Monthly Update September 2014

Monthly Update – September, 2014

In this update: stocks take another hit, real estate hits a bump, my LendingClub.com monthly update, an interesting item I spent money on, a business idea, and a couple of New Orleans-inspired songs.

Oh no! It’s like the sky is falling! My portfolio is taking hit after hit. From Lending Club to the stock market to my real estate investment, things look like trouble.

Therefore, this is the PERFECT month to stick to my guns. Mama said there’d be days like this. It’s called volatility and it happens in all investments. What to do? Nothing! A few years ago, I didn’t look at my finances as closely as I do now. The down side was that I wasn’t as frugal as I should have been. The up side was that I never thought to take money out of my investments. Now, I have to make sure to stick to my guns so I get the best of both worlds. In 5 years time, I’m sure I will thank myself.

Investment Portfolio

Personal Capital has a pretty a fun feature. It tracks “You Index” and tells you how much your investments are up or down as a percentage and compares that to a few other indices such as the S&P 500 and the Dow. Here’s a look at my snapshot for August.

Stock Market Portfolio September 2014
Market’s going down! My spirits are still up though!

The “You Index” is looking pretty sad this month. And the worst part is, I am writing this on October 2nd, and right now, the first couple of days of October are looking pretty bleak as well! All it does is make me wish I had some more free cash to start pumping in! Oh well, I will continue to pump in incremental amounts each month!

Real Estate

Disclaimer: Below are the straight income and expense numbers for my real estate investment. Part of the income is being put aside for reserves in case maintenance issues arise or the property is vacant for a period of time. Some months, the cash flow may look extremely rosy, but keep in mind that this is a long term strategy with expected bumps along the way.

Rent Income: $1,025 (paid by turnkey company)

Mortgage Payment (Including Principle, Interest, Taxes, and Insurance): $424.65

Property Management Fees: $102.50

Total This Month: $497.85

Here is the hiccup that I spoke about recently in my first real estate investing series post. The numbers look exactly the same because the turnkey company guaranteed my rent for the first year, but behind the scenes, an eviction is happening. As of now, we are working to get a new tenant in place and I am in the process of interviewing a new property management company. So I am bracing myself for new tenant placement fees from the new company and hopefully vetting them so I avoid crappy tenants in the future.

Lending Club

So I had a couple of charge-offs again this month! These were all loans that were made before I implemented the automatic investing filters to make sure I am lending to the best people, but it definitely hurt my return!

August Interest Received: $92.87

August Late Fees Collected: $0

August Losses (due to defaults): $47.32

Current Annualized Return: 16.91%

Current Lending Club Account Value: $5690.59

Wow – $47.32 in charge-offs in September is more than I have had the entire rest of the year. The good news is that 16.91% is still pretty good! It definitely beats the average and is still the best return I get from any investment. Perhaps I am coming back down to earth a bit, but I am hoping that as my filters kick in, this will level out or even bump back up slightly. Only time will tell.

September Spending

This one is just a bit of fun. I spent $1.05 with USPS, changing my address. If you move, I HIGHLY recommend spending this money so that you don’t miss any mail. They will forward along any mail addressed to you for a full year.

I also spent $4.90 on a ridiculous frozen coffee beverage thing at Starbucks. This is exactly the kind of spending I normally can’t bring myself to engage in. However, we were moving, and my significant other was tired, sweaty, and generally unhappy. I decided that even a frivolous Starbucks purchase was a good idea to brighten up another person’s day.

Business Idea

If you’re just joining these updates, I post business ideas that I have. From time to time, I have ideas that are fun to think about, but I may not pursue due to some specific hurdle, timing, or a host of other reasons. Hopefully, they get you thinking about your own business ideas!

Usually, I post business ideas that I could (in theory) put into action. This month is a little bit different. I am suggesting a change in how ANOTHER business operates. Lending Club has been a pretty lucrative investment for me so far (we will see how they pan out in the long run). I only initially invested $5,000 with them. I would be inclined to invest a BUNCH more if they changed one small thing:

Principle Only Investing

Let’s say I put $20,000 in to Lending Club. That $20,000 was lent out to LOTS of different people over time. What if, when they paid you back, that $20,000 was automatically reinvested in other loans for you, but the INTEREST that you received from those loans could be spun off into your bank account. This would create cash flow/a passive income stream. At my current 16.9%, I would be making over $280/month in cash flow from this investment. That could really help my early retirement goal in a big way!

Music

I just had an AMAZING time down in New Orleans. I went to FinCon and got to hang out with some other awesome bloggers. I also had a chance to hit up Frenchman Street, which if you don’t know, has great bands, pretty much every night of the week. I had a few drinks that night, so I don’t remember the names of the bands I saw, but I’ve always had a soft spot for New Orleans jazz, and brass band music. So, to that end, here are a few fun songs, starting with my personal favorite, Professor Longhair

The Rebirth Brass Band was playing while we were there, but we couldn’t make it! I was bummed, but I comforted myself by listening to this jam.

The next band is from Wisconsin, sure, but they have that great New Orleans sound – one of my favorite brass bands (the intro is a little long, so be sure to get past that part)

I have yet to see any of these artists live, but I imagine they all put on great shows! Enjoy these slower tunes as we head deeper into September and I’ll round back for another update next month!


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6 thoughts on “Monthly Update – September, 2014

  1. Mrs. Bookworm October 14, 2014 at 1:27 am

    Dave, you have good diversity in investment vehicles. My husband and I have just started looking into peer-to-peer lending and your returns from the Lending Club are certainly encouraging!
    A Starbucks frozen coffee beverage… yum, I haven’t had one of those in a while! Sweet of you to splurge on your significant other when she needed it. 🙂
    Mrs. Bookworm recently posted: How We Got Our Finances On TrackMy Profile

    • Mr NYBudget October 14, 2014 at 9:42 am

      Lending Club has been a pretty solid experiment so far. I think I am going to ramp up my investment with them in 2015!

  2. Louise @ Good Financial Choices October 14, 2014 at 3:48 am

    Seems like most of us are posting so-so updates due to the markets!
    Louise @ Good Financial Choices recently posted: Net Worth 2 – October 2014My Profile

    • Mr NYBudget October 14, 2014 at 9:43 am

      Ha! Yes indeed. Can’t stay that way forever though!

  3. Evan October 21, 2014 at 10:32 pm

    I haven’t been involved with P2P lending in a number of years when my job said I couldn’t invest in prosper any longer…but couldn’t you just do that manually with Lending Club? If you had amortization schedules for all your loans you could withdraw the amount you calculated yourself, right?
    Evan recently posted: Why Hasn’t an Investment Firm or Insurance Company Created this Product?My Profile

    • Mr NYBudget October 21, 2014 at 11:31 pm

      Absolutely. I am more interested in Lending Club as a passive investment, as opposed to an active “side hustle”, but it absolutely could be done manually. It would just take consistent time and effort.

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