How I Am Collecting Over $5,000 in Unearned Income This Month

Now that I got your attention…

If you were looking for a get rich quick scheme or a story about how something that I make or wrote went viral, you might as well stop reading this now and read something about the Kardashians or what Trump tweeted instead.

I would like to collect over $5,000 in unearned income per month with an e-commerce site, but that is a dream of mine and something that remains in the careful planning stage for now.

It is not so much that I, myself, am collecting over five grand in unearned income this month, but my family is through my long years of hard work and steady investing that I have made on their behalf, as well as my own.

Even though I am a thoroughly Middle Class Guy, it is true that just over five grand in dividends and capital gains are being paid out to our accounts.  The biggest of these payments, from the Vanguard Wellington fund and from the Vanguard Primecap fund, are being made to accounts in our daughter’s name and my wife’s name.

The dividends and capital gains paid into my Roth IRA account, comprised roughly equally by the T. Rowe Price Blue Chip Growth fund and the T. Rowe Price Capital Appreciation fund, were paid to the accounts today.  Keeping in mind that the share prices were reduced by the same amounts that were paid out in these accounts, the account balances actually dropped today as the share price dropped.  Together, I collected $1,540 in dividends and capital gains in my account today.  Later this month, the GNMA fund that I have used as a “savings account” for the past five or so years will make its monthly dividend payment.

My wife holds 255 shares of the Vanguard Primecap fund, originally funded by an $8,000 or so investment urged and largely funded by my late grandfather about seventeen years ago.  Through a combination of increased share price and several years of reinvesting dividend payments, the original investment has grown into over $34,000, with a $1,485 payment due us by the end of the year.

I set up and have made all the contributions to my wife’s Roth IRA, held entirely in the Vanguard 500 Index fund.  It does not show a capital gain for this year, but we anticipate a quarterly dividend this month, so that should add another hundred bucks or thereabouts.

The biggest dividend and capital gain payment will be made to my daughter’s Wellington fund account.  I obsessively sent $200 here, $300 there and sometimes $500 at a time to each of my children’s Wellington accounts for years.  I did this before and then in addition to their Illinois Bright Start accounts.  I have since cashed out my son’s Wellington account due to tax purposes during his junior year of high school.  I rolled those funds into the T. Rowe Price College 2018 fund, which I have used to pay for his second and recently-completed third semester of college.

Like the Primecap fund, through a combination of reinvesting dividends and capital gains for the last twelve years coupled with increases in share price, the $26,500 that I had sent to our daughter’s Wellington fund is now worth over twice that amount.  Due to the amount in her account, it has been transferred to the investor share class, and her 762 shares multiplied by a scheduled distribution of $2.79 per share will result in $2,125 being paid to this account in the form of additional shares later this month.

Five years ago when I fancied myself a stock picker and watched the Money Madman every night, I began following Annaly Capital Management after he excitedly rated it a Buy! Buy! Buy! several times within weeks.  So buy and then buy Annaly again I did, and enjoyed collecting healthy dividends quarterly as the stock sailed along.

Somehow, I continued holding it in the hopes that it would return to the $16 or so per share that I spent on it, even after it wallowed around $10 per share for a number of years.  I mention it because I am still waiting for it to return to $16 per share and it may never do so.  However, I continue to collect $60, or thirty cents per share, in dividends every quarter for the past several years.  It is not a lot, but it adds another $240 to our income every year and someday it will rise again.

NLY 12.24 0.08 0.66% 200 16.105                 -792.98      -24.47%         2,448.00  
03/05/2012 12.24 0.08 0.66% 100 16.50 8.00 -435.99      -26.26%         1,224.00 
03/28/2012 12.24 0.08 0.66% 100 15.71 8.00 -356.99      -22.58%         1,224.00 

Having been forced to view my E-Trade account for the first time in months (it is painful for me to look at and I generally choose to ignore it), I see that I remain about $800 or 24.5% down on Annaly, having purchased one hundred shares on March 5th of 2012 at $16.50 per share, then another lot of one hundred on the 28th of that month at $15.71 per.

The good news is that I have collected over $800 in dividends from it in the past five years and nine months.

So there you have it.  I did not make a great stock pick.  I did not buy even one share of Bitcoin although I certainly researched it quite a bit this past July when it traded around $2,500 per coin or about $15,000 less than what it trades for now.  Needless to say, I would much rather have purchased four bitcoins instead of the triple-leveraged gold miner fund that I was sending money to at the time.  A ten grand investment made this past July would be worth over sixty-eight thousand today, but I am sure that I would have already sold it for less than that.  Oh well, woulda coulda and shoulda.  I did not understand the mania for bitcoins this past summer and I understand it even less now.  When it flames out, you don’t want to be among the last ones who bought into this thing.

No, me and my family are collecting a grand total of five thousand dollars worth of dividends and capital gains based upon years and years of steady investing in solidly-run mutual funds with T. Rowe Price and Vanguard.

I issue the disclaimer that the funds that we hold may go down in flames like Bitcoin in the future on their own or as part of a Recession.  But when I add up all the payments this month, I am almost pleased at what I have picked.

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