The Portfolio page on my blog has been updated as of March 31st, 2018. This page outlines my portfolio of taxable investments and the income generated on a yearly and average monthly basis. Click here to see all previous updates.
This quarterly update contains a summary of my personal investment activity for the past quarter. I’ve shared the investment income (aka passive income) I earn in my non-retirement accounts on this website since October of 2013.
I automatically track my net worth and investment allocations with a free tool called Personal Capital. It’s the best free financial tool I’ve come across.
The information below does not include investments made in my employer-sponsored retirement plan and other tax-advantaged retirement accounts. The holdings on this and any other page on my website do not equal recommendations. I’ve determined these investments to be right for my situation, but they may not be for yours.
Back in the Game
The four months off was enjoyable. But I must admit, it feels awesome to be on a payroll again.
Now that my income is back to previous levels, I’m excited to get aggressive with investing again. But this past quarter was slow as I recovered from unemployment, and a good chunk of capital went to Mrs. RBD’s traditional IRA to lower our taxes. The $5,500 annual contribution saves us almost $2,000 per year.
That money is destined for index funds.
Also in retirement accounts, I used the market dips in February and March to allocate my old 401(k) in its new home and nerded out with my new employer-sponsored 403(b).
Update: PeerStreet just landed a fresh round of financing. $29.5 million Series B investment announced today (04/05/18).
The passing of the tax reform law was a boon for companies to increase their dividends this quarter. I’ll touch on dividend increases at the end of this post.
Since I was able to build my business income over the jobless period (and many years), I essentially receive three paychecks a month now. Two from my employer and one draw from my business checking account.
If my business and job continue as is, this should bode well for investing Q2.
Investment Income Received in Q1 2018
The S&P 500 index settled at 2,640.87 on the last day of March, down -1.22% for the first quarter of 2018.
This loss was after a 19.42% total return in 2017.
Here are the numbers for investment income I received in Q1 2018:
|Income Stream||January||February||March||Q1 Total||YTD Total|
|Interest on Cash||$24.25||$23.28||$26.54||$74.07||$74.07|
Investment income received increased from $1,633.48 in Q1 2017 to $1,847.14 this quarter. That’s a 13% increase year-over-year.
Most notable above are the Lending Club losses. These continue to hinder progress but I believe my account has turned a corner. You can see the losses more clearly in the featured image at the top. The details of my Lending Club exit are further explained below.
Overall, I’m happy to see my forward 12-month investment income (F12MII) increase in Q1 after being hit by unemployment and Lending Club losses. I stand a good chance of reaching $10,000 in F12MII by year’s end and a decent shot at reaching the coveted $12,000 mark ($1,000 per month) in 2019.
Summary of Investment Activity for Q1 2018
Below is a summary of all investment activity in my taxable accounts in Q1 2018.
With the addition of $2,724.90 in new working capital to my taxable investment portfolios, my forward 12-month investment income (F12MII) increased to $9,419.11 or $784.93 per month. This was a $227.85 and 2.50% increase over last quarter, and a $1,224.27 and 14.9% increase year-over-year.
I consider the $9,419.11 in F12MII the most important number because it represents an estimated amount of money I earn via investment income without a job. This was tested recently and the investment income never stopped flowing while I was unemployed!
Here’s a chart tracking my progress as of March 2018 since the start of RBD:
M1 Finance became a no-fee brokerage late last year to better compete against Robin Hood and more established online brokers. I created a six-holding portfolio and invested $1,000 to start.
I wasn’t able to allocate more money to M1 Finance until this March when I added another $500 of new money to the account. I’m not trying to time the market with this no-fee account. My aim is to dollar cost average into a few stocks that I want to own for the long-term. Dividends are pooled and reinvested.
The way M1 Finance works is you set your portfolio allocations, and the platform automatically invests your money to match your set allocations. When you add new money to an existing portfolio, it puts more new money toward lower performing stocks, and less toward the best performers.
Since Ross Stores (ROST) was up almost 20% since my last purchase on November 6th, less money was automatically invested in ROST. Just $32 vs. $57.88 for Altria (MO) which was the lowest performer.
It’s a little confusing at first, but basically, any time you put in new money, M1 Finance rebalances your portfolio to your desired allocation. You can also rebalance any time without putting in new money.
Read my complete M1 Finance review here.
Real Estate Crowdfunding
I’ve decided to put fresh capital into PeerStreet because it’s a relatively easy and safe way to invest in real estate debt and earn good returns. Most of the loans available are in the 6%-8% range and the loans are backed by the property. Capital losses are rare so far. Liquidity is also good with loans often maturing in one year or less.
My deposit is still awaiting automatic investment so this $1,000 will add to my forward income next quarter. Next month, I expect one of my Realtyshares investments to mature and I’ll likely move that over to PeerStreet for simplification purposes. The other Realtyshares loan will mature in September.
Realtyshares and PeerStreet are for accredited investors only. Therefore, Fundrise is the best real estate crowdfunding platform for non-accredited investors. The minimum investment is just $500 to get started.
I recommend all three, however, I have seen yields decline slightly since I started investing last year.
TD Ameritrade is still my primary stock investing broker for my taxable holdings. This year, I’ll be moving my four remaining DRIPs into the account to further simplify my finances. Most dividends I receive pile up in this account and I use them to reinvest into more dividend paying companies.
In March, I made a second lot purchase of drug distribution company, Cardinal Health (CAH). Cardinal Health is a Dividend Aristocrat that has paid and increased its dividend for the past 32 years.
I expect to be making more purchases in this account during the rest of the year to increase my compounding dividend income stream.
In conjunction with simplifying my finances and for many other reasons, I’ve been drawing down my Lending Club account on a monthly basis, pulling out returned principal and interest instead of reinvesting it.
Having ridden the excitement of this fintech roller coaster for five years as both as an investor and shareholder, I feel this alternative investment type is still a worthy platform for some investors.
The total value of my account stands at around $4,000, down from almost $11,000 at its peak. This is due to cash withdrawals, not losses.
Losses in the account seemed to bottom out in December. Since then, returns have stabilized. My Net Annualized Return (NAR), the measurement the Lending Club uses to track past performance, is now hovering around 5.6%. That means since May of 2013, I’ve earned about 5.6% on average each year. That’s down from about 8% a year ago and 12% from its peak.
I’m planning to write an updated Lending Club Review to commemorate my five years of investing on the platform next month.
I like to end on dividend increases because they grow my passive investment income with zero effort. I’ve always loved that about dividend growth stocks and it’s one reason why I buy them.
My aim is for each company in my portfolio to increase its dividends every year at a rate higher than inflation.
Of the 48 dividend paying stocks in my taxable portfolio, 15 companies increased their dividend payouts by an average of 12.30% in Q1 2018. That’s a great start to the year. Many of the large increases are believed to be a result of the recent tax reform law that was passed.
Below is a list of dividend increases in my portfolio announced in Q1 2018:
- ABBV – 35.2% to 3.84 annual
- ADM – 4.7% to 1.34 annual
- CLX – 14.3% to 3.84 annual
- CSX – 10% to 0.88 annual
- CVX – 3.7% to 4.48 annual
- HAS – 10.5% to 2.52 annual
- KO – 5.4% to 1.56 annual
- MMM – 15.7% to 5.44 annual
- MO – 6.1% to 2.80 annual
- O – 3.1% to 2.63 annual
- ROST – 40.6% to 0.90 annual
- TROW – 22.8% to 2.80 annual
- UL – 5.3% to 1.78 annual
- UNP – 9.8% to 2.92 annual
- V – 7.7% to 0.84 annual
Thanks for checking out my latest quarterly update. Before you go, please take some time to check out the Blogfeed. It’s a great place to find related content written by my peers in the personal finance and investing worlds. Also, take a look at the Dads Blog Money page for curated content from my Dads group board on Pinterest.
Disclosure: The author is long all stocks and ETFs mentioned in this article.
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