Dividend Income Update – February 2013

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.

Passive income is a wonderful thing, isn’t it? I’m so grateful that I decided to become a dividend growth investor back in early 2010. It’s a decision that has changed my life. I truly get excited every time I log in to my brokerage account and see fresh, new capital in the form of dividends. This is cold, hard cash I didn’t have to do anything for. Well, I did do something: I invested my money into high quality companies that reward me for doing so. It’s a great relationship!

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:

February 2013 Dividends Received

  • AT&T Inc. (T) – $22.50
  • Vodafone Group Plc (VOD) – $76.20
  • Raytheon Company (RTN) – $12.50
  • AbbVie Inc. (ABBV) – $28.40
  • Abbott Laboratories (ABT) – $9.94
  • The Procter & Gamble  Company (PG) – $28.66
  • Kinder Morgan Inc. (KMI) – $37.00

Total dividends received during the month of February: $215.20

This month compares very favorably with the $146.49 in dividends I received in February 2012. That’s a 46.9% increase in one year, which is really fantastic. My portfolio is actively growing and changing, so some months are going to compare better with others as the companies I’m invested in change over time. Also, it should be noted that General Dynamics Corporation (GD) accelerated its dividend and paid out in December of 2012, rather than this month as it usually does. This was in response to the possible tax increases that were on the table as part of the Fiscal Cliff negotiations. It should also be noted that although I received dividends from the companies, I recently sold my positions with Abbott Laboratories (ABT) and AbbVie Inc. (ABV). Time will tell if this was a wise decision. I’m open minded to buying shares in ABT at a later date if the dividend increases are substantial enough to warrant consideration.

Another great stat is that the passive income I received in the form of dividends this past month covered a full 16% of my expenses for the month of February. I’ve been at this for three years now, so the progress is real and tangible. This month’s dividends could have covered almost half my rent, or I could have covered my entire transportation bill and half of my food expenses. Good stuff!

With February behind me, I’m now two months into my goal of receiving $3,500 in dividends during the year of 2013. I’m 10.6% of the way there, so I feel great about my chances of exceeding my goal. It’ll be exciting to keep adding shares in quality companies to my Freedom Fund as the year progresses, which will naturally add to my monthly dividend tallies. Please continue to follow my journey as we mutually inspire and motivate each other!

I’ll update my Dividend Income page to reflect February’s dividends.

How is your journey to financial independence going? 

Full Disclosure: Long T, VOD, RTN, PG, KMI, GD

Thanks for reading.

Photo Credit: sscreations

Comments

    • says

      Compounding Income,

      The support is much appreciated!

      I’m fairly optimistic about that. One potential looming expense is my recent thoughts regarding purchasing a cheap (~$3k) vehicle. That would be at least one month of investing, along with various fees involved (insurance, registration, taxes, gas) that I don’t really have now. I’ve just been missing out on some social engagements lately due to living car-free and there are some areas of my town that are very difficult to access on a regular basis without a car. We’ll see.

      I do love the cheap living that not having a car allows.

      Best wishes!

  1. Anonymous says

    Really good results! Congrats!

    I don’t know if you’ve written a post about this earlier, but… a question: How do you invest your monthly dividends?
    Automatic reinvestment in the company that pays the dividends?
    Or just in cash for all or for some companies?
    And then investing in the most appropriate at the time?

    I’m a bit ambivalent about how I should do myself, hence the question.

    Thanks for a great blog! You keep me on track with dividend investing.

    /Peter
    from Sweden

  2. says

    DM,

    Great month there! 10% of the way to your goal, big increase from last year, 16% of your expenses could have been covered. Things are coming together nicely. The dividends will just continue to grow faster now that you they’re becoming more significant amounts. Keep up the good work!

    Has the work situation settled down any or is it still being a pain?

    • says

      Pursuit,

      It does feel wonderful to have 16% of my expenses covered solely through dividends. This number will rise significantly as we move forward, and also will temporarily rise during my higher payout months like March.

      My work situation? Ahh, I don’t quite know. We had a meeting just today actually about how “the bell is ringing”. I guess that means we’re having an emergency? My department has been suffering lately in CSI (Customer Service Index). Although my numbers are doing fairly well, I have significantly less seniority than others and I’m also no ass kisser. I just go in and do my job. So, we’ll see. I wouldn’t mind a break if I was let go! :)

      Thanks for stopping by. You’re doing a great job on your end too!

      Best wishes.

    • says

      Headed Home,

      The numbers continue to rise. It’s very inspirational for me. I’m slowly getting to the point where even dropping down to part-time work would be possible. I would rather enjoy that!

      Take care!

    • says

      writing2reality,

      Absolutely. I really like to compare the dividend income to actual, real expenses as that gives me a great yardstick to measure my progress.

      Great buy on KMI!

      Best regards.

  3. says

    Congrats on your progress! You are an inspiration to all of us dividend investors.

    It’s a great feeling when those dividend cheques role in and an even better feeling when they get increased!

    • says

      Dividend Freedom,

      Thanks so much for the kind words. Very much appreciated!

      I agree. Those bigger and bigger dividend deposits in my brokerage account get sweeter by the day. I simply can’t wait for the day that 100% of my expenses are covered by dividends!

      Best wishes!

  4. Steve says

    Good stuff DM!

    I know what you mean about seeing progress. This is my second year of aggressive DG investing and the income is beginning to materialize. I am currently on track to DOUBLE my total yearly income over last year. I’m still a long way from replacing my income but to see this kind of growth is amazing.

    Keep up the good work!

    Steve

    • says

      Steve,

      Congratulations on doubling your dividend income! That’s really fantastic. Good for you.

      Keep up the great work. Continue to allocate fresh capital to high quality dividend paying companies and you’ll likely see your wealth grow significantly over time.

      Best wishes!

  5. says

    Hi Jason,

    Congrats on the USA Today coverage! I found your blog via that article. Just curious if you’ve calculated your 2012 Rate of Return. I’m on the fence about dividend investing, so I’m curious to see how my portfolio (which is exclusively index funds) did against a dividend portfolio. We have approximately the same time horizons (I’m 32).

    Thanks!
    Joe at Foundry in the Forest

    • says

      foundryintheforest,

      Hey, thanks for stopping by! Sorry it took me a few days to get back to you.

      I’m currently in Michigan, so I don’t have access to my computer. I’m borrowing a computer to comment back to you. I believe my return was somewhere just above 14% on a total return basis for 2012. I’ll have to double check that when I get home. I can’t name it off the top of my head, because to be honest it’s not a primary concern of mine. I rather focus on the dividend income and am more able to recount numbers off the top of my head.

      However, I seen your portfolio and I don’t know why I’d change if I were you. You have a nice low-cost, diversified portfolio of index funds, bond funds and exposure to precious metals. The method I’m using requires a bit more time and interest, and is definitely more hands-on.

      I’ll have to start following your blog. You have a great outlook and I appreciate your frugality. Congrats on meeting MMM in person!

      Best wishes.

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