Another month has passed by, and it’s time for me to post an article on my favorite subject: dividend income. The reason why I love to post articles on dividend income is because it’s pure numbers. It’s hard to argue the success of long-term dividend growth investing when you can slowly and surely see dividend income rise over time and get closer to covering one’s expenses.
January’s dividends were not particularly spectacular. This was due to the fact that a number of companies that usually pay out in January decided to accelerate their dividend payments in time for a December payout in case there were dramatic tax changes affecting dividends due to the Fiscal Cliff concerns. Obviously we all know those concerns were overblown, but the fact that some of these companies are so thoughtful about individual investors makes me smile. I would have preferred to keep the dividends on a regular schedule, but again the decision was made with shareholder’s best interest in mind. In any case, I’m always excited to post these updates and I’m always grateful to receive a piece of profits from the ongoing business operations of companies I own a stake in. It does give me great joy!
I hope these monthly dividend income reports provide inspiration for any investors out there that are just starting out. It’s easy to see these payments rising month after month and it shows that it’s possible to one day pay for monthly expenses with dividends, which would provide an investor opportunities and freedom to pursue other interests than full-time work. Without further ado:
January 2013 Dividends Received
- PepsiCo, Inc. (PEP) – $41.39
- Altria Group, Inc. (MO) – $22.88
- Philip Morris International Inc. (PM) – $85.00
- Sysco Corporation (SYY) - $8.12
Total dividends received during the month of January: $157.39
While not as high as the dividend income I received in January 2012 due to the aforementioned accelerated dividend payouts, I always try to keep perspective. This was cash money that I didn’t have to clock in to a hellish workplace to earn. I didn’t have to hit my alarm clock at 6:15 in the morning, catch a bus ride 25 minutes down the road and bust my ass for 11 hours. All I had to do was invest in high quality companies that continue to increase earnings and pay me out increasing portions of those earnings. Sounds good to me!
These dividends covered a full 13.2% of my expenses this month. Not bad for a relatively sub par month of passive income. I continue to see the real results that this strategy offers and it inspires me to keep going.
With January’s dividends in the book and behind us, I’m one month in to the journey towards this year’s goal of receiving $3,500 in dividends during the year of 2013. I’m only 4.5% of the way there, but I anticipate making up a lot of ground throughout the year as I continue to make monthly purchases into high quality dividend growth stocks trading for attractive prices. I’m excited to continue this journey, and I hope you’re excited to continue yours as well!
I’ll update my Dividend Income page to reflect January’s dividends.
How is your journey to financial independence going?
Full Disclosure: Long all aforementioned securities.
Thanks for reading.
Photo Credit: sscreations
A light month for dividends, but it should get better as the year progresses. That said, $157 in extra income is still pretty darn good!
DGM,
Yeah, definitely a light month. Not unexpected, however. I’m looking forward to seeing these numbers improve as 2013 progresses.
Best wishes!
Rock on! That’s $157 you didn’t have to work for. And it’s $157 that will be taxed at a lower rate than your wages and will not suffer FICA taxes either.
4.5% of the way to your goal! Keep it up!
My Fi,
You got it right. The lower taxation on dividends is one of the most attractive qualities in regards to this investment strategy.
I look forward to making better progress as 2013 winds on. We’ll see how it goes.
Hope your journey is going just as well!
Take care.
$157 is great for a typically lower paying month. I’m jealous of that PM position! Good luck in hitting your $3500 goal.
AAI,
My PM position is full at this point. I’m glad I’ve purchased it in a few lots as it continued to move on up. I think my first purchase was in the low $50’s. The only thing that concerns me is plain packaging. That’s something I continue to watch.
I hope to hit that $3,500 dividend income goal. I would definitely be very excited to exceed that level in 2013. The progress isn’t lightning quick, but it is sure.
Best regards!
$157 in a slow month is great. Especially since it covered 13.2% of your expenses. I can’t wait to see how much you can cover with March’s payouts.
Pursuit,
Thanks!
Yeah, I expect March to be pretty big. That Mar-Jun-Sep-Dec payout schedule is pretty big for a lot of us DGI investors due to the companies that are on that list.
I was glad to cover such a large portion of my expenses through dividends on a slow month. It just goes to show the power of living frugally and being persistent with intelligent capital allocation.
Best wishes!
hey, not really on topic for your current post but i noticed you are already a GD share holder, as am i. has the recent pull back interested you in adding at all? i noticed they are currently a pretty small position for you. they’re starting to get pretty high on my list here with their north of 10% correction they are currently in.
took2summit
took2summit,
I’m taking a good look at some of the defense names I own like GD, RTN and HRS. They’re all suffering from looming sequestration and potential slowdowns in government spending and GD has already realized some of this with the recent earnings call and one-time charges due to reduced government spending.
I don’t want to have big positions here, but I think there is definitely some value to be had. All of these firms will most certainly be around (and very profitable) 30 years from now. War is evil and expensive and our position as a world enforcer ensures our need to continue spending on defense.
Best wishes!
Nice January payment! I’m currently on track to hit my goal of $700 in dividends this year. Up from $450 last year. I now average about $60/month. Not much in terms of covering my total monthly expenses but I console myself by thinking how I would feel if I entered a contest and won two free tanks of gas per month for the rest of my life. I would feel great!
I can’t tell you how badly I wish I had started this investing strategy years ago. I’m sure going to make use of the coming years!
I look forward to your posts. Keep them coming!
Steve
Steve,
Thanks for stopping by.
That’s a great way to look at your dividends: two free tanks of gas per month for the rest of your life. I recently wrote about how I’ll likely be able to eat free for the rest of my life based on the dividends I’m now receiving. It’s great to know that no matter how bad life gets, I’ll never starve.
I also wish I would have started younger. I’d probably be almost financially independent by now if I had started in my early 20’s. But, it is what it is.
Keep up the great progress. Keep your eye on the long-term and the rising dividend income and you’ll do very well.
Take care!
DM,
Do you ever let the month a company pays its dividend influence whether you buy or not? Say you had two similar companies with similar valuations: would you buy the one that pays in a month your portfolio is a bit light on dividends or does that not play into your thought process?
Headed Home,
The payout schedule of stocks matters very little to me. I have a pretty firm lock on my budget, so having more money in one month and less in the next doesn’t really adversely affect my lifestyle. Of all the quantitative and qualitative factors that go into looking at a stock, the payout schedule is pretty far down the list. I certainly wouldn’t mind smoothing out my monthly dividend tallies if it happened, but I’m not going to actively pursue such a strategy either.
Hope that helps!
Best wishes.
DM,
Great start to the new year! These small victories might not seem like much, but they will continue to add up to something much more spectacular.
Best of luck in reaching $3500 by the end of the year. If I can rebuild my dividend portfolio to close to where it was at the end of 2012, I’ll be more than happy.
Cheers!
FI Fighter,
You’re absolutely right. Building an ever-growing dividend stream is time consuming and a passive income level that can pay one’s bills doesn’t occur overnight. It requires constant diligence and a ton of patience. Luckily I have both in spades. I’m in this for the long haul.
Best of luck with the real estate holdings and turbocharging your savings level. You’ll rebuild that DG stock portfolio in no time!
Best wishes.
Get this book:
http://www.amazon.com/The-Rookies-Guide-Options-Beginners/dp/193435404X
Sell monthly cov’d calls that are two strike prices away, you can greatly increase your “income” WITHOUT any added risk. Rinse and repeat every month.
(This coming from a die hard dividend fan too, although I get a little more aggressive than that).
Addict,
I’m a dividend addict too! We should start an anonymous club: Dividend Addicts Anonymous!
I haven’t looked into options yet. I don’t believe there is any “free lunch” out there, other than perhaps diversification. Options, from my understanding, cap your upside while allowing the benefits to collect a premium while committing to a possible better entry price on a stock. They certainly have their benefits, but also their drawbacks as well.
I prefer to grow my dividend income stream through net purchases and by intelligently allocating capital on a value basis. We’ll see how it treats me!
Best wishes.
Nice work DM. I received a rather uninspiring $12.50 in January. That’s one of the challenges with foreign sourced dividends I guess. Their bi-yearly cycles (for Australian companies anyway) leaves something to be desired. February will also be pretty quiet also. The good news, if anything is that March will be a monster, multi thousand dollar month
Integrator,
I’d take $12.50 in January if I knew that I was going to receive thousands in March! Not a bad trade-off at all.
The semi-annual and annual dividends that many foreign companies pay out are only slightly frustrating for me. I have so many quarterly payers that a few oddballs don’t really matter all that much to me.
Best regards!
Great job Man!
You must be really pumping in the funds for that kind of growth!
Austin,
Thanks for stopping by.
I’m investing as much as my frugal living habits and income allow, which so far has been very generous. I just hope to be able to keep up this kind of progress for a few more years.
Best wishes.
Taking a look and comparing your dividends received per quarter and I’m a little confused. Why are some stocks not listed in 2013 that are listed in 2012 if you still own them? For 2012, you listed WMT and SYY, among others, that you don’t list for 2013 but still own. So it looks like 2013 has a lower quarterly dividend payout than it should have.
Anonymous,
SYY is listed as paying out both in Jan of ’12 and Jan of ’13. However, WMT accelerated their dividend payment and paid out in December of ’12 instead of Jan ’13 as a response to the potential fiscal cliff. This was designed to pay out dividends to shareholders while taxes were still advantageous.
I hope that helps!
Take care.