Goal Accomplished – $3,250 in Annual Dividend Income!

I threw a teaser in my last purchase article by mentioning that there was something else that I wanted to share with the community.  Well, back when I was setting my goals for 2016, I pushed myself to achieve at least $3,250 in annual dividend income.  You guessed it….my last purchase of Realty income pushed me over this mark and my forward dividend income total now sits at $3,265.  Now, I’ll summarize how I was able to knock this goal out with just under two months to spare in 2016.

goals

Man, it is funny how fast time flies by and how much you are able to accomplish in that short period.   At the end of June, my forward dividend income was $2,941, which was over $300 away from my goal.  Due to the fact that my wife and I have begun the process of saving for our first home, I thought increasing my forward income by over 10% in 6 months was going to be a long shot.  But, there were several factors that allowed me to dig deep and find the funds needed to accomplish my goal.  Let me dive into each of them.

Factor #1:  Purchases – In the last four months, I have made three large purchases, two of which were yielding over 3%.   I added 30 more shares of Target, 40 shares of Realty Income this week, and purchased 50 shares of Cardinal Health.  This is a pretty obvious statement, but the fastest way to increase your dividend income  is by purchase stock.  Duh.  What excites me most is the quality of the dividend streams I purchased over this span.  Two of the three companies are Dividend Aristocrats (TGT and CAH) and the other (O) is closing in on the coveted title.  Sure, I could have easily reached for the highest yielding stocks with payout ratios well above 100% just to accomplish this goal earlier on in the year.   Anyone can do that and if they do, please tell me how that works out.  But I would rather be patient and building my dividend income stream slow and steady and do it the right way.

Factor #2: Increasing my 401k Contribution – As a result of Lann’ys three-part tax saving series from earlier in the year, I decided to double my bi-monthly 401k contribution to maximize the pre-tax benefits of my contribution.  The mutual fund I invest in, VINIX, yields ~2.2% based on my calculations.  With the frequency of the contributions, my forward dividend income resulting from 401k contributions has really began to take off.  It isn’t quite as fast as Lanny’s though, but I’ll take it.  You don’t appreciate how quickly this automated method of investing until you reflect on the growth experienced over an extended period of time.  You know when else I am going to appreciate this….when I file my tax return.  Can’t wait to see the final impact this strategy has on my taxes.

Factor #3:  Dividend Re-Investment – Ah, the name of the game here.  Additional dividend income resulting from good old fashion dividend re-investment.  Over the last four months, I have re-invested the following dividend totals: July – $103 ,  August – $172  , September – $380 , and October – $148.   My portfolio’s dividend yield is ~3.5%, meaning the re-invested dividends produced approximately $28 in forward dividend income.  Now that may not seem like a lot of dollars; however, remember at the beginning of this article when I mentioned that I needed over $300 to accomplish my goal before the end of the year?  Well, the additional dividend income resulting from DRIP covered nearly 10% of this total.  Don’t tell me that $28 in additional income resulting from good ole fashioned dividend re-investment did not have a major impact on my forward income.

Factor #3: Dividend Increases – The smallest of all the impacts here.  Until October, my portfolio was shockingly quite in terms of announced dividend increases.  And the dividend increases that were announced were nothing to write home about.  However, a dividend increase is a dividend increase nonetheless.  Every little bit helps, so whether my portfolio received a $.01/share boost unexpectedly from Chevron or a double-digit increase from a low yielding dividend stock, I am always excited when a company I own decides to increase their distribution to me.  Heck, Lanny’s last article summarized it best.  Dividend paying stocks will always hit us with surprises and different ways to increase their dividend income.  Now, if only I owned a company such as Starbucks, which recently increased their dividend 25%!

Nothing feels better than being able to cross one of your goals off of the list.  Especially when you set a stretch goal at the beginning of the year thinking you would be battling till the end of the year to accomplish the goal.  But seeing these results reminds me that the impact of what we are doing here is real.  These are actual dollars that we are actually earning in a very, very passive manner.  Heck, how much effort do we really put into receiving this income once we purchase the stock?  I leave my last purchase of Realty Income and the writing of this article motivated to continue pushing myself, Lanny, and hopefully all of you out there to reach for the stars and push yourself to try to increase your dividend income as much as possible (without sacrificing quality of course).  We are laying down an excellent foundation, so let’s keep the good times rolling!  Financial Freedom…here we come!

-Bert

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20 thoughts on “Goal Accomplished – $3,250 in Annual Dividend Income!

  1. Hey that’s awesome – good to reach goals you set early in the year especially if it looks like you might not make it earlier in the year. Do note that your list of 3 factors turned into 4 as you wrote the article!

    • Tristan,

      Thank you so much! I still can’t believe I was able to hit my goal. As sad as it sounds, I thought I was going to fall short halfway through the year based on available capital. Luckily for me, it swung in the other direction.

      Crossing four digits and never looking back was an amazing feeling. There is something special about adding a comma to your dividend income total and I can’t wait for you to experience that feeling.

      Bert

    • ADI,

      Thank you so much. You know what, I have never looked at dividend income that way before. Now I want to get to $3,650 so I can cross $10 per day haha I’m still calculating the next target. I have something big in store for 2017 and I want to use this next year to push the envelope before we buy a house. I’ll leave you with a cliff hanger!

      Bert

  2. Awesome job hitting your goal. It always feels nice to set a goal and actually meet it. Just think, you have two more months of 2016 to pad your total dividend income for a loftier goal to be set for 2017. Like you, I like to reinvest my dividends and those dividend raises don’t hurt either. Congrats!

    • Divhut,

      Thank you so much! In sports terms, I’m going to use the last two months to “pad the stats” and keep building on my goal. In the past I have re-upped my goal; however, since I am so close to the end of the year, I think I am going to informally aim for a target. I just mentioned earlier that I am aiming high in 2017, so I cannot wait to bust out that goals article.

      Thanks again,

      Bert

  3. Congrats! Any time you can reach your goals for the year, it is a huge win. To do it early is even better. Looks like next years goal needs to be ramped up a bit. Shoot higher next year and watch it roll in. Good job.

    -Brian

    • Brian,

      Thank you very much. I agree completely; I’m excited to push myself in 2017 and really get my dividend income snowball rolling. What’s the point of setting a goal if you aren’t trying to push the envelope??

      Bert

  4. Congrats Bert on reaching $3,250 in forward dividends. Even better is that you still have 2 more months to boost that up and fly past your goal. Hopefully we get some volatility that unlocks better values for all of us.

    • Roadrunner,

      Thank you very much. Any year will be successful if we want it to be. In my opinion, anything you can do to increase your passive income, improve your cash flowing assets, and solidifying your financial position equates to success. Hopefully many others join in our journey towards early retirement.

      Bert

  5. Congrats on hitting the goal! Really amazing numbers. And who knows what the next 2 months will bring…
    It would be wonderful for us to hit the 4-digit mark, although we probably will not make it for this year.

    • Thanks Divnomics! Looks like we are in for a wild, wild ride here in the final two months of the year. The last few days have been crazy and I can only imagine what is in store for us as more plans for the future administration are released.

      How close are you to crossing four figures??

      Bert

    • Thanks Dividend Pig! I have something big in store for next year. I won’t tell you the dollar amount, I’ll save it more my big goals article. But let’s just say it is going to be north of that figure!

      Bert

  6. WOW this is absolutely amazing! Anything over three thousand in passive dividend income is amazing! It’s amazing how quickly your dividend income is snowballing! Keep up the great work! I’m hoping to be where you are at in the next two years so you guys definitely have a leg up on me!

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