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.
I received a total of $691.93 of dividend income in May. Approaching the $1,000 in an “off-month” slowly, but surely. Additionally, my wife earned $175.93 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 $867.86 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. Through two months in the 2nd quarter, my dividends being reinvested have added $59 (April & May) to my forward dividend income.
Here is the breakdown of dividend income for the month of May!
AT&T (T) takes the crown here, with over $100 in dividend income again. They’ve been yielding a highly absurd amount and one can only be curious at the sustainability of their dividend.
Citizens & Northern (CZNC), one of my favorite community banks, actually paid over $100 when you combine both taxable and retirement accounts. They’ve had quite the year, doing well on the performance side and also issuing special dividends.
Procter & Gamble (PG) is one of my favorites here, as they are approaching that $50 mark and I know next quarter, it will be even closer. I am also loving Delta’s (DAL) dividend and am hoping for a pullback there. Bring on the divvies baby!
Here, it shows that I received a total of $266.25 (up from $242.01 last year) or 38% of my income from retirement accounts and the other 62% was from my individual taxable account portfolio. This ratio decreased from last year due to the powerhouse additions of AbbVie (ABBV) and WestRock (WRK).
Dividend Income Year over Year Comparison
See that? This is consistency of investing, dividend reinvestment and dividend growth working their magic. Year-over-year, the dividend income increased 48.8%. If I repeat, that is OVER $1,000 next year. Bring it baby! That’ll be the new goal, as I would love to have that type of income in an off-quarter-end month.
New companies that I discussed were added. Further, Starbucks (SBUX) is new to the portfolio and they are a beast of a company. Hormel’s (HRL) dividend isn’t quite as strong, yet, but in time it will be. Their price has drastically taken off since purchasing them, therefore, it’s been hard to get back in to buy more shares.
I have to point out a great one. Kinder Morgan (KMI) had a nice change from last year. This was a 31% jump due to the dividend increase of 25% and the reinvestment of dividends in between those dates. I am looking forward to this time next year, as I anticipate my KMI dividend may be at/approaching the $50 per quarter; so long as performance keeps up.
Not too many dividend increases this month. However, Caterpillar (CAT) came in with a surprise. They increased their dividend by 19.76%! I love surprises when they arrive in double digit dividend increases. Further, that added almost $29 to my total income going forward.
Further, the dividend aristocrat Leggett & Platt (LEG) chugged along and increased their dividend 5%. This keeps their streak alive and adds to my total. I can’t complain here, as I didn’t do a thing, but click buy on their stock a few months ago.
Lastly, on the LAST day of the month, reliable LyondellBasell (LYB) increased their dividend 5%, which added $8.20 to my forward income.
$40.01 added would require an investment of $1,143 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 66.5% of my average $1,040 monthly expense. This isn’t including my wife’s income she earned, which would only help in the equation.
If I keep the same growth rate up, could I hit over $1,000 going forward? 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.
Another month in the books. 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!