The fear of the coronavirus still spreads. Unemployment claims still in the millions. No deal is reached on the economic stimulus package, the HEALS Act, but yet the S&P 500 was up 5.5% in July. What a confusing and volatile stock market. However, dividend income continues to fuel the mission to financial freedom.
In July, we set another record for dividend earnings and it shows proof that dividend income is one of the best passive income streams. Time to dive into my July 2020 dividend income results!
Dividend Income
Dividend Income is the fruit from the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio.
How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products) – commission free.
Related: Dividend Diplomat Stock Screener
Relates: Financial Freedom Products
I also automatically invest and max out, pre-tax, my 401k through work and my Health Savings Account. This allows me to save a TON of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend. This take the emotion out of timing the market.
Related: Tax Strategy – Part 3 to Reduce Taxes & Increase Investment.
Related: The Power of Dividend Reinvesting
Related: Why I Don’t Time or Predict The Market
Growing your dividend income takes time, consistency and allow compound interest (aka dividends) to work it’s magic. I have gone from making $2.70 in a single month in dividend income to well over $3,500+ in a single month. That dividend income record was set in 2019. The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?
*Not pictured is my wife’s dividend income above*
I want to show YOU that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, YOU can too.
dividend income – July 2020
Now, on to the numbers… In July, we (my wife and I) received a total of $784.27 of dividend income. A record dividend income month for us, to say the least! Despite the pandemic from COVID-19, dividend income continues to grow, due to additional investment and reinvestment. Further, though the dividend cuts hurt very bad, I know we did not take the worst of it. Dividend increases have also helped fuel the income growth. Dividend increases are discussed below and that’s one of the best feelings of being a dividend investor.
Related: Dividend Cuts: Pandemic Impact on Lanny’s Portfolio
Here is the breakdown of dividend income for the month of July, between taxable and retirement (far right column) accounts:
What dividend receipt sticks out like a sore thumb? Occidental Petroleum (OXY) is the dividend stock. A dividend of $0.53. Literally, barely two quarters worth at this time. Remember when they were increasing their dividend, buying Anadarko and trying to become an oil behemoth? How short-lived that was. Instead, not only did they cut their dividend once in the early parts of the global pandemic, but twice. Yes, they cut their dividend TWO different times. I have never experienced such dividend heart-burn in my life!
Speaking of oil, there is a bright spot from Total (TOT) , the french oil and gas company that has been around for almost a 100 years. Their dividend payout continues to churn and stay fairly consistent, if not, continues to actually grow.
We will see how long TOT can keep this up, given BP’s recent cutting their dividend in half over the last week. Oh, dividend cuts!
Even with press releases coming in for the 2nd quarter, the earnings are all over the place. Most are beating expectations, but the actual results are far below last year and it’s hard to wonder how long actual results can stay that low. I’ll be sure to review stocks to buy in a post-pandemic world and our Top 5 Foundation Dividend Stocks, no doubt!
Related: Stocks to Buy in a Post-Pandemic World
Related: Top 5 Foundation Dividend Stocks and watch our video: Top 5 Foundation Stocks VIDEO
As for our retirement accounts, we received a total of $151.49 or 19%. The other 81% was from the individual taxable portfolio that can be used for everyday expenses. I need to keep bolstering the taxable account, as that passive income stream can be accessed today/right now. However, I continue and will always maximize the 401k and IRA, as that continues to pay-off in dividends, literally.
Related: Maximizing your Roth for 10 Years… Then Set It & Forget It!
Dividend Income Year over Year Comparison
2019:
2020:
Dividend income, year over year is higher by $125.85 (including my wife’s dividend income of $87.24 last year with mine). This is a 19.1% growth rate from prior year. This time next year, we will be pushing over $1,000. We can do this, no doubt!
There were great spots. As I indicated, Total (TOT) had a nice increase year, after year. This is all on their own, no acquisition of new shares. Canadian Imperial (CM) also grew, primarily due to the trifecta of dividend growth, acquisition and dividend reinvestment. Philip Morris (PM) and Glasko (GSK) grew by dividend reinvestment primarily.
Related: Dividend Increases Expected in July 2020
Leggett & Platt (LEG) is also up 76% from prior year. This is due to acquiring many more shares, as well as dividend growth and reinvestment. However, they have now maintained their dividend for two quarters in a row. They were to increase their dividend back in May, but held steady. Then in August, they chose to do the same. Therefore, we will see what LEG decides to do in November. They will still hold onto the coveted dividend aristocrat title, as technically their dividend is larger in 2020 vs. 2019, in total.
Time to beef up positions, increase the # of shares I own and set records again in 2021.
Dividend Increases
I received 3 dividend increases in June. Glad I can keep the momentum through July with two incredible dividend increases, show cased below:
Related: The Impact of The Dividend Growth Rate!
Scott’s Miracle Gro (SMG) came in swinging. Not only did they increase their dividend almost 9%, but they also announced a special dividend of $5.00 per share! WOW! Talk about impressive. SMG sends a special dividend once every few years, and boy does it taste good during the global pandemic.
Further, Grainger (GWW) came in with another massive dividend announcement surprise. When I was expecting low-to-no dividend increase, they came and swung the big bat with a dividend increase over 6%! Just when it makes me cringe seeing OXY’s dividend hit my account, these dividend increases bless the portfolio.
Related: Dividend Increases Expected in August 2020
In total, dividend increases created a total of $13.46 in additional passive dividend income. I would need to invest $385 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn’t have to come up with the capital to create that form of income!
Dividend Income Conclusion & Summary
The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live life on your own terms. My plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!
Excited for the future, no doubt. Further, all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.
If you are just starting out on your investment journey and you aren’t sure to start – please see the articles mentioned throughout this post. We are trying to bring you financial education and help you reach your financial goals.
Further, if you are starting out and/or want to know the Top 5 Stocks we always recommend, please see our YouTube video, subscribe to our channel and check us out! We’ll help break down further investing topics not only on this blog, but by showing you through video!
As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing everyone!
Lanny,
Curious to know why max out the 401K? Aside from your tax benefit, is it a safety net for full retirement age?
For myself, ever since I fully realized the dividend growth strategy I switched to doing just the match since I rather use the money today as opposed to having it locked into a later age in life. I understand you will continue to do it as mentioned in the post but just wondering.
Stockrider 22-
Thank you – GREAT question. In fact – my company – as you’ve seen many others – removed their 401(k) match during the pandemic.
The tax benefit is amazing and am taking advantage of that.
Further – have you ever heard of the mega back door ROTH IRA?
This may help ; ) — > https://www.madfientist.com/after-tax-contributions/
-Lanny
Thank you for sharing Lanny! I had never read it into this level of detail, I just knew of the “myth” of this but never into this level of detail, great share, thank you!
Stockrider –
No problemo, thank YOU for wanting to know. The myth… can be real as you want it to be : ) Let me know if you have any questions!
-Lanny
Lanny,
Congrats on yet another strong month of dividend income, especially in the times we’re living in now and given that July is one of the slowest months of the year in dividend income!
Kody –
Thank YOU. I am trying to look forward and have that forecast to see if I can cross 4 digits in July in 2021. Ah… $1k consistent+ per month would be bittersweet. I am very excited to get there and am doing what I can!
-Lanny
Great update!
You are absolutely killing it. Great to see your year-on-year growth in income over time. The snowball is really starting to take off.
I personally invest in indexes but I have began to add a few small stock picks to start learning as my portfolio growths.
Best wishes!
Josh
Josh –
Thank you – I am going to have to check out your site, love the name!
Don’t hesitate to let us know if you ever have any questions about individual stocks, how we evaluate and the like. You’re going to do extremely well!
-Lanny
Lanny,
Nice progress in these times. A testament on your dedication. You’ll hit $1K easily next year at this pace. I hit $1,110 and want to be at $1250 next July.
– John
CW –
$1,250 next July? Make it $1,400. BOOM.
-Lanny
Congrats on a solid month Lanny. I like that you hold BNS just like us.
I haven’t posted our July monthly update yet but we received over $2,300 for July. 🙂
Tawcan –
WOW, $2,300… insane. The taste of freedom Tawcan! Yes, BNS I think it still a great, solid institution and am curious what they plan to do towards the end of the year with their dividend, by means of an increase.
What a journey… what A JOURNEY!
-Lanny
nice Lanny
great growth yr over yr. Love seeing those canadian banks. Congrats on that Scott’s bonus too!
keep it up. The income keeps growing, maybe your using that miracle grow.
=) cheers
PCI –
That Scott’s bonus is bittersweet. Hope they continue their fund trend of surprise dividends every now and again : ) No complaints here!
-Lanny
Just posted my results too. Was having site issues. Why can’t a person simply run a blog w/o dealing with the constant hacks, malware, DDOS, phishing, redirects etc.
Solid income for July considering our investing environment. Divvy cuts are the theme for 2020. I’m used to it with D, WFC, GE, KHC, YUMC, KTB, BP, VTR, WELL and I’m sure I’m, forgetting others. Oh well… Keep on buying, reinvesting and mitigate those cuts and focus on the positives ‘cuz many companies are still raising too 🙂
DivHut –
I feel your pain!
Ah… the list of dividend cuts… you just had to didn’t you! I have had a few weeks, maybe over one month since my last dividend cut. Let’s cheers to no more and only dividend increases going forward!
-Lanny
That’s a solid 19% YoY growth rate, Lanny. Your efforts are clearly on display. $1K by next year is certainly a possibility. Go get it!
I see you added another triple digit dividend payer compared to last year in TOT. Love seeing those.
Didn’t like hearing about that 401(k) match that your employer suspended. Hopefully, that’s a short-lived situation.
However, I did like hearing about that SMG special dividend you collected. That was a nice surprise, no doubt.
Keep doing your dividend thing… as it’s working so well.
Engineering Dividends –
TOT has been a bit of a surprise.
Yes, the 401(k) suspension for the match – definitely felt across many, I know even Exxon (XOM) had the big announcement of their suspension. Ultimately, is the match great? You know it. However, I try to not hang my hat on it ; )
Thanks again ED, can’t wait for the $SMG Dividend payment!
-Lanny