My last month was my worst yet in terms of option premiums collected in my quest of paying off my mortgage early. I still was past my initial goal of 1% collected for the month, however, with 1.7% for April. I think my first few months of 5%+ returns was mostly luck and not sustainable, so not surprised to see my performance comeback down to Earth a bit.
May was better than April with $125.75 of premiums collected which is a 2.9% return. Capital grew to $4,310.44, which is a .6% increase over April after excluding the $100 deposit into my trading account. At the risk of falling further behind on these update, no updates on my current positions and trades for May.
Extra Mortgage Principal Paid
As I explained in January’s post, I don’t take my options trading profits and put all of it towards the mortgage anymore. Instead I spread it across a couple other investments that I think are very likely to beat my 3.125% mortgage APR in the long run. I now target just 1% of the beginning trading portfolio value each month. May started with a value of $4,186, so I rounded 1% up to $42.
My preferred stock portfolio also paid out a few dividends as well as taking some capital gains from selling some shares and reinvesting in cheaper preferred shares. This amounted to $3.97 net, bringing the total paid towards the mortgage of $45.97. I have now paid a total of $423.42 over the past eight months towards my principal, which will save $645.66 over the life of the loan.
My first passive alternative to directly paying off my mortgage principal is preferred stock. At the end of May, my preferred stock portfolio for this mortgage pay off strategy was worth $296.69 and consisted of eight different positions. I purchased one preferred stock ETF for the month, totaling $24.45.
I hope to have a complete update with my benchmark numbers and an update on Hedgefundie’s Excellent Adventure next month!