As part of my ongoing goals to become financially independent, I have been busy creating as many new income streams as possible. For example, at the beginning of this year (2008), I opened up a Prosper account in order to participate in P2P lending which would allow me to earn interest off of lending money. I have also created new income streams by using my strategy to combine high dividend yields with covered call options through purchases of BAC and GE. I have also been working on a few things on PFI to help generate additional passive income by adding advertisements for Pepperjam & Foreclosure.com and by writing a few sponsored posts for SocialSpark.
Today I would like to begin posting monthly updates on the passive income that I have earned from the previous month. I use the term “passive” very loosely here, as most of these income streams are not truly “passive”. I hope to continue to make process improvements on these income streams to reduce the time spent on them so I can focus on creating new income streams in the future. The table below shows the “passive income” or “extra income” that I made during the month of June (2008).
| Income Stream | Income Earned |
| Dividend Income | $137.04 |
| Options – DIM Calls | $100.99 |
| Interest Income (Bank) | $9.00 |
| Covered Call Optioins | $340.93 |
| Gain from Sale of Stock | $276.91 |
| Prosper Interest | $24.72 |
| Online Income | $0.00 |
| TOTAL | $889.59 |
June Passive Income Analysis
While I was very impressed with my first ever month of tracking my passive income, I have noticed several items that I want to work on in future months to come. Below is an analysis and breakdown of items that I will be working on to help increase my passive income earnings in the future -
- Dividend Income – The June (2008) dividend income included several quarterly distributions which will not be included in July or August, so I expect a huge decrease in monthly dividend income for the next few months. I anticipate between $15 – $20 of dividend income for the month of July and August.
- Options – I made a few Deep In the Money (DIM) Option Call trades that produced $100.99 in additional income for June. When good opportunities arise, I like to trade Deep In the Money Options on quality stocks. I took advantage of a few quick trades in PFE & PAYX. Trading these types of options can be very risky if you don’t have a good strategy. Given the significant downturn in the market in July, I don’t anticipate any income generated from this source.
- Interest Income – I earned $9 in interest during June from some of the cash I had on hand. I don’t expect to ever see a large amount of income generated from this source, but these little streams add up over time!
- Covered Call Options – The biggest source of passive income for the month of June was selling Covered Call Options against several of my portfolio positions including BAC, GE, and HTE. Today is expiration day for the majority of these contracts, so I will begin to re-evaluate what trades (if any) I will place starting next week.
- Stock Sale – As part of my Covered Call Options strategy, I had two positions (HTE & FRO) get called during the month. This required me to sell the shares I had in my portfolio for the strike price with a net result of $276.91 in earnings.
- Prosper Interest – I earned $24.72 in Prosper interest during the month of June. I was very pleased with this income as I believe my Prosper account is becoming more and more passive. I look for this income stream to steadily increase over time.
- Online Income – I did not earn any online income from PFI during the month of June. I expect this to obviously increase in July as I have started bringing in some money this month.
Recap
While I expect my July & August passive income totals to come down from the $889.59 I earned in June, I think I am off to a great start! I have set a 1-year goal to be bringing in $1,000 per month in passive or extra income by July 2009. I also have a longer range goal (3 – 4 years) set of $4,000 – $5,000 per month in passive income which will more than cover our monthly expenses and give my family and I the financial freedom we desire.
How do you track your passive or extra income earned? Do you have goals set that you hope to eventually reach?
{ 3 comments… read them below or add one }
I certainly have monthly goals I need to reach, but I am waffling on making money from my blog. On one hand, I do want to be open to any and all possible passive (or semi-passive) streams of income, but I started my blog as a way to work out all the things that were going on in my head on personal finance and my situation. I’ve been feeling lately that I have been concentrating too much on monetization. Not that I want to get away from it, I like Pepperjam and the other companies I advertise, but I have decided not to include my blog in my monthly goals at this time. Any extra income that does come in that way will just be icing.
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What a great start to tracking your passive investments. Nice job! You’ll probably pass that $1k mark in less than a year. You might also want to consider averaging your stock dividend income over 3 months. Even though you are paid quarterly, you could calculate your monthly earnings. $889 is very impressive!
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Dawn – I feel the same way as you do. I started PFI to open up a forum to discuss passive income ideas on ways to save money. If I can earn a little extra “passive” income on the side from it, then it is a bonus!
Scott – Thanks! I know that July and August will be lower, but it is a start to tracking this income. I really didn’t think it would add up to that much.
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