Spring is in full effect. Some days, dare I say, feel like summer? I’m going back and forth between writing this and setting up our inflatable hot tub.
The last month has been crazy busy and it’s not looking to let up at all. The kids’ school have them doing everything from plays, concentrated theme study, and an arts extravaganza. Next week they have four field trips planned. Throw in a couple of birthdays, Little League, and it’s keeping us on our toes. Did I mention that my wife is traveling this week?
Sometimes I wonder why I’m not moving forward on my annual goals. I have to tell myself that this is why.
The Little League debut for my 9-year-old. He’s one of two kids on the team with no previous baseball experience, but he has about a .400 OBP due to his ability to draw walks. Might make contact this weekend!
In March we went bowling a few times. It’s cheap and easy at the local military base. The kids also got their school mid-term reports and they were all fantastic – even by my lofty tiger dad standards. The youngest finished up his Lego Robotics class and the parents gave me a $100 Visa Gift card for co-coaching it. It was completely unnecessary, but appreciated. We also had our annual Easter egg hunt. I can splice together 5-6 years of Easter Egg hunts now and make it into a full hour special. Maybe it will make good background watching like our photo frame.
My wife ran two things in April. First, she ran her first marathon! I’m so proud! Second, she ran a city Free Recycling event. It’s kind of like the online Freecycle or Buy Nothing Facebook groups, but everyone does it in person in public. It’s in conjunction with the town’s Earth Day committee and Cub Scouts. So many people got great stuff. We got a garage of unwanted stuff that we donated or just outright trashed. My wife did much of that stuff as I had the dogs and even a sick kid to deal with. The good news is that our garage went from a terrible mess, to an unmitigated disaster, and then to minor disorganization. It’s great overall progress in a month.
Let’s start the new and improved Passive Income report. I’ve streamlined this a bit, so hopefully, it will be a faster, easier read. I’ll try to continue to trim it down through the year.
I used to call it alternative income, but that idea didn’t catch on as it did when I used it back in 2008. Everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math that I’m going to use in this post.
The way I calculate these numbers requires that little explanation . I do things differently to show the journey. Following the progress keeps me motivated. For example, we don’t have much real passive income from our rental properties. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where we are on that journey. Over time, the bank owns less of the properties, and we own more of them. There will be no mortgages when this number gets to 100%, and all that rental income can be used for living expenses.
When calculating the percentage of rental income, I take the rent (minus estimated expenses) and apply it to the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it, with each of you splitting the profits at the end 50/50. If your friend is the bank and it owns 80%, you should only count on 20% of that net rental income. We used to be in that 20% range, but now it’s closer to 75%.
Lazy Man’s Passive Income

I categorize our passive income into three primary sources that are represented mainly in my passive income pyramid. For this report, I ignore the bottom section, “career/job,” – that’s not passive at all. (I have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are a little passive because I can make money even when I’m not immediately tending to them. I can do other money-making activities while I board dogs. When I’m on vacation, some blog money still comes in. I combine real estate and investment income as their separate main sources of very passive income. This way, if you want only to count those, you can do that.
New for this year, my passive income is only going to be 50% of blogging and dog-sitting income, 80% of real estate, and 100% of dividend income. That rewards types of income that are truly passive and punishes my quasi-passive sources like blogging.
1. Blogging + Dog Sitting Income
April is always a great month for dog boarding. The school vacation means that we often have no vacancy. After last Apri got so busy, I raised prices. It hasn’t slowed business at all.
My 10-year-old in a dog stand-off. They raced around the house like this for about five minutes.
Blogging also was good in April. For the first time this year, we passed last year’s average month. Blogging is tough nowadays and the money is trending down, down, down. We’ll celebrate it for one month and hope it’s the start of a turnaround.
In March, “dogs and blogs” combined for $2,073.09. In April, it was:
Total Blogging + Dog Sitting Income: $9,598.76
The blue line is the monthly income. The red line is the 3-month average. Look at that drop!
That was almost three times our average number for the year. It’s not surprising. It’s just how the seasonality of how the income streams work out. Nonetheless, after a March that was about half of 2022’s numbers, pulling in a big number in April makes me feel a lot better.
My kids help with the dog sitting. My 10-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 9-year-old was a little slower to develop dog skills, but he’s carved out a household niche catering to the smaller dogs – he just loves them.
Their help means I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned, they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. Kids should start a Roth IRA as soon as possible.
2. Rental Property Income
It looks like real estate is on the way up again. It hibernated over the winter while mortgage rates skyrocketed. However, it seems that people are getting used to the rates and have started shopping again. The total value of properties went up about $10,000 and we paid off about a $1,000 in mortgages.
In the last month, we went from 76.53% to 77.14% ownership of the equity in our properties. The move of more than half a percent is very good for just one month. If we owned both of our rental properties with no mortgages (100% of the equity), we’d make about $2,200 a month after insurance, property taxes, condo fees, and estimated condo maintenance.
If you multiply our rents of $2,200 by the amount of equity we have, 77.14%, you get $1,697/mo. in estimated passive income. Last month it was $1,684/mo. This month we added $13 in passive income. It doesn’t seem like much. We made a lot better gains when we had another rental property.
We were going out for dinner and popped into a local arcade. My son saw some friends and ended up beating the scammy claw machine
When I started tracking rental property income this way (January 2017), we only owned 36.4% of the properties, and the properties had lower rents. The math worked out to $1,174 of passive income back then. In six years, it grew a ton.
Eventually, these properties should bring about $25,000 after expenses. Rent is inflation resistant as it’ll rise over time. That means that even though this is $25,000 in today’s dollars, it will still have that buying power in the future.
Total Rental Property Income: $1,697
3. Dividend Income
For this section, I look at our stock market investments. I assume we could earn a 2.5% dividend yield on those investments. That assumption is a conservative number that helps us think about what kind of cash we can expect. It should be easy to get that 2.5% number as we could simply put all of our portfolios in a high-dividend ETF. For example, the high-yield ETF, iShares Core High Dividend ETF (HDV), is currently paying a 4.30% yield.
With today’s interest rates, my assumption of a 2.5% yield seem ridiculously low.
Most bloggers use the actual dividends they earned that month. I have quite a few accounts, and I’m too Lazy to add up the dividends on them. Even if we aren’t getting the 2.5% number now, we could always move the money around from growth to dividends if we needed to live off the cash flow. A vast majority of our money is in retirement accounts, so cash flow isn’t important to us now. I also combine all the taxable and retirement account numbers. It’s too much work to separate them out.
We continue to get a profit-sharing check since I bought (a lot of) a company. The company is doing well, and they occasionally throw an extra profit-sharing check to me. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.
My 9-year-old explains how renewable energy works at the Lego competition.
This month I recorded my numbers in our shared spreadsheet and my stocks were down. My wife is traveling so she hasn’t been able to do her numbers. I waited another day and the market had a big positive day – up around 2%. Since I can’t get her exact numbers, I estimated using the growth of the S&P 500. That extra 2% jump was enough to make her stocks move up (in my estimation). In any case, it was enough to push everything in the right direction.
Total Dividend-ish Income: $3,958.00
Last month it was $3,950.
In January 2017, the dividend income was at $1,180/mo. Now, we’re almost at $50,000 a year – enough for us to live fairly well, especially if we paid off our mortgage.
For the 78th month in a row (?), we’re looking into estate planning, but they gave us a lot of paperwork to do before we can move forward. I’ve got to finish our taxes first before I can look into this.
Adjusted Passive Income
I used to combine real estate and dividend income into “very close to passive income.” However, now I’ll simply add up the 50% dogs/blogs, 80% real estate, and 100% dividend income. This makes things a lot easier.
Dog/Blogs: $9,598.76 – Adjusted to $4,799.38
Rentals: $1,697 – Adjusted to $1,357.60
Dividends: $3,958 – Remains at $3,950
Dogs/Blogs Blue Line
Rental – Red Line
Dividend – Yellow Line
Total Adjusted Passive Income: $10,114.98
Last month it was $6,333.75. That’s a big month. Of course it was driven by the dog boarding which isn’t passive, but at least it is adjusted for that. As I type this, I’ve got a few dogs and they are very quiet and easy to take care of. It’s not always this easy, but this is a reminder that it can be.
This $10K+ number is about $120,000 of passive income annually. (Easy math this month!) That’s enough to pay all our bills now, even with private school and mortgages. Over time, the dog boarding income will probably go down, but the investment income will go up. In the meantime, I hope to keep this at a monthly number of around $8k and an annual around 100k. In the long run, that would be more than we’d need to live on.
It’s incredibly useful to have different income streams. As blogging income becomes more difficult, dog boarding income has grown to supplement it. For a long time, real estate didn’t grow much at all; then, in the last couple of years, it grew a ton. The stock market grew for more than a decade from 2010 to 2021 but had a little setback last year. When something goes down, it seems another thing jumps up. Over time we are making consistent progress.
Night bowling is a ton of fun. It’s too bad that it’s only for an hour as the bowling at the military base closes at 8PM nowadays.
The chance of all the income streams falling on hard times is low, but certainly not impossible. If we had another event like the Great Recession in 2008, they’d all be impacted quite a bit. In that case, we’d have to rely more on active income that I’m not reporting here. We might also have to rely on savings for a while. Also, dog boarding went away completely with COVID, so something like that can be just around the corner.
It’s also important to remember that these numbers aren’t “real” because much of the money isn’t liquid. We can’t spend those retirement investments without penalties. We can’t access the equity we have in properties without selling them or opening a HELOC. We can do some things to get to this money, but it only makes sense when my wife retires and we are in a lower tax bracket.
You’d think we’d feel “rich” having “won” the money game. Most of the time we don’t feel rich at all. Our social circle tends to have generationally rich people. Dog boarding is definitely looked down upon in the private school society. However, we are “rich” relative to many people’s circumstances. Money is relative. There’s a lot of value to being able to laugh at emergency bills and make reasonable splurges.
(The blue line represents the total adjusted passive income. The Red Line represents the three-month average.)
The three-month average in April 2021 was $6,311.55. In April 2022, it was $8,451.51. Now in April of 2023, it is $8,169.29. Because our vacations, dog boarding, and blogging are seasonal I like to compare the same months. We had our first downward trend (2023 was less than 2022) last month and it continues this month. The gap between them is getting smaller though. At least it’s above that $8,000 goal that gets us around 100k a year.
None of the numbers here include my wife’s bread-winning day job as a pharmacist or the minor freelance work I’ve been doing over the last few years. This income isn’t passive at all. When my wife retires, we can count her vested military pension as more passive income. It looks like it might be worth around $68,500/yr. and includes access to a good health care plan. A pension is a passive income cheat code. They are so rare nowadays. It gives us a lot of flexibility that most people don’t have.
For now, this active income (including the dog boarding) is the fuel that drives the passive income engine – it allows us to live well, get our kids a top education at a private school, pay off our mortgages, and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretch almost every dollar in much of our spending. It also allows me the flexibility to bring the kids to school and to after-school activities.
Net Worth Update
My net worth updates aren’t fascinating as I don’t share the exact numbers. That’s why it’s just a footnote, not its own article.
I truly believe that net worth is one of the most critical numbers in personal finance, so it is worth sharing in some way. Showing relative growth can be helpful.
This past month, our net worth was up 1.39%. For the year it’s up 4.23%. Finally, after nearly a full year, we are back to our all-time high net worth. Our money situation is better than it has ever been.
The fourth grade had a movie matinee at their school gym. No one watched the movie. They all ran around. Siblings were allowed and it’s a rare moment when my 9-year-old and 10-year-old get along well together.
Many bloggers show how much they spent and how much they made during the month. I don’t keep track of all those numbers. I know there are some tools that can make it relatively easy. However, I find that tracking monthly numbers works best for me. I can look at our liquid cash numbers which gives me similiar information. In the last month, we grew our liquid cash by over $7,000. That’s a great month! After some expensive travel and home renovations this year, our liquid cash is up $4,000 for the year.
There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. If the U.S. government didn’t back it like treasuries or FDIC, I may feel I should account for some uncertainty. I decided that it does make sense to include it. She could have earned a larger immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth.
It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 16 years. FIRE wasn’t a “thing” back in 2006, but that’s been my goal since the first sentence of this blog.
We naturally are further along in that journey than some younger readers who may be just starting. Many of those readers are saddled with huge student loans that we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.
How was your month? Let me know in the comments.
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