Dividend Income Update – October 2011

This article originally appeared on The Div-Net on November 3, 2011

Dividends. There are few words I like writing or speaking more. The very word conjures up images in my mind of financial freedom, still far off in the distance. Every month of dividends collected brings me one step closer to that far off destination.

The dividends I received for the month of October were less than what I received in September. It’s not a total disappointment because I’m still building my Freedom Fund, and due to such the monthly dividend totals are a bit volatile right now. I suspect that within a year or two the monthly dividend totals will be a bit more steady and rising. One aspect of my portfolio that also causes excess volatility in monthly dividend totals is the fact that I have holdings with Telefonica S.A. (TEF) that pays semi-annually and I also hold Total S.A. (TOT) that just switched to quarterly dividend distributions from a formerly semi-annual dividend schedule. My portfolio has also experienced a lot of growth this year, as I started this year with just over $20k in equities value. Without further ado:

October 2011 Dividends Received

  • Altria Group, Inc. (MO) – $21.32
  • Philip Morris International Inc. (PM) – $26.95
  • Total S.A. (TOT) – $25.75
  • Sysco Corporation (SYY) – $7.54

Total dividends received for the month of October: $81.56

Another wonderful month. Although not as high as the amount I received last month, it’s just one more step on a long and rewarding journey toward financial independence. As always, the biggest thing I will always remember is that this is passive income. I love to remind myself that this extra $81.56 this month came to me with no need for overtime or extra work on my part this month. It just requires me to invest in quality dividend growth stocks that pay me to own them.

I’m far behind my goal of producing $1,200 in total dividend income for the year of 2011. I have produced a total of $853.89 in dividends through October. I doubt I’ll reach my goal at this point, as I would need to average over $170 per month for the last two months of the year, which is far above my average. At any rate, it’s very fun keeping tabs on this and I enjoy showing the world my progress for better or worse. I knew when starting the year that a goal of producing $1,200 in dividends for 2011 was highly aggressive but I enjoy really pushing myself.

I’ll update my dividend income page to reflect October’s dividends.

Full Disclosure: Long MO, PM, SYY, TOT.

Thanks for reading.

Comments

  1. Anonymous says

    Keep it up, There is no rush, You still have time on your side, It great to keep track of your progress, Im also slowly building a dividend portfolio of solid blue chip companies. Im in Puerto Rico, who know maybe in a few years I can invite you over for a couple of pina coladas in the caribbean. Regards; Omar Fuentes

  2. says

    You may miss your goal for 2011 but you won’t be far off.

    Does the frequency of dividends paid (monthly vs quarterly vs semi annually) ever influence your investment decision?

  3. says

    DSO,

    Thanks for the encouragement. I hope I come close. I knew going in that $1,200 in dividends for 2011 was a tough goal.

    As far as your question goes it probably has a minimal impact on my investment decisions, but it does factor in. I prefer quarterly, like most of our U.S. corporations pay out…but the European semi-annual schedule is ok too. I prefer to limit my exposure to that kind of schedule and only have TEF paying out semi-annually now.

    Take care! Thanks for stopping by.

  4. says

    Pey,

    Thanks for asking. I’ve been giving it some thought. I’m likely going to peg my 2012 dividend income goal at $2,000. That will be a 66% increase over this years goal, which will be challenging considering I likely won’t hit this years goal. I like to aim high! :)

    What about you? Any dividend income goals in mind?

  5. Anonymous says

    DM,

    I read quite a few investment blogs and yours is my favorite. Keep up the great work!

    Couple of questions (sorry if you’ve already addressed these in previous post)…

    1) Do you plan on having a family down the road and, if so, what kind of impact do you expect that to have on your future plans. In particular, your monthly expenses and ‘retirement’.

    2) Do you contribute to a 401 and why/why not?

    Thanks!

    JD

  6. says

    Keep up the good work DM! I like that you should always aim high :)
    At the rate you are going, plus the dividend increases should allow you to reach your goal of $2000/yr next year easily. The real fun starts when you start earning 5 digit revenues per year :)

  7. says

    JD,

    Thanks so much for the kind words. I’m truly honored and glad that you enjoy the blog. I hope I continue to provide good content and inspiration for you.

    As for your questions:

    I do not plan on having a family at any time in the future. Although, the future is still quite unknown I am pretty firm on my lack of desire for family. By family, I mean children. I’m looking forward to a long-standing relationship with one person, however. So…in the end I plan on no increasing expenses by way of family, but instead I plan on expenses possibly rising due to more time on my hands and my possible exploration into traveling. This is still all unknown. I hope that clears your first question up a bit.

    I do not contribute to a 401(k). My employer does not offer a match and I’m most interested in attaining financial independence as early in life as possible, so a 401(k) that will allow distributions much later in life does not offer me a benefit as of now. By the time I reach my 60’s I hope that my rising income stream will be far ahead of expenses, and there may also still be Social Security around when I’m in that age bracket. If my employer offered a match on 401(k) contributions I would likely take the match..but it’s not a possibility as of right now.

    Thanks for stopping by and I appreciate your comment!

    Best regards.

  8. says

    Kanwal,

    Thanks! You keep up the good work too!

    I definitely try to aim high. My four goals for 2011 (going car-free, saving at least 50% of my net income, $1,200 in dividend income and reduce expenses by at least $150/mo) were all pretty challenging and I’m glad that I’ll hit at least three of them.

    I certainly hope that you’re right about me being able to reach $2k in dividend income next year. That would be an additional $166/mo on average for reinvestment. I’d be a very happy man.

    Earning 5-digit yearly dividends would be incredible. I can’t wait to get to that point and hope to cross the $10k mark within the next seven years. I’ll keep my fingers crossed!

    How are your dividend income goals progressing?

    Take care! :)

  9. says

    Hey DM,

    My work began offering a 401(k) match and since I’m now in a higher tax bracket, I’m diverting 20% of my pre-taxed income into my 401(k). In additional, I’m maxing out my Roth IRA each year and after saving for a house, there really isn’t much left over at that point.

    This year, I should be able to bring in about $1,000 in dividends and hopefully next year — even without purchasing any more dividend stocks — should be able to collect about $1,250.

    My target retirement date is further out than yours so I suppose I’ll be focusing on the tax-advantaged accounts and my Roth IRA for the foreseeable future since from an accounting standpoint this makes more sense.

    I’m excited to see your progress over the next year, though. Your dedication and commitment will certainly help you achieve your goal.

  10. deedubs says

    I like that you’re setting clearly defined goals and doing your best to achieve them. The overarching goal for my dividend-growth portfolio is to generate a rising income stream that eventually exceeds the salary from my day job. I am only about 2% of the way there (I just started investing fairly recently), but this is a long-term goal.

  11. says

    Pey,

    Great move on the tax-advantaged accounts. If my employer matched 3% or so I’d have one too. But, the fact that they don’t match and also the fact that I have an early timetable on retirement means I focus 100% on the taxable account.

    Sounds like you and I are on similar paths for dividends. Great stuff! I wish the best for both of us!!

  12. says

    deedubs,

    Thanks. I think it’s extremely important to set clearly defined goals that are challenging, but achievable. This makes it easy to see progress.

    Sounds like you’re moving along pretty well. I didn’t start too long ago either, and started really investing in May of 2010. Progress can happen quickly if you’re dedicated and challenge yourself.

    Best of luck!

  13. Anonymous says

    Im almost 32 now and at $6800 excluding my 401k. Been dividend investing for four years now. Never seem to reach my goals but being ambitious is the key I think. That and finding ways to supplement my investment income. Hoping to reach $10k in 2012. Hopefully get some big dividend increases to help on the way! good luck to all.

  14. says

    Anonymous,

    Wow! Great progress at only 32 years old. You’re on track for phenomenal success. That’s great to be there after only four years. If I can be where you’re at now after four years I’ll be very happy indeed. Best of luck on getting to $10k in 2012 and best of luck with reaching all of your other goals. Keep us updated.

    • says

      Andrew,

      Thanks for stopping by!

      What did you buy? I haven’t made my January purchases yet because I simply can’t believe the market won’t dip this month. It’s a tad pricey and I feel a pullback must be just around the corner. When the market does dip a little, I’ll be going all in!

      Best wishes!

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