Last month Lanny beat me to the punch and unleashed an amazing $740 dividend income month in July. It was a tough act to follow, especially considering that I came close but fell short of beating him. While it is unlikely to happen again, there is one thing I can promise….I will get my article out first this month! That really is not the point here though. We write these articles monthly so we can track our progress and see how far along we have come in such a short period of time. We have been in the dividend investing community for nearly a year and a half now and writing this article each month never gets old. With that being said, let’s take a look at my August dividend income summary.
Dividend Income Summary
Well, first I must say…it really sucks not receiving a special dividend like last month. Why can’t our companies pay out special all the time? Wouldn’t that be nice? While the special dividends are nice, our focus is on the building a steady, growing dividend income stream. That’s the ticket to financial freedom. Build a consistent and increasing stream of cash that can one day cover your expenses so you have the freedom to retire early or pursue your dream job. Boy oh boy does that sound amazing…especially when we all drive into our job, punch the clock, perform our job, punch the clock, and then head on home that even.
That’s why my smile was a little larger this month when I prepared the chart above compared to past months. What is unique about my August dividend income total is that the increase from last quarter was due solely to the power of dividend re-investing and dividend increases. That’s right, even though I was active purchasing stocks such as IBM, Emerson Electric, Johnson & Johnson and Norfolk Southern at various times over the last quarter, none of the companies pay a dividend in the second month of the quarter. Thus, all companies that I received a dividend from in August also paid me in May. In August, I received $131.77 in dividend income, which represents a 3.33% increase from May and a 16.41%increase from last August. The 3.33% increase was a result of additional income from re-invested dividends from the six individual stocks listed above, a higher than usual distribution from one of my mutual funds, and a $.01/share increase in KMI’s quarterly dividend that was announced in July.
Dividend Increases
Once again, this was a relatively quiet month in terms of dividend increases. Outside of the larger than anticipated distribution from OIEIX, as seen above, I received a dividend increase from only one of the companies in my portfolio. At the very beginning of the month, Scotts-Miracle Gro increased their quarterly dividend from $.45/share to $.47/share, a 4.4% increase. While it was not what we were hoping for considering the great dividend growth we experienced last year, I am happy with any dividend increase in this current environment. Usually I should feel excited writing this section of the article, but it has been tough over the last few months. I have high hopes for the last four months though as the majority of my portfolio is set to increase their dividend!
Summary
This wasn’t a sexy month for me by any stretch and this represented the lowest year over year monthly increase since March. But you know what, I couldn’t be happier. This month was all about displaying the power of dividend re-investing and the impact that dividend growth has on your portfolio and income stream. What a beautiful thing! On the other hand, I cannot wait to write this article because as I mentioned earlier, a lot of my recent purchases pay a dividend in the final month of the quarter. Do I love seeing textbook dividend growth…absolutely. But let’s be honest, I also love seeing a large spike in dividend income as a result of a lot of stock activity. After all, I have to reach my goal of over $15,000 in new stock purchases somehow, right?
How were your month’s of August? Were you able to take advantage of the downturn and purchase any new stocks? Did you receive any dividends from new companies this month? Do you have any recommendations of stocks I could purchase that pay a dividend during the second month of the quarter?
-Bert