Merry Christmas and Happy New Year everyone! Hope everyone had a blast finishing off the year and are ready to set 2018 on fire! What better way to ensure to light this year up, than a record-setting month of Dividend Income? That is my case and point. I am beyond thrilled and excited to see the figures everyone is putting up, showcasing the blood, sweat & tears everyone has endured to this point.
Dividend Income
I received a total of $2,009.22 in dividend income during December of 2017. HOLY SH*T, HOLY SH*T, HOLY SH*T!!!!! Hold on, as I go and change my boxers. WOW. December has luckily been the best month I have ever experienced in my investing journey and the proof is officially deep in the pudding. The 401(k), Health Savings Account (HSA) and all dividends are automatically invested/reinvested and helps take the emotion out of timing & making a decision. Also, to find out why I max out my 401(k) and HSA – please refer to the 3rd part of my tax series, as that describes the magnitude of benefits to increase the amount you can invest due to reduction in taxes. Grainger (GWW), Delta Inc. (DAL) and Kroger (KR) were the new investments made this year, sending checks my way. Outside of those dividends, the remaining growth is through dividend increases and reinvestment, as well as one additional contribution to Pfizer (PFE). This doesn’t include the massive contributions from the 401(k) and HSA, as mentioned.
There were 25 entities paying me in December. I am still in awe and shock, therefore, I apologize in my thoughts being gathered. I shouldn’t be too stunned, given the massive amounts of contributions made and staying the course with my companies I’ve owned above. When I think about my taxable accounts (everything in the first two column/sections), 20 out of 22 companies increased their dividend this year! That is a 91% success rate, and I’ll take it. The two exceptions were DowDuPont (DWDP) and Shell (RDS). DWDP did not increase their dividend primarily due to the acquisition finally closing and cleaning their operation up. Shell, given the oil industry still semi-struggling, did not increase their dividend again.
Similarly, I have split out the taxable and the retirement accounts, as the ” – R” indicates a retirement account dividend (or the furthest column to the right). I separated these two, as I like to know what portion of my dividend income is coming from retirement accounts that I cannot touch until 59.5 (barring any other usage rule I could use). Here, it shows that I received a solid total of $1,244.09 (up from $1,007.53 last year primarily due to 401(k) & HSA, as well as, dividend reinvestment & dividend increases) or 61.9% of my income from retirement accounts and the other 38.1% was from my individual taxable account portfolio. Additionally, this shows from retirement accounts that I’m all ready for my set it and forget it mentality to keep that income going. To see my portfolio – one can go to our portfolio summary page.
dividend income year over year comparison
2016:
2017:
So what are the differences here? Mattel (MAT) fully cut their dividend, hence no payment from them (bastards!). As mentioned earlier, quite a few new faces, with the purchase of Kroger (KR), Grainger (GWW) x 2 and Delta (DAL). Further, the reinvestment and dividend growth is phenomenal, as that’s the fuel to a lot of the fire. Year over year, the dividend income increase was 19.57%! Very excited about the increase over these 12 months. If I keep up the same pace, we are looking at over $2,400 next year!
dividend increases
We all know by now, the power of the dividend growth rate is real! 3 incredible companies increasing their dividend is always welcomed in my house! Additionally, Bert talked about a few of the dividend increases in his Expected December 2017 Increase article. To be honest, all increased their dividend as expected. It was Realty Income’s (O) turn to increase their dividend for the upcoming quarter, AT&T (T) increased their $0.01 per share per quarter and Pfizer (PFE) stayed consistent with a $0.02 increase per share per quarter. In order to achieve this much forward income, one would have to invest $461 at 3.50%! Thanks for the dividend increases!
dividend income conclusion & Summary
The name of the game is to learn and act in the right manner to what you have learned. The plan is to maximize every dollar for investment opportunities and live a balanced life. My hope is that my month of dividend income above shows the community that one can use dividend income as a revenue engine to take back control of your life. Dividend investing, once you learn the right way, becomes easier to do and starts to make quite a bit of sense : )
As I discussed with my updated – normal monthly expenditures at the moment, this dividend income would cover over 204% of my average $984 monthly expense for my house, including utilities. Covering my expenses that are fixed, two times over, is surreal… In addition, my auto loan is finally gone and I am able to deploy the additional capital into new investments that are opportunistic. In similar fashion – 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 allowed me to achieve lofty goals that I set in place for my 2017 year.
As always, excited to read everyone’s December income reports and start to compile our monthly article for everyone. 2017 was a whirlwind year and 2018 will be even wilder. I am exhausted, but need to find each piece of motivation to step forward, not backward. Only one life for us to live, and let’s make it meaningful, challenging and fun at the same time. Excited to read the comments below and thank you, the community, for stopping by; as you are helping me on my journey to financial freedom!
-Lanny