you’d wait for the million (I hope). It’s an extreme example, but it shows how the short-term plan should be pushed aside for the benefit of the long-term plan. If I don’t fudge the numbers, the $10 is the better deal.

Here’s how I’ve decided to fudge the numbers.

I add up all the properties equity and values. Zillow is fairly accurate for these condos as it has a lot of data points to work with. Next I calculate an equity-to-value ratio. In short, this is the percentage of the property value that we own vs. the bank. I then calculate the rents of all the properties as if they were owned free and clear. Thus we can say that we are “banking” (in a completely fudgey sense) a percentage of the rent that we would expect to have in the future.

If you are confused (and you probably are), this article on calculating cash flow of cash flowless real estate explains it in more detail.

Here are the numbers for April. We have 46.09% of equity in our properties with an estimated combined rent of $3,325. (This number is after insurance, property taxes, and condo fees.) We were able to raise the rents earlier this year a little bit as the rental market has been good and we turned over to new tenants.

If you multiply $3,325 by 45.98% you get $1,533. At the 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 16 months, we’ve seen the number grow around $359/mo. As the years march on, the ratio will grow to 100% of the rent, which is moving up from $3,325 a month (due to inflation). That’s what gets us to that annual $40,000 I mentioned above.

In the previous report, the rental property income was $1,529. This number usually moves slowly and this month was no exception. It’s only a $4 jump. This number only changes if one of two things happen: 1) The value of the properties go up in value. 2) We change the rents. I don’t control the housing market. Tenants are typically locked in for at least a year. The monthly paying off of the mortgages creates a little equity over time. This month one of the properties had a worse Zillow estimate which made our equity gains very minor.

Slow and steady wins this race. My hope is that by the end of this year, we’ll be looking at having 50% of the equity with $3,325 in rent or $1662.50 a month in fudged alternative income. It should be close as we’ve moved from 43.32% at the beginning of the year to 46.09% now.

Total Rental Property Income: $1,533

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers. You can decide if the game is fair. I always appreciate comments!

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.

Even though all this money is in retirement accounts, we could pull the money out and use it. We’d get tax penalties so we won’t do that, but like the mortgages on the rental property, there’s real value here that needs to be accounted for. My goal here is to capture the nearly 20 years of mostly maxing out retirement contributions.

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 2.50% in dividends. Most people estimate a 4% safe withdrawal rate, but withdrawal is not our plan here. We are only thinking about the cash that these investments could yield.

April was a good month for our portfolios. Part of that was that the China trade war hit stocks at the end of my last update (around April 6th), giving us some room to recover. Another part of that is that oil prices have been going up. That’s been a hedge we’ve had for some time.

Total Dividend Income: $1,449

Last month, it was $1411, so we gained $38 of theoretical monthly money from theoretical dividends. That $38 is like getting a free cell phone plan for life. Thank you Mr. Stockmarket.

Very Close to Passive Income

This is a newer section, but it’s quickly become a regular fixture.

Most people consider rental property income fairly passive income. It’s not, because you have to deal with tenants. However, when things are going well, there might only be “work” every couple of months. For sake of argument, I think we agree it is “more” passive than writing blogs and sitting dogs. I spend a lot more time on the later than the former.

This “very close to passive income” category is a combination of “rental property income” with “dividend income.” (That’s a lot of quotes.)

It’s interesting to me that these two numbers are so close. It’s like the stocks vs. real estate debate, but for our personal finances. I think of it as putting them in an arena to fight out which is the strongest. The dividend income started out the year with a big, nearly $50, lead. In March it fell behind real property income by more than $100. It’s closed the gap and now there’s only it’s only an $84 advantage for real estate.

The stock market goes up and down which makes the dividends fluctuate as well. The rental property income keeps going up, because the mortgages are always getting paid down every month.

April’s Very Close to Passive Income: $2,981

Last month it was $2,940, so it’s moving in the right direction. That’s grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these sources to $35,772. Investing is awesome! (At least investing in this bull market is awesome.)

Final Alternative Income

Adding up “dogs and blogs” to the “very close to passive income”, this month we on the investment stuff had $5934.46 in monthly “alternative” income. That would be $71,213.52 a year. It was trending towards over $100,000 last year, so seeing this go down is a little depressing. The dogs and blogs aren’t pulling their weight while I focus on more family things. On the other hand, by adding that other income opportunity, things could move back up.

Also, $71,213.52 a year on investments, writing on a blog, and taking care of dogs blows me away. In the long term, we can get by on half of that income, and it doesn’t include any of my wife’s bread-winning pharmacist income or her potential military pension if she retires next year.

Just like every month, I’m still hoping to 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

Since I don’t share real numbers of our net worth, this isn’t very exciting. 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 is still fun.

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try.

In April, our net worth grew 1.73%. That’s a great gain that offset March’s loss of 1.48% (which will forever be known as the China Trade War effect).

In any case, our net worth for the first four months of the year so far is up 4.50%. If it continues, that would be 13% for the year. I think that’s a very solid financial year.

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

It’s my favorite time of the month. Yes, the time when all the rent checks are in and deposited and I get to look at our net worth and see it grow by around 1.5% as it has done for quite a few years now.

Err, hold the phone on that last one. I ran the numbers on the 6th after some talk about a trade war with China. The stock market tanked and our net worth did a little too. That’s cool, because it already recovered a bit. In the grand scheme of things the daily snapshot is just a blip on the radar.

March was notable because we went to Disney World. My kids have two weeks off of school in March, which means the focus shifts on vacation and 24-hour kid care.

Let’s dig into the details:

Alternative Income Update: March 2018

For those that don’t know the term, “alternative income”, I started using it 11 years ago to be purposely vague*. I needed something to cover blogging income. Blogging income can be very erratic, but there’s a residual nature to it as well. Some popular bloggers are still struggling to categorize it. I think alternative income was more passive back in 2007 before social media, podcasting, and video. Today it seems like every blogger talks of hustling (as in moving quickly, not grifting people) and by that they mean “being everywhere.” I feel like the only one dumb enough to just keep writing blog posts… blog posts that often don’t have cool “pinnable” images.

In general, I call alternative income everything that comes from passive investment and these side hustles. The best way to think of it is income where you aren’t directly trading your time for money. This report is about all my alternative income. To include 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, 2017.

The last month I reported, February, my alternative income added up to $5,880. (I know I really need to set up a chart. I am certainly living up to my Lazy name here.) February was a slightly below average dog sitting month for a school vacation period. The summer tourist season are really the best months. Blog income rebounded from a terrible January, though we were still fighting the flu.

In any case, February is ancient history now, so let’s move on to more recent history… March.

Lazy Man’s Alternative Income – March 2018

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

My “real world” friends have asked me, “What do you do?” I’m not a fan of the question… because it’s simply rude. I feel it’s used to size up or pigeonhole someone. My responses of “software engineer” has received very differently reactions than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do. What are those things:

I suppose the best answer is that I’m a stay-at-home dad. The kids go to school for about 6 hours a day. So my “non-Dad stuff” is 30 hours a week. That gives me time to do some basic family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) and dog sitting and blogging fills in the gaps.

At blogging conventions a popular question is “Are you a full-time blogger?” I say yes, but then explain that I spend very few hours 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. If you really cared to read much more this gives you even more on that. 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.”

I’ve spent too many words on it, but if you want to read more of what I’m doing check out my “Now” page.

I don’t break out blogging income vs. 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… and there isn’t some other great catastrophe going on. (Sometimes it feels like life is a series of catastrophes. Fortunately, for me, they’ve been minor. I’m sure I’m not alone in feeling that it’s just one thing after another derailing your progress.)

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” Isn’t dog sitting and blogging TRADING time for money? That’s a solid point. 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 typically 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 very 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. Nah… I’m sure clients wouldn’t want to climb over my kids’ child seats. Also the recent MIT report shows that Uber drivers make far below minimum wage.)

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

Blogging is much more time-intensive than sitting dogs. However, it isn’t directly trading time for money either. If I write an article for the blog today (such as this one!), I don’t necessarily get any significant 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 12 years of blogging.

March was a poor month for sitting dogs. There were no school vacations (except for our own weird school) and we were the ones doing the traveling. I haven’t figured out how dog sit in Rhode Island when our family is at Disney. If I do though, I’ll be raking in the pennies.

Blogging jumped up a bit from February. It’s still not where it was last year, but that’s to be expected as I feel like Stella at the beginning of the movie. I’ve actually never seen the movie, I just presume that she starts without her “groove.” In any case, I’ll take any upward momentum.

While on the topic of blogging, I’d like to add that it isn’t about the money. I highly recommend personal finance blogging. I wouldn’t aim for creating the greatest blog in the world. Instead, I’d think of it as a way to keep yourself accountable. That’s worked for me. Here’s how to get started blogging with any type blog you might be interested in.

In February, these two categories combined to a total of $2,933.77. But for March it is…

Total Blogging + Dog Sitting Income: $3,640.70

Unfortunately, it’s still a good deal below last year’s pace. I’m going to ask you to pick up the slack and spread articles through social media and get clicky on my site. Oh and sign up for lots of Personal Capital accounts. It’s free and I can make a little money by referring you. I’m joking, but not really.

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 all on 15-year fixed mortgages. This means that we don’t make money on them now, but we are paying down those mortgages more quickly than most people. In 9 years, we should be able to collect an estimated income of $40,000 (in today’s dollars, after expenses) on them.

So here’s why I have to fudge the numbers. For the purposes of this report, I think it doesn’t make sense to count the properties as zero income. I don’t want this report to push me towards a bad decision. It might make me sell them and invest the money differently to make it better. If someone offered you a million dollars in 10 years or $10 per year right now, you’d wait for the million (I hope). It’s an extreme example, but it shows how the short-term plan should be pushed aside for the benefit of the long-term plan. If I don’t fudge the numbers, the $10 is the better deal.

Here’s how I’ve decided to fudge the numbers.

I add up all the properties equity and values. Zillow is fairly accurate for these condos as it has a lot of data points to work with. Next I calculate an equity-to-value ratio. In short, this is the percentage of the property value that we own vs. the bank. I then calculate the rents of all the properties as if they were owned free and clear. Thus we can say that we are “banking” (in a completely fudgey sense) a percentage of the rent that we would expect to have in the future.

If you are confused (and you probably are), this article on calculating cash flow of cash flowless real estate explains it in more detail.

Here are the numbers for March. We have 45.98% of equity in our properties with an estimated combined rent of $3,325. (This number is after insurance, property taxes, and condo fees.) We were able to raise the rents earlier this year a little bit as the rental market has been good and we turned over to new tenants.

If you multiply $3,325 by 45.98% you get $1,529. At the beginning of 2017, we only had a ratio of 36.4% of lower rents which lead to a number $1,174.74. So in 15 months, we’ve seen the number grow around $354/mo. As the years march on, the ratio will grow to 100% of the rent, which is moving up from $3,325 a month (due to inflation). That’s what gets us to that annual $40,000 I mentioned above.

In the previous report, the rental property income was $1,501. This number usually moves slowly, but we got a $28 jump, which is very good! This number only changes if one of two things happen: 1) The value of the properties go up a lot. 2) We change the rents. I don’t control the housing market. Tenants are typically locked in for at least a year. The monthly paying off of the mortgages creates a little equity over time. We saw our property value go up a little while some of the mortgages were paid off.

My hope is that by the end of this year, we’ll be looking at having 50% of the equity with $3,325 in rent or $1662.50 a month in fudged alternative income.

Total Rental Property Income: $1,529

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers. You can decide if the game is fair. I always appreciate comments!

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.

Even though all this money is in retirement accounts, we could pull the money out and use it. We’d get tax penalties so we won’t do that, but like the mortgages on the rental property there’s real value here that needs to be accounted for. My goal here is to capture the nearly 20 years of mostly maxing out retirement contributions.

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. Most people estimate a 4% safe withdrawal rate, but withdrawal is not our plan here.

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.

March was a poor month for our portfolio. The China trade war hit us at the end. It really wasn’t that bad… but we’ve become accustomed to this number always going up.

Total Dividend Income: $1,411

On a monthly basis this doesn’t jump up very much. However, it seems to steadily climb as the market climbs. If I was only reporting this number, I’d just throw it out there once a year. The little moves of $20 doesn’t really much especially in a retirement account context.

Very Close to Passive Income

I’m starting a new category here, but it isn’t exactly “new.”

Most people consider rental property income fairly passive income. It’s not. However, for sake of argument, can we agree it is “more” passive than “blogs and dogs”? I hope so.

I’m going to combine “rental property income” with “dividend income” to create my “very close to passive income” category.

It’s interesting to me that these two numbers are so close. I think of it as putting them in an arena to fight out which is the strongest. The dividend income started out the year with a big, nearly $50, lead. However, it now finds itself losing by more than $100.

Very Close to Passive Income: $2,940

That’s grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these sources to $35,280. Investing is awesome!

These should continue to rise as we continue to put more money in our retirement accounts (while compound interest does its thing) and the real estate numbers grow from paying off mortgages and raising rents.

Final Alternative Income

Adding up “dogs and blogs” to the “very close to passive income”, this month I had $6580.70 in monthly “alternative” income. That would be $78,968.40 a year. It was trending towards over $100,000 last year. I’ve got some serious work to do to turn this around. However, I need to pause and think, “Whoa! Nearly $79K a year?!?! Awesome!” (Is that too “Joey Lawrence”?)

In the long term, we can get by on half of that income, and it doesn’t include any of my wife’s bread-winning pharmacist income or her potential military pension.

Just like every month, I’m still hoping to writing a book to boost my alternative income. Last month I said I won’t make progress on that because of the Disney trip. My March self can suck it as I DID make progress. It’s wasn’t much, but it also isn’t zero like the previous billion months. 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

Since I don’t share real numbers of our net worth, this isn’t very exciting. 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 is still fun.

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try. (If you sign up with that link, I might get a few dollars from them.)

In March, our net worth SHRUNK -1.48%. The sky is falling!!!

Nope, it’s not. I am over-dramatizing it for effect. The loss is just about the China trade war stuff.

In any case, our net worth for the year so far is up 2.72%. Ho-hum, I like when money isn’t very interesting.

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

* If anyone can lay claim to “alternative income” before 2006, I’ll happily give credit to you.

I usually try to get this report out by the middle of the month. For once it looks like I’m a little early!

For us, the big news of the month was supposed to be questions about the government shut down. We were concerned whether my active duty wife would get paid. We avoided that, but it was almost like jumping out of the pot into the frying pan. My wife got hit by the surprise and sudden pay cut affecting public health workers.

I’ll let you interpret Washington Post’s title however you want:
we had a ton of condo assessments last year, so our emergency fund isn’t what we’d want it to be. It’s one thing to plan a year’s worth of expenses, but it’s another be surprised with a few letters that you need to cough up the cash for more than a year’s living expenses.

January also featured the family cycling through all that flu you’ve reading about. It seemed like everyone got it twice. Since it was spread out, it seemed like it was the whole month.

Warning, this is going to be ugly.

Enough excuses. Let’s dig into January’s report:

Alternative Income Update: January 2017

For those that don’t know the term, “alternative income”, I started using it 11 years ago to be purposely vague*. I needed something to cover blogging income. Blogging income can be very erratic, but there’s a residual nature to it as well. Some popular bloggers are still struggling to categorize it. I think alternative income was more passive back in 2007 before social media, podcasting, and video. Today it seems like every blogger talks of hustling (as in moving quickly, not grifting people**) and by that they mean “being everywhere.” I feel like the only one dumb enough to just keep writing blog posts.

In general, I call alternative income everything that comes from passive investment and these side hustles. The best way to think of it is income 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, 2017.

The last month I reported, December, my alternative income added up to $8,032. (I know I really need to set up a chart. I am certainly living up to my name here.) December was a great dog sitting month. The Christmas holiday is great like that. Blog income was around the average.

In any case, December is ancient history now, so let’s move on to more recent history… January.

Lazy Man’s Alternative Income – January 2017

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

My “real world” friends have asked me, “What do you do?” I’m not a fan of the question… because it’s simply rude. I feel it’s used to size up or pigeonhole someone. My responses of “software engineer” has received very differently reactions than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do. What are those things:

I suppose the best answer is that I’m a stay-at-home dad. The kids go to school for about 6 hours a day. So my “non-Dad stuff” is 30 hours a week. That gives me time to do some basic family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) and dog sitting and blogging fills in the gaps.

At blogging conventions a popular question is “Are you a full-time blogger?” I say yes, but then explain that I spend very few hours 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. If you really cared to read much more this gives you even more on that. 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.”

I’ve spent too many words on it, but if you want to read more of what I’m doing check out my “Now” page.

I don’t break out blogging income vs. 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… and there isn’t some other great catastrophe going on. (Sometimes it feels like my life is a series of catastrophes. Fortunately, they’ve been minor… for the most part.)

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 typically 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 very 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. Nah… I’m sure clients wouldn’t want to climb over my kids’ child seats.)

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

Blogging is much more time-intensive than sitting dogs. However, it isn’t directly trading time for money either. If I write an article for the blog today (such as this one!), I don’t necessarily get any significant 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.

January was a poor month for sitting dogs. There are few travel holidays. We had one steady dog, a dog that we’ve had since November because his owner keeps getting serious medical illnesses. We’d give the owner considering the circumstances, but caring for a 200lb Rottweiler isn’t easy. This dog is very kind-hearted and well-trained… but patting him brings a “purr” that looks like the worst nightmare you have ever had about a vicious dog. Some movie studio is missing out. Since it’s been months since he was with his owner, I feel like he’s losing his training.

Blogging was a big drop-off in January. That was to be expected because of the sicknesses. I couldn’t write as much as I would want to and traffic dropped to its lowest in quite some time.

While on the topic of blogging, I’d like to add that it isn’t about the money. I highly recommend personal finance blogging. I wouldn’t aim for creating the greatest blog in the world. Instead, I’d think of it as a way to keep yourself accountable. That’s worked for me. Here’s how to get started blogging with any type blog you might be interested in.

In December, these two categories added up to $4,869.60. But for January it is…

Total Blogging + Dog Sitting Income: $2,439.48

That’s almost a drop of exactly 50%. There’s nothing much more to say other than it was a mess.

Fortunately, I’ve already invoiced quite a bit in February. The invoices haven’t been paid, but I’m optimistic they will be.

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 all on 15-year fixed mortgages. This means that we don’t make money on them now, but we are paying down those mortgages more quickly than most people. In 9 years, we should be able to collect an estimated income of $40,000 (in today’s dollars, after expenses) on them.

So here’s why I have to fudge the numbers. For the purposes of this report, I think it doesn’t make sense to count the properties as zero income. I don’t want this report to push me towards a bad decision. It might make me sell them and invest the money differently to make it better. If someone offered you a million dollars in 10 years or $10 per year right now, you’d wait for the million (I hope). It’s an extreme example, but it shows how the short-term plan should be pushed aside for the benefit of the long-term plan. If I don’t fudge the numbers, the $10 is the better deal.

Here’s how I’ve decided to fudge the numbers.

I add up all the properties equity and values. Zillow is fairly accurate for these condos as it has a lot of data points to work with. Next I calculate an equity-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 owned free and clear. Thus we can say that we are “banking” (in a completely fudgy sense) a percentage of the rent that we would expect to have in the future.

If you are confused (and you probably are), calculating cash flow of cash flowless real estate explains it in more detail.

Here are the numbers for December. We have 43.36% of equity in our properties with an estimated combined rent of $3,325. (This number is after property taxes and condo fees.) We were able to raise the rent a bit as the rental market has been good and we got some new tenants.

If you multiply $3,325 by 43.36% you get $1,442. At the beginning of last year, we only had a ratio of 36.4% of lower rents which lead to a number $1,174.74. As the years march on, the ratio will grow to 100% of the rent, which is moving up from $3,325 a month (due to inflation). That’s what gets us within a $100 of that annual $40,000 I mentioned above.

In the previous report, the rental property income was $1,397. This number usually moves slowly, but with increased rent it went up $45, which is quite a bit. This number only changes if one of two things happen: 1) The value of the properties go up a lot. 2) We change the rents. I don’t control the housing market. Tenants are typically locked in for at least a year. The monthly paying off of the mortgages creates a little equity over time.

We would have done better than the 43.36% which was almost the same as last month, but Zillow dropped the value of the properties.

My hope is that by the end of this year, we’ll be looking at having 50% of the equity with $3500 in rent or $1750 a month in fudged alternative income.

Total Rental Property Income: $1,442

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers. You can decide if the game is fair. I always appreciate comments!

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.

Even though all this money is in retirement accounts, we could pull the money out and use it. We’d get tax penalties so we won’t do that, but like the mortgages on the rental property there’s real value here that needs to be accounted for. My goal here is to capture the nearly 20 years of mostly maxing out retirement contributions.

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. Most people estimate a 4% safe withdrawal rate, but withdrawal is not our plan here.

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.

Like almost everyone, our portfolio was doing incredibly well in January, up 7% or more. However, I calculate the numbers on the 5th or a little after to get all the rent checks in and cleared. By the time, I was running the numbers on the fifth, our portfolio had given up all those sweet, sweet, January gains. It was almost 0% change across the board. My wife calculated her numbers (I don’t have access to some of the government retirement accounts) a little later, so her numbers were a little lower.

Total Dividend Income: $1,434

This number is down a few dollars over the last month. I don’t you there was almost no change.

Very Close to Passive Income

I’m starting a new category here, but it isn’t exactly “new.”

Most people consider rental property income fairly passive income. It’s not. However, for sake of argument, can we agree it is “more” passive than “blogs and dogs”, right? I hope so.

I’m going to combine “rental property income” with “dividend income” to create “very close to passive income.”

It’s interesting to me that these two numbers are so close. I think of it as putting them in an arena to fight out which is strong.

Very Close to Passive Income: $2,876

That’s grown from a combined $2,354 last January. Since then, this has gone from an estimated annual income of $28,252 from these sources to $34,513. These should continue to rise as we continue to put more money in our retirement accounts and the real estate holdings grow.

Final Alternative Income

Adding up “dogs and blogs” to the “very close to passive income” and this month I had $5,315.48 in monthly “alternative” income. That would be $63,785.76 a year. It was trending towards over $100,000 last month. I’ve got some serious work to do to turn this around. Still, I can’t be too ashamed of that number. In the long term, we can probably get by on half of that, and it doesn’t include any of my wife’s bread-winning pharmacist income or her potential military pension.

Just like every month, I’m still hoping to 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

Since I don’t share real numbers of our net worth, this isn’t very exciting. 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 is still fun.

In January, our net worth grew 1.62%! However, this almost a fraudulent statement. The gain was almost entirely due to Zillow drastically raising the value of our primary residence. That’s money we can’t access without a loan and money we can’t spend. Many bloggers don’t include the value of their home in their net worth. However, I think it’s important because if you own a home, that’s a big expense that you’ve eliminated. We’re almost at the point where we could sell our primary residence and pay off the 3 rental properties. We could live in one (mortgage-free) and use the income from the other two mortgage-free properties to cover most of our remaining expenses.

I’m not saying we would do that, but it’s a nice feeling as a near worst-case scenario.

In any case, our net worth for the year so far is 5.09%. That’s very good for 2 months. I don’t think we’ll keep up that pace, but I don’t think we need to.

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

* If anyone can lay claim to “alternative income” before 2006, I’ll happily give credit to you.