Income Recap - November 2014

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Includes: AAPL, AGESY, SZEVY
by: Mark Farragher

When building a stock portfolio for dividend growth investing everybody agrees that it is wise to diversify. Investing $50k in one company is obviously a bad idea. What if the stock suddenly crashes? But invest $1k in 50 different companies and suddenly your risk is reduced enormously. Those 50 companies are not all going to crash at the same time.

Strangely enough you do not hear a lot of people talk about diversifying income. Almost everybody I know has a single full-time job. What would happen if they get fired? They'd be forced to dig into their reserves while looking for a new job.

I had my own wakeup call when I left my startup and moved to Belgium. The transition from The Netherlands to Belgium left me without income for 4 months and my bank account ended up dangerously close to zero.

I promised myself this would never happen again. I decided to create 10 separate and independent sources of income. With 10 income sources, if one source should suddenly stop, I would still receive 90% of my monthly income.

I started on this journey in August when I made my first dividend-generating stock purchase. It's December 1st today, so where am I now?

Dividend income

November was a memorable month for me because I received my first dividend from Apple (NASDAQ:AAPL)!

Apple's current dividend per share is $1.88. The company issues dividend four times a year, or $0.47 every three months. I own 13 shares so I receive $6.11 in gross dividend. My finances are handled in The Netherlands, which charges a 15% withholding tax on American shares. The result is $5.19 in net dividend, or €4.14.

My blog hosts Google advertisements through the AdSense program. I placed two ads in discreet locations: one in the sidebar and one below each article.

A couple of visitors clicked on ads, and because this is a finance-themed blog with a narrow focus, some of those were premium ads with a very high cost per click. The result is a very decent €17.71 in ad income, despite the low traffic.

Writing finance articles

Every month on the 8th and the 24th, I invest €1000 in new stocks. I try to find European stocks that are about to enter a growth spurt and this requires some research.

In November I started to write down my thoughts and submit them as articles to Seeking Alpha for publication. I wrote two articles about my most recent stock purchases:

Ageas (OTCPK:AGESY) - A European Insurance Company With A 43% Upside And 6% Dividend Yield

Suez Environnement (OTCPK:SZEVY) - A Good European Water And Waste Utility With 11% Upside And Excellent Long Term Prospects

To my great surprise, Seeking Alpha decided to publish both articles and paid me a handsome €147.04 for my efforts.

The following graph puts it all together:

Secondary income by type

This is all of my secondary income, meaning income from sources that are not related to my full-time day job of being a SharePoint consultant.

I made €168.89 in November, which is over 12 times more than in October.

Together with my full-time day job, this puts me at 4 income sources. I achieved 40% of my goal to eventually have 10 sources.

So how is my income distributed across those sources?

Income source distribution

I still have a long way to go before each source provides an equal share to my income. Right now the secondary income accounts for only 3.7% of my total income (last month: 2.6%).

My goal is for my secondary income to cover all of my monthly expenses. This will provide a lot of peace of mind and give me the freedom to pursue any career path I like.

Secondary income covering monthly expenses

My secondary income now covers 5.9% of my monthly expenses (last month: 4.1%).

I'm very happy with these results. Even though the percentages are small, the growth rate is very impressive. I never expected to get so far in only three months, considering the fact that I have a full-time job and do my investing and writing at night or the weekend.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.