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.

July was, quite simply, the best month I’ve had in years financially. It’s a little surprising, because we’ve been trying to maximize the most amount of family and fun time possible. Living in Newport, RI that’s the focus for these short summer months.

As you’ll see from the pictures, we went out quite a bit. We did a local carnival, beach concerts, movies (Toy Story 4), a Hellenic Festival (with some Greek friends), a few sunset dinners at the local Navy Base, and 4th of July Fireworks. There’s probably more, but this is what I was able to remember from looking at the pictures on my phone.

We did a lot of spending for the month. The carnival wasn’t a good value as the rides were cheap and quick… but at least the kids had fun and it was easy. We ate out a lot more than we probably should to be frugal, but that’s our form of entertainment. We usually get good value because we take advantage of the base or other restaurant specials. The restaurants have a lot of ways for locals to save money at them. I expect the all the tourists don’t know about these deals, which is good for us.

(Lots of pictures to share this month, so starting early.) The Red Sox implosion isn’t going to spoil my dog’s groove. The hat was my 6-year old’s idea.

There was also some big Prime Day spending. I spent over $1000. The good news is that I got around $2000 in value and much of that was on a new phone that should last me for a few years.

Oh, and as the title hints at, I had my best month making alternative/passive income ever.

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 – July 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.

My mother has been warning me about the shark attacks in Cape Cod, but this is the closest to a sighting we’ve had in Newport.

1. Blogging + Dog Sitting Income

The last month I reported, June, was a blockbuster. June is always a big dog sitting month in Newport, RI’s summer tourist season. It was one of our biggest months. At the same time we had our best blog income month. The combination of two was as close to perfection as I can think of.

Blogging income for July was almost as good as that record-breaking June. Some months advertisers love me and this is the second great one in a row. I can’t depend on that, so that’s one reason why it’s great to be diversified across all these income streams.

Dog sitting for July was an all-time record setter. It’s been a few years since we were close to these numbers. It helped that we didn’t travel much. We got so busy at a couple of points that I had to turn away some dogs.

In June, these combined for a total of $4,922.97. In July, it was:

Total Blogging + Dog Sitting Income: $5,713.84

The view from the Newport Navy base is incredible. The food and drinks are cheap too.

I’m going to enjoy this month for what it is. It’s not likely to happen again any time soon. August has been poor so far for advertisers and dog sitting. It doesn’t help that we haven’t been around for too many weekends. I’d love to continue to set new records, but it’s more important to spend time with the family.

Somewhat related to the month’s income report, my 6 year old had a summer camp at the local dog shelter. He already knows more about dogs than any other 6-year old I can imagine, but he loved spending time learning from the experts. My 5-year old is looking forward to camp next year when he’s old enough.

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 almost exactly the same as last month. As with every month, we paid off a couple thousand of mortgage debt. That helped us gain around $2,000 in equity. It is boring, but in a great, slow-and-steady way.

We now have 56.90% 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 56.90% you get $1,892 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 30 months, we’ve seen the number grow $718/mo. That’s like giving ourselves an annual $8,616 raise until the end of time from where we were 2.5+ 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.

The Navy Base also has a fun annual event to slide into summer. Free bouncy houses and dollar sundaes.

In the previous report, the rental property income was $1,880. 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: $1,892

3. Dividend Income

The Tariff Man is back and the markets don’t like it. As usual, it was timed at the beginning of the month, right when I start to compile these numbers. The markets have still be great to us overall this year.

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.

When the kids are at camp, sometimes the adults sneak off to Castle Hill for lunch and drinks. It’s more expensive than the Navy Base, but it’s a good change of pace.

With this month’s market hiccup we have a result of:

Total Dividend Income: $1,692

Last month, it was $1,725, so we went back a good deal. However, if we made this $1,692 every month, we’d have more than $20,000 a year in dividends. If our mortgage was paid off, we could this could cover most of our expenses alone. We would have to draw some money out or make more than 2.5% in dividends to be sure.

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 we don’t have that).

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 have a great Greek friend from college, and we’re making new Greek friends here. Incredible food, dance, and fun!

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, but people reliant on one passive income source will likely have a tougher time.

Very Close to Passive Income: $3,584

Last month it was $3,604, so it’s down $20. This is the first down month in 2019. As you’ll see from the graph, it’s not a big deal.

This was at one of the beach concerts. The kids spend a lot of time looking up to me. It’s good to look up to them (literally) sometimes.

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 $43,007. 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 or more.

Final Alternative Income

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

July’s Alternative Income: $9,297.84

That’s a new all-time record! A few years ago, the blog and dog sitting were doing better and we’ve had another one of those months. Add that to the rising passive income and it’s a good recipe of growth.

Sometimes dog sitting doesn’t go great and sometimes blogging doesn’t go great, but growing rental and investment income can cover a lot of the imperfections there. Annualized, the $9297 in monthly income would be $111,574.08. I have been trying to get this number consistently over $100,000 and I’ve been able to do it twice in row now. When most of the month goes well, I can get there. However, for the year it looks like we’re closer to landing the $85-90K range.

Finally, a picture of the local carnival. Next time, I’d like to go to a higher quality carnival. Maybe something in Old Orchard Beach Maine or the boardwalk in New Jersey.

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 some of the freelance work I’ve been doing over the last year.

As always, I’m still hoping to write a book someday – just to add some more passive-ish income. I’m 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? (Let me know in the comments.)

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 just suggesting it because I’m getting rich off it.

With the stock market getting hit hard, our net worth overall went down 1.35%. It’s just the second down month this year. Over the entire year it’s up 23.04%. A little more than 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 going down was due to 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 an $8K deposit and a $16K total job isn’t devistating.

I always have to remember that percentages can be weird due to the law of large numbers. Imagine someone with a net worth of $100 finds a $100 bill on the ground. Instantly it doubles his/her net worth. As our net worth grows larger, the percentage of growth will come down too. You’d rather have 10% growth of a million dollars ($100,000 gain) than 20% growth of a $100K ($20,000 gain), right?

Everyone is on 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 July? Let me know in the comments.

I am very late this month in posting the alternative income numbers for June. Usually it takes about a week to get the tenants checks cleared and mortgages paid, but the write up took right up into the weekend before the Black Friday Amazon Prime Day “holiday.”

June was a tremendous financial month for us. That will be the obvious takeaway when you read this alternative update and net worth data at the end.

However, before we get to the boring numbers, I thought I’d give a little breakdown of June. With the kids finishing up kindergarten and pre-kindergarten we had two weeks to fill before the start of summer camp.

We took one week to go our favorite staycation destination, Block Island. It has not only the smallest city in the smallest state, but you have to take a ferry or plane to get there. Unfortunately, it rained most of the time we were there. There isn’t much to do there when it rains. It was still great to get away from the monotony of the homefront.

The second week, I took the kid on a number of adventures. Sometimes it was local errands before their swim class. Other times, we drove the five minutes to the beach. When I was going through the pictures of the month, they were almost all kids from various fairs, bouncey houses, and their first sailing trip. Amazingly, we were still able to sit many dogs.

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 have a lot of questions.

Lazy Man’s Alternative Income – June 2019

I break our alternative income into 3 main sources that are largely represented in the passive income pyramid. I ignore the bottom section of career/job. 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 souces of passive income.

1. Blogging + Dog Sitting Income

The last month I reported, May, had a 33% drop-off in dog sitting income. I think that was just random bad luck. June jumped backed up to being our second best month of the year. It was second best by a small, small fraction. The summer months are popular when you live in a tourist area.

[The local Navy base was offering free sailing expeditions for military members, so we took advantage. I’ve forgotten a lot about sailing from the summer about 15 years ago. My wife remembered a lot more from her college days. The kids on their first sailing trip got to sail the boat and they loved it.]

Blogging income for June was a record for the year… but just by a tiny bit. Some months advertisers love me. I can’t depend on that, so that’s one reason why it’s great to be diversified across all these income streams.

In May, these combined for a total of $3,428.60. In June, it was:

Total Blogging + Dog Sitting Income: $4,922.97

That’s just a few dollars shy of the highest amount this year. This is really good for having spent nearly a week on vacation and having the kids at home with no school/camp options.

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 few thousand more than last month. As with every month, we paid off a couple thousand of mortgage debt. The combination leads to about $5,000 in equity. It is boring, but in a great, slow, and steady way.

We now have 56.53% 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.

[Annual picture of our labyrinth walk at Block Island. The laybrinth is a circular path you follow that eventually brings you into the center. It’s hard to get a 5 and 6 year old to meditate on life, but fortunately no one else was there so we didn’t bother anyone.]

If you multiply $3,325 by 56.53% you get $1,880 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 29 months, we’ve seen the number grow $706/mo. That’s like giving ourselves an annual $8,472 raise until the end of time from where we were nearly 2.5+ 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 $1,860. 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. Later this year, we should be able to raise the rents a bit.

Total Rental Property Income: $1,880

3. Dividend Income

For the first time in four months, June was a break-out month for our portfolios. It’s also the first time over that span that the Tariff Man didn’t send the stock markets into shock. Those were just tiny blips on the radar and haven’t hurt the long-term trend yet.

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.

[At the center of the labyrinth was this rock memorializing Scott James Peacock. I don’t know him, except for what was in an unfortunate Google search. However, I can tell you that he was born on my 14th birthday and died on my 11th wedding anniversary.]

With this month’s growth we have a result of:

Total Dividend Income: $1,725

Last month, it was $1,651, so it really was dramatic growth. If we made $1725 every month it would be around $20,000 a year. If our mortgage was paid off, we could probably live off that alone.

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 we don’t have that).

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.

[My wife and I like to do a few lunches at the local Castle Hill restaurant. This is the view. If you saw the last season of How I Met Your Mother, the outside pictures of the wedding venue were of Castle Hill.]

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.

Very Close to Passive Income: $3,604

Last month it was $3,511, so it’s up $93. Another month, another record high. 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 $43,254. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 9 years from now when the mortgages on the investment properties are paid off. Add in stock market growth (of a conservative 4%) and this number could reach $85K/year or more… and that’s not selling off any stock.

Final Alternative Income

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

June’s Alternative Income: $8,527.97

That’s just about a hundred dollars shy from our record back in May 2017. Sometimes dog sitting doesn’t go great and sometimes blogging doesn’t go great, but growing rental and investment income can cover a lot of the imperfections there. Annualized, the nearly $8528 in monthly income would be $102,335 for a whole year. I have been trying to get this number over $100,000. When everything goes right, like this month, I can get there. However, for the year it looks like we’re closer to landing the $80-85K range.

[With the kids off of school and my flexible work schedule, we got some good beach time in. This is Newport Rhode Island’s famous Easton’s Beach (better known as first beach).]

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 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 some of the freelance work I’ve been doing over the last year.

As always, I’m still hoping to write a book someday. I’m probably going to tip my toe into self-publishing within 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? (Let me know in the comments.)

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 just suggesting it because I’m getting rich off it.

With the stock market and the real estate markets going up, our net worth overall went up 2.54%. For the year it’s up 24.72%. A little more than 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.

I always have to remember that percentages can be weird due to the law of large numbers. Imagine someone with a net worth of $100 finds a $100 bill on the ground. Instantly it doubles his/her net worth. As our net worth grows larger, the percentage of growth will come down too. You’d rather have 10% growth of a million dollars ($100,000 gain) than 20% growth of a $100K ($20,000 gain), right?

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 all the money mentioned in this article, it isn’t immediately spendable cash.

However, because that would ridiculously dominate our net worth, I think I’ll include it as two separate numbers in our spreadsheet. Since I don’t share the numbers anyway, except for these hints, it shouldn’t matter much.

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