The Passive Income Report is the TOL’s favorite post. Our definition of Passive Income is any income received in the form of dividends, interest income and rental income. We consider it a true blessing to plant seeds as we go through life and reap the plentiful harvest, all without putting forth any additional effort. Passive Income is the key to financial independence and breaking the chains of a traditional job. Passive income, along with smart investing and eliminating wasteful spending, is how we will “Trade Our Life” from a grueling work schedule to that of true independence.
We are looking for August to be a rebound from last month’s dismal July report. The first months of each quarter, for most DGI investors, are the lowest paying months; however, there is usually a great rebound in the 2nd and 3rd months. With that said, let’s see how we faired!
Below are the numbers of our passive income for the month of August:
$ 1.26 – Main Street Capital (MAIN)
$ 7.20 – AT&T (T)
$ 3.39 – Verizon (VZ)
$ 6.38 – CVS Health, Inc. (CVS)
$30.60 – Omega Health Investors (OHI)
$ 0.84 – Starbucks (SBUX)
$49.67 TOTAL AUGUST DIVIDENDS
$ 5.31 ONLINE SAVINGS ACCOUNTS
$54.98 TOTAL AUGUST PASSIVE INCOME
For the month of August 2016, the TOL’s earned a total of $54.98 in passive income, which is a personal record for monthly Passive Income! What a great rebound from last month’s income!
For the month of August 2016, the dividend income of $49.67 is a personal best for the TOL’s. Look at all that hard work, saving and investing paying off! Dividend income for August 2016 crushed the income received in the previous year’s August by 545% (August 2015 dividend income was $7.70)!
When August 2016’s dividend income is shown against May 2016, the 2nd month of the previous quarter, we see the quarter-over-quarter dividend income growth of 34%, as we received $37.01 in May 2016. Contributing to the quarter-over-quarter increase was our first dividend payment from Verizon and increasing our position in Omega Healthcare Investors, our largest holding and dividend payer. We increased the number of companies from which we received dividends from 5 in May to 6 in August.
Interest income for August 2016 came in at $5.31, a slight 0.76% increase from last month. Our Emergency Fund, which is where we earn almost all of our interest, did not move for the month.
Compared to August 2015, interest income dropped 33.2% from $7.95 paid during that time. This is the result of using extra cash to pay off debts during 2015. We are still working on getting our emergency fund to $10,000, just not sure if it will happen this year.
Something new we are adding to our Passive Income posts is the percentage of our current monthly expenses that are covered by passive income. Currently, the TOL’s monthly budgeted expenses are $3,039.23. Passive Income coverage is as follows:
- Passive Income for August 2016 covered 8% of our monthly budgeted expenses.
- Average monthly Passive Income of $41.11, as of the time of this post, covers 3% of monthly budgeted expenses
Overall, August was a great month for Passive Income as we reached a new personal best. Receiving over $54 in one month and not having to work for it is an awesome feeling! That is the power of planting a seed, and continuously reaping a harvest every few month, even monthly! We will continue to push forward – we are just getting started!
We would love to know how all of you did with passive income for August. Was your month pretty calm or did you reach any personal highs? What are you looking to buy/invest in to increase your income and portfolio size?