Update on my income account

As many of you know, I’ve used my father’s inherited IRA to experiment with an income producing method of investing similar to the “old school” way that folks invested their money after retirement. This was laid out in Ben Stein’s book “Yes, you can become a successful income investor.” The idea was to create a method to generate enough income from the portfolio to live off of, without touching the principal (thereby letting it grow).

I detailed in a later post that, for the last 2-1/2 years, the stretch IRA was beating my vanguard allocation. I did note that this took into account the terrible 2018 year, which beat the Vanguard account down more than the income account. Over time, all my reading shows that the Vanguard account would do better – but be more volatile.

For the last three months, the account has not increase that much in value, but it has continued to throw off dividends. Investment value grew $2,194 for the six months (while the market was pretty stagnant), 1.7% (or 6.7% annual growth) while also throwing off $1,256.94 in dividends – the equivalent of 3.75% annual yield.

stock Details 1-Jul 1-Oct Yield Dividend
CVX Chevron $6,222.00 $5,614.50 4.24% $59.50
CSCO Cisco Systems $8,209.50 $6,984.00 3.01% $52.50
HR Healthcare Realty $7,830.00 $8,312.00 3.61% $75.00
PFF iShares $16,766.75 $16,912.35 5.24% $221.49
O Realty Income Corp (REIT) $6,897.00 $7,673.00 3.54% $67.95
SVC Hospitality Properties Trust $7,500.00 $7,498.50 8.64% $162.00
UMH UMH Properties $7,446.00 $8,622.00 5.01% $108.00
VZ Verizon $5,713.00 $5,891.00 4.09% $60.25
VBTLX Vanguard Total Bond Market Index $32,621.94 $33,248.71 2.69% $223.25
VBILX Vanguard Int-term Bond Index $32,787.96 $33,432.51 2.72% $227.00
$131,994.15 $134,188.57 3.75% $1,256.94

Not too shabby! Basically, its close to hitting the 4% withdrawal figure, while still growing sufficiently to keep up with inflation. What is interesting is that, while the stocks declined a lot (look at Chevron & Cisco) the other items (REITs,  bonds) helped to cushion the blow.

I’ll continue to monitor and see how this goes.

Mr. 39 Months

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