We’re well into 2020, but I have to take one last look at 2019 to close it out. It always takes some time to get the final numbers together, especially when a tenant puts her rent check in the mail on the 11th. Usually, I can get this report together a little earlier, but at day 16, we’re having arguably our second day of health this year in the family. We’ve already been to the hospital 3 times, which was about 2 more times than 2019.

I’m sure that December is a busy month for everyone. For us, it’s no exception. My wife’s birthday starts the month and the rest of family’s follows. With the holidays happening in the middle of the week this year, it seemed like all the time before and after were days off. By the time everything was done, it seemed like the entire month was one week. And of course that week I had a mental breakdown. All this means that I have more pictures than usual this month.

That’s enough lead-in… let’s get to the Alternative Income report. I’ll mix in some personal pictures from the month throughout this financial update, because some people find numbers boring. (But not you or you wouldn’t be here!)

If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions. They way I calculate these numbers does require some explanation.

Lazy Man’s Alternative Income – Novemeber 2019

I categorize our alternative income into 3 main sources that are largely represented in my passive income pyramid. I ignore the bottom section of career/job – that’s not passive or alternative. I combine dog sitting and blogging into one section of “slightly active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

The last month I reported, November, was the worst blogging and dog sitting month I’ve had since the start of the year. We traveled to Aruba and didn’t take dogs over Thanksgiving – one of the busiest dog sitting times.

December’s dog sitting was simply below average. I’ll take it because it was much, much better than November.

Blogging income for December rebounded as well and was just slightly below average for the year. Part of me feels like it should be easy to make money as the end of the year has a rush of advertisers spending money. Another part of me is realistic that website traffic takes a nosedive because people are living their very busy lives.

In November, these combined for a total of $1,570.39. In December, it was:

Total Blogging + Dog Sitting Income: $2,605.87

I’ll take the thousand dollar rebound. It brings things closer to the average that I expect. This kind of income jumps all over the place, which is why I include a 3-month average (in red) in the chart below.

2. Rental Property Income

Zillow estimated our rental properties were worth a little more than last month. We saw a lot of appreciation in 2019 – about 10%. As with every month, we paid off a few thousand dollars of mortgage debt.

We now have 60.20% of the equity in our properties with a combined rent of $3,325 after insurance, property taxes, condo fees, and estimated maintenance. I use that number because it represents our net gain. Very soon, I’ll need to update that number since we get more in rent now… but the condo fees are more.

If you multiply $3,325 by 60.20% you get $2,002 in estimated monthly alternative income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 35 months, we’ve seen the number grow $828/mo. That’s like giving ourselves an annual $9,936 raise until the end of time from where we were nearly 3 years ago.

As the years march on, the ratio will grow to 100% of the $3,325 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 income I mentioned in the FAQ above.

In the previous report, the rental property income was $1,983. This number always moves slowly as it only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. We had a change of tenant and raised rates, but I need to do the math to see if the $3,325 number is still accurate. To come up with that number, I make some assumptions in estimating after insurance, property taxes, condo fees, and estimated maintenance.

Total Rental Property Income: $2,002

3. Dividend Income

The stocks markets have been doing so well that even my wife has noticed. That has happened only about 3 times in the decade… and the stock markets had done very well overall. However, by the time was all said and done our investments were worth almost exactly what they were the month before. Of course we all knew the end of the year was going to do well. It certainly feels like the markets went up at least the 5% that was predicted.

For this section, I assume we will earn a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF or from simply holding strong companies that have a long history of dividend growth. For that we’ll look at making passive income with dividend kings. If I wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get closer to a 4% average dividend yield. That link to the newsletter has a special discount rate and in full disclosure I make a few dollars if you sign up for it.

In December, we continued to get a profit sharing check since I bought (a lot of) a company. This investment income is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend-ish Income: $2,896.00

Last month, it was $2,813. So at $2,896, we’ve got a huge jump of $83. The stock market continues to hit new highs all the time. This can’t continue forever, but I’ll enjoy it while it lasts.

Annualized, this is $34,755. If our mortgage was paid off, this could cover all our necessary expenses by itself. Of course, because most of our investments are in retirement accounts, we can’t use this income for now. We’ll let continue to compound for at least another 15 years, but hopefully a lot longer.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, we’d include that here (but my rockstar career hasn’t taken off yet).

The stock market goes up and down fast which makes the dividends calculation fluctuate a bit. The rental property income keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen.

I love having both types of income working together for us. I think everyone in FIRE should have stocks and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate economic event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for awhile. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Very Close to Passive Income: $4,898

Last month it was $4,796, so it’s up $102. Most good months, this goes up $15-$30 a month. This is a huge, huge jump, especially in terms of passive income. I started Lazy Man and Money with the tagline of “Making my money work, so I don’t have to” and it is working overtime. A passive income of $58,773 is incredible. It’s about double what I estimate we’d need to live on.

This very close to passive income has grown from $2,354 in January 2017 – or an annual income of $28,252. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 7 years from now when the mortgages on the investment properties (and our primary residence) are paid off. Add in stock market growth (of a conservative 4%) and this number could be real, non-fudged $100K/year.

Final Alternative Income

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

Alternative Income: $7,503.87

In November it was $6,366.39, so this is a solid step forward. Annualized, the $7,503.87 in monthly income is $90,046.44. I have been trying to get this number consistently over $100,000. It didn’t happen in 2019, but it’s great upward momentum heading into 2020.

That largely hypothetical annual income for writing on a blog, taking care of dogs, and investments feels like a dream. In the long term, $90K+ would be a lot more income than we’d need. Here’s what our necessary expenses look like… for the next 45 years. You never know what bad news is lurking around the corner, but this gives us the financial flexibility to fight it.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last year (which isn’t passive at all). That’s the fuel that drives the passive income engine.

As always, I’m still hoping to write a book someday – just to add some more passive-ish income. I may tip my toe into self-publishing sometime next year. I would love to talk to a real a publisher, but I don’t want to take on the “job” of writing. That’s probably a deal breaker. If you know someone who I could talk to contact me.

Net Worth Update

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

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

Our net worth jumped 2.73% for the month. The stock market has been hitting new highs almost every day. For the 3rd or 4th months, Zillow gave our primary residence a big boost in value. After years of it feeling vastly undervalued to other areas locally, we’re starting see the gap close. Our primary residence has jumped over 11% for the year and about 6% in the last few months. Some people don’t count primary residence value much in net worth, but I believe it has value. We can always downsize or move to a cheaper place and pocket the difference.

Over the entire year our net worth is up 34.49%. That’s clearly banana pants crazy. At that rate we’d double our net worth every 2 years (rule of 69). And in fewer than 20 years, we’d be billionaires. These years are rare, so I’ll take it for what it is. Also, at age 43, I’m expecting to live long enough to witness more than a few crashes. When those crashes come, please remind me about 2019.

I feel it’s important to acknowledge that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 13 years. FIRE wasn’t a thing back then, but it’s in the news all the time now. We naturally may be further along in that journey than some younger readers who may be beginning their journey. Don’t be discouraged by some of the numbers above if you are just starting out. Pleaes try to use it as motivation for what may be possible (depending on your circumstances). I had a number of years where I was ecstatic simply to save for retirement. May the markets be forever in your favor (ummm… maybe not the best reference).

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask whether to include a pension in your net worth. I decided that it does make sense to include it. She could have earned more direct monetary compensation if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth. In the end, it seems my wife’s pension may be worth $2.28 million. However, like most of the money mentioned in this article, this isn’t money we can spend.

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

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

The decade is rapidly coming to a close. After this month’s report, I’ll have just one more, coming after the new year.

November started with a great friends’ son’s Bar Mitzvah party. Before the party started, my wife and I spotted Massachusetts Senator Ed Markey in the lobby of the hotel we were staying at. The party was even more interesting. There was a moment (which I can’t tell you about in full detail) that was about as jaw-dropping as Taylor Swift writing a custom song to congratulate the young man. Everyone in the audience was like, “Did we really see what we think we saw? That couldn’t have been real?” It was.

My wife took some time away with her friends over Veterans Day. That left me with the kids for a couple of days. They got to explore their first computer (a Kano that they built – pictures below). We had Happy Meals and Applebees dinners. We put together Pokemon Mega Construx. We watched classic Japanese Anime (My Neighbor Tortoro). We visited a nearly 100 year old tower that is a national landmark (also pictures below). We did a lot more as I tried to cram everything I could into the weekend.

November was also eventful because we vacationed in Aruba, using the timeshare that my wife bought long, long ago.

We originally booked the trip around Thanksgiving to limit the days the kids miss at school, but flights got too expensive. It was around $2000 more. We changed our trip go from Wednesday to Wednesday to save a lot of money. It’s probably obvious to nearly every reader that Thanksgiving travel is more expensive. We’ve never done it, so it didn’t occur to us. We are learning all the time.

We closed out the month with a Thanksgiving dinner with family… and me spending way too much money on Black Friday/Cyber Monday shopping.

That’s enough lead-in… let’s get to the Alternative Income report. I’ll mix in some pictures from the month throughout this financial update, because some people find numbers boring. (But not you or you wouldn’t be here!) Usually, I have more pictures, but it was a light month with not a lot of variety.

If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions. They way I calculate these numbers does require some explanation.

Lazy Man’s Alternative Income – November 2019

I categorize our alternative income into 3 main sources that are largely represented in my passive income pyramid. I ignore the bottom section of career/job – that’s not passive or alternative. I combine dog sitting and blogging into one section of “slightly active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

The last month I reported, October, was the worst blogging and dog sitting month I’ve had since the start of the year. Between the start of school, my travel for FinCon, my wife’s travel for work, we were busy.

November’s dog sitting was terrible – far, far below what it usually is. Last year’s November was one of our best months due to a busy Thanksgiving holiday. This year, we were traveling, so we missed almost the month’s entire business.

Blogging income for November was also down, but just a tiny bit. I can’t complain because it seems like half the month was preparing for vacation, having vacation, or recovering from vacation.

In October, these combined for a total of $2,476.44. In November, it was:

Total Blogging + Dog Sitting Income: $1,570.39

The months of June and July at $5000 are looking really good now. Fortunately December is looking better. We’ll have to see how it ends up though, because I’m not sure if we’ll sit dogs over Christmas and I know Internet traffic will be down then.

Here’s a historic chart with the red line being a 3-month average:

2. Rental Property Income

Zillow said our rental properties were worth a less than last month. We’ve seen a lot of appreciation this year, so it’s not surprising to give back some of those gains. As with every month, we paid off a few thousand dollars of mortgage debt. That helped us keep about the same of equity.

We now have 59.65% of the equity in our properties with a combined rent of $3,325 after insurance, property taxes, condo fees, and estimated maintenance. I use that number because it represents our net gain.

If you multiply $3,325 by 59.65% you get $1,983 in estimated monthly alternative income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 34 months, we’ve seen the number grow $809/mo. That’s like giving ourselves an annual $9,708 raise until the end of time from where we were nearly 3 years ago.

As the years march on, the ratio will grow to 100% of the $3,325 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 income I mentioned in the FAQ mentioned at the beginning of the article.

In the previous report, the rental property income was $1,978. This number always moves slowly as it only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. We’ve got a change of tenant soon, and we’ll be raising rents to match that. In January, I’ll revisit all the assumptions that go into that $3,325 estimate after insurance, property taxes, condo fees, and estimated maintenance.

Total Rental Property Income: $1,983

3. Dividend Income

The stocks markets have been pretty volatile over the last month. However, by the time was all said and done our investments were worth almost exactly what they were the month before.

For this section, I assume we will earn a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF or from simply holding strong companies that have a long history of dividend growth. For that we’ll look at making passive income with dividend kings. I’ll get Sure Dividend’s newsletter (this link has a special coupon code if you are interested) to try to get closer to a 4% average dividend yield.

In November, we continued to get a profit sharing check since I bought (a lot of) a company. This investment income is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend Income: $2,813.00

Last month, it was $2,789. So at $2813, we’ve got a modest jump of $24. The stock market seems to hit new highs all the time. I was briefly scared that the Tariff Man was going to temporarily torpedo this report like he did 4-5 times before this year. Fortunately, things recovered quickly and so far the tariff stuff has just been temporary fluctuations.

If this stayed steady it would be $33,756 in investment income a year. If our mortgage was paid off, this may cover our necessary expenses alone. Of course, because most of our investments are in retirement accounts, we can’t simply use this income right now. It will have to keep on compounding another 15 years or so.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, we’d include that here (but my rockstar career hasn’t taken off yet).

The stock market goes up and down fast which makes the dividends calculation fluctuate a bit. The rental property income keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen.

It is great to have both types of income working together for us. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate economic event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for awhile. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Very Close to Passive Income: $4,796

Last month it was $3,767, so it’s up $32. That may not seem like much, but slow and steay wins the race. That $32 erases some of our smaller bills. This passive income now consistently over the average of my dog sitting and blogging. That’s the goal as more and more income moves to the top of the passive income pyramid. However, it would be better if dog sitting and blogging challenged it more.

This very close to passive income has grown from $2,354 in January 2017 – or an annual income of $28,252. Our passive income is now more than double that at $57,522. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 8 years from now when the mortgages on the investment properties (and our primary residence) are paid off. Add in stock market growth (of a conservative 4%) and this number should be real/non-fudged $100K/year.

Final Alternative Income

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

November’s Alternative Income: $6,366.39

In October it was nearly $7250, so this is a step backwards. Annualized, the $6,366.39 in monthly income would be $76,396.66. I have been trying to get this number consistently over $100,000. It doesn’t look it’s going to happen this year. If I can finish above $80K, I’ll consider that a win. It’s going to be close and perhaps come down to the last month. Maybe 2020 is the year I can get that average over $100,000.

That largely hypothetical annual income for writing on a blog, taking care of dogs, and investments feels like a dream. In the long term, $80K+ would be a lot more income than we’d need. Here’s what our necessary expenses for the next 45 years roughly look like.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last year (which isn’t passive at all). That’s the fuel that drives the passive income engine.

As always, I’m still hoping to write a book someday – just to add some more passive-ish income. I may tip my toe into self-publishing sometime next year. I would love to talk to a real a publisher, but I don’t want to take on the “job” of writing. That’s probably a deal breaker. If you know someone who I could talk to contact me.

Net Worth Update

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

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

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. For more full disclosure, I haven’t made a dollar from that suggestion this year so I’m not just suggesting it because I’m getting rich off it.

Our net worth jumped 1.21%. The big reason? The stock market has been hitting new highs almost every day. Also, Zillow gave our primary residence a big boost in value. If that sounds familiar, that was exactly the same reason last month. Our primary residence has jumped 5% in the last couple of months. Some people don’t count primary residence value much in net worth, but I believe it has value. We can always downsize or move to a cheaper place and pocket the difference and get real cash.

Over the entire year our net worth is up 30.92%, which is crazy. At that rate we’d nearly double our net worth every 2.5 years. And in 25 years, we’d be billionaires. This is probably a once-in-a-lifetime year though. Also, at age 43, I’m expecting to live long enough to witness more than a few crashes. When those crashes come, please remind me about 2019.

Finally, it’s important to remember that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 13 years. We naturally may be further along in that journey than some younger readers who may be beginning their journey. Don’t be discouraged by some of the numbers above if you are just starting out. Use it as motivation for what may be possible (depending on your circumstances).

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask Should I Include a Pension in Our Net Worth?. I decided that it does make sense to do it. It’s not easy, but I came up with some ways to figure out what a pension is worth. In the end, it seems my wife’s may be worth $2.3 million. However, like most of the money mentioned in this article, it isn’t immediately spendable cash.

That pension would ridiculously dominate our net worth, so I’ll note two separate numbers in my internal spreadsheet. Since I don’t share the numbers anyway, except for these hints, it shouldn’t matter much to you.

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

There are a lot of holidays you usually say, “Happy” in front of, but Veteran’s Day isn’t one. Today, we solemnly reflect on all the people who served bravely to give us (Americans) the freedom we enjoy. Fortunately, my wife hasn’t been deployed into any kind of war zone, so she isn’t a veteran. She’s deployed for hurricane relief a couple of times and that’s stressful enough. I can’t imagine what it is like for soldiers and their families deploying into war zones.

On the topic of my wife and veterans, she’s away this weekend enjoying some time with “the girls” – some of whom are veterans.

So I get to celebrate Singles Day, the Chinese version of Black Friday. The boys and I are going to lunch at the Chinese buffet, which is everyone’s favorite. They like it because they get to see the food they are choosing. I like it because I can always find some foods they’ll eat without a fight.

Let’s get back to the month recap. After a lot of travel in August and the difficult transition to the new school year in September, October was relatively quiet. That doesn’t mean it was quiet overall. Our oldest joined the Cub Scouts and it was steep learning curve. Aside from that, there were community street parties, parades, harvest festivals, and at least four different Halloween events.

That was enough to fill the social calendar. At the end of the month, we had our best tenants move out. After four years they seem to have found their “forever house.” It’s sad for me, but I’m happy they are taking advantage of today’s low interest rates. We haven’t found new tenants yet, but hopefully we’ll have it occupied soon.

That’s enough lead-in… let’s get to the Alternative Income report. I’ll mix in some pictures from the month throughout this financial update, because some people find numbers boring. (But not you or you wouldn’t be here!)

If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions. They way I calculate these numbers does require some explanation.

Lazy Man’s Alternative Income – October 2019

I categorize our alternative income into 3 main sources that are largely represented in my passive income pyramid. I ignore the bottom section of career/job – that’s not passive or alternative. I combine dog sitting and blogging into one section of “slightly active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

The last month I reported, September, was the worst blogging and dog sitting month I’ve had since the start of the year. Between the start of school, my travel for FinCon, my wife’s travel for work, we were busy.

October’s dog sitting mirrored September – it was bad. The busy summer tourist season of Newport, RI is over. Families are back in school, so they aren’t traveling and leaving their dogs behind with me.

Blogging income for October was also down. If I want to grow blogging income, I need to spend more time blogging. The good news is that I have a number of articles that I want to get out there. The bad news is that we’re going on vacation soon. The holidays at the end of the year are terrible for blog traffic as people are (rightly) spending time with their families. I might have to start focusing on 2020.

In September, these combined for a total of $2,390.35. In October, it was:

Total Blogging + Dog Sitting Income: $2,476.44

So essentially there’s no change there. I wish I could tell a story about how the money is growing and growing and share a special secret so you can do it too. Unfortunately, that’s not the case.

Here’s a historic chart with the red line being a 3-month average:

2. Rental Property Income

Zillow said our rental properties were worth a little more than last month. As with every month, we also paid off a couple thousand of mortgage debt. That helped us gain more than $5,000 in equity. Too bad it isn’t liquid, because then the blogging and dog sitting side hustles wouldn’t matter much.

We now have 59.50% of the equity in our properties with a combined rent of $3,325 after insurance, property taxes, condo fees, and estimated maintenance. I use that number because it represents our net gain.

If you multiply $3,325 by 59.50% you get $1,978 in estimated monthly alternative income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 33 months, we’ve seen the number grow $804/mo. That’s like giving ourselves an annual $9,648 raise until the end of time from where we were nearly 3 years ago.

As the years march on, the ratio will grow to 100% of the $3,325 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 income I mentioned in the FAQ mentioned at the beginning of the article.

In the previous report, the rental property income was $1,958. This number always moves slowly as it only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. We’ve got a change of tenant soon, and we’ll be raising rents to match that. In January, I’ll revisit all the assumptions that go into that $3,325 estimate after insurance, property taxes, condo fees, and estimated maintenance.

Total Rental Property Income: $1,978

3. Dividend Income

The stocks markets have been pretty volatile over the last month. However, by the time was all said and done our investments were worth almost exactly what they were the month before.

For this section, I assume we will earn a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF or from simply holding strong companies that have a long history of dividend growth. For that we’ll look at making passive income with dividend kings. I’ll get Sure Dividend’s newsletter (this link has a special coupon code if you are interested) to try to get closer to a 4% average dividend yield.

In Ocober, I got the first profit sharing check since I bought (a lot of) a company. This investment income is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend Income: $2,789.00

Last month, it was $1,732. So at $2789, it’s a huge jump. Most of that comes from the new investment. However, the stock market has been doing extremely well hitting new highs almost every day.

This would total $33,463 in investment income a year. If our mortgage was paid off, this may cover our necessary expenses alone. Of course, because most of our investments are in retirement accounts, we can’t simply use this income right now.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, we’d include that here (but my rockstar career hasn’t taken off yet).

The stock market goes up and down fast which makes the dividends calculation fluctuate a bit. The rental property income keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen.

It is great to have both types of income working together for us. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for awhile. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Very Close to Passive Income: $4,767

Last month it was $3,691, so it’s up $1056. It’s now consistently over the average of my dog sitting and blogging. That’s the goal as more and more income moves to the top of the passive income pyramid.

This very close to passive income has grown from $2,354 in January 2017 – or an annual income of $28,252. Our passive income is now more than double that at $57,204. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 8 years from now when the mortgages on the investment properties (and our primary residence) are paid off. Add in stock market growth (of a conservative 4%) and this number should be real/non-fudged $100K/year.

Final Alternative Income

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

October’s Alternative Income: $7,243.44

In September it was a hair over $6000, so this is a nice gain. Everything was a little better this month, plus the new investment income helped a lot.

Annualized, the $7,243.44 in monthly income would be $86,921.28. I have been trying to get this number consistently over $100,000. It doesn’t look it’s going to happen this year. If I can finish above $80K, I’ll consider that a win. Maybe 2020 is the year I average over $100,000.

That largely hypothetical annual income for writing on a blog, taking care of dogs, and investments feels like a dream. In the long term, $80K+ would be a lot more income than we’d need. Here’s what our necessary expenses for the next 45 years roughly look like.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last year (which isn’t passive at all).

As always, I’m still hoping to write a book someday – just to add some more passive-ish income. I may tip my toe into self-publishing sometime next year. I would love to talk to a real a publisher, but I don’t want to take on the “job” of writing. That’s probably a deal breaker. If you know someone who I could talk to contact me.

Net Worth Update

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

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

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. For more full disclosure, I haven’t made a dollar from that suggestion this year so I’m not just suggesting it because I’m getting rich off it.

Our net worth jumped 2.92%. The big reason? The stock market has been hitting new highs almost every day. Also, Zillow gave our primary residence a big boost in value. Some people don’t count primary residence value much in net worth, but I believe it has value. We can always downsize or move to a cheaper place and pocket the difference and get real cash.

Over the entire year our net worth is up 29.36%, which is simply unbelievable. At that rate we’d nearly double our net worth every 2.5 years. This is probably a once-in-a-lifetime year though. Also, at age 43, I’m expecting to live long enough to witness more than a few crashes. When those crashes come, please remind me of this article.

It’s important to remember that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 13 years. We naturally may be further along in that journey than some younger readers who may be beginning their journey. Don’t be discouraged by some of the numbers above if you are just starting out. Use it as motivation for what may be possible (depending on your circumstances).

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask Should I Include a Pension in Our Net Worth?. I decided that it does make sense to do it. It’s not easy, but I came up with some ways to figure out what a pension is worth. In the end, it seems my wife’s may be worth $2.3 million. However, like most of the money mentioned in this article, it isn’t immediately spendable cash.

That pension would ridiculously dominate our net worth, so I’ll note two separate numbers in my internal spreadsheet. Since I don’t share the numbers anyway, except for these hints, it shouldn’t matter much to you.

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

September is always a difficult month for us. There’s often a FinCon, the one time of the year that I travel for a financial blogger conference. My wife’s career has a focus on open enrollment, which ramps up quickly after summer vacations.

This year, I went to FinCon for 5 days. I got back to see my wife for literally one hour before she went on her 6 day work trip. That’s a lot of single parenting. We can make it work because we have some good systems in place. However, it’s difficult to do anything to move forward. We’re essentially treading water. There’s usually a “catch-up” period of a few days when one parent travels.

September is also the start of school. That comes with new teachers, orientation activities, and the extracurricular “stuff.” This year, we did soccer for one kid and Cub Scouts for the other. Cub Scouts is a lot to digest. It’s almost a whole second school. We went from having zero homework for our oldest (Kindergarten last year) to having two sets of homework.

To throw one more monkey wrench into the system, it was also the oldest’s 7th birthday at the end of the month. Around the same time, there was a death in my circle of friends that I had to process. I am perhaps the worst person on Earth dealing with death.

I’ll leave the math to you, but there wasn’t a lot of time to focus on “work” or growing alternative income. When I started this blog in 2006, almost all my thoughts were consumed by my desire for financial independence. We’re in a good financial place now, so almost all my thoughts are focused on family.

That’s enough lead-in… let’s get to the Alternative Income report.

I’ll mix in some pictures from the month throughout this financial update, because some people find numbers boring. (But not you or you wouldn’t be here!)

If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions about how I do these numbers.

Lazy Man’s Alternative Income – September 2019

I categorize our alternative income into 3 main sources that are largely represented in my passive income pyramid. I ignore the bottom section of career/job – that’s not passive or alternative. I combine dog sitting and blogging into one section of “slightly active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

The last month I reported, August, was the start of this income trending down. We took a couple of weeks of vacation. With travel and play, I didn’t do much work.

September’s dog sitting wasn’t very good either. The busy summer tourist season of Newport, RI is over. Families are back in school, so they aren’t traveling and leaving their dogs behind with me. Blogging income for September was also off. Between FinCon, my wife’s travel, and the start of school, I didn’t write as much as I’d like. Also, some months advertisers aren’t around and this would be one of those months. This is exactly why I like to be diversified across all these income streams.

In August, these combined for a total of $2,705.48. In September, it was:

Total Blogging + Dog Sitting Income: $2,390.35

That’s well below average and not where I’m looking to take things. So far, October is looking a little better, but you’ll have to check back next month to see if there’s a rebound.

Here’s a historic chart with the red line being a 3-month average:

2. Rental Property Income

We now have 58.90% of the equity in our properties with a combined rent of $3,325 after insurance, property taxes, condo fees, and estimated maintenance. I like to use that number, because it represents our net gain.

If you multiply $3,325 by 58.90% you get $1,958 in estimated monthly alternative income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 32 months, we’ve seen the number grow $784/mo. That’s like giving ourselves an annual $9,408 raise until the end of time from where we were nearly 3 years ago.

As the years march on, the ratio will grow to 100% of the $3,325 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 income I mentioned in the FAQ mentioned at the beginning of the article.

In the previous report, the rental property income was $1,930. This number always moves slowly as it only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. We’ve got a change of tenant soon, and we’ll be raising rents to match that. In January, I’ll revisit all the assumptions that go into that $3,325 estimate after insurance, property taxes, condo fees, and estimated maintenance.

Total Rental Property Income: $1,958

3. Dividend Income

The stocks markets have been pretty volatile over the last month. However, by the time was all said and done our investments were worth almost exactly what they were the month before.

For this section, I generally assume we’ll be able to make a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF or from simply holding strong companies that have a long history of dividend growth. For that we’ll look at making passive income with dividend kings. I’ll get Sure Dividend’s newsletter (this link has a special coupon code if you are interested) to try to get closer to a 4% average dividend yield.

I’ll have a new surprise in this section when I get to October’s results. I’m really excited about it, but I can’t spill the beans just yet. It should be a big jump though.

Total Dividend Income: $1,732

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, we’d include that here (but my rockstar career hasn’t taken off yet).

The stock market goes up and down fast which makes the dividends calculation fluctuate a bit. The rental property income keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen.

Having both types of income working together for us is going great. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for awhile. Of course a bad economy may impact both at the same time.

Very Close to Passive Income: $3,691

Last month it was $3,664, so it’s up $27. Another month, another record! It’s now consistently over the average of my dog sitting and blogging.

It has grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these two sources to $44,286. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 8 years from now when the mortgages on the investment properties (and our primary residence) are paid off. Add in stock market growth (of a conservative 4%) and this number should be “real/non-fudged” $85K/year.

Final Alternative Income

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

September’s Alternative Income: $6,080.35

Annualized, the $6,080.35 in monthly income would be $72,964.20. I have been trying to get this number consistently over $100,000. It doesn’t look it’s going to happen this year. If I can finish above $80K, I’ll consider that a win and start to focus on 2020.

That largely hypothetical annual income for writing on a blog, taking care of dogs, and investments feels like a dream. In the long term, $80K+ would be a lot more income than we’d need. Here’s what our necessary expenses for the next 45 years roughly look like.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last year (which isn’t passive at all).

As always, I’m still hoping to write a book someday – just to add some more passive-ish income. I may tip my toe into self-publishing sometime next year. I would love to talk to a real a publisher, but I don’t want to take on the “job” of writing. That’s probably a deal breaker. If you know someone who I could talk to contact me.

Net Worth Update

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

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. For more full disclosure, I haven’t made a dollar from that suggestion this year so I’m not just suggesting it because I’m getting rich off it.

Our net worth dropped 0.32%. The big reason? We tapped our HELOC for some home re-siding/painting. That was a large check to write. Every year we seem to have one really large expense and this going to be it this year. Hard work, good planning, and very good luck has put us in a position where a big check isn’t devistating. Hopefully, it’s the only big expense this year. So far we have nothing planned for the abnormal big expenses next year. We’ll be plowing any extra cash we have into paying it off.

Over the entire year our net worth is up 25.69%, which is amazing considering it is a sizeable number. About half of that growth was from a large percentage of that was based on a website sale that I had at the beginning of the year. The rest has been simply investment gains and savings.

It’s important to remember that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 13 years. At age 43, we naturally may be further along in that journey than some younger readers who may be beginning their journey. Don’t be discouraged by some of the numbers above if you are just starting out. Use it as motivation for what may be possible (depending on your circumstances).

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask Should I Include a Pension in Our Net Worth?. I decided that it does make sense to do it. It’s not easy, but I came up with some ways to figure out what a pension is worth. In the end, it seems my wife’s may be worth $2.3 million. However, like most of the money mentioned in this article, it isn’t immediately spendable cash.

That pension would ridiculously dominate our net worth, so I’ll note two separate numbers in my internal spreadsheet. Since I don’t share the numbers anyway, except for these hints, it shouldn’t matter much to you.

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

Who has two thumbs and posts his August update at the end of September? This guy (*points to self with thumbs*)

I’m in a joking mood, because it’s better than being crazy.

Why would I be crazy? I don’t do travel well (especially alone) and just came back from FinCon in D.C. My wife did everything to get the kids going for the start of the school year… while handling her busy workload. Getting the kids going is usually my role. I have systems in place (not the best ones, but systems nonetheless) to help get the kids going in the morning. You do something more than 150 times a year for 3 years and you get better at it, right? (I hesitate to say that I’m “good.”)

I got back from FinCon just in time to give my wife a high-five (literally) as she went on her own trip. That was just overnight, but we had an immediate back-to-school event to go to after that high-five… so it was straight out the door.

It’s my wife’s turn to be D.C. this week… all week. With all of this D.C. travel, you’d think we are politicians, right? At least we are almost through it. It will be great to get back to two parents for two kids.

So in short, September is a mess. Every September seems that way. Maybe I should spend my alternative income on a nanny?

That’s way too much about September, this article is supposed to be about August, right?

(This is my favorite part of the article as I get to journal the moments in life that make it worth living. It’s my personal part of “personal finance.” If you want to get straight to the money stuff just scroll down to the next title.)

August was crazy… crazier than this September, but in a different way.

My wife and I got to see the musical “Hamilton.” She’s seen it three times (twice in NYC), but this was my first time. I guess it is kind of a big deal. I loved it and if you get the chance, it’s worth the money… even though it is a lot of money. My wife was surprised that the touring version, Providence RI, was competitive with the NYC version. She’s a great judge of acting. I mostly focus on whether I was entertained. And I was!

The next couple of days we went to the beach. We made some new friends (I hope)! Actually my wife made new friends since I only know how to talk to 6-year olds or younger. Fortunately that allowed me to take the kids for a second beach day in a row. Our 5-year old decided to wear ALL the mud on the beach at the same time. He was trying to be like Muk of Pokemon fame.

A few days later we had the annual beach party from a local animal conservatory. The fire pit is always fun.

However, the next day we were in Florida. My wife did “a thing” as I think they say on social media. That thing was add an MBA in public health policy (I think) in addition to her Pharm. D. A doctor adding an MBA… I married well… especially when counting her pension.

Maybe she’ll retire soon… but let’s a pin on that for now. We’ll get to it later.

Right after that, she needed to travel. I took the opportunity to be the most productive I’ve been in years. I cleaned almost everything in the house. I even did yard work where a bee went in between my glasses and my eye. What kind of bee does that? I’m deathly afraid of bees (except when bees are currency). Fortunately, the bee decided to only sting my thumb as I ripped off my glassed and tumbled to the ground like an idiot. I like to think a neighbor was watching and good a laugh out of it.

And then we took a break… for about 30 seconds!

My wife decided that it was a good time to celebrate her new degree… and did so in style for a week. It was almost like she was testing out early retirement… and I think she liked it. There’s a reason why so many people flock to Newport, Rhode Island in the summer, so since we’re already here, we might as well take advantage of it.

The following week, we went on a trip with the kids. We drove to New York and spent a day going to the Pokemon store, the children’s museum, and a National Geographic exhibit on the ocean. We also went to the M&M store and were on the Today Show the next morning (in the crowd of course).

From there we moved on to Hershey Park. We stayed at the Hershey Lodge which is a little like a Great Wolf Lodge with an indoor water park… except much better. I can’t remember having so much fun and the kids never wanted to go sleep.

I think we got in just the right amount of mischief in that above Tweet. We cleaned when we were done.

That sums up the very, very busy month of August. Well, except for the money update. That’s why you are here right?

Well, with all the goofing off and traveling, August was not a good month for making money. It’s hard to run a successful dog sitting business when you are in Florida one weekend and New York and Pennsylvania the next. I also didn’t do much blogging.

If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions about how I do these numbers.

Lazy Man’s Alternative Income – August 2019

I categorize our alternative income into 3 main sources that are largely represented in the passive income pyramid. I ignore the bottom section of career/job – that’s not passive or alternative at all. I combine dog sitting and blogging into one section of “slightly active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

The last month I reported, July, was a record-breaker. We didn’t get close in August. It would normally be a big dog sitting month due to the local summer tourist season, but we weren’t around much.

Blogging income for August was just off. Some months advertisers aren’t around. This is why I like to be diversified across all these income streams.

In July, these combined for a total of $5,713.84. In August, it was:

Total Blogging + Dog Sitting Income: $2,705.48

So while that looks like a big loss, it’s just a little below the average. September is shaping up to be worse, due to the craziness.

Here’s a historic chart with the red line being a 3-month average:

2. Rental Property Income

Zillow said our rental properties were worth a lot more than last month. As with every month, we also paid off a couple thousand of mortgage debt. That helped us gain more than $10,000 in equity. Too bad it isn’t liquid, because that would pay for a lot more vacations.

We now have 58.06% of the equity in our properties with a combined rent of $3,325 after insurance, property taxes, condo fees, and estimated maintenance. I like to use that number, because it represents our net gain.

If you multiply $3,325 by 58.06% you get $1,930 in estimated monthly alternative income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 31 months, we’ve seen the number grow $756/mo. That’s like giving ourselves an annual $9,072 raise until the end of time from where we were nearly 3 years ago.

As the years march on, the ratio will grow to 100% of the $3,325 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 income I mentioned in the FAQ mentioned at the beginning of the article.

In the previous report, the rental property income was $1,892. This number always moves slowly as it only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. We’re raising the rents a bit next month, but it mostly negates rising HOA fees, so I’m not going to count as increased rent.

Total Rental Property Income: $1,930

3. Dividend Income

The Tariff Man went away! Or maybe the markets just didn’t care about him. In any event, our stocks are doing well.

I had to estimate some of the numbers for my wife’s retirement plans. Things have just been to busy for me to ask her to log into her accounts. Fortunately, because they are index funds, I can usually estimate fairly well.

For this section, I generally assume we’ll be able to make a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF or from simply holding strong companies that have a long history of dividend growth. For that we’ll look at making passive income with dividend kings. I’ll get Sure Dividend’s newsletter (this link has a special coupon code if you are interested) to try to get closer to a 4% average dividend yield.

I’ll have a new surprise in this section when I get to October’s results. I’m really excited about it, but I can’t spill the beans just yet. It should be a big jump though.

Total Dividend Income: $1,733

Last month, it was $1,692, so that’s a good jump. This is another all-time record (go markets!). This would be nearly $20,800 in dividends a year. If our mortgage was paid off, this could almost cover of our necessary expenses alone. We would still have to draw some money out or make more than 2.5% in dividends to be safe. Of course we wouldn’t really need to do that because of the other income streams.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, we’d include that here (but my rockstar career hasn’t taken off yet).

The stock market goes up and down fast which makes the dividends calculation fluctuate a bit. The rental property income keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen.

Having both types of income working together for us is going great. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for awhile. Of course a bad economy may impact both at the same time.

Very Close to Passive Income: $3,664

Last month it was $3,584, so it’s up $80. It’s another record! It’s now consistently over the average of my dog sitting and blogging.

It has grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these two sources to $43,965. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 8 years from now when the mortgages on the investment properties (and our primary residence) are paid off. Add in stock market growth (of a conservative 4%) and this number could reach $85K/year by then.

Final Alternative Income

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

August’s Alternative Income: $6,368.48

That off of last month’s all-time record. The passive income of dividends and rentals didn’t quite make up for the low blog and dog income. That’s going to happen.

Annualized, the $6,368.48 in monthly income would be $76,421.80. I have been trying to get this number consistently over $100,000. After doing it twice in a row, it has come back down. However, for the year it looks like we’re closer to landing the $85-90K range for the year. Maybe we’ll have a big end of the year, but if not, that’s fine too.

That largely hypothetical annual income for writing on a blog, taking care of dogs, and investments feels like a dream. In the long term, $90K+ would be a lot more income than we’d need. Here’s what our expenses for the next 45 years looks like.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last year (which isn’t passive at all).

As always, I’m still hoping to write a book someday – just to add some more passive-ish income. I may tip my toe into self-publishing sometime in the next year. I would love to talk to a real a publisher, but I don’t want to take on the “job” of writing. If you know someone who I could talk to contact me.

Net Worth Update

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

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

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. For more full disclosure, I haven’t made a dollar from that suggestion this year so I’m not just suggesting it because I’m getting rich off it.

With the stock market and real estate markets getting back on track, our net worth overall jumped 2.48%. Over the entire year it’s up 26.09%, which is amazing considering it is a sizeable number. About half of that growth was from a large percentage of that was based on a website sale that I had at the beginning of the year. The rest has been simply investment gains and savings.

Some of our net worth will be held back in the next report because we are tapping our HELOC for some siding repairs. Every year we seem to have one really large expense and this going to be it this year. Hard work, good planning, and very good luck has put us in a position where a $15K total job isn’t devistating. Hopefully, it’s the only big expense this year. So far we have nothing planned for the abnormal big expenses next year.

It’s important to remember that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 13 years, naturally, we may be further along in that journey. Don’t be discouraged by some of the numbers above if you are just starting out. Use it as motivation for what may be possible (depending on your circumstances).

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask Should I Include a Pension in Our Net Worth?. I decided that it does make sense to do it. It’s not easy, but I came up with some ways to figure out what a pension is worth. In the end, it seems my wife’s may be worth $2.3 million. However, like most of the money mentioned in this article, it isn’t immediately spendable cash.

That pension would ridiculously dominate our net worth, so I’ll note two separate numbers in our spreadsheet. Since I don’t share the numbers anyway, except for these hints, it shouldn’t matter much to you.

How was your August? Do you even remember it? Let me know in the comments.