I earned enough side income this week to purchase enough shares next week that, moving forward, I will earn $99+ dollars a month in passive income. I’ll be one dollar away, give or take, from my goal of $100 a month in passive income. So April is the month I win.
Now, nothing is truly passive. I had to invest time in researching how brokerages worked, how to earn side income within the criteria I laid out for myself, and then I had to take time to execute that strategy. But I can confidently say that even if I did nothing, my portfolio and my income from that portfolio would grow over time.
It happened faster than I expected. 2 years and 5 months. I had estimated it would take 3 years, but there’s a few things I didn’t take into account. My thinking has changed. I now think of my portfolio as a tree. When I began the land (my portfolio) was bare. I worked hard to earn income through side hustles to plant seeds (the stocks, bonds, and investments).
My goal was income, so I didn’t really factor in capital appreciation (the seeds growing into trees, which became bigger and bigger). I did take into account dividend reinvestment – the trees bearing fruit, planting more seeds nearby. But what I really did not take into account was dividend growth. Each tree producing more fruit with each passing season. This past week Colgate raised their dividend.
So from one, well-purchased stock you get 3 incomes – capital appreciation, dividend growth, and dividend reinvestment (netting you more income next time).
I believe that dividend growth is why I finished in 2 years and 5 months rather than 3 years. And it really took time for me to see it and even more time for me to understand it. Solid companies with a history of dividend growth.
I am very glad I experimented cautiously with funds like YieldMax’s NVDY. Looking at my total gains and losses for each investment – I’m actually down 28%. It doesn’t feel that way because I invested around $20 dollars and it’s at $50 after reinvesting the dividends. But they were reinvested at higher prices and I could have invested in something else like Brown & Brown which has grown 35% in my portfolio! I would have made far more money. And they raised the dividend!
It takes time and patience. That may be the real challenge. I still don’t know what I will do when I hit my goal. Perhaps I will set another grand goal or several mini-goals. But I have learned not to be swayed so much by volatility and remain consistent.