photo credit: TheTruthAbout…

Recently, we added a gas credit card to our portfolio of passive income streams. This was the Discover Open Road card that earns 5% cash back on gas purchases up to $100 per month. That means if you spend a little over $100 on gas per month using the card, you can earn around $60 per year just for making purchases on gas. Not a bad return on a recurring expense!

Once you earn your rewards from this card, Discover gives you several options to redeem your cash back. These options include the following possibilities to redeem your cash back rewards.

• Credit Account - One option available is to transfer your cash rewards back to your account as a credit, thus reducing your next months bill.
• Electronic Deposit - Another option is to setup an electronic transfer that would apply your rewards to a savings or checking account.
• Donate to Charity - There are also several charities that you can donate your cash rewards to which is really a nice option to have if you would like to send money to a good cause.
• Gift Cards - Finally, they offer cardholders the ability to purchase a wide range of gift cards for even further savings. Obviously this is my favorite option!

If you decide to choose the gift card option for your redemption, then you can increase your savings and stretch your money further. I absolutely love when these opportunities become available to me! For example, if you enjoy renting movies, you can purchase a $40 Hollywood Video gift card for only $20 or purchase a $30 Blockbuster gift card for $20! That is a really nice opportunity to stretch your money further and make it work for you. Even one of my favorite places to shop has a gift card available. You can purchase a $45 gift card from CVS for $40. While it is not as good of savings as the video store gift cards, it is still a nice deal. Using the CVS gift card along with shopping the great deals can really make your money go a long way!

What types of cash back cards do you use?

photo credit: FadderUri

My original goal back in April of this year was to slowly divest a good portion of my WB position. This was a necessary step to diversify my holdings and build a strong dividend-producing portfolio. Instead of selling the shares outright, my plan was to sell covered call contracts spread out across several different strike prices to earn extra income. That way, if the option contracts were not called, I could turn around the next month and continue to earn this income. Between April and September, I earned $964.15 which was a nice income stream. The problem with this approach was that during those months, the price of WB has gone from the upper $20’s to below $10 per share. At one point this week, it traded below $1! As Dividend Growth Investor commented in my first post - I am making this extra income at the expense of the share price dropping over the course of several months. I completely agree with the comment and looking back should have sold most of my position back in April or May. I will add this to my list of lessons learned for stock trading.

photo credit: TheTruthAbout…Well, as you probably already know a lot has happen in those few little days since I first posted about my income generated from selling covered call options. Wachovia was on the brink of financial chaos, similar to Washington Mutual. Then last weekend they worked out a deal with the Federal Government and Citi to basically sell three quarters of their business for around $1 per share. Obviously as a shareholder, I was not pleased with the situation. Well this morning, the next chapter on Wachovia seems to be unfolding. Wells Fargo has announced that it will be merging with all of Wachovia in a deal priced around $7 per share. I am much happier with this news than what came out earlier in the week.

I always look for the bright spot in a bad situation. Yes, I am upset with myself for not exiting out of my position in Wachovia earlier this year. If I had to do it all over again, I would! Earlier in the week, when the Citi deal was announced, many investors panicked and sold. Some of these long time dedicated investors probably sold their positions for under $1. I will admit it crossed my mind a few times, but what would be the point? I decided that I still like some things about WB, or least what was left of it. Instead of selling, I decided to remain confident in what was left of the company and see how things played out. While the $7 share price does not come close to the upper $20’s, it is still much better than $1. I think it is very important in the investment world and in life to not panic. When times are tough you need to stick with your fundamental goals and stay strong. Who knows what will happen over the course of the next few months or years, but I am not going to panic and see how this all plays out. I remain committed to Wachovia, or I guess Wells Fargo into the foreseeable future.

• Number of Loans - 49
• Average Interest Rate - 16.80%
• Daily Interest Accural - $1.01
• Number of Late Loans - 5

Over the past month, I have increased the number of loans from 46 to 49 and I currently have one bid out on another waiting to be approved. If this loan is funded, that will bring me up to 50 loans! My average lending rate rose from 16.63% to 16.80%. My daily interest accrual jumped from $.95 to $1.01 because of the increase in the number of loans and the slight jump in the average lending rate from last month. This daily interest accrual will bring in around $30.30 per month in interest income. This form of interest is an excellent source of passive income. My long-term goal is to bring in $50.00 per month in interest income through Prosper, which will fund 1 new $50.00 bid. The magic number that I am shooting for is to bring my daily interest accrual up to $1.66.

Late Loans
I am a little more upbeat this month in the 5 late loans that I currently have in my portfolio. These late loans make up 10.2% of my portfolio compared to 10.8% last month. I have not seen any increase in the number of late loans compared to last month. The breakdown of these late loans are as follows -

• Late - 1 loan - This loan only has $4.33 left to payoff in principal and is about 1 day late and is not a concern to me at this point.
• 1 month late - 2 loans - I have two loans that are 1 month late. The good news here is that one of these loans last month was over 2 months late and not one payment had been made yet. I had assumed the worst, but finally got a payment to bump it into the 1 month late category. The bad news is that the borrower for the other 1 month late loan has filed for bankruptcy! At this point I don’t think I will ever see the remaining principal balance of $45.40 remaining on the loan.
• 2 months late - 2 loans - I have two loans in the 2 months late payment status. One of these loans is from an previous Prosper borrower who paid off a loan in the past. I am optimistic this one will come out of a late status eventually. The other 2 month late loan comes from an individual with a decent credit history who is trying to get out of credit card debt. I am also optimistic that this loan will eventually come out of late status.

Overall, it was a good month for my Prosper lending account with the exception of the bankruptcy loan. Hopefully, I will continue to move forward in meeting my goals to put this passive income stream on autopilot!

One of the more passive income streams included on the list of alternative income streams is Pepperjam Network. To date, I have earned a decent commission considering that PFI is still very young and the small amount of traffic that I am currently getting. I have investigated several other affiliate marketing programs and even tried some for awhile. In the end I keep coming back to Pepperjam Network because of the service that they can provide. They have an excellent list of available advertiser’s and provide very good customer service.

The growth of Pepperjam Network is truly an amazing story. Inc. Magazine ranks them as one of the top 100 fastest growing privately help companies in the United States. This is actually the third consecutive year that they have been included on this list. They are also ranked as the #1 fastest growing affiliate marketing network. Pepperjam Network also has an amazing list of advertisers available for fellow publishers like myself to fit with the overall theme of their site. I have used advertisers including: Foreclosure.com, eBay!, and Review Me just in the past few months. They have over 500 clients available.

If you have a blog or website and are looking to enter a relationship with an affiliate marketing program, I would recommend investigating Pepperjam. Join Pepperjam Network and Receive a $10 Sign On Bonus.

I have options contracts for GE(1), HTE (1), and WB (5) ready for expiration today as long as the shares do not hit the strike price. For those of you who follow my blog, I lost out on my BAC shares last month so I have started to alter my strategy a little to prevent losing out on shares that I purchase and want to retain. I ended up making $261.97 in less than one month from the BAC transaction and was able to pick up the shares again on a dip. While I did make some income, this is not my desired plan as I would like to take a longer range approach. The only stock that could be in jeopardy for being called today would be the GE shares.

During the month of August, I brought in a total of $239.96 by selling Covered Call options contracts. I hope to continue to push forward with this strategy for the upcoming months.

• Number of Loans - 46
• Average Interest Rate - 16.63%
• Daily Interest Accural - $.95
• Number of Late Loans - 5

I have increased the number of loans from 45 to 46 over the past month and have 1 current bid on another loan which would bring my total number of loans up to 47. My average interest rate per loan dropped a little from 16.79% to 16.63% compared to last month. The daily interest accrual remained constant at $.95 which would bring in around $28.50 in interest income each month. My goal is to still bring the daily interest accrual up to $1.66 which would allow me to earn $50 per month in interest income which would fund 1 new loan. If I am able to get to the $1.66 mark, the plan is to no longer transfer $100 per month from my checking account and allow the existing Prosper loans to fund new loans.

Concerns
While I am please with the number of loans that I have funded, along with the daily interest accrual, I am starting to have some concerns over the number of late loans I have in my portfolio. As I noted above, I have 5 late loans out of 46 in my portfolio which is around ~10%. I currently have 1 loan in Late (<15d) status, 1 loan in Late status, 2 loans in 1 month late status, and 1 loan in 2 months late status. The loan that is over 2 months late is obviously the biggest concern at this point. There has not been one payment made on this loan yet and I fear there will be no money collected on it. I will be closely monitoring these 5 loans over the course of the next month, along with any others that fall into a late status. If I continue to see issues with an increasing number of late loans, I will start to alter my criteria for bidding on loans.

Since moving in, we have been stockpiling aluminum cans, glass bottles, newspapers, etc. in our garage and then take a trip once per month to unload our recycled materials at the transfer station. This has become a cumbersome process as we use up a lot of extra garage space with these materials. In addition, we have to sort through the materials each month before loading them into our car to ensure no little critters have crawled into the boxes so they don’t end up staying in our vehicle. All that being said, we still feel so strongly about recycling these materials, that we go through this process each month.

Instead of going through this dirty and tedious process each and every month, I have set out on a mission to find alternative ways to recycle our household items. That is when I came across the New Ways to Make Money Off Recycling article which I earlier mentioned. The article provides the following list of companies that will actually pay you money for recycling products -

1 - RecycleBank
2 - Greenphone
3 - MyBoneYard
4 - Feed Your Player
5 - Terracycle

Do you recycle? Have you ever used one of the recycling programs listed above? Do you know of any other recycling programs that pay you money that are not on the list above?

So far this week I made one trip to CVS to continue this money making opportunity. My transactions this week are as follows -

• Dawn Dish Soap
• Cost = $.88
• Coupons Used = $.50
• Net Cost = $.38
• Crest Toothpaste
• Cost = $2.49
• Coupons Used = $.75
• Extra Bucks Earned = $1.50
• Net Cost = $.24
• Oral-B Toothbrush
• Cost = $2.49
• Coupons Used = $1.00
• Extra Bucks Earned = $1.50
• Net Cost = $(.01)
• Children’s Advil
• Cost = $5.79
• Coupons Used = $1.00
• Extra Bucks Earned = $5.79
• Net Cost = $(1.00)
• Sunday Newspaper - It was well past Sunday, but the CVS had some extra Sunday papers and there were so many great coupons this week, I couldn’t resist buying another.
• Cost = $1.50
• CVS $2 Off Purchase of $10 Coupon = $(2.00)
• Tax = $.66

NET TOTAL = $(.23) - I made $.23 off of my transactions shopping at CVS. This was possible by only shopping the best deals for the week and month and combining these deals with coupons and Extra Bucks that were offered. So in the past two weeks since I have been tracking my purchases through PFI, I have made $22.31 by shopping at CVS. The goal is to not necessarily make a lot of money from these transactions, but to reduce our monthly grocery budget. If we can reduce our spending on products offered at CVS, then it frees up more money in our family budget. More positive cash flow in the monthly budget means more money can flow into investments like high yielding stocks!

I will be heading out to CVS one more time this week and will also make a stop at Rite Aid and Walgreens to pick up some more great deals!

• Number of Loans - 45
• Average Interest Rate - 16.79%
• Daily Interest Accrual - $.95

At the current daily interest accrual rate of $.95, I am bringing in around $28.50 in interest per month. My long range goal is to fund 1 new loan per month just from interest accumulated. In order to reach that goal, I need to increase my daily interest accrual rate to around ~$1.66 per day which translates into 28 more loans. At my current pace, I anticipate hitting this goal sometime in March/April

While I am progressing on my long range goals for my Prosper income stream, I want to point out some recent concerns that I now have with 3 loans. The following loans are now in collections and are all over 1 month late.

The first loan in the list is my biggest concern. This loan was funded back in May (2008) and not one payment has been made yet. The other 2 loans in question have had at least some payments made on the loan. The 1st loan, actually has a loan value of $53.13 which is $3.13 more than the original $50.00 loan amount as no payments have been made to date. I will continue to monitor these 3 loans very closely and will see if the collection agency can recoup any funds from them.

Today I would like to provide a status on the Prosper loan that I took out earlier this year. For a history of activity prior to this month, please check out the following post - Loan Status - June (2008). When I last posted the status of my investments using this $1,000 Prosper loan, I had accumulated the following assets -

• Stock - I purchased 46 shares of HTE (Harvest Energy Trust).
• Cash Generated - As a result of selling Covered Call Options against my HTE (Harvest Energy Trust) position, I have generated $40.20 in positive cash flow.
• Remaining Cash - I had $14.55 remaining in leftover cash after making the purchase of HTE (Harvest Energy Trust).

Current Status
There have been a few updates since the last status to these assets associated to my Prosper loan -

• June Dividend Payment - I received approximately .535 shares of HTE (Harvest Energy Trust) as a result of the June (2008) DRIP payment. This brings the total number of shares owned up to 46.535.
• Drop in Oil - There has been a significant drop in the price of oil since I last posted, which has resulted in a significant drop in the price of HTE (Harvest Energy Trust) shares. I purchased the 46 shares for an average cost of $24.99 (commission included). Since then, shares are off by more than 20%.

As of today (July 23, 2008), I estimate that value of the assets listed above at -

• Shares - 46.535 @ $20.22 per shares = ~$940.94
• Cash - $54.75
• GRAND TOTAL - ~$995.69

While I am disappointed in the drop in price of shares of HTE, I believe the monthly dividend payments will help me continue to grow this asset. The last time I posted an update in June (2008), my total assets available was estimated at $1,164.09 and has since dropped by ~17%. The total payments required over the course of the 3 year loan are $1,095.07, so I am now ($99.38) behind. Any jump in oil prices should quickly push me back over this amount.