Everyone, I made it. I made it to this illustrious milestone. I can’t believe this moment. In November, after one of my dividend stock purchases, I crossed over $12,000 in projected dividend income!
Crossing the $12,000 milestone means a great deal to me. I am sure you already know why, but this is the moment that you can see an average of $1,000 in dividend income depositing into your account. I sit and look around my house, close my eyes and picture if there was someone working as hard as I am and walks over to me, to hand the $1,000. Only difference is, the businesses that I own, are doing all of this work now. Milestones are a true part of being a dividend income investor.
Now, I haven’t wrote about milestones in quite some time. Heck, it was back in December of 2016, where I talked about crushing through $8,000. I’m going to make this statement and will bold it. In less than 2 years, I have added OVER $4,000 in projected dividend income, or a 50% boost! What is funny is, it just doesn’t seem that long ago. Well, it was close to 730 days ago and I’ve added, roughly, around $90,000 into the portfolio, this is including dividends received and reinvested. I did not necessarily publish this goal for 2018, but I keep an internal goal and $12,000 was the measure for the year. I began the year at $9,733.33, therefore, I added $2,266.67 to my forward income and then some, during 2018.
Crossed crushed $12,000 in projected income
It all came last week, on my purchase of 21 shares of AbbVie Inc. (ABBV), to which added almost $90 to my forward dividend income. There were, of course, a few dividend increases and dividend reinvestment that occurred, which added even more to my forward income. Therefore, as of this writing, I am not just at $12,000; but I am actually at $12,120.83! Talk about CRUSHING over the $12,000 threshold baby!
Here is a wild estimate that I want to share with the community. When using a dividend reinvestment calculator (no more contributions or market appreciation) but anticipate a 3.25% yield on the portfolio with a 6.85% dividend growth rate, that reinvestment and dividend growth propels me close to $40,000+ in income in 13-15 years! Obviously, that won’t be the case, as I’m doing everything I can to make every dollar count right now and road to $40,000 will be much shorter. That is the snowball effect, that we consistently refer to. Another fun fact, as long as all goes accordingly, this is just the beginning and this snowball is only going to be bigger and faster! Example: Prior to this milestone, it was taking me around 8 months to add $1,000 in forward income. This period was when I was tracking each $1,000 religiously (i.e. from $5k to $6k, etc.). I have brought the average to approximately 5.5 months, in order to add $1,000 in forward income – a 31% improvement! That is pure speed, consistency and compounding.
How else did I get here? One might ask. It all came down to having a high savings rate. I never let my expenses spiral out of control and whenever I would start to see a utility or monthly bill start to creep up – I did my best to squash it. Whether that was paying the car loan off early to save interest and open up cash flow or if it was to make another insurance change to reduce my expenses, it was done (See: Bills to Review Annually).
This did not come with just saving on expenses. 2018 marked the year of big, life events that altered routes, made things very stressful and life is still hectic to this writing. In July, I left my employer of 7 years in public accounting and accepted a Controller position at a local financial institution, to explore my passions and to work towards a better “work-life” balance, if there is such a thing. Not only was that a hurdle and battle internally & externally to get through, I got MARRIED THIS YEAR! Yes, I got married in October to the love of my life and I couldn’t be more happier about being so lucky. However, saving for & planning a wedding, while switching jobs, being a public accountant and the this being the first time we are living together with our families in different geographical directions (even family in different countries), led to an extremely stressful/suffocating year. We got through it, but damn, I was tired. This took funds away from being able to invest, but I never allowed that to be an excuse to not achieve goals set.
Cruising past $7,200 Dividend income within Taxable account
In addition to not only crushing $12,000 in total forward income, a few months ago I set an individual taxable goal to exceed $7,200 in that account. You guessed it. Due to the significant amount of purchases in my taxable account (thanks to the career switch and not being eligible to contribute until mid-January), I had quite the capital to deploy into dividend income producing stocks. I have invested heavily in names, such as, Illinois Tool Works (ITW), Leggett & Platt (LEG), WestRock Co. (WRK) and National Grid (NGG).
At the time of the the goal article, I needed to add $686 in forward income and in 4 months! However, I was committed to making this happen and the community witnessed this, as I started to write bulk purchase articles, relating to my activity in 10-15 day increments. I am now at approximately $7,218 in forward dividend income, within my taxable account. Obviously, the stock market has been on a rollercoaster, but I do my best to not try to time the market. It’s been doing stock analyses and making decisions based off of our Dividend Diplomat Stock Screener. Since I started the new job, I deployed over $16,500 in new capital that I have saved and that wasn’t easy, trying to save for a wedding, but gosh dammit, I had to get it done and do… “what’s best for business”.
Now, it’s always nice to go crazy, pound my chest and scream, “I DID IT” (in Rocky’s voice), but it’s a great time to look at what’s to come. 2019 will be a new year. A clear year. We aren’t planning a wedding. I am not anticipating job change. We are not anticipating any form of move, from a house standpoint. Therefore, this has the sound of a, “let’s step in the ring and kick some ass” music.
First, my wife and I will have combined portfolios. I have been working on hers for about 3+ years and let’s say – she has her own dividend engine brewing, as her portfolio is pumping out over $3,000 per year. Therefore, we have well over $15,000 in dividend income per year going forward into 2019. A stretch goal will be to add $3,000 in forward income throughout 2019, ultimately crossing over $18,000 in forward income.
Second, I’ll be able to contribute (pre-tax) to my 401K starting in mid-January. This will start consistent, dollar-cost averaging throughout the year and the maximum deferral amounts are now at $19,000 in 2019. This could have the potential to open up more capital to invest, due to the tax savings, $0 in fees for the 401k for trading and taking the emotion out of the picture.
Lastly, I’ll wrap this up by saying thank you to the community for sticking with me this year, with Bert and the Diplomats. It’s an honor to write as often as we do and be a part of this thriving group – taking down own milestone at a time. I know Bert had to bear witness to the year that this was and yes everyone – you better believe the young one was my best man in the wedding. I am excited to have the new year start and to have the engines firing on all cylinders. Earn money, save money, invest money; then you rinse and repeat. LANNY OUT.