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Our Goals for July were:
- Grow equity base of the businesses by $2,376
- Grow our share of earnings from equities by %1 (For a new monthly total of $280 passive income)
- Our total income goal (both active and passive) for July was: $2,683
Online Earnings
Garg. What a frustrating month! We really struggled to gain traction on our goal for the first half of this month, and only some of this was our fault.
So what did we mess up? We let inventory sit at our house a few days while we took an unplanned break. No big deal. If it wasn’t for this blog, we wouldn’t even notice. But since we publish our numbers here, that delay will show up in the bottom line. Basically, it just means that the inventory we sent in will not make it before Amazon sends out its payments for this month. In the short term our numbers will drop. In the long term, it means nothing.
So what wasn’t our fault: Shipping delays. Lots of shipping delays. Distributors were slow in shipping to us. Amazon was slow to receive our shipments. Mistakes were made. Inventory was lost, found, lost again, sent across the country on a slow boat through the desert.
THEN. Amazon broke an entire shipment of our inventory. Like the whole thing. Nearly a hundred items. Broken. This is something that has never happened to us before, and there was a moment of panic before we realized that Amazon was going to make right on their error. They actually reimbursed us more than we would normally make, had the items been sold in the normal way. So in the end, it actually worked out in our favor! Thanks Amazon!
But in all seriousness, even though it’s frustrating, I understand. It’s tough out there right now. The covid crisis has really slowed down everything. There are less people working, and therefore less work getting done. So even though I make light of my frustrations, I want to make it clear that the real feeling I have right now is one of gratitude. I am so thankful to have my work from home jobs right now. These side businesses have afforded us a level of protection I never would have imagined.
Now let’s get on with how we did. Even in the face of great slowdowns in our distribution network we managed to increase our equity base by $1900 (We define the increase in our equity base as: Inventory + Cash – Credit – Monthly expenses – what we take out as income. Put another way, it’s the dollar amount that our business grew).
Our goal for July was to grow by $2,376.
We missed our goal by about $500. Given that the US has just witnessed the worst GDP reduction in it’s entire history, and considering that the number of unemployed has not been this high since the Great Depression, I am truly, speechlessly thankful for my side businesses.
Because of our small, low-cost businesses, we stayed profitable. We continued to grow.
But most importantly, we slept well at night.
Security is priceless.
Because we missed our goal, we’ll be dropping back to a purely arbitrary price level:
Our goal for August is to grow our equity base by $2000.
Passive Income from Investments
*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.
I believe we are seeing the beginning of the recession in action. And I have to admit, I was a overly optimistic last month.
Last month, I made the bold claim that if earnings did indeed fall (meaning a decrease in our share of the earnings from the stocks we own) we would buy extra shares to keep our passive income level growing by 1% per month.
Well. Earnings fell. And they fell far harder than I thought they would. That in itself is no big deal. It is just part of investing.
The real surprise came with what happened to the price of stocks as the earnings fell.
They went up.
This puts us in an awkward position. We now have the privilege to buy less earnings for more money. Now, because I don’t believe in timing the market, and because I believe the only intelligent way to invest is by regularly investing a regular amount (also known as dollar cost averaging), we still invested our $600 dollars, just as the strategy says we should.
We could have invested more (remember we made almost twice our investment goal of $600 this month) but we decided that investing that extra cash back into the business was more efficient. So we used it to buy extra inventory, taking advantage of volume discounts offered by some of our suppliers.
It might annoy me to pay more to get less in passive earnings but in the long run, earnings will return to normal and we will see an upward swing in our passive income. For now, though, our passive earnings will take a hit. We will maintain our goal of increasing earnings 1%, but with the following caveat: We will only invest over our $600 target if we can’t responsibly invest it in our work-from-home businesses.
Total passive income for July: $235
Total Online and Passive Income
Total online and passive income for July 2020: $2135
Our Goals
Our goals for August:
- Grow the equity base of the businesses by $2000
- Grow our share of earnings from equities by %1 (For a new monthly total of $238 passive income)
- Our total income goal (both active and passive) for August is then: $2238
Find out if we met our goals in the Income Report for August 2020.
