Wednesday, December 6, 2017

Goal Update: End Of November, 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of November, 2017
Current value: $37,550
Change from last Month: +1,385
Percent of Goal:  34.53%





Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.


Events Of Note Last Month:

My SQL courses on Udemy generated $96.64 of income. One of my courses was selected to be part of the Udemy for Business program. This means Udemy will be including the course in a package of courses that they sell to businesses. I will earn income based on minutes viewed for courses in this program rather than earning a flat fee per course sold. There seems to be great potential for a large number of students with this program.

And speaking of getting paid per minute viewed, I received my first payment from SkillShare. I made $11.14. Not bad considering I only have 5 students there and they have only watched about 200 minutes of my courses so far. Next month is looking better: I'm up to 11 students and 300 (additional) minutes already.

Cash Backed Naked Put Update

As I mentioned last month, Realty Income stock took a bit of a dip and I was able to sell some cash backed puts at what I felt was a very safe strike price. I received $231 for selling puts with a strike price of $52.50. Sure enough, the price rebounded and when the options expired, the stock was trading at $56.48. This means I keep the $231 I received and was not forced to buy any stock. This three week investment netted me a 10% annualized ROI.

I turned around and made pretty much exactly the same trade on November 22 - I sold 6 puts for $0.40 for a net income of $231. This time, the strike price was $55 with an expiration date of Dec. 15. I have a feeling my options might be exercised when that date rolls around and I'll have to buy the shares. As of this writing, the stock is trading at $55.55. It has to stay above $55 for 2 more weeks for the options to expire worthless (which I want). My mistake, if you can call it that, was that I miscounted the weeks remaining in this option when I sold it. I normally like to only have about 2-3 weeks until the option expires but this time, I sold options 4 weeks out. That gives me a little more exposure than I like.

Assuming the options don't get called, I'll have made a 9.11% annualized ROI. If the stock closes on Dec. 12 below $55, I'll have to buy 600 shares at $55 each. I'm not opposed to that. I like the stock and have no problem owning it at that price. It's just that then I'd be earning a 4.66% ROI from the monthly dividend instead of roughly double that by selling options each month. We'll have to wait and see how this one turns out.

In other news, I've changed jobs! Starting yesterday, I'm now working for a new company based in the Washington area. Although not the reason for the change, the new position did come with a 28% salary increase, plus a significant signing bonus. There was one drawback, but I'll get into that next week. Once I know what my regular paycheck will be, I'll be re-figuring my budget. I expect I'll be able to up the amount I put in the Tesla fund each month!


Net Worth Update

Our net worth increased by $9,922 over last month. This is more or less just a reporting adjustment. Mint finally resolved their issue with accessing my 401(k) account, so that figure finally got updated after a couple of months. (Note there is no more red dot next to the Investments" category.) I did pay about $10,000 in a repair bill for the new house, but the check has not cleared the bank yet, so that's not reflected in this month's numbers.


October 2017
November 2017

























If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, November 29, 2017

Equifax Gives Free Credit Monitoring To Pretty Much Everyone In The U.S.


In July, Equifax discovered its security systems had been compromised and the financial data of up to 143 million Americans had been stolen. Compromised data included names, addresses, social security numbers, drivers license numbers, birth dates, and credit card numbers. It was, quite frankly, a colossal screw up.

Equifax has a website you can use to see if your data was part of the compromised information. Visit https://trustedidpremier.com/eligibility/eligibility.html and enter your last name and the last 6 digits of your social security number.

If your data was affected, I would strongly suggest signing up for the TrustedID Premier service Equifax is providing for free. Do this by visiting https://www.equifaxsecurity2017.com/ and clicking the Enroll Now button. Enrollment is offered for free through January 31, 2018.

And here's a bonus - even if your data was not affected, you can still sign up for one year of this free service. Yes, anyone and everyone in America can sign up for this for free before January 31! Note that when signing up, you will be asked certain questions from your credit history - things like what street have you lived on, who you've had a mortgage with, etc. These are multiple choice questions and should be fairly easy to answer.

This is 100% free. There is no auto-renewal after 1 year where you have to pay. You don't have to provide any payment information to sign up.

The Benefits

By signing up for TrustedID Premier, you get:

  • Identity Theft Monitoring - Your credit report at all three major credit bureaus will be monitored for suspicious activity.
  • Free copy of your Equifax Credit report - This is in addtion to your yearly free copy you can get from annualcreditreport.com
  • Ability to lock your Equifax credit report - This will prevent unauthorized third parties from accessing you credit. This is slightly different than a credit report freeze (more on that later).
  • Social Security Number Monitoring - They will monitor the internet for appearances of your social security number of sites that sell such information.
  • $1 Million Dollars Of Identity Theft Insurance - This will pay for certain out of pocket expenses if you are affected by identity theft.

Lock Versus Freeze

The old way to stop people from accessing your credit report was to put a freeze on it. You can unfreeze your report by phone, mail, or online by using a PIN you set up when your placed the freeze. Placing or removing a freeze can cost money, depending on the state you reside in.

I've done this in the past and it was a pain in the ass. This was probably because I forgot my PIN and had to jump through all kinds of hoops to prove my identity.

A lock is a more modern process and can be readily turned on and off with mobile devices. This can be done immediately and on demand.

Both locks and freezes must be done for each credit bureau separately.

The Bottom Line

The Equifax data breach was huge and its full effect might not be felt for some time. Your stolen data may be sitting dormant for months before it gets sold. Be proactive and protect yourself from identity theft by enrolling for a year of free coverage with TrustedID Premier.

Wednesday, November 22, 2017

I Reached A Passive Income Milestone! Let Me Show You How You Can Do It Too.


I’ve written before about passive income and why it is great. It’s the underlying basis for this blog – I plan on paying for my Tesla with passive income.

Sometimes, passive income can be boring. Actually, I prefer it to be boring. When I talk about passive income, I want the same, predictable amount coming to me each month (or, even better, an increasing amount). I’m not looking for huge gains one month and losses another. Slow and steady wins the race. But then, there's boring and there's boring.

Boring Boring

The most boring type of passive income is bank account savings. If you have an account that pays you any interest at all, it’s probably under a buck a month. *Yawn* That’s boring and even I will admit it’s probably a little too boring.

Run-Of-The-Mill-Boring

If you own a dividend paying stock, that can be boring too, but it’s a bit closer to the type of boring I like. Hopefully, the company you’ve invested in regularly increases the dividend and rarely, if ever, reduces it. If you are reinvesting the dividends, you end up buying more shares of the stock each time the dividend is paid. Because the stock price varies, the amount of the stock you get when reinvesting will vary. This is my kind of boring. Still, unless you own a good chunk of shares, it’s probably a small amount you get each time the dividend is paid.

Exciting Boring!

My favorite kind of boring, the exciting boring, if you will, is royalties. Royalties are the income you receive for something you created. You spend some time once creating something and then you can sell that something over and over, making money each time, with no further effort on your part. Royalties can be really small – check out some of my monthly updates and you’ll find sometimes I receive a penny for my ebook royalties – but they can be larger as well.

Source Of Passive Income Excitement

With royalties, the excitement comes from two components: volume and time.

The more of something you sell, the more money you make. Even if it’s a small amount on each item individually, if you sell enough of something, those little amounts join forces and become large amounts.

Time is the other big component. You’ve already invested your time creating whatever it is you are selling. If you can keep selling that item for years, your income will add up.

This really hit home for me this month because my online courses just crossed a major milestone:

That's a lot of smackaroos!

This month, I crossed the $10,000 threshold for income from my online courses! I created and sold my first course in August 2013. My total monetary cost was $149 for a microphone. I spent several hours developing and recording my first course. The subsequent three courses were made more quickly, as I had gained a lot of experience with my first one.

After that initial work, I have done next to nothing. I’ve had a spend a few minutes here and there answering questions from a student or two, but for the most part, once I published the courses, my work was done.

Four years later, those courses have made me over ten thousand dollars! They are still generating income. Furthermore, I recently posted them on another training site and they have started earning me money over there as well.

Small incomes over a long time period. That’s the type of boring I like.

You Can Do It Too

There are many ways to create a royalty stream and you should pick the one that best suits your skills and knowledge. I chose to create computer-related courses, but you can make courses about almost anything. See my post here about this type of side hustle.

If you are musically inclined, try writing, performing, or producing music. Create some songs and sell those.

Do you prefer words to music? Write stories.

Paint.

Take photographs.

The internet makes it very easy for anyone to create content and sell it. If your content can be delivered electronically, you have no ongoing production costs, no shipping charges, no assembly. You can sell your creation over and over, automatically. Just sit back and collect the income.

I know that is making it sound easy. You do need to be able to produce something that people want or have a need for. It helps greatly if you are knowledgeable in your subject. But if you really enjoying doing something, you probably already are knowledgeable about it anyway.

The costs of entry are so low, there is really no excuse to not try. Look what my investment of $149 and a couple of weekends has returned so far!

Get out there and create your own passive income stream!

Wednesday, November 8, 2017

Your House Is Not An Investment



"Your house is not an investment." - My grandfather

My grandpa told me this one day when I was a teenager. He was driving me home from somewhere and we were stuck in traffic on the freeway. I don't remember what the whole conversation was about, but that line stuck in my mind because it was the opposite of what I heard so often before: "The path to the American Dream starts with home ownership."

Many people, including financial advisors, advocate home ownership as a top financial goal to strive for. And for many people, this is perhaps a smart move. Real estate values generally rise over time although, as we have seen in the last decade, there can be dramatic corrections. A mortgage payment is a type of forced savings plan because you are forced into paying down your principal each month, building up your equity in your house that you can recoup when you sell it.

But to call your home an investment is not true. As any home owner will tell you, it costs money to own a house. I'm not talking about the mortgage payment. I'm talking about all the expenses that go into keeping a house in a livable condition. Consider:

  • Your refrigerator died and all the food inside went bad and had to be thrown out. Plus, you had to buy a new refrigerator.
  • Your yard is overgrown with weeds, so you need to hire a gardener or buy a lawn mower and spend your weekends keeping the plants under control. 
  • The yard attracts pests, so you need to hire a pest control company to stop the bugs from invading your family room.
  • The water taps for your washing machine have corroded and are now leaking all over the floor.
  • Rodents played in your crawlspace and destroyed the vapor barrier, which needs to be replaced before the wood walls start rotting.
  • The condensation drain line for the air conditioner in the attic plugged up, causing the drain pan to overflow and you now have water damage to your ceiling.
  • A glass seal on your double pane window broke and let water in, which damaged the window sill. Both the sill and window need to be replaced.
  • After 15 years, the insulation in your attic has broken down and needs to be replaced.

I'm not making this up. Every one of those things has happened to me at some house I have called home. We're talking tens of thousands of dollars in repairs.

If it regularly costs you money, it's not an investment.

Investments put money in your pocket. Your home does not put money in your pocket.

The only time a house is an investment is when you own it and rent it to someone else. Then, it's putting money in your pocket.

This isn't to say owning a home is bad. I don't think it is. You need a place to live and a house provides that. You get the benefits of a mortgage interest tax deduction, but you also have the maintenance expenses. One could make a persuasive argument that it's just as smart financially to rent an apartment as it is to buy a house.

So look at your house as a place for you to live and raise a family. Fix it up the way you want. Make it yours.

Just don't think of it as an investment.