Passive Income - Race from $10k to $40k per year

[Money Badger]

@farmecologist Over 4% is quite nice indeed compared to the last 15 years or so!   There's still quite a bit of risk vs. reward gnashing of teeth that's causing some real chances for value investing at long last as well.   The tricky point is knowing when to be greedy as others are fearful as no one ever times it perfectly.   

At this end, my passive across all accounts is now crossing $5K/month which sounds great compared to where we were at start of this challenge.   But only about half of this is tax exempt passive income though.  And MLP and REIT payments aren't guaranteed by any means.   So we just keep putting cash to work slowly in bites after each Fed hike or bad news so we overshoot on FIRE income and I'm accumulating enough positions in the IRA stock funds that are "on-sale" for long-term growth (VTI, BRK.B, etc.) 10+ years out.  Meanwhile, as I replace salary with passive after-tax $, I've been increasing my 401K % to max it out this year by August.   That's about the point where I hit the FIRE number for income consider taxes and healthcare and either jump or declare OMY.   Will be interesting to see if or when HR or someone asks me why.   ;-)

[farmecologist]

@farmecologist Over 4% is quite nice indeed compared to the last 15 years or so!   There's still quite a bit of risk vs. reward gnashing of teeth that's causing some real chances for value investing at long last as well.   The tricky point is knowing when to be greedy as others are fearful as no one ever times it perfectly.   

At this end, my passive across all accounts is now crossing $5K/month which sounds great compared to where we were at start of this challenge.   But only about half of this is tax exempt passive income though.  And MLP and REIT payments aren't guaranteed by any means.   So we just keep putting cash to work slowly in bites after each Fed hike or bad news so we overshoot on FIRE income and I'm accumulating enough positions in the IRA stock funds that are "on-sale" for long-term growth (VTI, BRK.B, etc.) 10+ years out.  Meanwhile, as I replace salary with passive after-tax $, I've been increasing my 401K % to max it out this year by August.   That's about the point where I hit the FIRE number for income consider taxes and healthcare and either jump or declare OMY.   Will be interesting to see if or when HR or someone asks me why.   ;-)

We have maxing out our 401Ks (pre-tax) for years....best thing we have ever done.  The tax savings alone has been absolutely tremendous.  And we anticipate having much lower income in retirement...so I'm not really worried about taxes all that much.  Full disclosure though...I'm one of those that doesn't buy the Roth narrative.

Also, I honestly don't know how "local" banks with many brick and mortar locations are going to stay in business, long term.  They just are not paying diddly squat for savings accounts, etc...  We moved over to Sofi ( 4.20 percent ) and couldn't be happier.  Laziness is a thing in terms of moving accounts though...so I'm assuming the local banks will survive for a while.   

[GilesMM]

VTSAX pays about a $0.40 dividend so you would need a lot to live off dividends, versus a 4-5% SWR.

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622

Trailing 1 year:
2023-Q1: $25,192
2023-Q2: $26,920

Recalculated Q1 a little higher. Q2 seeing further increases. I assume this is still because of the money market rates. This year is a little weird with moving to a new house.

[McStache]

2016: $2,367
2017: $3,270
2018: $6,456
2019: $8,329
2020: $8,034
2021: $14,465
2022: $12,616

Trailing 12 months:
2022 Q3: $11,587
2022 Q4: $12,616
2023 Q1: $12,998
2023 Q2: $13,297

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622

Trailing 1 year:
2023-Q1: $25,192
2023-Q2: $26,920
2023-Q3: $26,945

About two months of this quarter we had significant funds still locked up in our old house equity. Presumably we'll see more growth in Q4 now that that is invested.

[Ozlady]

Today is 11 April 2023

i have decided to graduate from the Passive Income to 10K thread .

I am here to track my 3 children's Passive Income Journey to 40K per year...

The eldest son is 26 and have started work about 2 years ago; the 2nd daughter is in final year in uni and the youngest son is in 4th year uni.

An update on the kids' progress for first quarter 2023.

                                   DS1              DD             DS2

Age                             26                23              21

Passive income
(rolling annual)              14131      5522          4816

Net worth                      223171     82391        68529

% return                       6.33%         6.7%          6.2%

As i am typing this, the S&P 500 is at 4109 and the ASX200 (XJO) is at 7308...

Onwards and forwards!

Today is 2 October 2023...and time for a 6 months update.

As i am typing this, the S&P 500 is at 4288 and the ASX200 (XJO) is at 7024...essentially the US market has gone up and the Australian market has come down.

An update on the kids' progress for third quarter 2023.

                                   DS1              DD             DS2

Age                             26                24             22

Passive income
(rolling annual)              16 405      6107          4816

Net worth                      250661     89612        81154

% return                       6.54%         6.8%        5.2%


DS1 has become a quarter of a millionaire and DS2 is edging closer to his sister ..DD has got her final exams before she graduates and has not been pulling much in terms of part time income...

Another strong quarter ....Onwards and forwards !

[Freedomin5]

Today is 11 April 2023

i have decided to graduate from the Passive Income to 10K thread .

I am here to track my 3 children's Passive Income Journey to 40K per year...

The eldest son is 26 and have started work about 2 years ago; the 2nd daughter is in final year in uni and the youngest son is in 4th year uni.

An update on the kids' progress for first quarter 2023.

                                   DS1              DD             DS2

Age                             26                23              21

Passive income
(rolling annual)              14131      5522          4243

Net worth                      223171     82391        68529

% return                       6.33%         6.7%          6.2%

As i am typing this, the S&P 500 is at 4109 and the ASX200 (XJO) is at 7308...

Onwards and forwards!

Today is 2 October 2023...and time for a 6 months update.

As i am typing this, the S&P 500 is at 4288 and the ASX200 (XJO) is at 7024...essentially the US market has gone up and the Australian market has come down.

An update on the kids' progress for third quarter 2023.

                                   DS1              DD             DS2

Age                             26                24             22

Passive income
(rolling annual)              16 405      6107          4243

Net worth                      250661     89612        81154

% return                       6.54%         6.8%        5.2%


DS1 has become a quarter of a millionaire and DS2 is edging closer to his sister ..DD has got her final exams before she graduates and has not been pulling much in terms of part time income...

Another strong quarter ....Onwards and forwards !

I love that you are still involved in your adult children's financial journeys. My family is the same -- I'm in my 40s, and my mom knows how much we make, what taxes we pay, the cost of our house, how much of a mortgage we have, and our net worth. She's also our tax accountant. She also knows all the financial information for my sisters as well.

On the other hand, we would never in a million years share this information with DH's parents or siblings. They know we bought a house and we're doing okay, and that's all they need to know.

[Ozlady]

Hi Freedom 5

I am involved more for my 2nd and 3rd child as they are not yet launched into the working world yet...

My eldest son is a full working adult and i have told him many times i want OUT..but he is still insistent on getting me involved...i have even told him to change his bank passwords but Nope..mum ..not yet!  ( i hate that he is still tied to my apron strings  so i told him 1 MORE YEAR!)

I am curious why you have a different approach to your own vs your hubby's family?

Is it because you run the finance in your family? (asking as i have 2 sons and 1 daughter haha!)

[Freedomin5]

Hi Freedom 5

I am involved more for my 2nd and 3rd child as they are not yet launched into the working world yet...

My eldest son is a full working adult and i have told him many times i want OUT..but he is still insistent on getting me involved...i have even told him to change his bank passwords but Nope..mum ..not yet!  ( i hate that he is still tied to my apron strings  so i told him 1 MORE YEAR!)

I am curious why you have a different approach to your own vs your hubby's family?

Is it because you run the finance in your family? (asking as i have 2 sons and 1 daughter haha!)

My mom is a multi-millionaire in her own right and has a strong understanding of personal finance. She doesn’t need or want our money, and her goal in life is to get her daughters set up financially and taken care of (as in, make sure we are all well-educated, have jobs and can pay our bills, and aren’t homeless). She’s very financially savvy, so we (my sisters and I) run our financial decisions by her because she has a proven track record of financial and general life management success.

DH’s parents did okay for themselves too, but lucked out by buying a triplex 30 years ago that’s now worth $2M. They live off of their pensions and aren’t the greatest at managing their money. His older sister is unemployed and made several really bad life decisions, and the feeling is that any family member with money needs to keep working to fund the lifestyles of non-working members. So it’s better for them not to know exactly how much money we have, otherwise there may be hard feelings when we choose not to give all our *extra* money to his more needy family members. It’s better for them to think we are living paycheck to paycheck.

[Ozlady]

Ah i see....family and money dramas eh?

You are very lucky to have  such a supportive mum !  (also she sounds like she is not the controlling type but that  it is you and your sisters who run to her for her opinion...which is very good!)

[McStache]

2016: $2,367
2017: $3,270
2018: $6,456
2019: $8,329
2020: $8,034
2021: $14,465
2022: $12,616

Trailing 12 months:
2022 Q4: $12,616
2023 Q1: $12,998
2023 Q2: $13,297
2023 Q3: $13,245

[GilesMM]

Our annual dividends have been six figures for a while.  I don't really appreciate the income during retirement because it is all taxable.

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622
2023: $29,313

Q4 was absolutely nuts for us this year. Over $10k in dividends for the first time, so if every quarter was like that we'd be at the goal for this race already!

[BlueHouse]

Q4 was absolutely nuts for us this year. Over $10k in dividends for the first time, so if every quarter was like that we'd be at the goal for this race already!

Is this all in a taxable account?  My dividends are still pretty low, despite my having a decent-sized LNW.  But most of my dividend-paying funds are held in retirement funds.  So they're not counted yet. 

[RWD]

Q4 was absolutely nuts for us this year. Over $10k in dividends for the first time, so if every quarter was like that we'd be at the goal for this race already!

Is this all in a taxable account?  My dividends are still pretty low, despite my having a decent-sized LNW.  But most of my dividend-paying funds are held in retirement funds.  So they're not counted yet.

This is all accounts, both taxable and retirement. It is roughly one third from taxable, and two thirds from retirement accounts. There are enough ways to tap retirement accounts early that I think it is reasonable to count the dividends as passive income.

I'm not deliberately seeking dividend paying funds. Almost everything is in broad market index funds which typically pay ~2% dividends. Though I got a little help from money market funds paying over 5% this year.

[BlueHouse]

Q4 was absolutely nuts for us this year. Over $10k in dividends for the first time, so if every quarter was like that we'd be at the goal for this race already!

Is this all in a taxable account?  My dividends are still pretty low, despite my having a decent-sized LNW.  But most of my dividend-paying funds are held in retirement funds.  So they're not counted yet.

This is all accounts, both taxable and retirement. It is roughly one third from taxable, and two thirds from retirement accounts. There are enough ways to tap retirement accounts early that I think it is reasonable to count the dividends as passive income.

I'm not deliberately seeking dividend paying funds. Almost everything is in broad market index funds which typically pay ~2% dividends. Though I got a little help from money market funds paying over 5% this year.

Ah, I see.  Similar for me then.  I keep thinking I'm doing something wrong when I see others with such high dividends, but I only look at mine on my tax forms, so I've only been looking at taxable. 

[McStache]

2016: $2,367
2017: $3,270
2018: $6,456
2019: $8,329
2020: $8,034
2021: $14,465
2022: $12,616
2023: $16,264

Trailing 12 months:
2023 Q1: $12,998
2023 Q2: $13,297
2023 Q3: $13,245
2023 Q4: $16,264

Steady growth in income this year. Might need to up my income tax withholding a bit to compensate

[ca-rn]

I got about 26k for 2023 from brokerage accounts.  Add about 12k net rental income (still have mortgage) is about 38k total, if I'm figuring this out properly.

Don't know if that's good or not b/c I still have to pay taxes on it.

Positive-this is about my base yearly budget (once mortgage is gone) including healthcare.  I'm not expecting any ACA credits with planned 401k to RothIRA conversions.

Dang it, all the numbers point to being able to quit now but want to hit my totally made up FIRE number and to access 401k via Rule of 55. 

[Ozlady]

Today is 11 April 2023

i have decided to graduate from the Passive Income to 10K thread .

I am here to track my 3 children's Passive Income Journey to 40K per year...

The eldest son is 26 and have started work about 2 years ago; the 2nd daughter is in final year in uni and the youngest son is in 4th year uni.

An update on the kids' progress for first quarter 2023.

                                   DS1              DD             DS2

Age                             26                23              21

Passive income
(rolling annual)              14131      5522          4816

Net worth                      223171     82391        68529

% return                       6.33%         6.7%          6.2%

As i am typing this, the S&P 500 is at 4109 and the ASX200 (XJO) is at 7308...

Onwards and forwards!

Today is 2 October 2023...and time for a 6 months update.

As i am typing this, the S&P 500 is at 4288 and the ASX200 (XJO) is at 7024...essentially the US market has gone up and the Australian market has come down.

An update on the kids' progress for third quarter 2023.

                                   DS1              DD             DS2

Age                             26                24             22

Passive income
(rolling annual)              16 405      6107          4816

Net worth                      250661     89612        81154

% return                       6.54%         6.8%        5.2%


DS1 has become a quarter of a millionaire and DS2 is edging closer to his sister ..DD has got her final exams before she graduates and has not been pulling much in terms of part time income...

Another strong quarter ....Onwards and forwards !

Today is 6 march 2024

Time for a 6 months' update..

As i am typing this, the S&P500 is at 5078 and the ASX200 (XJO) is at 7708...the market has definitely gone off like a rocket during the last few months:)

An update on the kids' progress for first quarter 2024

                                   DS1              DD             DS2

Age                               27               24             22

Passive income
(rolling annual)              18 344      6 810          5 139

Net worth                      289,138     93,942        90,437

% return                       6.34%        7.25%        5.68%

Another quarter of upward trajectory..

Added together the kids' total net worth is now nearly half a million... it shows an early start really starts the Snowball rolling...

Here's hoping DS1 will crack the 20K passive income in the next quarter and that DD and DS2 will crack the 100K net worth ...i think it is doable if we keep our eyes focused.

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622
2023: $29,314

Trailing 1 year:
2024-Q1: $30,398

Over the $30k mark! Might hover here for a bit, as we are installing solar this year which will reduce invested assets a bit (maybe reducing dividends by roughly $2-3k annually).

[McStache]

2016: $2,367
2017: $3,270
2018: $6,456
2019: $8,329
2020: $8,034
2021: $14,465
2022: $12,616
2023: $16,264

Trailing 12 months:
2023 Q2: $13,297
2023 Q3: $13,245
2023 Q4: $16,264
2024 Q1: $17,099

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622
2023: $29,314

Trailing 1 year:
2024-Q1: $30,398
2024-Q2: $29,914

Slight slip as expected from selling some investments to pay for our solar install. On the flip side we will now be saving hundreds per month on electricity.

[Ozlady]

Today is 6 march 2024

Time for a 6 months' update..

As i am typing this, the S&P500 is at 5078 and the ASX200 (XJO) is at 7708...the market has definitely gone off like a rocket during the last few months:)

An update on the kids' progress for first quarter 2024

                                   DS1              DD             DS2

Age                               27               24             22

Passive income
(rolling annual)              18 344      6 810          5 139

Net worth                      289,138     93,942        90,437

% return                       6.34%        7.25%        5.68%

Another quarter of upward trajectory..

Added together the kids' total net worth is now nearly half a million... it shows an early start really starts the Snowball rolling...

Here's hoping DS1 will crack the 20K passive income in the next quarter and that DD and DS2 will crack the 100K net worth ...i think it is doable if we keep our eyes focused.

Today is 30 Sep 2024

Time for a semi annual update for the kids...another strong half year set of results:)

                                  DS1              DD             DS2                   Note

Age                               27               25             23

Passive income
(rolling annual)              21320         8632              7094

Net worth                    439376     133410              123700            (gifted 100k to DS1)

% return                       4.85%       6.47%               5.73%

I stated my wish in the last qtr and yes! DS1 has cracked the 20K passive income mark...
Both DS2 and DD have also cracked the 100K net worth crucial barrier:)

Added together, the family wealth in terms of kids only have also reached an all high of 705K...Do note however DS1 net worth has gone up by 100K due to a gift from me of 100K for house purchase...

It will be interesting to see if the combined wealth of the kids will hit 1Mil mark...

However DS1 is now house hunting with fiancee (24)  in earnest and she is bringing approximately 250K  onto the table and so technically , kids' wealth  will zoom past 1 mil mark by end of 2024...

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622
2023: $29,314

Trailing 1 year:
2024-Q1: $30,398
2024-Q2: $29,914
2024-Q3: $30,314

Holding steady...

[McStache]

2016: $2,367
2017: $3,270
2018: $6,456
2019: $8,329
2020: $8,034
2021: $14,465
2022: $12,616
2023: $16,264

Trailing 12 months:
2023 Q4: $16,264
2024 Q1: $17,099
2024 Q2: $17,352
2024 Q3: $18,708

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622
2023: $29,314

Trailing 1 year:
2024-Q1: $30,398
2024-Q2: $29,914
2024-Q3: $30,314
2024-Q4: $31,082

Small improvement this year.

[McStache]

2016: $2,367
2017: $3,270
2018: $6,456
2019: $8,329
2020: $8,034
2021: $14,465
2022: $12,616
2023: $16,264
2024: $17,845

Trailing 12 months:
2024 Q1: $17,099
2024 Q2: $17,352
2024 Q3: $18,708
2024 Q4: $17,845

A bit down from last quarter, but overall a bit up for the year