Geographic independence: July 2009 & first half update

August 2nd, 2009 · No Comments

It’s been quite awhile since I posted an update on our progress toward our geographic independence goal – by which I mean what is our GI-qualified income and how does it measure up to our plan for hitting our GI goal?



Our weighted average GI income for the month was $594.55, which is a decent jump up from the last time I did a similar analysis.  However, the real news is that we were within spitting distance of breaking the $1K barrier this month!  Our GI-qualified income was $956.34.  The main reasons for that are:

  1. A 47% increase in online revenue from blogging – $340 in AdSense revenue.
  2. Big, quarter-ending, dividends on the GI investment portfolio, including a $91 dividend on a ~$2K position in NLY alone.
  3. And the start of income from doing covered calls.

The rest comes from interest on cash, investment dividends, and credit card rewards (which Kimberly is starting to question as GI-qualified but I think counts as it results from making a few simple decisions about how to purchase things we’d be buying anyway.)

As you can likely guess, having almost $1K in income yet only a weighted average of $594.55 means that our income in prior months was quite a bit lower.   Between my last update in February and this one, we hit a low of $352.3o in weighted income in May, and a correspondingly low actual cash income of $265.44.  But we are averaging $476.66/month in monthly GI income for the first 7 months of 2009.  For the year to date, just under 40% comes from online sources, 20% is interest on cash, 20% is investment dividends, and the rest is from nascent efforts like covered calls or miscellaneous, irregular sources like credit card rewards.   I’m hoping the income from trading can go up quite a bit in the future.

A footnote should be that I’m counting interest earned but not yet credited on our No Penalty CDs at Ally Bank as part of our GI-qualified income.  It appears that Ally doesn’t credit any interest to your accounts for these CD products until either you close out the CD, or it reaches maturity.  Because there is no penalty for closing the CD at any point, and your earned interest is paid out 100% at that time, I feel okay counting it as if it was credited during the month.

So how does this month’s income compare to the plan?  In short, we’re WELL ahead of the plan.  The weighted income exceeds the plan’s target for July, 2012!  This is a jump of almost 1.5 years ahead from the last comparison.   While that is great news, both my wife and I feel we’re risking falling behind by not making faster progress on starting our own online business – meaning something other than blogging.   However, time has been tight due to doing our own remodeling of our master bathroom.   Once that is finished, we’ll dive headfirst into establishing our own business.

Given that we’re more than half-way through the year, I took a look back at our short-term GI goals for 2009 and have the following comments.  (The number of each comment corresponds to the number of each goal.)

  1. Contribute an average of $100/month to our GI portfolio.  Even if we don’t contribute another penny this year, we’ve already exceeded this mark.   This growth in capital in the portfolio is really what has allowed us to start doing covered call trades, and to consider doing outright options trading.
  2. Go live with a technology start-up.  This is the area where I’ve already mentioned us being way behind.  There is still a good chance of going live before the end of the year.
  3. Increase blogging revenue to $300/month.  It’s only the end of July and we now have two months of exceeding this target.  The $340 we received in July for the AdSense period ending in June, and the $340 we have yet to receive for the AdSense period ending July 31st.
  4. Increase returns on the GI portfolio using non-buy-and-hold strategies.  We’ve done our first three covered call trades in the last 4 weeks, and it is looking very likely that the two not yet liquidated will be assigned at August expiration.  The end result looks like a total income of over $420 in just 7 weeks, or an annualized yield of 82%.  This is much higher than our average long-term buy-and-hold return, though I will admit we could have done much better if we’d simply bought and hold AFL through this same time period.
  5. Establish processes for sticking with the budget and maximing GI income.  At this point, I think we have a good hold on this one, thanks to trying to find something to post about on this blog. 🙂  We’ve figured out ways to maximize returns on cash, including our emergency fund.  We’ve figured out an easier way to pay bills and earn credit card rewards doing so.  We’ve figured out efficient ways to invest and trade our GI portfolio.

It looks like we’re doing quite well for our 2009 goals!

Tags: Geo Ind Goal

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