Wednesday, October 11, 2017

Passive Income Project

Mr. DebtFree here, today I want to talk about a new project I am working on.  From our September Spending Update you can see that we were on the hook for about $3,300 in monthly spending.  While I believe that we can lower our monthly spending with some simple frugal tactics I will use $3,300 as a baseline for this new project.  Simply put, I propose to grow multiple different passive income streams until they are equal to our baseline $3,300 spending.  Let's lay down the groundwork for how we can get there!

Passive Income Streams:

Stream 1:  Investments in stocks and bonds

For this income stream I will use the 4% rule and assume that I will on average be able to draw upon my investment accounts to the tune of 4% without touching the underlying investment principle.  You can read more about the 4% rule here.

With current investments I am able to dig up $515.33 per month.

Ms. DebtFree who is at the very beginning stages of her investment career also adds $2.21 per month to the pot.

Current income $517.54 or 15.68% of the way to our goal!

Stream 2:  Real Estate

We currently own one property, a 3 bedroom 1.75 bath single family home.  We could probably rent out our spare room to the tune of $700 per month netting ~$650 per month (after the increase in utility bills due to another person).  I hesitate to do this at this time due to the absolute joy that singing at the top of my lungs in my underwear while dancing around the house brings me.  On the other hand, if we were to move this house would rent out for $1,500 per month (my house has an evil twin next door currently renting for $1,500).  With a mortgage of $915 and ~ $150 for property management, as well as another $150 reserved for times when the house is not occupied/repairs (newer house) that $1,500 is quickly depleted to about $285 per month.

So, option 1 rent a room for $650 per month or, option 2 move and rent house for a profit of ~$285 per month.

In the future I plan on looking into adding a managed rental property or two to our investments to boost our passive income.

Current income $0 per month with potential $650 or $285 on the table.

Stream 3: Cryptocurrency Mining

I have been interested in Cryptocurrency from the early days of the bitcoin.  At one point I had my personal computer mining ~1 bitcoin per day.  This lasted all of 7 days until people (including me) were too annoyed at the jet engine level noise at which my computer fans operated to keep my rig from burning down the house.  At this time the coins were worth almost nothing so I didn't think much of shutting down the operation.  Flash forward a few years and I sold 6 of those coins for ~$1,000 each (keeping one to this day for nostalgia purposes). Had I only known what those coins would be worth some day I would be long since retired on my own tropical island.  The current price of bitcoin is a whopping $4,809 each!

At this time I use the second video card in my computer to mine coins on the Nicehash platform.  
This brings in a sizzling $16.38 per month after accounting for the cost of the electricity.  This operation could be scaled up with a small investment as I have the perfect square footage available in my garage to house a new mining rig.  I will be sure to post in the future about the budding mining operation.

Current income $16.38 per month or 0.5% of our goal. 

That's all I currently have for passive income streams.  My brain is currently working double time to try and dream up new ideas for more streams of income.  As we think of and employ these new strategies we will keep you up-to-date.   I look forward to the day when we can post about reaching our goal of all expenses covered by passive income!

Current total monthly passive income:  $533.92 out of $3,300 or 16.18%

Monthly I will update this page to reflect gains/losses in passive income.

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