SHARPE INCOME … Mountains of Maneuverability

Posted on Mar 9 2015 - 11:00am by Sharpe Trade

The original Sharpe Income post can be found here.

The Sharpe Income category be be found by clicking on that red ‘Sharpe Income’ tag next to this post title, or by clicking here.

We continue the discussion from the last entry


As you will note in the PDF attached at the bottom of this post, The Sharpe Income project now has $238.30 in cash after this Monday’s deposit.

Those weekly deposits per the rules set out in the original post cannot be under-estimated.  Because that rule provides us with mountains of maneuverability.

It means that each and every week, we have more cash.  More than that, we will know that we have $1,300.00 in cash for the next 52 weeks with which to work.  And cash in maneuvarability.  In fact, I would go so far as to say that it makes the success of the entire project … well … it’s nearly a slam dunk.

Next week?  We will know that we have $1,300.00 in cash for the next year.

The week after that?  Again, we will know that we have $1,300 in cash for the next year.

The week after that?

Well … you get the idea.

Not only does this constant inflow of cash give us maneuverability, it works in tandem with our dividends, which will be growing, each and every month.  At a certain point, the dividends we collect will far over-shadow what we put into the project from a capital deposit perspective.  But until that time, those capital deposits give us the maneuverability so that we can purchase dividend producing assets.

Over time, this compounds in and upon itself so that you can reach the point of receiving $3,000 per month of income, and beyond.

There are other tricks we can use to get us to that point more quickly.  But we will talk about those tricks in future entries.

Actionable View of Markets for ‘Sharpe Income’

IBM will pay us our dividend in the next 48 hours.  As we also own JNK, this will also pay us our dividend within the next 48 hours..  

As noted in this entry, monthly income will not count the dividend from JNK or other assets that are considered part of the Capital Gains strategy.

We put in the time, persist, and let these capital contributions pile up.  As you will note within the attached PDF, we only have $238.30 in the project account at this time. So we persist, and wait while the capital contributions increase the size of the account.  We have about 3 weeks before we can make another purchase.  Plenty of time, and we can impart a few lessons in the meantime.

The link to the Google Drive Spreadsheet that you can view, that we will edit, build upon and refer to over time can be found at this link.

We continue the Sharpe Income project with this next entry.

The Sharpe Income PDF breakdown for Week 15 can be found here …

6 Comments so far. Feel free to join this conversation.

  1. Steve March 10, 2015 at 9:07 pm - Reply

    Just a quick question: Why not D.R.I.P. on the purchases?

  2. Dan Shy March 10, 2015 at 10:33 pm - Reply

    Heyya Steve!

    I’m going to consider what’s going on with this project a “Synthetic DRIP”.

    In other words, the DRIP won’t be turned on with the individual names.

    But in this initial phase, we will collect those dividends, plus the cash we receive from the capital contributions to make purchases. So the dividends WILL be put towards buying more shares. But at the shares of stock that I want to buy, rather than just re-investing it.

    So the net result is the same, in that the dividends are re-invested. But instead of happening automatically, in this first beginning phase, they are re-invested when we make the purchases we do.

    🙂

    Hope that helps …

    Dan

  3. Steve March 11, 2015 at 1:55 am - Reply

    Thanks much Dan!

  4. Edgar March 11, 2015 at 2:35 pm - Reply

    Do you have an estimate of how much time can a project like this take to produce $2000 – $3000 a month?

  5. Dan Shy March 11, 2015 at 3:29 pm - Reply

    Interesting question.

    In all honesty?

    Anywhere from 5 years, to 20 years

    The variables are soooo many, that prediction as to an exact time frame becomes impossible. I think in a very, very non-linear manner ( https://www.youtube.com/watch?v=4pMZOXhv3UM ) and prediction as to absolutes becomes difficult.

    What do I mean?

    Well … what if I get the cap gains strategy built inside this project (it’s coming) in this strategy, and that produces 10% for two years in a row? Then I rebalance that cap gains strategy, and take half the profits, and dump it into new purchases of income producing assets. That’s going to accelerate the project isn’t it? But what if the cap gains produces 5% inside of two years? That’s a different outcome isn’t it?

    What if I have a 35% year trading? I can take 8% of the trading profits, dump it into this project, and BAM … the growth of the project is accelerated greatly

    What if I have an 80% year trading, and I take 8% of those trading profits, and dump into this project? That’s even MORE nominal numbers to play with, so it’d mean more money,a nd accelreate the growth of the project.

    But what if I had no trading account at all? Then I have to stick to the $25.00 a week, and hope for a good cap gains year.

    All of the above scenario’s give wildly different results.

    Mr. Money Moustache ran a blog, he got to $800,000 in a few years time, by going into a rediculous “savings” mode.

    All non-linear and it makes difficult to predict exact time frames.

    🙂

  6. Edgar March 12, 2015 at 1:30 am - Reply

    Thanks for the honest and comprehensive answer …

    Good to see you are answering questions in the blog posts.

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