Income/Financial Freedom Report – January 2017

I didn’t think it was possible to actually *lose* money with passive income.  Turns out I’m wrong.

Here’s the summary:


Notable Items:

Lending Club

Increased my position in lending club from roughly $6k to $10k, and decreased my monthly contributions to retirement from $400 down to $100.

As I see it, you aren’t going to hit it out of the park with lending club (it’s going to yield 5-10% per year).  But compounded, that’s quite good!

So I’m seeing Lending Club as my new “retirement” fund.  Dangerous?  Maybe.  But what’s more likely?  A stock market crash wiping out half of your savings when you are in retirement (which seems to happen every 5-10 years?), or 100s of people defaulting on their payments at the same time?

Also, another primary reason I stopped contributing as much to my 401k is a tax reason.  When it comes out (after compounding), I’ll get taxed at whatever my rate is.  Assuming I’m not working but still having income coming in (from real estate or whatever else), I’ll actually be in a higher tax bracket.

I think this deserves it’s own post, but needless to say, I think conventional wisdom is selling you a pack of lies.

136 N 10th

Lots of repairs.  The main one was a $1600 boiler that was leaking.

I probably didn’t have to get this fixed (at least not right away), but it was one of the main concerns when getting back the building inspection and actually I negotiated down $5k for the house.

After more investigation, I thought this might cost closer to $10k and wipe out all of the income for the year.

Also, aside from a $1k PITI payment every month, I’m getting hit with $300-400 utility bills from the local gas company.  Maybe it’s time to look into individual metering and/or RUBS? (FYI, “RUBS <state>” is the wrong way to look this up on google – instead “ratio utility billing system <state>”)

Also, got surprised with a $229 bill for water + sewer.  I knew it was coming eventually, I just “conveniently” forgot about it.

On the plus side: At the start of the month, there was one tenant who hadn’t paid on time. He claimed his rent was stolen (but no police investigation – dog ate my homework?).  Was it stolen?  Maybe, who knows.  But he ended up getting a charity to come through to pay his rent.  Whew!  I’m glad for him and glad for me.

Vertical Credit Spreads

I’ve been making money each month with this, just not very much.  Now it’s time to scale up and instead of trading SPY, I’m trading SPX.

I up’ed the cash in my trading account to $15k from $5k. Now I can take 1-5% risk trades comfortably on SPX.

The way I see it: If I want to gain 20% through spreads, all I have to do is make roughly $50 per week.  Most of the spreads I’m trading (if taken to expiration) would make about $100.  So all I really need to do is trade one contract a week (and assuming I’m not losing very often, which I don’t plan to be with such low delta values), I should easily make 20% (others make 40-50% per year).

Treasury Direct

Tried short term t-bills on treasury direct.  Only put in $100 into a 4-week t-bill.

Obviously these t-bills lock up the money.  There’s no obvious way to trade them on treasury direct, so I think I’m going to stay away from these.


Making my first Udemy course.  I already have some results, but that’s for another post.

Financial freedom Report

Maybe not even worth posting – since I had negative numbers.  This month I was 10% in the hole for my financial freedom account.

What’s more interesting is my expenses nearly doubled from the month before?  Why?  I had a few high ticket items:

  • I moved out of a storage space.  I moved all of my stuff across the country (from NYC => California).  I should have done this years ago, but my future seemed uncertain.  This cost nearly $1500 for the movers.  But it will be saving me $150 a month.  Over the long term, this should be worth it.
  • I dropped my cell phone and broke it.  Luckily I was able to contact  A nice guy came over and fixed my phone for $100.  I had another old one sitting around which hand’t booted and was replaced for free by verizon when I was on their coverage. He was able to fix it for $50.  I was able to sell it on ebay and made a few bucks on it.
  • Took my girlfriend to a Kanye West concert.  I’m not really into Kanye, but she certainly is.  Tickets: $150.
  • Also, started donating money to my college again.  It’s only $200 but I think it’s a good thing.

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