December is THE BEST month to be a dividend growth investor. Not only is it the third month of the quarter the most popular month to pay a dividend, but December is also the month where mutual fund companies pay their capital gains distributions! Whoo. Lanny and I were refreshing Vanguard’s website hourly (okay, probably less frequent than that) since we were eagerly awaiting the results. For Lanny, the results WERE INSANE as he crossed $2,000 in dividend income for the first time ever. Lanny congratulations my man. Just incredible! While my portfolio is far behind his (one day I’ll catch you Lanny!), my December’s have historically been strong. If I ever had a chance to record a record level of dividend income and beat him this month, it would be in December. So now, let’s dive into the details and check out my December dividend income summary!
December dividend income summary
This month, I SET A NEW PERSONAL RECORD by earning $1,724.44 in dividend income. I could not be more excited with results. Sure, I couldn’t defeat Lanny this month, but I am to even thing about that! This represents a 46.6% increase compared to last year. Each month I have also been highlighting my dividend growth rate without my wife’s investments since 2017 is the first year I am reporting our consolidated dividend income totals. Thank goodness this is the last time I am showing this metric! Even after excluding my wife’s dividends received, I was still able to post a 25% increase compared to 2016. The table below provides a detailed breakdown of the dividends we received during the month
Here are some interesting facts and items I wanted to highlight from the table above:
- I received dividend payments from 32 companies and mutual funds during the month, or more than 1 dividend per day!
- The dividends and capital gains distributions played a huge role in our success this month, as over 68% of our dividends received were from mutual funds. The largest of which is from VWNAX, a semi-annual dividend paying fund. What’s funny is that I no longer contribute to that fund each paycheck and I still continue to receive a massive dividend and dividend growth rate from this fund. I have now selected VINIX as the sole mutual fund receiving contributions each paycheck and you can see that this amount increased tremendously during the quarter. But still, that VWNAX distribution always makes me smile.
- Speaking of mutual funds, our recent strategy of investing larger amounts of our pay check into our 401-k and HSA accounts to maximize the tax benefits is really starting to pay off. The impact is largely measured through growth in our mutual fund distributions, which continue to post great growth rates each quarter. I’m excited to discuss this topic more with my goals for 2018, because I still have room for improvement in this category. But the bottom line is that I am going to make sure to maximize my tax benefits going forward.
- We received our first dividend payment from the newly merged DWDP. However, this is just a timing difference from another month as the merged company switched the month they paid their dividend.
- Two dividends grew compared to last year because of purchases. I had initiated a position in Kroger earlier in the year and added to my position in TROW as well. Outside of those two increases, and the previously mentioned DWDP item, the majority of the other companies show an increased pay out due to the good old fashioned power of dividend re-investing and dividend increases. Man do I love dividend growth investing!
dividend increases and portfolio items
Unfortunately, I did not purchase any stocks this month. But the great news is that I did receive two HUGE dividend increases during the month. Okay, huge is relative, but I always get excited when a company I own decides to increase their payout to shareholders. I actually covered both of these in my monthly article summarizing companies that are expected to increase their dividend and companies that increased their dividend during the last month. So if you read that article already, you should be pretty familiar with these two companies. This month, I received increased from AT&T and PFE. AT&T’s increase added $7.03 in forward dividend income and PFE’s increased added $8.61. Guess what I had to do to earn that extra $15.64 in forward income? That’s right…..nothing. Man I freaking love dividend growth investing.
Now that 2017 is coming to a close, I thought it would be fun to highlight that I received $5,657.15 in dividend income during the year. What I love about this stat even more is that it is actually greater than my current projected dividend income stream (Thank’s mutual funds). For comparisons sake, I received $3,478.08 and $3,331.16 in 2016 and 2015, respectively. Again, something must have been in the air in 2017 because I cannot believe we were able to realize that large of a growth rate during the year. Of course, it does help that I started reporting my wife’s income totals during the year as opposed to prior years.
I was fortunate to end the year with a new personal record and go out in style. If I was able to realize such large gains, I cannot wait to see what all of you were able to accomplish this month. I’m assuming all of us finished the year strong and are heading into 2018 with a ton of momentum. What this shows me is that the results of what we are doing are real. Every dollar we save and are able to invest makes a huge difference. Think about that. We are all scraping every dollar we can, cutting our bills where possible, and trying to turn cash outflows into income producing assets Sure I finished the year strong, but I know there is SO MUCH more work to be done. I can’t stop now. I need to stay focused and make sure that I set challenging goals that will push me to the limit and make sure that I am once again setting a record in December 2018. This has been an amazing year and I cannot thank all of you enough for your encouragement and motivation along the way. Let’s crush this in 2018!
What was your dividend income total for the month of December? Did you set a new record? What percent of your income was from mutual funds? What dividend increases did you receive during the month?