Is it just me or is 2017 flying by?? I cannot believe that the third quarter came to a close! This third quarter was an exciting one for my wife and I and I think we spent nearly every free minute we had together fixing our new house, painting walls, packing (and then unpacking), and finally settling into our first home. It was a stressful process for sure, but man I am excited that it is over. I’ve been looking forward to reporting my dividend income for September because let’s be honest, who doesn’t like reporting their income in the final month of a quarter when their mutual funds pay dividends? Now it is time to check out my September dividend income report.
september dividend income summary
In September, I received $748.83 in dividend income from 27 different companies/mutual funds. This was a 96.77% increase from September 2016. Of course, this is the first year I am including my wife’s dividend income in my monthly summary; so the results are slightly skewed since I only reported my income in 2016. To combat that, I also calculate my own individual dividend income growth rate to see how much my personal income stream has grown during the year. Even without my wife’s dividend income, I was able to post a 42.28% increase compared to 2016. The chart below provides a detailed summary of the companies and mutual funds that paid us a dividend in September:
Here are some of my highlights and observations from the month:
- Lanny wrote about his tax strategy and how he is focused on taking advantage of every legal tax incentive possible. I have followed suit and have since increased my traditional 401(k) contributions and HSA contributions. My increased contributions are invested in low-cost Vanguard mutual funds (VINIX and TSMX). While I do not think I am going to fully maximize my 401(k) contributions this year due to the fact that we were hoarding cash in the first part of the year for our house purchase, the impact of this strategy is really starting to be felt. My dividend income from VINIX (401k mutual fund) has tripled over the last twelve months and I received $10 from VTSMX (HSA investment account) compared to $0 last year . I’m really liking this strategy and I cannot wait to maximize this benefit in 2018!
- This was the first dividend I received from one of my recent purchases, Kroger. It is always nice to receive a dividend for the first time from one of your investments. Now the fun begins and I may even look to add to my stake as the current price has fallen below my purchase price.
- I continue to have to explain how KHC changed the month they paid their dividend during the year. It has come up nearly every month so far in 2017. While it looks like I received a new dividend from KHC, the large increase in the chart above is simply a timing difference.
- I’m so excited to see how well my wife is doing in terms of dividend income. Sure, this isn’t the first year she received dividends (rather, it is just the first year I have reported them). But I have enjoyed monitoring her portfolio, showing her the results, and getting excited about our future early retirement with her.
My Debt Payment Coverage Ratio
One of my favorite aspects of Lanny’s dividend income report is how he compares his monthly dividend income total to his average monthly housing expenses. It is amazing that Lanny was able to cover over 100% of his housing expenses (including utilities) in September. I’m going to use Lanny’s report as inspiration for this new section in my monthly dividend income report. Last month I wrote an article about how I am fed up with debt and I want to begin aggressively paying down my debt. I’m tired of seeing such a large portion of my monthly income to banks and other financial institutions and have a plan in place to aggressively pay off my wife’s student loan debt. If I want to retire early, I am going to have to have my income stream cover my monthly expenses, right?
In the article, I mentioned that my current monthly principal and interest payments are $1,975.54. My September dividend income of $748.43 would cover only 38% of my monthly debt payments. Man, looks like I have some work to do. Time to become even more aggressive with my side hustling so that I can allocate every extra dollar I can to pay off some of my debt, reduce my monthly outflows, and begin drastically increasing that coverage ratio. One step at a time!
Despite the fact I can only cover 38% of my monthly debt payments with my September dividend income, I cannot help but smile, encouraged, and motivated by the results this month. How could I not be? Twelve months may have flown by, but this review has reminded me of how much hard word Lanny, myself, and all of you have put in and how much progress we have been able to make in this short period of time. We say it all the time, but I am believing it as much now as I ever have. Every dollar counts and can make a huge difference in our journey towards financial freedom. Every dollar we can invest turns a cash outflow into an income producing asset that continues to grow with each re-invested dividend. Man I cannot wait to start diving into all of your dividend income summaries to see your results and progress over the last year!
How did you perform in September? Were you able to set a new record? What percentage of your debt payments did your September dividend income cover? What moves are you planning on making in the fourth quarter to continue to grow your dividend income?