April is Here
Q1 2017 has ended and the flowers are blooming again. It has been a good quarter for my portfolio and I have high hopes going into Q2 that the year will continue to trend well. Outside of how my investments performed I also racked up several accomplishments:
- Paid off all credit cards
- Increased the amount of money being invested each month
- Started a Fundrise account
- Started purchasing bond funds (VCLT)
- Reduced total debt by +10%
Paying off the credit cards in particular has been a real struggle that at times I have not been the best at keeping up with. It was also the most important as I was paying over 17% interest on the balances. Now that that is done I can focus on my investments.
(For last quarter's update click here)
Vanguard: 4.18%
Vanguard is a pure income stream investment for me. I'm buying it only for the dividends (though appreciation is well, appreciated). On top of VYM I also added VCLT to the mix this quarter to add bonds to my holdings. These holdings are relatively new for me so it isn't a surprise that they are returning 4%. Hopefully as they age they will pick up the pace
Lending Club: 4.82%
I have mixed feelings about Lending Club right now. At the beginning of the year I had shot up to 8% projected returns however that quickly retreated as multiple people defaulted on their loans. This may be a seasonal occurrence with the holidays and requirements of colder weather being financially difficult for people. There was also the change that previously under my projected return Lending Club posted a range that a similar portfolio could expect to produce. This has been removed although how accurate it was to start with is debatable. I still believe in the model of peer-to-peer lending, I'm just a little suspicious of some of the loans.
I've had people take out $15,000 "Home Improvement" loans only to default and go bankrupt 3 months later. These loans are unsecured which means a borrower doesn't put anything on the line other than their credit rating. I've had the feeling that some borrowers are gaming the system, taking out loans when they know they are going to declare bankruptcy anyway. From the lender's side there really isn't any way to tell and the hope is that by diversifying through holding a large amount of loans that you are somewhat protected from things of that nature. I'll be keeping an eye on this as the year moves on.
Betterment: 4.9%
My investment in Betterment is doing exactly what I expected of it, steadily growing. The market has been good for buy and hold investors in the past months and my 90% stock allocation in Betterment is taking that ride. Additionally I'm not paying any fees for Betterment as I referred 3 people to get accounts, not that the fees would amount to very much. I'm pretty happy with Betterment as a set and forget investment. I literally don't have to raise a finger to continue investing and I have confidence in their model and their automated features.
Fundrise: 8.25%
My first foray into crowd funded real estate seems to be a big winner. Fundrise has declared 8.25% dividends for both their East Coast and Heartlands eREITs. These dividends appear to be prorated however so I won't be getting the full payout this quarter but can expect it next quarter. I also have to wait until "Mid April" to get the payout which will mess up my accounting but I wanted to post the rate for informational purposes.
If you aren't familiar with Fundrise you can find my article about my investment here. Just as I said in my article I'll say again that this is a new company and a fairly new investment vehicle. I maintain my cautiousness and keep in mind that this could completely fail at any point. That said I am optimistic about Fundrise as it has assets to back up its investments.
Stock Options: 10.92%
It has been a great quarter for selling Options. With the market trending up I chased it all the way to the top. Just last week we leveled off and had a bit of a drop which left me holding stock to sell Calls over. I could be stuck with the stock for a few months if the "Sell in May" adage proves true this year. That will put a dent in the performance of my Options strategy for the year but it remains to be seen if that will happen or not. Last year Options were my best performer and I'm hoping to duplicate that this year.
Quarterly Income Streams: 6.05%
Based on my target income for retirement this quarter met 6.05% of the goal. While that isn't great in terms of how far I have to go that does rival my best quarter from last year (6.85%) which is a great start to 2017. This year additional income streams are kicking in, the debt is going down, and I'm continuing my plan to increase investments. As I roll more investments along I'll get to see compounding interest take effect and I'm looking forward to the day when my reinvested gains outpace my monthly investments. I've got a ways to go.
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