Another month towards financial freedom. Can you taste it? I know I am starting to. However, though sweet the taste this is, it’ll be very “sweet” once the dividend income trumps all expenses in a given month. We are not quite there yet, but in time, this will happen. Proof has been in the pudding, as you’ve seen throughout the years of writing articles, and May is no different.
Dividend Income
I received a total of $2,040.17 of dividend income in June. A record June baby and glad that I nudged over the $2k hurdle! Additionally, my wife earned $675 this month and I am still debating on how to incorporate that into the analysis, which I don’t mind this problem, right? Therefore, combined, we earned almost $2,715 for the month!
Further, 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. The dividend reinvestment adds quite a bang to the portfolio, as well. Through these 3 months within the 2nd quarter, my dividends being reinvested have added $122 (April through June) to my forward dividend income.
See – Tax Strategy – Part 3 to Reduce Taxes & Increase Investment.
Here is the breakdown of dividend income for the month of June!
Retirement account income takes the crown here, overall. Look at Vanguard’s VINIX and VGK, two massive checks totaling almost $800. The VINIX is from my old 401(k) plan with my previous employer. VGK is an ETF I have owned for a significant long time and simply does it’s thing.
See – Who & What is Vanguard?
In addition, Aflac (AFL) has been on a tear and it’s wild to see this cross $60. Further, my last beast of Lockheed Martin (LMT) is great to see. Their engine is continuing to power forward and can’t wait to see that cross the 3 digit mark soon.
Here, it shows that I received a total of $1,000.20 (up from $946.08 last year) or 49% of my income from retirement accounts and the other 51% was from my individual taxable account portfolio. This ratio decreased from last year due to the addition of UPS & LYB, as well as additional shares into ADM.
See – Maximizing your Roth for 10 Years… Then Set It & Forget It!
Dividend Income Year over Year Comparison
2018:
2019:
A few differences here, year over year. First, Delta (DAL) paid in a different month (May vs. June), therefore, is not included this year. My retirement account fund vehicles list is quite a bit longer. This is primarily due to doing a trustee-to-trustee transfer to Lively, when I left my older employer (hence the SPDR ETFs). In fact, this helped make up for the lower dividends from VGK and VINIX.
Outside of that, LyondellBasell (LYB) is the large newbie paying me this time around. I have purchased a decent position with them and couldn’t be happier. Further, United Parcel Services (UPS) is also a new name and am looking forward to the dividend payments and increases going forward.
In total, this June was higher by $211.63 or 11.6%. Obviously the growth rate is lower due to the size of the income stream. I will be doing everything I can to maintain that growth rate up! $2,250+ next year should happen, from dividend increases and reinvestment alone.
Dividend Increases
Target (TGT) continued their streak and we all knew it wouldn’t be a large one. I’ll take 3% and the additional $9.33 any day.
Realty Income (O) still makes me laugh. Their dividend increases are so damn consistent, it is not even funny. This one added three quarters going forward.
Kroger (KR) made me fall out of my chair. I recently had them on my watch list and their 14% dividend increase was very appreciated. Their low payout ratio allowed this increase, no doubt.
$15.88 added would require an investment of $453 at 3.50% yield, in order to produce that result.
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 show that dividend income can be a revenue engine. A revenue engine that can allow you to take back control of your life. Dividend investing, once you learn the right way, becomes easier and starts to make quite a bit of sense!
There is a nice adjustment to my most recent monthly expenditures article. My property taxes increased by 14%. Therefore, my new average is $1,040 per month Therefore, my current dividend income would cover almost 2x my average $1,040 monthly expense. This isn’t including my wife’s income she earned, which would only help in the equation. However, majority of that is retirement account income BUT I could still have it covered with taxable dividends alone… WHOA.
If I keep the same growth rate up, could I hit over $2,250 going forward? I want $2,500. Seems like a steep challenge. I’ll strive for that figure, no doubt, and if I don’t reach that, I’ll be close at least! 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.
One half down and one half left for 2019! Dividend reinvesting, dividend increases and the power of time is occurring. I can taste it, one month closer baby! 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!