Dividend Income Update – April 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.

April was just another fantastic month where I received passive income via dividends from some high quality companies that I have equity positions in. Every time I log in to my brokerage account and see new capital that wasn’t there yesterday I get really excited. Maybe I’m easily entertained. I don’t know. But what I do know is that this capital continues to get reinvested back into high quality companies so that these dividend tallies expand exponentially over time. It’s a surefire recipe for success and I am simply glad I found it at a young age.

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:

April 2013 Dividends Received

  • Wal-Mart Stores, Inc. (WMT) – $17.86
  • PepsiCo, Inc. (PEP) – $41.39
  • The Coca-Cola Company (KO) – $22.40
  • Illinois Tool Works Inc. (ITW) – $13.30
  • Altria Group Inc. (MO) – $22.88
  • Philip Morris International Inc. (PM) – $85.00
  • Medtronic, Inc. (MDT) – $9.62
  • Sysco Corporation (SYY) – $8.12
  • The Bank of Nova Scotia (BNS) – $12.50

Total dividends received during the month of April: $233.07.

This month was definitely kind to me, and a 44.5% improvement upon the $161.26 in dividends I received in April of 2012. That’s definitely progress and I can only hope that I continue progressing forward toward my goal of early retirement in a similar fashion as time goes on.

I was able to cover about 14.7% of my expenses via dividends during the month of April. Fantastic, right? That means I only had to come up with 85% of my expenses on my own, and that’s during a month where my dividends were slightly below average and my expenses were above average. Sweet! And although I can’t wait for the day I hit that elusive 100% mark, I’m enjoying the sweet taste of progress along the way.

We’re now four months deep into 2013 and I’ve been able to generate $1019.38 in dividends this year, including April’s tally. That’s 29.1% of my goal of generating $3,500 in dividends during the year of 2013. I’m slightly behind my goal so far, but I’m confident I can still make it. A healthy market correction would certainly help my case so that I could buy more shares with my limited capital resources.

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

How was April for you? Great month of dividends?

Full Disclosure: Long all aforementioned securities

Thanks for reading.

Photo Credit: sscreation’s/FreeDigitalPhotos.net            

Comments

  1. Larry says

    That’s awesome progress DM ! I have a few the same April stocks as well (WMT, MO, SYY) and looking to add to em over time. I managed to earn $171 this month myself, a record for me. Now I’m ooking forward to my next purchase (possibly ED or LMT) to add to my June totals. As always I visit your blog to find inspiration and learn some things. Thanks for the update and keep up the good work!

    • says

      Larry,

      Great job on the $171. That’s a very solid total right there, especially during what’s a lean month for many of us DG investors. You’ll be well over $200 before you know it. Keep it up!

      I’m looking forward to another purchase as well. I have my commission check hitting my account next Thursday and could easily do two purchases, but it’s tough to find anything overwhelmingly attractive right now.

      Best wishes!

  2. Onassis says

    Wow, more than 1.000 USD$ in only 4 month!
    CONGRATULATIONS! That is really amazing!

    I´m absolutely sure, that you reach your planned 3.500 USD by the end of 2013! You’ll make it!

    In April I have received 125 EUR. But the german companies pay only once a year, most in April and Mai.
    Therefore I think, I have to invest now in some US-companies, to have a regular cashflow in the future.

    I’m really looking forward to your next purchases.

    Best regards!

    Onassis

    • says

      Onassis,

      Thanks so much for the kind words! Really appreciate it.

      You had a great April! That’s fantastic.

      That’s strange that most German companies only pay once a year. I know that it’s common to have semi-annual (interim and final) dividend payments for European companies, and I know Novartis (NVS) pays just once a year. I guess for some that might be a drawback. It would be awfully strange to collect 80% of one’s annual dividend income in just one month. I am pretty strict with my budget so I could make one lump sum work for a year, but many would have a hard time with that. Overall, I prefer the quarterly payments.

      Keep up the great work on your end too! :)

      Best regards.

    • TiglatPileser says

      Granted that the dividend policy of German/European companies is rather different from the way US based companies handle their dividends – eg in Europe the dividends paid are often much more closely linked to the actual profit which adds volatility (eg if a company adopts the policy of paying out let’s say 50% of their profit in any given year). However I cannot see why monthly or quarterly payments should be such an advantage apart from adding a wee bit to ones convenience. I have been working freelance for more than a decade now and I had to learn not to confuse sales with income right from the start, otherwise I would not be in the business any more. When you have finished a project you get paid for the whole thing, it’s as simple as that. The straightest way to financial doom is to isolate this lump sum from the extended period of time you needed to finish the project and to acquire the know how to get it in the first place. Instead of abstaining from simply phantastic companies like eg Atoss, a software company that’s growing all the time and that’s sharing the benefits with its shareholders via dividends, because they pay their dividends once a year, I’d suggest another solution for the possibly felt inconvenience: keep two accounts. One for your “business” where all the dividends are coming in. Out of this account you pay yourself your monthly salary. It might be rather desirable that the bank balance of your business account goes up bit by bit, maybe erratic but still with an identifiable tendency however ;-)
      Regarding that the prices for shares have gone up quite a lot I am currently looking all over the world. What do you think of the Singapore based Keppel Corp?

  3. Spoonman says

    14.7% of expenses covered by dividends is great! That’s an awesome metric to look at. The level of control you have over your expenses is very inspiring, it allows you to say with certainty (via the percentage metric) how far you’ve come along.

    As your dividend income continues to grow, there will be months when the dividend income will spike to a huge fraction of your expenses (for example, we all had a good month back in December and I think a lot of us will have a great month in June). When that happens, FI will seem so close you’ll be able to taste it. In March we had a nice spike in dividend income, and when I told my wife about it she was like “holy cow, we’re almost FI!”. Of course, we both knew it was a spike but it felt good anyway.

    Good job!

    • says

      Spoonman,

      I really like looking at how much of my expenses are covered by way of dividends. It gives me a very accurate picture of exactly how FI I am for any one given month. Certainly when I’m hitting 80-90% levels routinely I’ll know that I’m very close. You could also look at forward dividends and forward expenses, but these are both uncertain. What actually happened this past month was reality and I prefer to be conservative anyhow.

      Even though you just had a spike with a great month in March it’s still nice to look at how close you are, even if it’s just for one month. You’re not far away anyway, and it must get very exciting for you and your wife to see the final countdown begin. That’s awesome! I hope to join you guys in less than a decade.

      Best wishes!

  4. Paige says

    Your dividend income amounts for April are outstanding! I am especially impressed with the percentage increase from last year to this year. Truly outstanding! April is a lean month for me in terms of dividends. I think I had somewhere around $10 in dividend income this month. But, my portfolio is fairly young and I am pretty heavy in the June-September-December-March payers so I don’t mind the lean months. It will even out in the end. Keep up the good work!

    Paige

    • says

      Paige,

      Thanks so much! The percentage gain YOY for dividends was certainly more impressive than the YOY change in expenses covered via dividends, but that was simply due to the fact that April was an expensive month for me. I also now have healthcare costs that weren’t being factored in before.

      I wouldn’t worry about lean months either. It’s good that you don’t. I think a better way to look at it might be rolling quarter figures, using 1Q-4Q. Look at what you earned Jan-Mar 2012 against Jan-Mar 2013 and also figure out Jan-Mar dividends against Jan-Mar expenses. This gives you a great idea of where you’re at because months with dividend surpluses can easily roll into the months with deficits (f you’re budget conscious).

      Thanks for stopping by!

      Take care.

  5. Debbie M says

    I had zero in April, but due to dividend increases, my average monthly dividends have increased 6% since January 1 (from $18.39 to $19.45). That’s pretty fun.

    Have you ever thought of calculating your average monthly dividends? I bet they’d go up every month for you (since you’re always buying something new). And I think that would be a more interesting number to follow than the total market value of your freedom fund.

    • says

      Debbie M,

      So glad to hear of the increase in your monthly dividends. That’s the power of dividend growth at work.

      My forward dividends are always increasing due to new purchases as well as dividend growth. I always keep my forward dividends in mind against expected 12-month rolling expenses, but since there is so much that can happen in the future I use the past 30 days as my proxy for the future. You can look at it either way.

      Glad to hear you’re having success with the DGI strategy as well. Stick with it!

      Best wishes.

    • Steve says

      Debbie,

      Its nice to see a fellow DGI who is just starting out. My average is about $60 per month now. I have an excel document that I use to track my dividend income for each month. Each January I record each dividend payment I expect to get for the year and then adjust as month comes. I get really excited projecting out the whole year and seeing what I should be getting and then comparing that to what I actually get. Usually, what I actually get is higher each month.

      Steve

    • Debbie M says

      That’s cool.

      I still have so few stocks that I usually find out about dividend increases before I get the new higher payment.

    • says

      MFIJ,

      Thanks! It was a fairly solid month, overall. I’m happy with how April turned out. I’ll be publishing my budget here pretty soon and although it was an expensive month, my dividends still covered a healthy portion. I’m happy about that.

      I’m definitely doing my best to find value. There are limited opportunities to be had, so we’ll see what May brings us. I’m currently looking at the energy and technology sectors most heavily as that’s where I see the most value.

      Thanks for stopping by!

      Take care.

  6. Anonymous says

    Question for you DM — from a practical standpoint, when are you going to “retire”? I mean, I understand what your goal is for early retirement in terms of your target date, but is your retirement date instead some point in time at which 100% of your monthly expenses are covered by your dividend income? And if so, how many month of hitting 100% of your expenses or more will be sufficient for you to say “okay, I’ve got enough saved up”? 3 months? 6 months? A year? Just curious….keep up the good work!

    • says

      Anonymous,

      Great question there!

      There are a lot of thoughts on this particular subject – the margin of safety you should have when retiring (especially when it’s as early as 40). I go back and forth on it a bit, but I don’t think I’ll need a year of exceeding expenses before I consider myself financially independent. I’d say a good 3-6 months and I’ll be okay with it. We’ll see exactly how I feel when I get there (things can certainly change), but I don’t think I’ll want to keep working to build up some large margin of safety. That’s because I’ll be young enough to where opportunities that bring in income will almost certainly be in my future (this blog is but one) and so I doubt that my portfolio will be my one and only source of income for the remainder of my life. This is highly unlikely. From the few people that I’ve talked to that retired early they only regret not doing it earlier as they had found it difficult not to make some kind of side income anyhow.

      Hope that helps!

      Best wishes.

  7. says

    Another great month for you, congrats! It’s great that even in a lower month, 15% of your expenses are covered just by your dividends. Over $1,000 total on the year is a great milestone to reach, keep up the great work!

    • says

      Jake,

      Thanks for the support. I appreciate it very much!

      It wasn’t one of my biggest months, but instead it was just another solid $233 that hit my account that didn’t require me to work for. And the best thing is that the $233 got reinvested, so that it eventually turns into $300, $400, $500 and so on. Works for me. :)

      Take care!

  8. says

    I had to read this twice because it’s so inspiring. Your approach is so simple but incredibly smart. You’re going to be at 100% before you know it!

    • says

      Pretired Nick,

      Aww, thanks. That’s kind of you. I’m glad you like the approach and can see the logic behind it. It’s certainly not a get rick quick scheme, but rather a get rich eventually scheme. Patience is key.

      I hope we both get to that 100% level very soon! It’ll be wonderful for our sanity. :)

      Best regards.

  9. says

    Congrats on the big jump and hitting $200+ for April! I’ll be glad when $50-80 month over month increases only represent 25% of so raises. Still got a ways to go until that however. 29% of the way towards $3,500 is good although a correction would surely help out a whole lot and let us all make some more purchases. I’m a little behind where I’d like to be as well but at some point I’ll get to really add to it.

    • says

      Pursuit,

      A correction would certainly be wonderful. Cheaper shares means my limited capital goes much further by buying more shares, and more shares means more dividends. That’s what I’m talking about. :)

      Let’s keep our fingers crossed!

      Best wishes.

  10. says

    Congratulations on another fine month! I think these stocks will grant you rising income for many more years. Even if a couple of them end up being a disappointment, the rest of your holdings can pick up the slack. Nice!

    • says

      Compounding Income,

      I received my PEP dividend in April. It was due for payment in March, but I find that Scottrade is sometimes one day late on payment for some reason. For instance, I also didn’t receive my TD dividend in April like I should have and instead seen it on May 1. Weird. I noted the PEP dividend note on last month’s report. I should have made a similar note for TD this month.

      Best regards!

    • says

      DGM,

      Thanks! I appreciate it. I’ve been blessed so far in my journey.

      Congrats to you on your success so far as well. You’re doing fantastic with your investments and your writing. Really great stuff and it’s wonderful to be part of a great community of young, like-minded investors.

      Best wishes!

  11. says

    Great job DM!

    April was OK, even if it’s not my bigger month for the dividend return.
    Even stocks too costly for some of them I’ve been able to sell a 35% stock, buy it again at dip, reinforce a canadian small cap (and dividend stock) which raised its stock price toward +15%, and bought some high yield good oil companies.
    My divi return for 2013 is calculated at 7.22%, the total return with sell at 12.61%.

    I bought also some bullion too.

    Keep it up!

    • says

      Anonymous,

      Thanks for the article there! Good stuff.

      I’m currently long TD and BNS and am also looking at RY. They all appear to be very solid banks with different strengths. I really like the foreign exposure and footprint that BNS has, and TD has some great expansion plans here in the U.S. Both look to be very solid banks.

      Best wishes!

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