The Portfolio page on my blog has been updated as of June 30th, 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.
For details on how I track dividend income in an Excel spreadsheet, read this article. 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. I max out all tax-advantaged accounts before making these investments.
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.
Flat and Disappointing
I had high hopes of seeing strong results this quarter now that I’m back to work. Unfortunately, my forward-12 month investment income (F12MII) for 2018 is flat year-to-date.
Things were looking good after the last report. Then two things happened that lowered my projected forward income.
The first was the underlying returns on my Fundrise eREITs decreased. This was not all of the sudden. The returns naturally fluctuate based on the eREIT performance. I wasn’t tracking this as closely as I should have over the past year.
Once I noticed the discrepancy in the eREIT yields compared to what I was using to track my own returns, I made the change.
My $10,712.30 Fundrise portfolio of five eREITs is now yielding about 6.77%. That’s not bad, but it has come down since I first started investing. This lowered my projected returns on real estate crowdfunding by about $192 per year.
Second, the taxes on my condo rental increased by $290 per year. This was not unexpected, but it was on the higher end.
Combined, that’s a $482 hit on F12MII in Q2. Now that these two setbacks are out of the way, I feeling better about finally making some progress in Q3.
On the plus side, that amount was partially offset by an increase in dividend income. Dividend income increased by $350 this past quarter after I added to some existing holdings and opened two new positions. Plus a big dividend increase from Bank of America (BAC).
I’ve also succeeded in simplifying my finances by cutting one real estate crowdfunding platform from my portfolio and reinvested the proceeds into PeerStreet. And I’ve finally transferred all my old DRIPs out of Computershare and into TD Ameritrade.
Investment Income Received in Q2 2018
The S&P 500 index settled at 2,718.37 on the last day of June, up 2.93% for the second quarter of 2018 and 1.67% year-to-date.
Here are the numbers for investment income I received in Q2 2018:
|Income Stream||April||May||June||Q2 Total||YTD Total|
|Interest on Cash||$23.83||$24.21||$22.89||$70.93||$145.00|
Investment income received increased from $1,948.25 in Q2 2017 to $2,296.85 this quarter. That’s an 18% increase year-over-year.
Halfway through 2017, my year-to-date income received was $3,539.88. This year’s total is also 18% higher than at Q2 last year at $4,194.18.
Summary of Investment Activity for Q2 2018
Below is a summary of all investment activity in my taxable accounts in Q2 2018.
Even with the addition of $5,256.75 in new working capital to my taxable investment portfolios, my forward 12-month investment income (F12MII) decreased to $9,191.94 or $765.99 per month. This was a $227.17 and 2.4% decrease from last quarter, and a $156.32 and 1.7% increase year-over-year.
I consider the $9,191.94 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 June 2018 since the start of RBD:
Real Estate Crowdfunding
I started investing on three separate real estate crowdfunding platforms in 2017. Overall, I’m very pleased with the returns on all platforms. In the name of simplification, I’ve decided to only continue investing on two of them.
The last of my RealtyShares (review) debt investments matured in June and the $2,000 principal was returned to me. RealtyShares has moved away from smaller debt deals in favor of larger equity investment opportunities.
These larger deals require higher minimum investments and complicate taxes when the deal is outside of your state of residence. So I’m no longer investing. I still recommend the platform for high net-worth individuals looking for real estate equity deals.
I’ve found PeerStreet (review) to have a better user experience and it offers greater ease of diversification, automatic investing, reinvestment, and shorter investment durations with similar yields. PeerStreet is still for accredited investors only, but it’s better for newly accredited investors (net worth ~$1 million).
So I moved the $2,000 proceeds from my final RealtyShares investment to PeerStreet.
The account now has $6,649.45 invested in seven PeerStreet loans averaging 8% yields. Some investments are returning principal early. So when my cash balance reaches $1,000, I have it automatically make a new investment, I then have 24 hours to decide if I like the deal.
My initial $10,000 investment on the Fundrise platform (review) is now estimated to be worth $10,988.08 after reinvesting all the dividends. I own five separate eREITs with an average yield of 6.77%. That average yield is down from 8%-9%. The lower yields from the eREITs cause a decrease in my F12MII.
I sold one stock and bought four others this quarter.
The sale Apergy (APY) stock. This company was spun off from another stock I own, Dover Corporation (DOV). Apergy is a small-cap oil and gas company that I felt did not fit into my portfolio. I decided to sell it and put the proceeds into a larger and more established company.
With the proceeds, I bought another 9 shares of Disney (DIS) to balance out my holdings at 30 shares.
Consumer staples have taken a hit recently. So I used the dip in share prices to purchase more General Mills (GIS) and to open a position in Colgate Palmolive (CL).
General Mills was an existing holding yielding above 4% so I decided to add to it and lower my cost basis. It’s a solid company that has paid a dividend for 119 years (including its predecessor company).
Colgate Palmolive is a Dividend Aristocrat new to my portfolio. Instead of adding to another existing holding such as Proctor & Gamble, I opened this new position to spread out my dividend income risk.
Though it’s not particularly cheap compared to its peers, I’m attracted to the global portfolio of brands and very strong balance sheet. Colgate is the primary toothpaste for sale in every corner of the world that I’ve been to.
Lastly, I opened a new position in Walgreens Boots Alliance (WBA). This Dividend Aristocrat has been on my watch list for some time now. When Amazon announced it bought an online pharmacy, Walgreens fell 10%. The same week, Walgreens reported decent earnings and increased its dividend by 10%.
Here’s a view of the new Income Estimator tool from my TD Ameritrade account that I wrote about a few weeks back. This view only includes dividends I’ll receive in this account and does not yet include some recent dividend increases (BAC).
My current allocation is 50% VTI (Vanguard Total Stock Market ETF) and 10% into each of the five stocks I own in the Five Stocks Pie.
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.
M1 Finance is adding new featured regularly. You can now buy add money to individual stocks ad hoc instead of using the Pie functionality.
The newest addition is M1 Borrow. It’s a margin account from which you can borrow money at 3.75% to invest or pay off higher interest debt. M1 Borrow is only applicable to customers with assets of $25k or more for now, but expect that to come down later this year.
Learn more about M1 Finance here.
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 invest in them.
My aim is for each company in my portfolio to increase its dividends every year at a rate higher than inflation.
Of the 49 dividend paying stocks in my taxable portfolio, 12 companies increased their dividend payouts by an average of 9.2% in Q2 2018. That makes 27 increases of 49 stocks so far this year.
Below is a list of dividend increases in my portfolio announced in Q2 2018:
- AAPL – 15.9% increase to 2.92
- BAC – 25% increase to 0.60
- CAH – 3.2% increase to 1.91
- COST – 14% increase to 2.28
- DCI – 5.6% increase to 0.76
- FLO – 5.9% increase to 0.72
- IBM – 4.7% increase to 6.28
- JNJ – 7.1% increase to 3.60
- PG – 4.0% increase to 2.8688
- PH – 15.2% increase to 3.04
- PM – 6.5% increase to 4.56
- TGT – 3.2% increase to 2.56
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 except APY, AMZN
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