Happy September! It’s been super busy here with the kids going back to school. I feel like I’m chasing my tail. I have been trying to get this article out for several days now.

It feels like August was a billion years ago. The vacation that we took at the end of the month broke up the month. I shared many pictures in that article, but I have more photos here. With the kids in school mode now, reflecting that they were in camps in August is weird.

One kid was in cooking camp while the other was in sailing. I love the idea of cooking camp, but it’s only three hours long. I drop off the kid and get back with only about 2.5 hours before I have to get him again.

We went to a Barbie party. My wife went all-in and got costumes for the kids so they could Barbie’s dog and horse. I had a pink shirt, so it was easy to dress like Ken. I’m not a big Barbie fan, but my wife puts up with boys in the house (I’m just an oversized boy). It’s only fair that we indulge her stuff sometimes, right?

Barbie had a special premier showing at a local theater.

The Cub Scouts had a Red Sox day at Fenway, so my kids got to go on the field!! They complained about getting up a little early. They have no idea how special that is.

We went to so many beach concerts that the kids got annoyed with us. They always had a great time, but overcoming that initial inertia to get them out was challenging.

We went to a fundraiser at the Newport Tennis Hall of Fame. Some people are looking to restore and open up a historical theater. We also went to a steak dinner fundraiser for the Elks or a similar group. I forgot to be honest. The facility is close to our house, but usually members only except for a couple of days a year.

We went to a Jamaican Polo team fundraiser. We have no affiliation with them, but it seemed like a fun thing to do. It was at the Top of Newport, a rooftop bar no one knows about. Maybe it’s just too expensive for the general public. It’s a great atmosphere in the summertime. They hired someone to play the steel drums, which always reminds me of vacation.

(That’s a lot of fundraisers for one month! Perhaps more than we’ve had all year.)

We went to the annual Fool’s Rules race. I had wanted to go for years, but we always missed it due to something else scheduled. The Fool’s Rules race is where a group of people (usually 2 or 3) build a sailboat and sail it in a race. They have two hours to make it, and it can’t use typical boat parts. So people often use things like 5-gallon water jugs or insulation foam that you can buy at Home Depot. There are some other rules, such as not having a motor. Some of the stuff can be constructed at home before the race. It’s fun to see what crazy things people are coming up with.

My oldest soon with a Fools Rules sailboat in the background.

Before leaving that vacation, we ended our time in Newport with their annual Salute to Summer at the local navy base. It combines a carnival, a concert, and a fireworks show.

Well, now you know why I didn’t write as much as I had hoped. Remember that all that doesn’t involve the big vacation at the end of the month, that essentially doubles the activities. I’m tired when I think about it, but if we don’t plan this stuff, we tend to blow the day on an electronic device a foot in front of our faces.

Let’s start the new and improved Passive Income report. I’ve streamlined this a bit to make it a faster, easier read. I’ll continue to trim it down through the year.

I used to call it alternative income, but that idea didn’t catch on as it did when I used it back in 2008. Everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math that I’m going to use in this post.

The way I calculate these numbers requires that little explanation. I do things differently to show the journey. Following the progress keeps me motivated. For example, we only have a little passive income from our rental properties. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where we are on that journey. Over time, the bank owns less of the properties, and we own more. There will be no mortgages when this number reaches 100%, and all that rental income can be used for living expenses.

When calculating the percentage of rental income, I take the rent (minus estimated expenses) and apply it to the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it, with each splitting the profits at the end 50/50. If your friend is the bank and it owns 80%, you should only count on 20% of that net rental income. We used to be in that 20% range, but now it’s closer to 75%.

Lazy Man’s Passive Income

I categorize our passive income into three primary sources that are represented mainly in my passive income pyramid. For this report, I ignore the bottom section, “career/job,” – that’s not passive at all. (I have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are passive because I can make money even when not immediately tending to them. I can do other money-making activities while I board dogs. When I’m on vacation, some blog money still comes in. I combine real estate and investment income as their separate primary sources of very passive income. This way, if you want only to count those, you can do that.

New for this year, my passive income will only be 50% of my blogging and dog-sitting income, 80% of my real estate income, and 100% of my dividend income. That rewards types of income that are truly passive and punishes my quasi-passive sources like blogging.

1. Blogging + Dog Sitting Income

August is a high-demand month for dog boarding. Unfortunately, the month started with uncertainty. The zoning officer said I couldn’t run Rover.com boarding out of my home because it is in a residential area. I convinced him that he had misinterpreted town law, but he applied a different ordinance intended for dog ownership that limits three dogs on a property.

We went on vacation at the end of the month. That limited time that I could board dogs as well. Overall, we did about half the business we would have done during a normal summer month.

Kids playing cornhole at the Elks steak fundraiser

Blogging did reasonably well in August. Other bloggers like my Running Out of Life article and spread it around to their readers, and that helped with traffic. For the first time in a long time, I missed a whole week of blogging while we were on vacation.

Speaking of blogging, we got a solid rebound in July. Blogging is still a tough business, and I did quite well to get a rebound in a month when I didn’t write much.

In July, “dogs and blogs” combined for $7,437.82. In August, it was:

Total Blogging + Dog Sitting Income: $4,478.82

The blue line is the monthly income. The red line is the 3-month average.

That may seem like a significant drop, but our yearly average is $5,673.26. It’s lower than that, but reasonable for being on vacation.

My kids help with the dog sitting. My 10-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 9-year-old was a little slower to develop dog skills, but he’s carved out a household niche catering to the smaller dogs – he loves them.

Their help means I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned, they can save money in their kid Roth IRAs, and it will be money that they’ll never pay tax on. Kids should start a Roth IRA as soon as possible.

2. Rental Property Income

The real estate market is heating up again. There’s no supply and a lot of money sitting on the sidelines. I think we’re going to high prices for some time. I used to be very happy about this because it means we have more money, even if it’s on paper. However, now I see so many people being locked out of the real estate market, and it’s hard.

Beach Concert Part 1

We bought our primary residence for around $400,000 in 2011, and Zillow has it priced at nearly $900,000 now. That’s a lot of paper net worth we can’t easily access.

In any case, Zillow thought our properties were worth a little more than they were last month. We lowered our mortgage/liability on them like we do every month.

Last month, we owned 78.44% of our properties, but this month we own 78.70%. This is always a small change. Since January, we’ve gained more than $50,000 in equity. It’s safe to say that our landlord job is paying well.

Beach Concert Part 2. Lifeguards abandon their chairs at night, so kids can take them over.

Suppose we owned both rental properties with no mortgages (100% of the equity). In that case, we’d make about $2,218 a month after insurance, property taxes, condo fees, and estimated condo maintenance. The $2218 number is specific, but that’s how the rents came out, with the fraction accounting for the condo maintenance.

If you multiply our rents of $2,218 by the amount of equity we have, 78.70%, you get $1,745/mo. in estimated passive-ish income. Last month it was $1,739/mo. They say slow and steady wins the race. It’s hard to get more slow and steady than $6.

When I started tracking rental property income this way (January 2017), we only owned 36.4% of the properties with lower rents. The math worked out to $1,174 of passive income back then. In almost seven years, it grew a ton. We sold off a property to invest it in the stock market and still have about 50% more income after expenses.

The background is the International Tennis Hall of Fame. It’s one of the few grass tennis courts in the country.

Eventually, these properties should bring about $25K-30K after expenses. Rent is inflation-resistant as it’ll rise over time. That means that even though this is $25K in today’s dollars, it will still have that buying power in the future.

At some point, I won’t want to manage properties. One option is to let my kids do it and pay them well for the help. They are at least ten years away from that, though. If that doesn’t work out, I might invest in a different real estate platform. I’ve heard some good things about Ark7.

Total Rental Property Income: $1,745

3. Dividend Income

For this section, I look at our stock market investments. I assume we could earn a 2.5% dividend yield on those investments. That assumption is a conservative number that helps us think about what kind of cash we can expect. Getting that 2.5% number should be easy, as we could put all the money in a high-dividend ETF. For example, the high-yield ETF, iShares Core High Dividend ETF (HDV), currently pays a 3.96% yield.

Most bloggers use the actual dividends they earned that month. I have too many accounts, and I’m too “Lazy” to add up their dividends. Even if we aren’t getting the 2.5% number now, we could move the money from growth to dividends if we needed to live off the cash flow. A vast majority of our money is in retirement accounts, and cash flow isn’t essential to us now. I also combine all the taxable and retirement account numbers. It’s too much work to separate them.

Red Sox game! I didn’t include the picture with the kids on the field because I got Lazy when editing their faces out.

We continue to get a profit-sharing check since I bought (a lot of) a company. The company is doing well, and they occasionally give me an extra profit-sharing check. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.

The stock market has been dull lately. It goes up and down a little bit. Over the last month, it didn’t move much. Last month, this number came out to $4187, and this month, it was down to…

Total Dividend-ish Income: $4,150

In January 2017, the dividend income was at $1,180/mo. We’re still around $50,000 a year – enough to live reasonably well, especially if we paid off our mortgage.

For the 113th month in a row (?), we’re looking into estate planning, but they gave us a lot of paperwork to do before we can move forward. I need to contact them and see if there’s some way around it.

Adjusted Passive Income

I used to combine real estate and dividend income into “very close to passive income.” However, now I add up the 50% dogs/blogs, 80% real estate, and 100% dividend income. That gives a more accurate number of what’s truly passive.

Dog/Blogs: $4,478.82 – Adjusted to $2,239.41
Rentals: $1,745 – Adjusted to $1,396.00
Dividends: $4,150 – Remains at $4,150

Dogs/Blogs Blue Line
Rental – Red Line
Dividend – Yellow Line

Total Adjusted Passive Income: $7,785.41

Last month it was $9,297.11. The numbers are down, but I don’t mind. I look at the long-term, and it’s going in the right direction.

This ~$7,785 is nearly $95,000 of passive-ish income annually. That’s almost exactly what all our necessary expenses comes out to. Eventually, the two biggest expenses (mortgages and education costs) will disappear, and we’ll make much more than we need. That means we’ll be able to spend on a lot more fun stuff.

It’s incredibly useful to have different income streams. As making money from blogging becomes more difficult, dog boarding income has grown to supplement it. For a long time, real estate didn’t grow much at all; then, in the last couple of years, it grew a ton. The stock market grew for over a decade from 2010 to 2021 but had a slight setback last year. This year it’s recovered. When something goes down, it seems another thing jumps up.

I’ve been writing for months that dog boarding will probably go down. I felt like we’d travel more or there may be more competition. I didn’t expect the town to target me specifically and attempt to shut me down. Hopefully, it will go down gradually. I will try to be positive because with the other areas coming up, I can tread water for a while.

The chance of all the income streams falling on hard times is low, but anything is possible. If we had another event like the Great Recession in 2008, they’d all be impacted quite a bit. In that case, we’d have to rely more on active income that I’m not reporting here. We might also have to rely on savings for a while.

Kids’ camp version of cooking chef challenge show.

It’s also important to remember that these numbers aren’t “real” because much of the money isn’t liquid. We can’t spend those retirement investments without taxes and penalties. We can only access the equity we have in properties if we sell them or open a HELOC. We can do some things to get to this money, but it only makes sense when my wife retires, and we are in a lower tax bracket.

You’d think we’d feel “rich” having “won” the money game. Most of the time, we don’t feel rich at all. Our social circle tends to have generationally rich people. Nearly every of my son’s classmates lives in a $2-3 million house. Dog boarding is looked down upon in the private school society. However, we are “rich” relative to many people’s circumstances. Money is relative. There’s a lot of value to being able to laugh at emergency bills and make reasonable splurges.

(The blue line represents the total adjusted passive income. The Red Line represents the three-month average.)

The three-month average in August 2021 was $8,856.01. In August 2022, it was $8,101.23. Now, in August of 2023, it is $8,628.71.

It doesn’t look like it’s growing too much. In August of 2021, people were getting vaccines and traveling a ton. That led to a lot of dog boarding in those numbers. All of these numbers are very good, especially adjusted to reflect their passive nature.

None of the numbers here include my wife’s bread-winning day job as a pharmacist or the minor freelance work I’ve been doing over the last few years. This income isn’t passive at all. When my wife retires, we can count her vested military pension as more passive income. It might be worth around $85,000/year and includes access to a good health care plan. A pension is a passive income cheat code. They are so rare nowadays. It gives us a lot of flexibility that most people don’t have.

For now, this active income (including the dog boarding) is the fuel that drives the passive income engine – it allows us to live well, get our kids a top education at a private school, pay off our mortgages, and invest. My income doesn’t match my wife’s, but the flexibility allows me to stretch almost every dollar of our spending. It also allows me the flexibility to bring the kids to school and after-school activities.

Net Worth Update

My net worth updates aren’t fascinating. I don’t share the exact numbers. That’s why it’s just a footnote, not its own article.

Net worth is one of the most critical numbers in personal finance, so it is worth sharing in some way. Showing relative growth can be helpful.

This past month, our net worth was up 0.72%. For the year, it’s up 11.97%. The steak of hitting all-time net worth highs has reached five months. That’s great, but most of it is in Zillow’s evaluation of our primary residence. That’s not useful net worth until the mortage is paid off.

Many bloggers show how much they spent and how much they made during the month. I don’t keep track of all those numbers. Some tools can make it relatively easy. However, tracking overall monthly numbers works best for me. I can look at our liquid cash numbers, which gives me similar information. In the last month, we grew our liquid cash by $3,000. For the year, our liquid money has increased by $35,000.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. If the U.S. government didn’t back it like treasuries or FDIC, I may feel I should account for some uncertainty. I decided that it makes sense to include it. She could have earned a larger immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth.

Let’s end the month with a salute to summer.

It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 17 years. FIRE wasn’t a “thing” back in 2006, but that’s been my goal since the first sentence of this blog.

We naturally are further along in that journey than some younger readers who may be just starting. Many of those readers are saddled with huge student loans we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.

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

Wow, this may be the latest I’ve ever put out a monthly review. Amazon Prime Day threw me a curve ball. I was going to publish this at the end of last week, but I got busy.

We went from the unofficial start of summer in May to full-blown summer in June. However, now that I’m catching up, it seems like summer is half over. It’s upsetting me to think that way, so let’s keep the focus on June.

In June, the kids went out of school for ten days and then right back into school. I sent them to summer school because I’m the ultimate tiger dad. I’m joking! They went back to their school to do theater camp. My oldest loves acting – it was his favorite camp last year. My youngest did stage crew, building and painting sets. He loves that kind of thing, so it was perfect for him.

We started the month with my wife on work travel. I took kids to a charity bingo event to support a friend’s non-profit. The youngest kid had a birthday party to go to, so I had a lunch date with my 10-year-old. Halfway through the date, one his friends’ mothers asked about a playdate. That never happens for him, so we picked up his friend on the back, and played Wii in our finished basement.

We went to a church fundraiser. We had gone since the kids were 3-4. We always get a few books, and my wife wins some wine in a ring toss game. The kids’ school had a big milestone gala and we celebrated my wife’s recent promotion a little too much.

My 9-year-old ended his first baseball season. They had a party at end with a wiffleball game. My 10-year-old had previously decided that baseball wasn’t for him, but had so much fun, he decided to sign up for the fall! There were a billion parties to end the school year. The kids got their report cards – they did awesome!

We went to Block Island for a couple of days. I got taken out to dinner for Father’s Day and my son and I tried octopus. Crazy! (It wasn’t bad, but not great either.)

Finally, we out to a random dinner and my kids found their first threak. They were super excited. This is where you ask, “What’s a threak?” Well, it’s a fork, but with only three prongs. Sometimes, it’s the little things.

Wow, it feels like each day had a new thing. I’m getting tired reliving it, so let’s move on.

Let’s start the new and improved Passive Income report. I’ve streamlined this a bit, so hopefully, it will be a faster, easier read. I’ll try to continue to trim it down through the year.

I used to call it alternative income, but that idea didn’t catch on as it did when I used it back in 2008. Everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math that I’m going to use in this post.

The way I calculate these numbers requires that little explanation . I do things differently to show the journey. Following the progress keeps me motivated. For example, we don’t have much real passive income from our rental properties. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where we are on that journey. Over time, the bank owns less of the properties, and we own more of them. There will be no mortgages when this number gets to 100%, and all that rental income can be used for living expenses.

When calculating the percentage of rental income, I take the rent (minus estimated expenses) and apply it to the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it, with each of you splitting the profits at the end 50/50. If your friend is the bank and it owns 80%, you should only count on 20% of that net rental income. We used to be in that 20% range, but now it’s closer to 75%.

Lazy Man’s Passive Income

I categorize our passive income into three primary sources that are represented mainly in my passive income pyramid. For this report, I ignore the bottom section, “career/job,” – that’s not passive at all. (I have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are a little passive because I can make money even when I’m not immediately tending to them. I can do other money-making activities while I board dogs. When I’m on vacation, some blog money still comes in. I combine real estate and investment income as their separate main sources of very passive income. This way, if you want only to count those, you can do that.

New for this year, my passive income is only going to be 50% of blogging and dog-sitting income, 80% of real estate, and 100% of dividend income. That rewards types of income that are truly passive and punishes my quasi-passive sources like blogging.

1. Blogging + Dog Sitting Income

There is always a high demand for dog boarding in June. Everyone wants to travel and they leave their dogs behind with me. A lot of tourists are coming here to Newport, RI who leave their dogs while they visit the beach or mansions.

The only problem is that we travel in June. Our June travel was cut a little short because we couldn’t get our preferred bed and breakfast on Block Island. We were late and had to settle for a different place that had less availability. I learned my lesson and booked our stay for next year already.

We ended up making 65% more money than last June. Our June was pretty good last year, so this was a nice surprise.

(You get a dog. You get a dog. Everyone gets a dog.)

The blogging for June wasn’t too good. I’ve noticed a lot of financial bloggers are saying that their income is way down. At least I know it’s not just that I’m being too “Lazy.” I also got stiffed out of a big check when an advertiser ghosted me. They worked hard and wasted a lot of both of our time to get a couple of days of free advertising.

In May, “dogs and blogs” combined for $5,938.04. In June, it was:

Total Blogging + Dog Sitting Income: $6,544.02

The blue line is the monthly income. The red line is the 3-month average.

My kids help with the dog sitting. My 10-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 9-year-old was a little slower to develop dog skills, but he’s carved out a household niche catering to the smaller dogs – he just loves them.

Their help means I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned, they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. Kids should start a Roth IRA as soon as possible.

2. Rental Property Income

The real estate market is on fire again. I guess the home builders haven’t caught up with demand yet? Zillow said our rental properties were worth more than $20,000 of what they were last month.

Last month we owned 77.14% of our properties, but this month we are up to 78.56%. The big gain is due to increase in overall equity. For the first six months of the year, our two properties are up $50,000.

If we owned both of our rental properties with no mortgages (100% of the equity), we’d make about $2,218 a month after insurance, property taxes, condo fees, and estimated condo maintenance. I know the $2218 number is kind of specific, but that’s the way the rents came out to be with the fraction taking away the condo maintenance.

If you multiply our rents of $2,218 by the amount of equity we have, 78.56%, you get $1,742/mo. in estimated passive-ish income. Last month it was $1,721/mo. This month we added $23 in passive income. This number usually moves very slowly, so $23 is actually a very good number.

(Sunset at our hotel in Block Island)

When I started tracking rental property income this way (January 2017), we only owned 36.4% of the properties, and the properties had lower rents. The math worked out to $1,174 of passive income back then. In six years, it grew a ton. We sold off a property to invest it in the stock market and still have about 50% more income after expenses.

Eventually, these properties should bring about $25K-30K after expenses. Rent is inflation resistant as it’ll rise over time. That means that even though this is $25K in today’s dollars, it will still have that buying power in the future.

Total Rental Property Income: $1,742

3. Dividend Income

For this section, I look at our stock market investments. I assume we could earn a 2.5% dividend yield on those investments. That assumption is a conservative number that helps us think about what kind of cash we can expect. It should be easy to get that 2.5% number as we could simply put all of our portfolios in a high-dividend ETF. For example, the high-yield ETF, iShares Core High Dividend ETF (HDV), is currently paying a 4.26% yield.

Most bloggers use the actual dividends they earned that month. I have quite a few accounts, and I’m too “Lazy” to add up the dividends on them. Even if we aren’t getting the 2.5% number now, we could always move the money around from growth to dividends if we needed to live off the cash flow. A vast majority of our money is in retirement accounts, so cash flow isn’t important to us now. I also combine all the taxable and retirement account numbers. It’s too much work to separate them out.

We continue to get a profit-sharing check since I bought (a lot of) a company. The company is doing well, and they occasionally throw an extra profit-sharing check to me. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.

(At the bingo event, a vendor was selling Dorito bag nachos, which I had never heard of before. She put a scoop of taco meat and cheese in the bag and… perfect kid dinner.)

The markets are doing well. It feels like technology is really driving things. Maybe it’s another year of putting COVID behind us. Maybe it’s the banks settling down. Maybe it’s averting the debt ceiling crash. Maybe it’s a little of all the above.

For the first time in a couple of months, my wife has been home. It’s great to have her back. However, more relevant to this section is that I don’t have to estimate her numbers.

Total Dividend-ish Income: $4,138.00

Last month it was $4,111.

In January 2017, the dividend income was at $1,180/mo. Now, we’re almost at $50,000 a year – enough for us to live fairly well, especially if we paid off our mortgage.

For the 78th month in a row (?), we’re looking into estate planning, but they gave us a lot of paperwork to do before we can move forward. I’ve got to finish our taxes first before I can look into this. We made a lot of progress on taxes, so hopefully we can just finish off a few things and have a productive second half of the year.

Adjusted Passive Income

I used to combine real estate and dividend income into “very close to passive income.” However, now I’ll simply add up the 50% dogs/blogs, 80% real estate, and 100% dividend income. This makes things a lot easier.

Dog/Blogs: $6,544.02 – Adjusted to $3,272.01
Rentals: $1,742 – Adjusted to $1,393.60
Dividends: $4,138.00 – Remains at $4,138.00

Dogs/Blogs Blue Line
Rental – Red Line
Dividend – Yellow Line

Total Adjusted Passive Income: $8,803.61

Last month it was $8,456.82. We had a big month of growth in dog boarding, but the rentals and dividends grow too.

This $8,800 is about $105,000 of passive-ish income annually. That’s almost exactly what we need to live on all our necessary expenses (including private school and mortgages). Eventually the two biggest expenses will go away and we’ll make a lot more than we really need. I guess that means we’ll be able to spend on a lot more fun stuff.

It’s incredibly useful to have different income streams. As making money from blogging becomes more difficult, dog boarding income has grown to supplement it. For a long time, real estate didn’t grow much at all; then, in the last couple of years, it grew a ton. The stock market grew for more than a decade from 2010 to 2021 but had a little setback last year. When something goes down, it seems another thing jumps up.

(When you live on an island, the end of year school parties tend to be at the beach)

Over a span of a few years, the dog boarding income will probably go down. We’ll travel more or perhaps there will be more competition. Maybe I’ll just want to take care of fewer dogs.

The chance of all the income streams falling on hard times is low, but anything is possible. If we had another event like the Great Recession in 2008, they’d all be impacted quite a bit. In that case, we’d have to rely more on active income that I’m not reporting here. We might also have to rely on savings for a while. Dog boarding went away completely with COVID, so something like that can be just around the corner.

It’s also important to remember that these numbers aren’t “real” because much of the money isn’t liquid. We can’t spend those retirement investments without taxes and penalties. We can’t access the equity we have in properties without selling them or opening a HELOC. We can do some things to get to this money, but it only makes sense when my wife retires and we are in a lower tax bracket.

You’d think we’d feel “rich” having “won” the money game. Most of the time we don’t feel rich at all. Our social circle tends to have generationally rich people. Nearly every of my son’s classmates lives in a $2-3 million dollar house. Dog boarding is definitely looked down upon in the private school society. However, we are “rich” relative to many people’s circumstances. Money is relative. There’s a lot of value to being able to laugh at emergency bills and make reasonable splurges.

(The blue line represents the total adjusted passive income. The Red Line represents the three-month average.)

The three-month average in June 2021 was $7,504.23. In June 2022, it was $8,665.62. Now in May of 2023, it is $9,125.14. It’s good to see that the numbers are growing in the right direction. For most of this year, it was going in the wrong direction.

None of the numbers here include my wife’s bread-winning day job as a pharmacist or the minor freelance work I’ve been doing over the last few years. This income isn’t passive at all. When my wife retires, we can count her vested military pension as more passive income. It looks like it might be worth around $85,000/yr. and includes access to a good health care plan. A pension is a passive income cheat code. They are so rare nowadays. It gives us a lot of flexibility that most people don’t have.

For now, this active income (including the dog boarding) is the fuel that drives the passive income engine – it allows us to live well, get our kids a top education at a private school, pay off our mortgages, and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretch almost every dollar in much of our spending. It also allows me the flexibility to bring the kids to school and to after-school activities.

Net Worth Update

My net worth updates aren’t fascinating as I don’t share the exact numbers. That’s why it’s just a footnote, not its own article.

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

This past month, our net worth was up 3.14%. For the year it’s up 10.46%. This is our third straight month of reaching an all-time net worth.

(The traditional annual Block Island labyrinth walk)

Many bloggers show how much they spent and how much they made during the month. I don’t keep track of all those numbers. I know there are some tools that can make it relatively easy. However, I find that tracking monthly numbers works best for me. I can look at our liquid cash numbers which gives me similar information. In the last month, we grew our liquid cash by $10,000. For the year, we’ve only grown our liquid $20,000. We’re spending a lot of money on home improvements.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. If the U.S. government didn’t back it like treasuries or FDIC, I may feel I should account for some uncertainty. I decided that it does make sense to include it. She could have earned a larger immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth.

It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 17 years. FIRE wasn’t a “thing” back in 2006, but that’s been my goal since the first sentence of this blog.

We naturally are further along in that journey than some younger readers who may be just starting. Many of those readers are saddled with huge student loans that we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.

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

Summer is unofficially here! The kids have just a handful days left of school. This is a great time of year for them. School is just focusing on the fun ways to review lessons. Once they are out of school we’ll be heading to Block Island and then camps will get going.

I’ve got to figure out some fun ways to keep them engaged while learning. We’ve been rewatching Netflix’s Brainchild which they like a lot. I also picked up a Galaxy S6 Lite Tab(let) for my artistic son. I had an S7+ but it fell in the inflatable hot tub and died. I guess they don’t make tablets water proof like phones. That’s an expensive lesson learned. The S6 Lite is very good though. It’s smaller which is perfect for him. Of course the big selling point for me is that it includes a pen for drawing. It may seem expensive to buy a 3-year-old tablet for $250, but I don’t know where else you can a great drawing tablet for cheaper.

May was a weird month. On the way back from Mother’s Day brunch, I got a text from the president of a local business networking group I’m a part of. One of the members had died in his sleep. He was a professional physical trainer and probably the most health-focused person I’ve ever encountered. I wouldn’t bring anything with sugar in it to the meetings because I knew I’d get a disapproving look. A couple of days before he died, I asked him how I would get started with working on him. He had heart problems in his past, which is why he was so focused on health. However, he didn’t like doctor’s and modern medicine much. There’s a lot of value in replacing medication with diet and exercise, but in this case, it would have been better if he had been on the medication.

What else happened in May? Our third grader performed in the school play. (We just got some commercials he was in for another school project.) He also showed off his state project. The kids do a deep dive into one state. He chose Texas and my other kid chose California last year. They are almost complete opposites. We also sent to the school’s art festival, where we saw a ton of art that they had been working on throughout the year. Some of the kids put on a special performance. My kids passed on doing that – they are busy enough!

Third grade play! They get a lot better each year. I don’t think I had drama until middle school. Maybe that’s why don’t have a YouTube channel.

We all went to the new Guardians of the Galaxy night-before preview showing. The other ones were my kids’ favorite movies ever so this was a special treat.

Newport hosted the only stop of the Volvo Ocean Race in the United States, so we went to the sailboats. It’s like an small Olympic Village with something like a half million people showing up for the 10 day event.

I did a major cleaning of the garage while my wife away on travel. It was a good surprise for her to come back to.

Yikes, that’s a lot. Let’s start the new and improved Passive Income report. I’ve streamlined this a bit, so hopefully, it will be a faster, easier read. I’ll try to continue to trim it down through the year.

I used to call it alternative income, but that idea didn’t catch on as it did when I used it back in 2008. Everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math that I’m going to use in this post.

The way I calculate these numbers requires that little explanation . I do things differently to show the journey. Following the progress keeps me motivated. For example, we don’t have much real passive income from our rental properties. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where we are on that journey. Over time, the bank owns less of the properties, and we own more of them. There will be no mortgages when this number gets to 100%, and all that rental income can be used for living expenses.

When calculating the percentage of rental income, I take the rent (minus estimated expenses) and apply it to the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it, with each of you splitting the profits at the end 50/50. If your friend is the bank and it owns 80%, you should only count on 20% of that net rental income. We used to be in that 20% range, but now it’s closer to 75%.

Lazy Man’s Passive Income

I categorize our passive income into three primary sources that are represented mainly in my passive income pyramid. For this report, I ignore the bottom section, “career/job,” – that’s not passive at all. (I have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are a little passive because I can make money even when I’m not immediately tending to them. I can do other money-making activities while I board dogs. When I’m on vacation, some blog money still comes in. I combine real estate and investment income as their separate main sources of very passive income. This way, if you want only to count those, you can do that.

New for this year, my passive income is only going to be 50% of blogging and dog-sitting income, 80% of real estate, and 100% of dividend income. That rewards types of income that are truly passive and punishes my quasi-passive sources like blogging.

1. Blogging + Dog Sitting Income

May is always a “meh” month when it comes to dog boarding. April and Febraury’s school vacation bring us a lot of business. In March we often travel for 10-12 days, while our kids are on school vacation, so business is down. May is probably the most average month. That’s exactly what earnings looked like too.

Just what I didn’t need, another dog. Fortunately, this husky is just a kid in a costume for the school’s Crazy Hat Day.

Blogging also was very good in May. I almost had the same as April’s highs. One advertiser is stiffing me on the payments and I feel she’s going to ghost me forever. Oh well, I guess she stole a few days of advertising, which isn’t too big of a deal.

In April, “dogs and blogs” combined for $9,598.76. In May, it was:

Total Blogging + Dog Sitting Income: $5,938.04

The blue line is the monthly income. The red line is the 3-month average.

I would be very happy with nearly $6,000 from dogs and blogs. So far it looks like June is going to be the same.

My kids help with the dog sitting. My 10-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 9-year-old was a little slower to develop dog skills, but he’s carved out a household niche catering to the smaller dogs – he just loves them.

Their help means I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned, they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. Kids should start a Roth IRA as soon as possible.

2. Rental Property Income

The real estate market is thriving again. I guess it is house buying season again. People seem to have shrugged off the high mortgage rates. Zillow said our properties are worth $8,000 more than last month. We also knocked $800 off of the mortgages. That combination means that we went from 77.14% ownership of our properties to 77.63% ownership.

We were also able to increase our rents a little bit. I wanted to do more, but my wife thought it was too much at one time. Since we don’t really need the money, I agreed with her. However, I’m starting to wonder if we’d be better off just selling the properties and putting the money in the bank or market. If we can make as much money that way, why trouble ourselves with being landlords?

One of the Volvo Ocean Race sailboats. Imagine going around the world (or close to it) in a sailboat?

If we owned both of our rental properties with no mortgages (100% of the equity), we’d make about $2,218 a month after insurance, property taxes, condo fees, and estimated condo maintenance. I know the $2218 number is kind of specific, but that’s the way the rents came out to be with the fraction taking away the condo maintenance.

If you multiply our rents of $2,218 by the amount of equity we have, 77.63%, you get $1,721/mo. in estimated passive-ish income. Last month it was $1,697/mo. This month we added $24 in passive income.

When I started tracking rental property income this way (January 2017), we only owned 36.4% of the properties, and the properties had lower rents. The math worked out to $1,174 of passive income back then. In six years, it grew a ton. We sold off a property and still have about 50% more income after expenses

Eventually, these properties should bring about $25,000 after expenses. Rent is inflation resistant as it’ll rise over time. That means that even though this is $25,000 in today’s dollars, it will still have that buying power in the future.

Total Rental Property Income: $1,721

3. Dividend Income

For this section, I look at our stock market investments. I assume we could earn a 2.5% dividend yield on those investments. That assumption is a conservative number that helps us think about what kind of cash we can expect. It should be easy to get that 2.5% number as we could simply put all of our portfolios in a high-dividend ETF. For example, the high-yield ETF, iShares Core High Dividend ETF (HDV), is currently paying a 4.06% yield.

Most bloggers use the actual dividends they earned that month. I have quite a few accounts, and I’m too “Lazy” to add up the dividends on them. Even if we aren’t getting the 2.5% number now, we could always move the money around from growth to dividends if we needed to live off the cash flow. A vast majority of our money is in retirement accounts, so cash flow isn’t important to us now. I also combine all the taxable and retirement account numbers. It’s too much work to separate them out.

They usually don’t let my kids get together with karate, but for one class, they randomly made an exception.

We continue to get a profit-sharing check since I bought (a lot of) a company. The company is doing well, and they occasionally throw an extra profit-sharing check to me. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.

The stock market is doing really well. It seems we averted the debt ceiling problem and the markets love it. Like last month, my wife has been traveling this month. That means that I just have to estimate her numbers a bit. I’m good at estimating her numbers because the investments are all in index funds.

Total Dividend-ish Income: $4,111

Last month it was $3,958.

In January 2017, the dividend income was at $1,180/mo. Now, we’re almost at $50,000 a year – enough for us to live fairly well, especially if we paid off our mortgage.

For the 78th month in a row (?), we’re looking into estate planning, but they gave us a lot of paperwork to do before we can move forward. I’ve got to finish our taxes first before I can look into this. I did make some progress on taxes in the last month.

Adjusted Passive Income

I used to combine real estate and dividend income into “very close to passive income.” However, now I’ll simply add up the 50% dogs/blogs, 80% real estate, and 100% dividend income. This makes things a lot easier.

Dog/Blogs: $5,938.04 – Adjusted to $2,969.02
Rentals: $1,721 – Adjusted to $1,376.80
Dividends: $4,111 – Remains at $4,111

Dogs/Blogs Blue Line
Rental – Red Line
Dividend – Yellow Line

Total Adjusted Passive Income: $8,456.82

Last month it was $10,114.98. That’s what happens when the big month of April dog boarding is over. It seems like a big change for something that should be “passive.” Nonetheless, I like how it is back above the $8,000 mark. It’s funny, but I was reviewing last month’s report and the dogs we nice and easy. This month when we made less we’ve had more difficult dogs. They chewed up a couple of pairs of shoes and just have been a lot of hands-on attention. It’s to know what level dogs we’ll have.

This $8,500-ish number is about $100,000 of passive-ish income annually. That’s almost exactly what we need to live on with private school and mortgages. Eventually those big expenses will go away. Over time, the dog boarding income will probably go down, but the investment income will go up. In the meantime, I hope to keep it right were it is.

It’s incredibly useful to have different income streams. As making money from blogging becomes more difficult, dog boarding income has grown to supplement it. For a long time, real estate didn’t grow much at all; then, in the last couple of years, it grew a ton. The stock market grew for more than a decade from 2010 to 2021 but had a little setback last year. When something goes down, it seems another thing jumps up. Over time we are making consistent progress.

The chance of all the income streams falling on hard times is low, but anything is possible. If we had another event like the Great Recession in 2008, they’d all be impacted quite a bit. In that case, we’d have to rely more on active income that I’m not reporting here. We might also have to rely on savings for a while. Dog boarding went away completely with COVID, so something like that can be just around the corner.

It’s also important to remember that these numbers aren’t “real” because much of the money isn’t liquid. We can’t spend those retirement investments without taxes and penalties. We can’t access the equity we have in properties without selling them or opening a HELOC. We can do some things to get to this money, but it only makes sense when my wife retires and we are in a lower tax bracket.

You’d think we’d feel “rich” having “won” the money game. Most of the time we don’t feel rich at all. Our social circle tends to have generationally rich people. Nearly every of my son’s classmates lives in a $2 million dollar house. Dog boarding is definitely looked down upon in the private school society. However, we are “rich” relative to many people’s circumstances. Money is relative. There’s a lot of value to being able to laugh at emergency bills and make reasonable splurges.

(The blue line represents the total adjusted passive income. The Red Line represents the three-month average.)

The three-month average in May 2021 was $6,858.66. In May 2022, it was $8,675.21. Now in May of 2023, it is $8,301.85. I was curious as to why it is going to down, but it seems like the sale of the rental property last year made the difference. We’ve put the money into the stock market, but I guess it lead to more passive-ish income even with my adjustments. It’s reassuring that it is close.

None of the numbers here include my wife’s bread-winning day job as a pharmacist or the minor freelance work I’ve been doing over the last few years. This income isn’t passive at all. When my wife retires, we can count her vested military pension as more passive income. It looks like it might be worth around $68,500/yr. and includes access to a good health care plan. A pension is a passive income cheat code. They are so rare nowadays. It gives us a lot of flexibility that most people don’t have.

For now, this active income (including the dog boarding) is the fuel that drives the passive income engine – it allows us to live well, get our kids a top education at a private school, pay off our mortgages, and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretch almost every dollar in much of our spending. It also allows me the flexibility to bring the kids to school and to after-school activities. They are getting spoiled, but I don’t think they know it. They probably think that’s just the norm.

Net Worth Update

My net worth updates aren’t fascinating as I don’t share the exact numbers. That’s why it’s just a footnote, not its own article.

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

This past month, our net worth was up 3.16%. For the year it’s up 7.53%. We reached an all-time high in net worth last month and it just gets bigger now.

Many bloggers show how much they spent and how much they made during the month. I don’t keep track of all those numbers. I know there are some tools that can make it relatively easy. However, I find that tracking monthly numbers works best for me. I can look at our liquid cash numbers which gives me similiar information. In the last month, we grew our liquid cash may have dropped by $2,000. I write “may have” because I’m not counting my wife’s accounts due to her travel. I’m sure her accounts have more money and it may be positive.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. If the U.S. government didn’t back it like treasuries or FDIC, I may feel I should account for some uncertainty. I decided that it does make sense to include it. She could have earned a larger immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth.

It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 16 years. FIRE wasn’t a “thing” back in 2006, but that’s been my goal since the first sentence of this blog.

We naturally are further along in that journey than some younger readers who may be just starting. Many of those readers are saddled with huge student loans that we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.

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

Spring is in full effect. Some days, dare I say, feel like summer? I’m going back and forth between writing this and setting up our inflatable hot tub.

The last month has been crazy busy and it’s not looking to let up at all. The kids’ school have them doing everything from plays, concentrated theme study, and an arts extravaganza. Next week they have four field trips planned. Throw in a couple of birthdays, Little League, and it’s keeping us on our toes. Did I mention that my wife is traveling this week?

Sometimes I wonder why I’m not moving forward on my annual goals. I have to tell myself that this is why.

The Little League debut for my 9-year-old. He’s one of two kids on the team with no previous baseball experience, but he has about a .400 OBP due to his ability to draw walks. Might make contact this weekend!

In March we went bowling a few times. It’s cheap and easy at the local military base. The kids also got their school mid-term reports and they were all fantastic – even by my lofty tiger dad standards. The youngest finished up his Lego Robotics class and the parents gave me a $100 Visa Gift card for co-coaching it. It was completely unnecessary, but appreciated. We also had our annual Easter egg hunt. I can splice together 5-6 years of Easter Egg hunts now and make it into a full hour special. Maybe it will make good background watching like our photo frame.

My wife ran two things in April. First, she ran her first marathon! I’m so proud! Second, she ran a city Free Recycling event. It’s kind of like the online Freecycle or Buy Nothing Facebook groups, but everyone does it in person in public. It’s in conjunction with the town’s Earth Day committee and Cub Scouts. So many people got great stuff. We got a garage of unwanted stuff that we donated or just outright trashed. My wife did much of that stuff as I had the dogs and even a sick kid to deal with. The good news is that our garage went from a terrible mess, to an unmitigated disaster, and then to minor disorganization. It’s great overall progress in a month.

Let’s start the new and improved Passive Income report. I’ve streamlined this a bit, so hopefully, it will be a faster, easier read. I’ll try to continue to trim it down through the year.

I used to call it alternative income, but that idea didn’t catch on as it did when I used it back in 2008. Everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math that I’m going to use in this post.

The way I calculate these numbers requires that little explanation . I do things differently to show the journey. Following the progress keeps me motivated. For example, we don’t have much real passive income from our rental properties. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where we are on that journey. Over time, the bank owns less of the properties, and we own more of them. There will be no mortgages when this number gets to 100%, and all that rental income can be used for living expenses.

When calculating the percentage of rental income, I take the rent (minus estimated expenses) and apply it to the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it, with each of you splitting the profits at the end 50/50. If your friend is the bank and it owns 80%, you should only count on 20% of that net rental income. We used to be in that 20% range, but now it’s closer to 75%.

Lazy Man’s Passive Income

I categorize our passive income into three primary sources that are represented mainly in my passive income pyramid. For this report, I ignore the bottom section, “career/job,” – that’s not passive at all. (I have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are a little passive because I can make money even when I’m not immediately tending to them. I can do other money-making activities while I board dogs. When I’m on vacation, some blog money still comes in. I combine real estate and investment income as their separate main sources of very passive income. This way, if you want only to count those, you can do that.

New for this year, my passive income is only going to be 50% of blogging and dog-sitting income, 80% of real estate, and 100% of dividend income. That rewards types of income that are truly passive and punishes my quasi-passive sources like blogging.

1. Blogging + Dog Sitting Income

April is always a great month for dog boarding. The school vacation means that we often have no vacancy. After last Apri got so busy, I raised prices. It hasn’t slowed business at all.

My 10-year-old in a dog stand-off. They raced around the house like this for about five minutes.

Blogging also was good in April. For the first time this year, we passed last year’s average month. Blogging is tough nowadays and the money is trending down, down, down. We’ll celebrate it for one month and hope it’s the start of a turnaround.

In March, “dogs and blogs” combined for $2,073.09. In April, it was:

Total Blogging + Dog Sitting Income: $9,598.76

The blue line is the monthly income. The red line is the 3-month average. Look at that drop!

That was almost three times our average number for the year. It’s not surprising. It’s just how the seasonality of how the income streams work out. Nonetheless, after a March that was about half of 2022’s numbers, pulling in a big number in April makes me feel a lot better.

My kids help with the dog sitting. My 10-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 9-year-old was a little slower to develop dog skills, but he’s carved out a household niche catering to the smaller dogs – he just loves them.

Their help means I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned, they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. Kids should start a Roth IRA as soon as possible.

2. Rental Property Income

It looks like real estate is on the way up again. It hibernated over the winter while mortgage rates skyrocketed. However, it seems that people are getting used to the rates and have started shopping again. The total value of properties went up about $10,000 and we paid off about a $1,000 in mortgages.

In the last month, we went from 76.53% to 77.14% ownership of the equity in our properties. The move of more than half a percent is very good for just one month. If we owned both of our rental properties with no mortgages (100% of the equity), we’d make about $2,200 a month after insurance, property taxes, condo fees, and estimated condo maintenance.

If you multiply our rents of $2,200 by the amount of equity we have, 77.14%, you get $1,697/mo. in estimated passive income. Last month it was $1,684/mo. This month we added $13 in passive income. It doesn’t seem like much. We made a lot better gains when we had another rental property.

We were going out for dinner and popped into a local arcade. My son saw some friends and ended up beating the scammy claw machine

When I started tracking rental property income this way (January 2017), we only owned 36.4% of the properties, and the properties had lower rents. The math worked out to $1,174 of passive income back then. In six years, it grew a ton.

Eventually, these properties should bring about $25,000 after expenses. Rent is inflation resistant as it’ll rise over time. That means that even though this is $25,000 in today’s dollars, it will still have that buying power in the future.

Total Rental Property Income: $1,697

3. Dividend Income

For this section, I look at our stock market investments. I assume we could earn a 2.5% dividend yield on those investments. That assumption is a conservative number that helps us think about what kind of cash we can expect. It should be easy to get that 2.5% number as we could simply put all of our portfolios in a high-dividend ETF. For example, the high-yield ETF, iShares Core High Dividend ETF (HDV), is currently paying a 4.30% yield.

With today’s interest rates, my assumption of a 2.5% yield seem ridiculously low.

Most bloggers use the actual dividends they earned that month. I have quite a few accounts, and I’m too Lazy to add up the dividends on them. Even if we aren’t getting the 2.5% number now, we could always move the money around from growth to dividends if we needed to live off the cash flow. A vast majority of our money is in retirement accounts, so cash flow isn’t important to us now. I also combine all the taxable and retirement account numbers. It’s too much work to separate them out.

We continue to get a profit-sharing check since I bought (a lot of) a company. The company is doing well, and they occasionally throw an extra profit-sharing check to me. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.

My 9-year-old explains how renewable energy works at the Lego competition.

This month I recorded my numbers in our shared spreadsheet and my stocks were down. My wife is traveling so she hasn’t been able to do her numbers. I waited another day and the market had a big positive day – up around 2%. Since I can’t get her exact numbers, I estimated using the growth of the S&P 500. That extra 2% jump was enough to make her stocks move up (in my estimation). In any case, it was enough to push everything in the right direction.

Total Dividend-ish Income: $3,958.00

Last month it was $3,950.

In January 2017, the dividend income was at $1,180/mo. Now, we’re almost at $50,000 a year – enough for us to live fairly well, especially if we paid off our mortgage.

For the 78th month in a row (?), we’re looking into estate planning, but they gave us a lot of paperwork to do before we can move forward. I’ve got to finish our taxes first before I can look into this.

Adjusted Passive Income

I used to combine real estate and dividend income into “very close to passive income.” However, now I’ll simply add up the 50% dogs/blogs, 80% real estate, and 100% dividend income. This makes things a lot easier.

Dog/Blogs: $9,598.76 – Adjusted to $4,799.38
Rentals: $1,697 – Adjusted to $1,357.60
Dividends: $3,958 – Remains at $3,950

Dogs/Blogs Blue Line
Rental – Red Line
Dividend – Yellow Line

Total Adjusted Passive Income: $10,114.98

Last month it was $6,333.75. That’s a big month. Of course it was driven by the dog boarding which isn’t passive, but at least it is adjusted for that. As I type this, I’ve got a few dogs and they are very quiet and easy to take care of. It’s not always this easy, but this is a reminder that it can be.

This $10K+ number is about $120,000 of passive income annually. (Easy math this month!) That’s enough to pay all our bills now, even with private school and mortgages. Over time, the dog boarding income will probably go down, but the investment income will go up. In the meantime, I hope to keep this at a monthly number of around $8k and an annual around 100k. In the long run, that would be more than we’d need to live on.

It’s incredibly useful to have different income streams. As blogging income becomes more difficult, dog boarding income has grown to supplement it. For a long time, real estate didn’t grow much at all; then, in the last couple of years, it grew a ton. The stock market grew for more than a decade from 2010 to 2021 but had a little setback last year. When something goes down, it seems another thing jumps up. Over time we are making consistent progress.

Night bowling is a ton of fun. It’s too bad that it’s only for an hour as the bowling at the military base closes at 8PM nowadays.

The chance of all the income streams falling on hard times is low, but certainly not impossible. If we had another event like the Great Recession in 2008, they’d all be impacted quite a bit. In that case, we’d have to rely more on active income that I’m not reporting here. We might also have to rely on savings for a while. Also, dog boarding went away completely with COVID, so something like that can be just around the corner.

It’s also important to remember that these numbers aren’t “real” because much of the money isn’t liquid. We can’t spend those retirement investments without penalties. We can’t access the equity we have in properties without selling them or opening a HELOC. We can do some things to get to this money, but it only makes sense when my wife retires and we are in a lower tax bracket.

You’d think we’d feel “rich” having “won” the money game. Most of the time we don’t feel rich at all. Our social circle tends to have generationally rich people. Dog boarding is definitely looked down upon in the private school society. However, we are “rich” relative to many people’s circumstances. Money is relative. There’s a lot of value to being able to laugh at emergency bills and make reasonable splurges.

(The blue line represents the total adjusted passive income. The Red Line represents the three-month average.)

The three-month average in April 2021 was $6,311.55. In April 2022, it was $8,451.51. Now in April of 2023, it is $8,169.29. Because our vacations, dog boarding, and blogging are seasonal I like to compare the same months. We had our first downward trend (2023 was less than 2022) last month and it continues this month. The gap between them is getting smaller though. At least it’s above that $8,000 goal that gets us around 100k a year.

None of the numbers here include my wife’s bread-winning day job as a pharmacist or the minor freelance work I’ve been doing over the last few years. This income isn’t passive at all. When my wife retires, we can count her vested military pension as more passive income. It looks like it might be worth around $68,500/yr. and includes access to a good health care plan. A pension is a passive income cheat code. They are so rare nowadays. It gives us a lot of flexibility that most people don’t have.

For now, this active income (including the dog boarding) is the fuel that drives the passive income engine – it allows us to live well, get our kids a top education at a private school, pay off our mortgages, and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretch almost every dollar in much of our spending. It also allows me the flexibility to bring the kids to school and to after-school activities.

Net Worth Update

My net worth updates aren’t fascinating as I don’t share the exact numbers. That’s why it’s just a footnote, not its own article.

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

This past month, our net worth was up 1.39%. For the year it’s up 4.23%. Finally, after nearly a full year, we are back to our all-time high net worth. Our money situation is better than it has ever been.

The fourth grade had a movie matinee at their school gym. No one watched the movie. They all ran around. Siblings were allowed and it’s a rare moment when my 9-year-old and 10-year-old get along well together.

Many bloggers show how much they spent and how much they made during the month. I don’t keep track of all those numbers. I know there are some tools that can make it relatively easy. However, I find that tracking monthly numbers works best for me. I can look at our liquid cash numbers which gives me similiar information. In the last month, we grew our liquid cash by over $7,000. That’s a great month! After some expensive travel and home renovations this year, our liquid cash is up $4,000 for the year.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. If the U.S. government didn’t back it like treasuries or FDIC, I may feel I should account for some uncertainty. I decided that it does make sense to include it. She could have earned a larger immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth.

It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 16 years. FIRE wasn’t a “thing” back in 2006, but that’s been my goal since the first sentence of this blog.

We naturally are further along in that journey than some younger readers who may be just starting. Many of those readers are saddled with huge student loans that we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.

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

Who is ready for Spring! We’ve got the first quarter in the books. Tax day is just a few days away. We’re filing for an extension as we do nearly every year. Our tax people need the numbers a month ahead of time. Our kids school is always then, and I’m not the type of person who is going to get it done six weeks ahead of time. With two corporations (blogging and real estate) it’s more complicated than most people’s taxes.

Much of March was spent on our southern California vacation. After focusing on accumulation phase of money for years, we’re flipping the switch to spending more. That means more elaborate trips as well as hiring contractors for finishing a basement, painting the house, and new carpet. This was a month where we stress tested our money.

Since I’ve written about that vacation, I won’t write much else here. I’ll include a few pictures, but not too many – looking at other people’s vacation pictures gets old fast. The other big news of the month was our dog of 14 years crossing the rainbow bridge. I’ve got an idea for a full blog post about that. I promise it will be different than almost any other ode to a dog that you’ll read. I’ll also keep it on theme.

Other than that, my oldest got his red belt in karate. He’s about a year away from a black belt. My younger son is about 6 months behind him. The kids also got to be in the Newport St. Patrick’s Day parade representing the Cub Scouts. It’s a very big deal as this area has a huge Irish population. Think of it as a combination of College Spring Break and Mardi Gras, but at 9 AM.

The kids were supposed to show off their uniform, but it was very cold. They took turns wearing my coat, which – of course, was comically and ridiculously too large.

Let’s start the new and improved Passive Income report. I’ve streamlined this a bit, so hopefully, it will be a faster, easier read. I’ll try to continue to trim it down through the year.

I used to call it alternative income, but that idea didn’t catch on as it did when I used it back in 2008. Everyone loves “passive income” better. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you may have some questions about the math that I’m going to use in this post.

The way I calculate these numbers requires that little explanation . I do things differently to show the journey. Following the progress keeps me motivated. For example, we don’t have much real passive income from our rental properties. We still have mortgages to pay off. Instead, I calculate the percentage of equity we have to show where we are on that journey. Over time, the bank owns less of the properties, and we own more of them. There will be no mortgages when this number gets to 100%, and all that rental income can be used for living expenses.

When calculating the percentage of rental income, I take the rent (minus estimated expenses) and apply it to the portion of equity we own. Think of it like you and a friend owning a property 50/50. This would be how you’d handle it, with each of you splitting the profits at the end 50/50. If your friend is the bank and it owns 80%, you should only count on 20% of that net rental income. We used to be in that 20% range, but now it’s closer to 75%.

Lazy Man’s Passive Income

I categorize our passive income into three primary sources that are represented mainly in my passive income pyramid. For this report, I ignore the bottom section, “career/job,” – that’s not passive at all. (I have some income in that area, but that’s not the focus of this report.) I combine dog-sitting and blogging into one section of my “somewhat active” income. They are a little passive because I can make money even when I’m not immediately tending to them. I can do other money-making activities while I board dogs. When I’m on vacation, some blog money still comes in. I combine real estate and investment income as their separate main sources of very passive income. This way, if you want only to count those, you can do that.

New for this year, my passive income is only going to be 50% of blogging and dog-sitting income, 80% of real estate, and 100% of dividend income. That rewards types of income that are truly passive and punishes my quasi-passive sources like blogging.

1. Blogging + Dog Sitting Income

March is always a poor month for dog boarding. It’s impossible to board dogs at home while we travel for two weeks. Besides that, there are no big holidays and Rhode Island’s public schools don’t have vacations. (During school vacations people tend to travel leaving their dogs behind for me to board.)

One of the last pictures I took of Jake. He’s at the vet about to get acupuncture. Always smiling!

I also didn’t blog much in March. Not only that, but I set up a vacation responder on my email, so I missed all advertising deals. There’s a silver lining, though. Those potential deals have been rekindled in April and we’re off to a fast start this month.

In February, “dogs and blogs” combined for $5,521.50. In March, it was:

Total Blogging + Dog Sitting Income: $2,073.09

The blue line is the monthly income. The red line is the 3-month average. Look at that drop!

Ouch, that’s not a good number at all. However, given the circumstances, I’ll have to settle for it. Last March, when we had the same obstacles, this number was $4,295.77. I’d be worried if April wasn’t already higher. With current dog bookings and blogging income already earned I’m looking at around $7,000. There’s a possibility or cancellations and advertisers not paying, but it’s looking like it will be very good month.

My kids help with the dog sitting. My 10-year-old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He’s spending more time in front of the clients as a helper at pick-ups and drop-offs. My 9-year-old was a little slower to develop dog skills, but he’s carved out a household niche catering to the smaller dogs – he just loves them.

Their help means I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned, they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. Kids should start a Roth IRA as soon as possible.

2. Rental Property Income

Our properties last month hit a hiccup. It turns out that the heating unit wasn’t properly vented when it was installed a few years back (before we bought the property) and it’s a mess to repair. A lot of it is determining who is responsible because it’s a condo with other units and the association’s walls. The Allstate claims adjuster calls when I’m not prepared and then fails to respond to any of my last five emails.

The Lego Robotics group used $100,000 of grant money to buy this Boston Dynamics robot dog. Spot went viral a few years ago because you can buy an optional handle that allows him to open doors. Hook him up to artificial intelligence and we’re finished as a civilization.

Rental income continues to be boring. We’ve had the big bubble of increase property value last year. Then the bubble let out some air. Now, it’s starting to inflate again. When the properties don’t appreciate, we pay down the mortgages and slowly gain more ownership of the properties that way.

In the last month, we went from 76.05% to 76.53% ownership of the equity in our properties. The move of half a percent is very good for just one month. If we owned both of our rental properties with no mortgages (100% of the equity), we’d make about $2,200 a month after insurance, property taxes, condo fees, and estimated condo maintenance.

If you multiply our rents of $2,200 by the amount of equity we have, 76.53%, you get $1,684/mo. in estimated passive income. Last month it was $1,673/mo. This month we added $11/mo in passive income. It doesn’t seem like much, but $100 in mostly passive income in a year isn’t too bad. It allows you to start eliminating some bills. If someone knocked $100 of your mortgage or car loan, you’d take it, right?

When I started tracking rental property income this way (January 2017), we only owned 36.4% of the properties, and the properties had lower rents. The math worked out to $1,174 of passive income back then. In six years, it grew a ton. We sold our biggest rental property last year and invested that money in the stock market. It’s much more passive now. That was a strong driver as to why I started to count certain passive income sources as less valuable than others in this report.

Eventually, these properties should bring about $25,000 after expenses. Rent is inflation resistant as it’ll rise over time. That means that even though this is $25,000 in today’s dollars, it will still have that buying power in the future.

Total Rental Property Income: $1,684

3. Dividend Income

For this section, I look at our stock market investments. I assume we could earn a 2.5% dividend yield on those investments. That assumption is a conservative number that helps us think about what kind of cash we can expect. It should be easy to get that 2.5% number as we could simply put all of our portfolios in a high-dividend ETF. For example, the high-yield ETF, iShares Core High Dividend ETF (HDV), is currently paying a 4.40% yield.

Disneyland and the 100th anniversary of Disney in general

With today’s interest rates, a 2.5% yield seems ridiculously low. I need to remember that interest rates could go back to where they were a year ago.

Most bloggers use the actual dividends they earned that month. I have quite a few accounts, and I’m too Lazy to add up the dividends on them. Even if we aren’t getting the 2.5% number now, we could always move the money around from growth to dividends if we needed to live off the cash flow. A vast majority of our money is in retirement accounts, so cash flow isn’t important to us now. I also combine all the taxable and retirement account numbers. It’s too much work to separate them out.

We continue to get a profit-sharing check since I bought (a lot of) a company. The company is doing well, and they occasionally throw an extra profit-sharing check to me. The investment income from this is essentially the same as dividend income. It is taxed differently, but for this report, it makes sense to group all stock ownership in this bucket.

The markets barely moved, so this number didn’t move much either. Boring!

Total Dividend-ish Income: $3,950

Last month it was $3,960.

In January 2017, the dividend income was at $1,180/mo. Now, we’re almost at $50,000 a year – enough for us to live fairly well, especially if we paid off our mortgage.

For the 78th month in a row (?), we’re looking into estate planning, but they gave us a lot of paperwork to do before we can move forward. I’ve got to finish our taxes first before I can look into this.

Adjusted Passive Income

I used to combine real estate and dividend income into “very close to passive income.” However, now I’ll simply add up the 50% dogs/blogs, 80% real estate, and 100% dividend income. This makes things a lot easier.

Dog/Blogs: $2,073.09 – Adjusted to $1,036.55
Rentals: $1,684 – Adjusted to $1,347.20
Dividends: $3,950 – Remains at $3,950

Dogs/Blogs Blue Line
Rental – Red Line
Dividend – Yellow Line

Total Adjusted Passive Income: $6,333.75

Last month it was $8,059.15. That’s a big drop, but it’s a good number considering the travel. Even though I made the adjustment to count dog boarding as less passive, it is still location dependent.

This $6,300 number is about $75,000 of passive income annually. That wouldn’t cover all our expenses now, but it would after our mortgage is paid off and the kids are out of school. We’ll finish the mortgage in a couple of years and the kids’ school is still a luxury that we’ll choose to pay for.

It’s very useful to have different income streams. As blogging income becomes more difficult, dog boarding income has grown to supplement it. For a long time, real estate didn’t grow much at all; then, in the last couple of years, it grew a ton. The stock market grew for more than a decade from 2010 to 2021 but had a little setback last year. When something goes down, it seems another thing jumps up. Over time we are making consistent progress.

The chance of all the income streams falling on hard times is low, but certainly not impossible. If we had another event like the Great Recession in 2008, they’d all be impacted quite a bit. In that case, we’d have to rely more on active income (the other 50% of our dogs/blogs, 20% of rental income, and other jobs) or rely on savings for a while. Also, dog boarding went away completely with COVID, so something like that can be just around the corner.

It’s also important to remember that these numbers aren’t “real” because much of the money isn’t liquid. We can’t spend those retirement investments without penalties. We can’t access the equity we have in properties without selling them or opening a HELOC. We can do some things to get to this money, but it only makes sense when my wife retires and we are in a lower tax bracket.

You’d think we’d feel “rich” having “won” the money game. Most of the time we don’t feel rich at all. This month’s travel was one exception. Our social circle tends to have generationally rich people. However, we are “rich” relative to many people’s circumstances. Money is relative. It’s nice not to have to worry about emergency bills and make reasonable splurges.

(The blue line represents the total adjusted passive income. The Red Line represents the three-month average.)

The three-month average in March 2021 was $5,784.73. In March 2022, it was $7,609.36. Now in March of 2023, it is $6,956.89. Because our vacations, dog boarding, and blogging are seasonal I like to compare the same months. We’re on a downward trend for the first time. Closing the dog boarding in January for renovations and the longer vacation affected the numbers. Next month, the three-month average won’t have January and we’ll probably be back in the growth area.

I don’t know how long dog boarding will last. It was a lot of work last year. This year has been easier with the lighter schedule. I think that with dog boarding, either the market will change or I’ll change. Perhaps I’ll want to travel more. Perhaps, I’ll want a different challenge. I’m on my third career (software engineering, blogging, and dog boarding), so it would be naive of me to think it might be my last.

None of the numbers here include my wife’s bread-winning day job as a pharmacist or the minor freelance work I’ve been doing over the last few years – neither is passive at all. When my wife retires, we can count her vested military pension as more passive income. It looks like it might be worth around $68,500/yr. and includes access to a good health care plan. A pension is like a passive income cheat code. They are so rare nowadays.

Super Nintendo World and Bowser’s Challenge is awe inspiring. The Yoshi in this picture is probably somewhere between 6-8 feet tall to give you an idea of just how big this is.

For now, this active income (including the dog boarding) is the fuel that drives the passive income engine – it allows us to live well, get our kids a top education at a private school, pay off our mortgages, and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretch almost every dollar in much of our spending. It also allows me the flexibility to bring the kids to school and to after-school activities.

Net Worth Update

My net worth updates aren’t fascinating as I don’t share the exact numbers. That’s why it’s just a footnote, not its own article.

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

I thought the kids were getting old for Legoland, but they really enjoyed driving with no track or guidance.

This past month, our net worth was up 0.97%. For the year it’s up 2.80%. We’re at 99% of our all-time highs. Any kind of positive market move should put us over the top. We’re in the best money situation we’ve ever been in. As Hannibal Smith used to say, “I love it when a plan comes together!”

I had been giving updates on on our liquid cash, but somehow it’s slipped out of the last few reports. Liquid cash is important to us because it helps us feel comfortable while the rest of our money is hard at work. For the month our liquid cash was down $1,400. That’s great considering the vacation and vet bills. Some of those were paid with credit cards though and will spill into April. For the year our liquid cash is down about $3,000. That sounds bad, but we put nearly $20,000 into the January renovations.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. If the U.S. government didn’t back it like treasuries or FDIC, I may feel I should account for some uncertainty. I decided that it does make sense to include it. She could have earned a larger immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth.

My wife and I had a date at a fancy bed and breakfast – where John Legend and Chrissy Teigan stay in Newport. This is their high tea.

It’s important to recognize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 16 years. FIRE wasn’t a “thing” back in 2006, but that’s been my goal since the first sentence of this blog.

We naturally are further along in that journey than some younger readers who may be just starting. Many of those readers are saddled with huge student loans that we didn’t have to deal with. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 10 of blogging and early retirement planning. Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15-20 years.

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