Need help understanding these numbers? Visit our first monthly income report for more information. Or you can (and we recommend that you) start at the beginning and read through all of the Income Reports.
Our Goals for June
- Increase the worth of our businesses by 10% or $1,700
- Grow sales volume of online store by 10%
- Grow our share of earnings from equities by %1
So how’d we do?
Online Earnings
In June, the equity base (Inventory + Cash – Credit – Monthly expenses – what we take out as income) of our side businesses increased by: $2,176!
Our goal for June was to increase our equity growth by 10% or about $150 (for a total increase of around $1,700)
We beat our goal by $476! This is even more satisfying because we had an unusually high number of expenses this month. Not only did we need to restock on on supplies, but shipping errors by distributors cost us a good chunk of change by sending us the wrong items (which we had to ship back) and by failing to send our entire order. The net effect was that an entire shipment of goods, a nearly a 30 day supply, was stuck in limbo for the whole month (and still hasn’t been fully rectified.) We can only speculate how good this month would have been operating at full capacity.
This outstanding growth was due in large part to our successful push into a new product market, and the acquisition of a new brand to our product line.
We do not believe this sort of increase is likely to happen again any time soon (though we really hope it will). Home runs are few and far between. Keeping this in mind, we are maintaining our long-term goal of increasing our equity growth by 10% per month, but we are treating this month as an anomaly.
Our goal for July is to increase the equity growth of our online businesses by 10% or about $200 dollars per month, for a grand total equity increase of $2,376
Passive Income from Investments
Our estimated monthly share of earnings from stocks grew from $248 to $279, or just over 11%.
Our goal was to increase our passive income from investments by 1% (in line with our long-term goal of growing investment income by 12% each year).
Yes, we achieved nearly a year’s worth of our goal in a single month. Yes, we are ecstatic at that number. BUT, how we managed this feat needs some explanation (that will make this gain seem less amazing):
In short, we cleaned out the equity closet. I maintain a spreadsheet that tracks the stocks we own, the earnings per share of those stocks, and the return on our investment we are getting form them. (It does this automatically and is very cool, if you’re into that sort of thing).
We had a handful of individual stocks that I bought back in the days when I thought trying to beat the market was a good idea. These were not good buys. Each had lost over 50% of their market price since I bought them and their long-term prospects looked just as bad.
Basically, with no hope of a turn around, they were just a drag on the portfolio, so I sold them off (booking losses, so no tax will be owed) and used the meager funds from the sale to buy extra shares of the market. Here’s why this 11% gain is not as great as it seems:
Had we just been investing properly from the start, we would have been earning this extra income from the beginning. So while I’m happy to see our passive income grow by 11% this month, we must remember that it could have been 11% higher for years.
*See Getting our Fair Share for an in-depth explanation of what we mean by this section and why it’s important to your investing psychology.
Our goal for July is for our share of earnings to increase to at least $307 (an increase of 1%). This puts us in line with our long-term goal of growing our passive income by 12% per year.
By the way, this means that the passive income from our online businesses is now a full 50% of our $600 goal. This will likely decrease somewhat if the recession plays out like the financial pundits say it will. If all that doom and gloom does come to pass, we will be buying even more market shares, and increasing our passive returns, at discount prices no less. We will continue to aim for a 1% increase in passive earnings each month, even during an earnings recession.
Total Online and Passive Income
Total online and passive income for June 2020: $2,455.
A quick note about Antifragility
In his book Antifragile, Nassim Nicholas Taleb introduces us to the concept of Antifragility. Antifragility is the idea that somethings benefit from chaos.
After reading this book, Leslie and I have been looking to increase the antifragility of our businesses. Basically this means taking the time to think about what events might occur that could hurt our income, and then taking steps to not only prevent, but to profit from those events occurring.
We believe we are entering into such a time. The following months will be a test of well we did.
Our Goals
Our goals for July:
- Grow equity base of the businesses by $2,376
- Grow our share of earnings from equities by %1 (For a new monthly total of $282 passive income)
- Our total income goal (both active and passive) for July is then: $2,658
Find out if we met our goals in the Income Report for July 2020.
