Portfolio Income Update – Half Year to December 31, 2016

What then is freedom? The power to live as one wishes.

Marcus Tullius Cicero

My goal is to to build up a passive income of around $58 000 by July 2021, but I have been tracking the interest and distributions from my portfolio investments off and on for the past fifteen years or so. More of that in future posts!

Twice a year, though, I prepare a summary of the total income from my portfolio income. As part of the transparency and accountability of this journey, I want to regularly report this income.

Passive income summary

  • Vanguard Lifestrategy High Growth – $7 605
  • Vanguard Lifestrategy Growth  – $464
  • Vanguard Lifestrategy Balanced – $660
  • Vanguard Diversified Bonds – $442
  • St Andrews ‘Top 200’ Australian shares (indexed) – $191
  • Telstra shares – $118
  • Insurance Australia Group shares – $241
  • Ratesetter (P2P lending) – $2120
  • BrickX (P2P rental real estate) – $5

Total passive income: $11 846

Resized Dist

Comments

That’s not supposed to happen! The amount went down. This is actually a recurring pattern in distributions in my portfolio, and I think it must relate to the underlying distributions schedule in the Vanguard funds. So big picture, I hope that there may be a small bump upwards in the July 2017 report. My investment plan actually is based on an assumption of $28 000 per annum.

The Vanguard funds typically distribute twice a year, except for the diversified bond fund. Australian shares that I have owned have distributed only twice a year. Interestingly, the bond funds can produce quite variable distributions, which doesn’t quite align with the theory.

By far the most ‘visible’ and regular income has come from my investment in Ratesetter’s peer to peer (P2P) lending platform, with returns of 8-9% for terms of between three and four years.

My small investment in P2P real estate has also started to produce some very small yields. This is attributable to the low yields in those parts of Australia’s residential property the fund has available. But it will be interesting to seek if it grows, and how it fares in any property market falls – constantly predicted to occur here in coming months and years.

Overall, I’m happy with this level of distributions, which means that on average my investments are producing an average of $1974 every month.

 

5 comments

  1. Great passive income goal. I recently sold some non dividend paying stock to purchase a dividend paying one. I was on the fence because more stable companies pay dividends and I’m on the growth stage of portfolio building in my life. What would you recommend to me (low 30s) in order to generate passive income but still have growth in investments?

  2. Thanks very much for stopping by SMM and for the comment.

    I hear you on the dividend vs non-dividend paying issue. It’s a tricky one that will really come down to personal circumstances, and preferences. For example, seeing those regular dividend payments can be really motivating and help keep the process of investing and deferred gratification a little more appealing.

    I have toyed with some Vanguard high-dividend yield funds we have available here, you must also have access to similar products I imagine. That could be one option. I know many in the FIRE community point to real estate as a cash-flow investment with some growth, but I have not explored this area much yet – does $5 in distributions in 2016 count? 🙂

    Thanks again, and look forward to hearing more of your thoughts in the future!

  3. Wow almost $2k a month in passive income is awesome. It looks like you will be there in no time at all to reach your goal of $58k a year. Looks like you have an awesome diversification mix. Thanks for sharing!!!

    1. Thank you for the visit, and the encouraging words. It is easy to lose track of progress already made when you’re reaching for your goals, and comments like that help me remember the work already done!
      😀

  4. Looks like you have a great diverse portfolio of assets. In the long run I suppose it’s about income and asset growth, which you an re-invest into more. So having the Vanguard strategy fits this perfectly. Good luck until the next update!

    Tristan

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