A Series of Somewhat Interesting Facts

Do you ever check how much interest, dividends and passive income you earn on a daily basis?

Ever since I started on my Financial Enlightenment, I’ve been keeping track of my interest and dividends. I’ve been tracking a lot of things actually (gotta love spreadsheets). I figure the more I keep track of things, the more aware I’ll be of my financial situation at any given moment. This kind of awareness helps in little ways, like when my wife asks me questions about how much we have here and there.

Interestingly enough, I started out this year earning about $0.35/day passively (Hey, don’t judge me. We all have to start somewhere.). As of the end of this month, I’m earning about $2.60/day. There are still some numbers that need to come in, but here’s the chart that corresponds with the growth of that number:

Daily Interest Graph as of June 29, 2015


And here’s the chart which corresponds with the annual projections based on those numbers as multiplied for the year:

Annual Projected Interest as of June 30, 2015

You know, at this rate, it’s almost to the point where I’ll earn over $1,000/year without doing anything. That’s a pretty excellent achievement on the path to making about 60 – 100X that amount. It’s basically like step one has been completed, which leads me to my next interesting fact.

Today, I Invested More

My monthly paycheck finally cleared, so I decided to do two things before I send money elsewhere. One, I started the transfer that will effectively complete my Emergency Fund goal of $50,000, so look out for the post on that achievement. Second, I moved another $2,500 into VTSAX.

Coincidentally, the price dropped today — from $53.06 Friday to $51.93, so I’m not sure how much that will impact my total investment but if it works out, great. If not, I’m in it for the long haul so it doesn’t matter in the big scheme of things. What’s important is that I’m not trying to time the market. Also, I’m trying to maximize how much I put into my SEP IRA before I transition into a salaried position. Hopefully that just means more daily accrued interest and more in dividends. Oh, right, and I also just learned VTSAX pays dividends (thank you Dividend Life!).

Interesting Possibilities

Now that these milestones are being hit, I am starting to consider what to do next.

Admittedly, part of what I’ve been considering is reducing my six month E-fund down to three, and investing the rest. I won’t do anything drastic, of course, but that doesn’t mean I haven’t toyed with the idea of putting that $25k somewhere to generate higher returns overall. It won’t do much to my net worth, but it would, for example, certainly help the interest rate if I put that much in VTSAX. Right now, the E-fund is earning 1% sitting in Ally, when it could be earning much more in the long run. That would probably push me closer to $2,000/year!

But what if I invested it in something else?

A friend of mine is thinking about investing in a franchise, which would be built in a nearby location I think is perfect. The overall start-up cost? Around $250,000. It just so happens that I could put in for 10% of that. Another friend has become a decent property manager, having purchased his fifth duplex and successfully renting all but one of the units, which he lives in himself. I’m actually set to talk to him about this very thing this week, so I’m excited about that. In this area, I don’t think $25k will get me into a duplex, but it will at least give me a target number to shoot for.

I’m also keeping an eye on some Flippa web “properties” for potential investments. It seems like $25k could get me somewhere in the neighborhood of $1,000 – 1500/month in passive income. The trick is finding sites that aren’t in an irreversible (without a ton of work) decline. And let’s face it, in a lot of areas, I am green. I’m still watching though.

Lastly, I have started the gears turning on a side business that could turn out to be pretty big.

You never know.


6 Responses

  1. Hi FM,

    Thanks for the mention!

    I’ve changed my views on my EF over the last year or so and I’ve moved from 100% cash to a mixture of cash and stock/bond funds. My target EF amount is a multiple of my monthly living expenses (currently 9 months) so the target amount increases or decreases whenever I adjust my budget. That way I keep it in line with inflation. It really depends on your definition of Emergency – mine is for loss of employment as I save money separately for other expected (but infrequent) expenses.

    Best wishes,
    Dividend Life recently posted…3 Retirement planning mistakes I made 20 years agoMy Profile

    1. DL,

      My target EF amount is a multiple of my monthly living expenses (currently 9 months) so the target amount increases or decreases whenever I adjust my budget.

      That’s a great way of thinking! I too keep mine set aside for loss of employment, but if I’m unemployed for more than a month, there is a serious issue going on. The other reason is in case I want to just have a break to work on something — say a month of just working on my side business, I can do that too. Likely though, it will just sit there and lose value (albeit more slowly than money I’d keep in my mattress) to inflation.

      That’s fine though, because it’s a just-in-case stash. I do think that 3 months would be the bare minimum, which means that anything on top of that is fair game for investing.

      Thanks for coming back!


  2. Though I never looked at how much I earn on a daily basis it would be interesting and fun to know especially at how it grows on a month to month basis. I’d be careful about buying domains/sites. Even the most popular sites need constant updates and upgrades not to mention the big Google X factor every time they change their search algorithm and your site just drops out of site overnight.
    DivHut recently posted…Building A Financial Safety Net: My Real World ExperienceMy Profile

    1. DivHit,

      On buying sites, I agree. The only thing that would push me in that direction is just the fact that I have a bit of an edge in that area because I build sites for a living (like a lot of people in the FI community, I’ve found). Of course, being a developer only gets you so far. I’d need a network of people with different relevant skills to even consider it. Luckily I do have a buddy who does SEO, a buddy who does front-end dev and a graphic designer friend. However, you’re still right because these things need content and lots of it. For a long time!


  3. Ahh now I see you’re going from EF of 50k to 25k, also I would look up some articles on using your ROTH Ira as a backup backup EF (in case the 25k isn’t enough).

    (Response to comment on my blog)
    VTSAX vs $25,000 .. so I’m going with a nice round number of VTSAX = $52/share.
    $25,000 @ $52/share = 480.76 shares (so let’s say 480 shares)
    Dividend yield is 1.85% as you said but what’s important to look at is the dividend payment amount. Since this is an index fund it appears they don’t forward declare the dividend payment amount. Some companies release the dividend payment amount for the entire year so you can calculate math more accurately.

    The past three dividend payment amounts were:
    Dividend $0.22800 06/24/2015
    Dividend $0.24700 03/23/2015
    Dividend $0.27300 12/18/2014

    If you take a conservative estimate for the next dividend payment amounts in the range of $0.23 a share you would look at 480 x $0.23 for $110.4 a quarter and about $441.6 a year. (give or take $20)



    Redeemed Finance recently posted…Tapping the Emergency Fund AAA StoryMy Profile

    1. Rich,

      I’m not absolutely going to use my E-fund for investing, but it’s definitely very tempting, especially when the stock market takes a bit of a dip like it has recently. :)

      Dividend yield is 1.85% as you said but what’s important to look at is the dividend payment amount. Since this is an index fund it appears they don’t forward declare the dividend payment amount.

      Okay, that was the confusing part for me. Let’s say I want to come up with some sort of calculator script that takes my existing investments and tells me what my projected dividend payout is going to be, the fact that they don’t publish those numbers ahead of time makes that pretty difficult. Not that you would know for any stock ahead of time, but you could at least make projections off of the current/last number I suppose.

      Currently, I have 238 shares in VTSAX. Based on what you’re saying, I could safely project 238 x $0.23, which should get me around $54.74/quarter or $218.96 a year ($200, let’s say).

      That actually makes a lot of sense and I appreciate you coming all the way over here to explain it to me! Hopefully someone else reads this and feels a bit more enlightened as well. :)

      Thanks again!


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