June was another great month for passive income. Compare to June of last year, passive income went up by more than $200. Again, this month I made a handful of trades. I sold KMI, WELL, MYC and bought LUV, T, and as usual, VT.
May was a great month for passive income. Compare to May of last year, passive income went up by more than $700 and this was mainly due to my company delaying it’s dividend distribution to May. This month I made a handful of trades. I sold 120 shares of OHI after it’s dividend distribution, and bought WELL, KMI, MYC, GE and the usual VT.
April is an average month for passive income. Compare to April of last year, passive income went down by almost $100 and this was due to a company delaying it’s dividend distribution to May. April was another slow trading month. This month I added more shares of VT and OHI.
It’s tax season and this is a good time to review how my retirement accounts performed last year. I have a 401k (traditional and Roth) plan through my current company, a rollover traditional IRA from my previous company and a Roth IRA that I opened over a decade ago on my own.
June was a not bad month for passive income. Compare to the third month of last quarter, passive income increased by about $100. I picked up 50 more shares of F and 40 more shares of MYC this month.
May was a bad month for passive income. Compare to the second month of last quarter, passive income decreased by about $85. I picked up 20 more shares of GPS and 50 more shares of MYC this month.
The third step of my five year plan to FI/RE is to become an accredited investor. Given that most of my assets are tied up in my primary home, and the primary home does not count as part of the assets required to be an accredited investor, I have some work to do. The requirements to become an accredited investor is to have an annual salary of at least $200K for singles and $300K for married couples, or have a net worth of at least one million, not counting your primary home. For me to achieve this, that means I need to invest, invest and invest in the stock market.
Some of my ex-coworkers lost big in the tech bubble in 2001 and that scared me from heavily investing in my early years. The worst part was a couple of them bought their options to hold, and then they got laid off. They ended up with a huge tax bill and no salaries to pay. Luckily, I just started working, so I didn’t have much to lose. I probably loss enough to buy a nice BMW, but not nearly as much as some of my older c0-workers.
I funded my 401k when I started my job, but I was not maxing it out. I was putting all my savings in a money market for a down payment. It was not until 2006 that I started to max out my 401k, and around the same time funding a Roth IRA. When the market crashed around 2008-9, that’s when I slowly got back into the market, and picked up a couple of index funds and value stocks. I bought my home in 2006-7 with a ~40% down payment, so that cleaned out my savings. And as some of you know 2006-7 was the peak of the real estate market in the SF Bay Area, before it crashed. Strike 2! So far I had the worst timing in the real estate market.
After refinancing my home four times, I am down to about a 15% loan-to-value, and a monthly payment that’s less than 1k. At the same time, I have also built a hefty 2 to 3 years emergency fund and invested about 1 year worth in I-Bonds. At this point, I don’t need more cash cushion, unless I want to invest in another rental. But with the Las Vegas rental situation, I am turned off by the idea of being a landlord again. Who knows? When my boyfriend and I do move in together, I do want to eventually buy a bigger place to live. If I do, then my current place will be my next rental.
My plan for the next five years with the extra cash I have each month is to invest, invest and invest in index funds, REITs, and dividend stocks. I am open to any kind of investment that gives me a high return in dividend or interest. I have not started the peer-to-peer lending, but I might consider doing it in the near future. I am also looking into investing in crowd funding in large scale real estate investments. This is after I pay off my monthly mortgage payment and after I invest in muni bonds in step 1. The stock market is almost back at it’s all time high again. I hope third time is the charm and leads me to FIRE. I am excited what the future holds.