Currently is ice raining here in Cleveland. However, for the most part, winter has been warm and even sunny on a few days. One thing, though, is certain. Dividend income arrives – rain, snow or shine baby! Time to warm up and check on the dividend income that my stock portfolio delivered last month!
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 Income and my Dividend Portfolio.
How do I research & screen for dividend stocks prior to making a purchase? I usually put the stocks through our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products).
See – Dividend Diplomat Stock Screener
See – Financial Freedom Products
I also automatically max out, pre-tax, my 401k through work and my Health Savings Account. This allows me to save a TON of money come tax time (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 helps take the emotion out of timing & making a decision.
See – Tax Strategy – Part 3 to Reduce Taxes & Increase Investment.
See – Why I Don’t Time or Predict The Market
Lastly, Dividend Increases add quite a bang to the portfolio, as well. As you saw from my recent post in January, dividend increases added almost $415+ for 2019! I do this to show YOU the power of dividend investing – the increases is the trifecta in the dividend equation.
See – The Impact of Dividend Increases through December of 2019
On to the numbers… In January, we (my wife and I) received a total of $850.56 of dividend income. almost to 4 digits, but we are hopeful to make it there next month in February. Consistent investing into the stock market, specifically dividend investing, continues to pay off. Receiving dividend income at this level for January is solid, especially since it’s a non-quarter end.
Here is the breakdown of dividend income for the month of January:
Two large dividend income checks came in and that is from Philip Morris (PM) and Canadian Imperial bank of Commerce (CM) came in with over $100 each. Total (TOT) is not too far behind. These 3 have been long term dividend stock holdings, for sure.
Here, it shows that we received a total of $131.70, (up from $71.27 last year), 15%, from retirement accounts and the other 85% was from the individual taxable portfolio. This % allocation increased due to a few reasons. First, my wife has retirement dividend income added. Second, dividends are higher due to dividend increases.
See – 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 $35.08 (including my wife’s dividend income of $37.85 last year with mine). This is 4.3% growth rate from prior year. Not that much growth, honestly. There is one MASSIVE outlier here. That is BHP Billiton’s (BBL) one-time, special dividend they paid last year that represented $144.79! Removing that from the equation, then dividend income was up 27%, but hey – all good here.
At this rate, we should be well over $1,100+, right? Let’s get it! Dividend increases and dividend reinvestment should take care of most of the growth.
Dividend Increases
A stock or two was on Bert’s article for January increases, such as Intel (INTC) and Realty Income (O). Diageo (DEO) came in with a sleeper move and Archer Daniels Midland (ADM), snuck in January instead of February. For the most current version – see Bert’s Expected Dividend Increases in February and see if your stock is on the list.
I do not have a specific favorite. However, Realty Income (O) has made the dividend aristocrat list! We wish them a huge congratulations.
Overall, $24.42 added would require an investment of $700 at 3.50% yield, in order to produce that result.
See – The Impact of The Dividend Growth Rate!
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 a balanced life. 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!
There is a nice adjustment to my most recent monthly expenditures article. Sadly, my property taxes increased by 14% in 2018. Therefore, our average is $1,040 per month Due to that, my current dividend income would cover 81%+ of that amount. Almost to 100%, almost there.
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 allowed promising results already this year.
First month of… 2020 is in the books baby! Let’s make it count and start this year off right. Financial Freedom, Financial Independence, insert your freedom phrase here, awaits! Please share your thoughts, questions and feedback below! Excited to read how everyone did this month, as well. Thank you again, good luck and happy investing!