Wow. Here we are again everyone. The first month of the year has come to a close. 31 days have flown by and another month of dividend income has been received. As a CPA, this month has worn me down, to say the least. Thank the Lord that dividend income continues to fuel the portfolio to new heights and continues to march on when I am struggling for time, research and spending time with loved ones. January was a great start for dividend income and I am proud to present the results to the community.
Dividend Income
I received a total of $417.68 in dividend income during January. This is a solid increase from last year, which I will talk about in the next section. There were really no surprises, no movements of dividend expected payments as it relates to timing and everything went smooth. 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.
There were 11 entities making payments my way this month. Honestly, this is consistent with last month, sticking with the trend of consistency and expectations. Only real differences are the payments just keep getting bigger, which has been a joy to see. The one different/split out is Cisco (CSCO) paid this year and Dow Chem, due to acquisition (DWDP), pays on a different date, which was expected based on their last payment.
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 $37.19 (up from $33.50 last year primarily due to dividend reinvestment & dividend increases) or 8.9% of my income from retirement accounts and the other 91.1% 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
2017:
2018:
So what are the differences here? As I stated above, Cisco (CSCO) is new this month versus last year’s January. I ended up purchasing shares in Cisco two times, which is starting to already pay off. Year over year, the dividend income increase was 9.39%! This is better than last year, due to a lot of payment date changes, growth of 1%. If I keep up the same pace, we are looking at over $456 next year!
dividend increases
We all know by now, the power of the dividend growth rate is real! Let’s just say tax reform has been nice thus far, as it relates to dividend increases. Every single increase above had exceeded my expectations, beyond belief. I thought that there would be great growth rates, but this is knocking it out of the park in month one. Intel (INTC) continues to surprise me with their results, in a difficult, competitive and potentially shrinking market, but yet, their performance allowed this result to occur. Secondly, Aflac (AFL) came out of left field with this jolt to the portfolio. This was very surprising, specially after their October increase was in the lower, single digits and this is not their typical month of increase. Then, Visa (V) also announced an unexpected 7.7% dividend increase, I will take it! Lastly, Norfolk (NSC) completely tore the cover off the ball this month with their 18% increase. In order to achieve this much forward income, one would have to invest $2,368 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 42% of my average $984 monthly expense for my house, including utilities. Almost covering half of the amount, I will get there soon. In addition, my auto loan is finally gone and I am able to deploy the additional capital for all of 2018 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 promising results already this year.
I know the first month always needs a clean start, to be on the right foot, make the right decisions and plant seeds for future blossoms. I am satisfied with the results, but since I am not financially free – the work is not even close to being over yet. How did you do? Killing it the first month of the year? Only 11/12 months to go, make it count everyone! 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