A lot has changed…. 2022 Update
Almost 4 years since I last wrote a word on this blog. Time flys. As you can imagine a lot has changed and I hope to go back and summarize many of those changes over the next few weeks / months. I still manage an income portfolio – i.e. The Daily Dividend Portfolio but it looks a lot different – with a lot fewer holdings… I’ll get into the think behind that soon. In the mean time let me just give a couple updates about where I’m at.
Change Of Plans
Back in 2018 I decided / realized that while trying to build an income portfolio that paid out daily, that is M-F for as many days of the month as possible, what I was really doing was building my own mutual fund. At one point the DDI contained over 100 different stock holdings, actually I think it was probably closer to 125. I really wasn’t concerned about doing financial or statistical analysis on all of the holdings to watch for pitfalls – I figured the shed size created enough diversity that the portfolio was “self-protecting”. For the most part this was true – as with most things in life Pareto’s Principal came into action. 80% of the portfolio did great or better than great, while the remaining 20% lingered or lost money. In the end I was approaching about $2000/month in “passive”, dividend income. That was great, but not really the income stream I was hoping for with the size of the portfolio growing so gnarly.
The Transition
In Spring of 2018 an interesting real estate opportunity presented itself. A realtor friend of mine approached me with an off market deal on a vacation rentable condo on the island of Maui (Hawaii). Having over $25k in capital gains in the DDI Portfolio I decided it was time to diversify and sold off a good portion of the portfolio to invest in the Maui condo. I get into details on the condo project in another post, but the basics were that this unit had been ignored for years by it’s previous owners who just milked every last penny out of the income without putting anything back into improvements or repairs. This condo was straight out of the 1980’s as far as decor, but what it had going for it was an amazing ocean view that would never go away. I realized pretty quickly that there was an opportunity here to diversify a portion of the DDI Portfolio into real estate while creating additional equity through some basic property improvements.
The Return
After selling of the bulk of the DDI Portfolio in 2018, I redeployed the remaining cash into 2 separate Vanguard ETF for income: VNQ, a Real Estate Investment Trust (REIT) fund and VYM, a high yielding income fund. For the next several years I just left these two funds alone in my DDI Portfolio brokerage account. In early 2019 I started a small side-business selling miscellaneous items on eBay. Over the next few years I grew this e-commerce store from about 25 items up to over 250. I started off making around $100 a month, however after a couple of years of growth the eBay store is now grossing around $3000/month. Once I was able to stabilize the income at or above $1000/month I started an automated funding of the DDI Portfolio Brokerage account on a monthly basis. Using that model I have built the new (and IMPROVED!) DDI Portfolio account up to just over $50,000.
Going Forward
I hope to be able to provide more updates about the current state of affairs of the DDI, the commerce business as well as the growing Real Estate Holdings here on the Daily Dividend Investor blog.
I won’t be doing much analysis of individual stocks unless there’s a holding that I’m particularly fond of for some reason – I do have some core holdings and plan to explain why I hold and add to each of them as I continue to rebuild the portfolio.
It would be great to hear about how you are building YOUR passive income streams – what has worked and even what hasn’t. I’d love to learn more about your pursuits as I document my own. Stay tuned for more updates.