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.
December was a wonderful month for dividends. It turns out that for whatever reason many of the high quality large cap companies that us dividend growth investors follow and invest in (like most oil majors, tobacco companies, industrials, banks) choose to schedule their quarterly dividend payouts for the last month in every quarter. So that means that you’ll typically see a nice little boost in dividend income during the months of March, June, September and, of course, December. Nothing wrong with that, if you ask me. Although my dividend income during early retirement may be a bit “lumpy” due to this payout schedule, I’m keen on budgeting and won’t have a problem rolling over any excess dividend income to the following month(s) when income is a bit lighter.
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:
December 2013 Dividends Received
- Royal Dutch Shell plc (RDS.B) – $22.50
- BP plc (BP) – $45.60
- The Coca-Cola Company (KO) – $22.40
- Realty Income Corp. (O) – $12.73
- McDonald’s Corporation (MCD) – $48.60
- Avista Corp. (AVA) – $16.78
- American Realty Capital Properties Inc. (ARCP) – $7.83
- Johnson & Johnson (JNJ) – $66.00
- Exxon Mobil Corporation (XOM) – $12.60
- Norfolk Southern Corp. (NSC) – $36.40
- Lorillard Inc. (LO) – $55.00
- Target Corporation (TGT) – $10.75
- International Business Machines Corp. (IBM) – $9.50
- Chevron Corporation (CVX) – $40.00
- Emerson Electric Co. (EMR) – $25.80
- Harris Corporation (HRS) – $16.80
- Southside Bancshares, Inc. (SBSI) – $20.46
- Phillips 66 (PSX) – $10.53
- Wells Fargo & Co. (WFC) – $27.00
- Intel Corporation (INTC) – $22.50
- Aflac Incorporated (AFL) – $37.00
- ConocoPhillips (COP) – $37.95
Total dividends received during the month of December: $604.73
Right on! This was my second highest tally ever, right behind September’s monster haul. The snowball is indeed growing, as my Freedom Fund now generates substantial organic income all by itself, even before I add in fresh capital from my day job. Adding in the capital I generate through hard work and combining that with the dividend income my extra worker provides makes for a nice little recipe for building wealth. Sprinkling on the growth in the organic dividend income is simply icing on the cake.
This was a wonderful month. This December’s take was a full 33.7% better than the dividend income I received in December 2012. I’ll take double-digit percentage gains any day of the week!
I was able to cover about 25% of my expenses over the last month via passive dividend income. This would be a much higher number, but I decided to embrace my inner consumer and I really went big on gifts this Christmas. That’s okay because the next 11 months are going to be back to fantastic frugality.
My goal is to receive $3,500 in dividends during the year of 2013. December is in the books, and with that I can close out 2013. Tallying up all the dividends I received throughout the course of the last year, I came up with $3,926.12. I blew away my goal! This was the first time I exceeded my dividend goal so spectacularly. I’m really excited, because everything else aside the dividend income is what’s really going to determine my ability to become financially independent one day. The progress is really happening here, guys. What’s wonderful about dividend growth investing is that the proof is in the pudding. The income is tangible. I can actually physically see freedom one penny at a time. It’s a great feeling!
I’ll update my dividend income page to reflect December’s dividends.
Full Disclosure: Long all aforementioned securities.
How was your December? Better yet, how was your 2013?
Thanks for reading.
Photo Credit: sscreation’s/FreeDigitalPhotos.net
That’s quite a slug of dividends Jason. No wonder you exceeded your goal. With bond yields on the rise I’ve been looking more and more at once popular “bond proxies” like REITs and Utility Stocks. Are there any, that you don’t already own, you’re looking at? At what prices would you be interested in adding to JNJ? In my opinion it’s not as overpriced as Proctor & Gamble or Clorox, but it’s well on up there. I’ll need to do an analysis of it and Pepsico in the next couple weeks
-Bryan
Congrats, very nice monthly dividend income!
$604 can cover a decent chunk of expenses. Congrats man!
Great December DM! I knew December would be a good month for you! It’s also very motivating to see how it grows over the years. Just imagine how good next December will be if you’re able to increase another 33%. I hope to get my own snowball rolling very soon!
What is your dividend goal for 2014?
$600+ and almost $4k for the year is awesome! That snowball will really get rolling in 2014. That’s an extra 2-3 purchases/positions without accounting for dividend growth. I’m guessing some semi-annual foreign companies led to the decline from September. One day you’ll be able to cover all your expenses from dividends alone. Looking forward to see what 2014 has in store for all of us.
Bryan,
I am actually looking at a few REITs right now, chiefly O, ARCP, HCP and OHI. I already own the former two, but the latter two would give me further exposure to healthcare. Tough to say where REITs are going from here with all the interest rate changes, but as long as the fundamentals look good and the valuation is sound then I’d buy.
I’m not interested in adding any more JNJ here only because it’s my largest holding right now. I really, really like JNJ over the long haul, however. I’d love to add some more consumer stocks like PG and the like, but many are overpriced. GIS and UL seems okay here, though.
Best wishes!
DividendHawk,
Thanks so much! A lot of hard work went into putting me in the spot I’m in now, but it should get easier from here. 🙂
Hope you’re able to spot some deals from the sky!
Take care.
Roadmap2Retire,
Thanks so much. I appreciate the support!
The progress is really astounding. I don’t make a ton of money, and I certainly don’t have a glamorous job. I have no insider tips and I taught myself everything I know. It’s a cliche, but if I can do it anyone can.
Success begets success, and dividends beget more dividends. It’s a wealth building machine that you just really can’t stop.
Best regards.
BuySmart,
Thanks! Any other month and this probably would have covered more than 1/3 of my expenses.
Hope all is well with your journey, and I hope you’re jamming out some games. 🙂
Cheers!
D-S,
Thanks for the support! Much appreciated.
Keep up the great work on your end too. You’re getting there one day at a time.
Take care.
Chris,
You’ll get your own snowball rolling downhill very soon. It seems like you’ve got a great thing going, and concentrating on paying down debt is smart. Before I started this journey I paid off every dime of debt other than my student loan debt. And I only keep it around because the interest rate is very low (sub 3%) and it’s tax deductible.
Best wishes.
Anonymous,
I have a number in mind. It wasn’t as high as I was originally going to go because of increased expenses (a car, health insurance) and less income at work (my recent pay cut). I’ll be talking about that goal in the coming days after I review 2013’s goals.
Stay tuned! 🙂
Best regards.
Pursuit,
Thanks! Yeah, you’ve got it right. The snowball really starts moving when the dividends are funding significant purchases all by themselves. Add in fresh capital and dividend growth and you’ve really got a heck of a machine.
Yeah, BBL pays semi-annually. And PEP pays in September, but not in December. So those are the reasons for the decline from September. I hope to break September’s record by late 2014. We’ll see how it goes. 🙂
Keep up the great work on your end. I’ll be checking out your progress for inspiration.
Cheers!
Congrats on surpassing you 2013 dividend income goal… The snowball is gaining serious momentum with more fresh capital purchasing equities and the increase in dividends through dividend raises. It’s feels great when you see the yearly income grow constantly with dividend payments.
Investing Pursuits,
Thanks a lot. Yeah, the portfolio is really gaining steam here. And it does feel good to see the totals climbing month after month, year after year. That kind of tangible progress really feeds this loop of success, where the bigger dividends buy more stock which pay out more dividends which makes you feel even better and keeps you committed. It’s like this great self-fulfilling prophecy coming true right before your eyes.
Best regards.
Congrats on the dividends, Mantra.
You’ve made some fantastic progress and are an inspiration to a lot of people. Keep it up.
regards
Hey DM,
This is awesome! It goes on to prove the basis of your blog and your philosophy of generating passive income. Very inspiring!
What are your goals for 2014?
An increase of 33 percent in one year is great!
600 USD is a risen Amount – Congratulations!
regards
D-S
Fantastic achievement. Long may your dividend snowball keep rolling, and hope for a 33% increase in the future.
Dividends truly are our best worker
Monty,
Great buy there with GIS. It’s not particularly cheap, but it’s a decent value compared to many other consumer stocks. Although if you’re looking for brands, I’d encourage you to take another look at UL. They have a huge list of brands under their umbrella, and their product lineup is impressively diversified.
Cheers!
Anonymous,
Glad you find this inspiring. That’s exactly why I publicize all of my numbers. It’s out there to inspire others to do the same. 🙂
I’m going to be talking about my 2014 goals very soon, right after I talk about how I did with my 2013 goals. Stay tuned!
Take care.
FI UK,
Absolutely. Dividends are a wonderful little worker bee. They don’t require any sleep, food or lodging. And they don’t complain. They just keep on filling your bank account.
I hope your snowball keeps rolling over there across the pond as well!
Best wishes.
DM,
I totally agree on General Mills. It’s a winner. I bought the first third of my eventual position at $50. I want to buy my next under $47, and another 3rd below that. I know we’ll get the sell off eventually, but I’ve been impatient for months.
-Bryan
First Million,
Thanks! I have a long way to go, but this is a really nice start. I’m happy with my progress thus far.
I hope 2014 treats us all incredibly well. Good luck to you on your 50% savings goal! And best of luck with the wedding. 🙂
Take care.
I agree I’m currently buying GIS. I was thinking about Uni as well, but I pull up GIS’s product list and they have a monsterous moat IMO.
DM,
That is an awesome lineup for December. I just recently started buy individual companies about 8 months ago. I have the majority of my taxable savings in two mutual funds. The first is a high yield bond fund (AHITX) and the second is a dividend heavy equity fund (CAIBX). The bond fund pays monthly and the stock fund pays in March, June, September, and December. Most of my dividend therefore come during these four months. The stocks I currently own that pay in “off months” are PG, MO, KO, T, KMI, AND HCP.
I know that you probably don’t put too much weight in the month a company pays its dividend, but are there any companies that pay in “off months” that you might recommend watching?
Thanks, and I look forward to your future posts!
Hi DM,
Congrats! The dividends you earned for the month of December is pretty much half of a mortgage payment! That is awesome. I wanted to let you know that your blog inspires many, especially, young and novice investors like myself. Although I must admit, when I look at your portfolio and compare it to mine, I can not help but laugh. I own 20 stocks here, 30 stocks there.. etc. I am 24 years old now, but I want to seek out opportunities where ever possible and create myself a true portfolio worthy of providing me with income 20-30 years from now.
I have also initiated a very small position in GIS, just above $50, however, I will buy more when it dips below $47 as well. It’s a quality company with strong brands underneath. With the developing markets growing, I think GIS is very well positions. UL is also another as many folks mentioned above, and nothing wrong with owning that one as well. Just waiting for it to dip little bit as well.
Anyway, keep posting and keep inspiring us all!
Long XOM, KO, MO, GIS
– Mitul
Almost $4k in dividends is pretty impressive. Hopefully 2014 treats us all as well as 2013 did!
Dividend Pipeline,
Congrats on starting your own portfolio! I just popped over to your site and see you have your portfolio live now. Great looking stuff. You’re off to a very healthy start.
Yeah, I’m not really worried about the lumpiness in monthly payments as long as my yearly total exceeds my yearly expenses. In fact, it wouldn’t bother me too much to receive one big dividend payout all in January and then just budget it for the year. Not many people could do that, but I’m confident I could. However, I’m also glad I don’t have to. Receiving the monthly payouts is especially great right now as it allows me to compound quicker. As far as companies that pay out in the first two months of each quarter you have a nice list there. You could add GIS, APD, ITW, BAX, OKE and PM among many others to that list.
Thanks for following along. Keep in touch!
Best wishes.
Mitul,
I’m glad you find some inspiration here. That’s exactly why I blog: to inspire others, especially those just starting out. Don’t worry about comparing yourself to me. You’re much younger than I am. If I had the foresight to invest at your age I’d be much further ahead than I already am right now. Congratulations to you for taking your financial future so seriously at your age. That’s a great start in the right direction.
We all have to start somewhere. I started out with very little just a few years ago. You can go back to some of my early dividend income reports where I was only receiving $30/mo…and that was after almost an entire year of investing. Dividend growth investing isn’t a get-rich-quick scheme, but you will build wealth over time. The proof is in the pudding. Be patient and you will be rewarded.
Keep up the great work. You’ll be far ahead of where I am now when you’re my age.
Cheers!
Nice haul! You have big oil on lockdown wow.
Is there anything in particular catching your eye at the moment? I’m thinking about TGT, MCD, and maybe even UL.
Tell your little worker good job and to get back to work!! lol
great month. You’re almost hitting that $1k mark. keep it up. Love theses updates.
Wonderful income for December from investment. How many months have you crossed $500, sep and December probably, Great keep it up. Dividend Mom
Very impressive numbers, DM, keep it up! You managed to cover 25% of your expenses, which is awesome.
This month was great for us as well, an all time high. Months like these are very encouraging. I just can’t wait to use those dividends to pay for expenses and spend my time doing what I want.
IMO you cant lose with UL either. I’m actually looking over there financials now. I have been considering UL for about the last month. They are only up 4% this year, which seems like a good buy. PG is starting to kick their but a tad in the US which is temporarily hurting their share price. I think I will be buying UL as well.. I love GIS and will continue to purchase it, sine they offer a free DRIP. They only have a 32B market cap and can grow quite a bit still IMO.
DM,
I can’t help but look at your current income and timeline and think that you’ll be coasting into FI much in advance of 40. If you can maintain your income (which I know is going to be impacted) then you will be smashing it. Factoring in the big chunk of change your freedom fund is now throwing off and adding in your excess income your going to achieve your goal much in advance. Considering that income is going to grow all by itself regardless of what else you add to it through compounding an dividend growth. Your in great shape buddy. If I ever find myself in Florida we’ll be having a beer on me, hopefully when we’re both FI!
DM,
Thanks for the update! At the end of the day exceeding goals and making marked progress towards your end goal is really where it’s at!
I like the fact you have invested in quality companies. It is very easy to get carried away with dividends and invest in high yield but low quality companies and end up losing capital!
Solid month and you have a lot of payers! I’m guessing September was higher due to the larger VOD payment. The same thing threw mine off a little too where my third quarter was a little higher than fourth this year. As our portfolios get larger though I don’t expect any previous quarters to be smaller.
CI,
Thanks! Yeah, the oil holdings are wonderful. 🙂
You had a great month too. Keep it up!
I’m currently looking at KO, O, ARCP, HCP, OHI, UL, TGT and GIS. I don’t have as much capital as usual right now, so it might just be one of these.
Best wishes.
FFdividend,
Haha. Don’t worry, I never give him a break.
Thanks! I’m still a ways away from $1k in one month, but I really look forward to that day. Hopefully within the next couple of years or so.
Best regards!
Dividend Mom,
Thanks for the support!
I should be able to surpass $500 during the last month of every quarter from here. The progress is definitely real.
Keep up the great work with your journey as well.
Cheers!
Spoonman,
That’s awesome you guys hit an all-time high! Congratulations. You guys can just taste freedom, I’m sure. 🙂
Best wishes.
KM,
Thanks for the encouragement! I’ve run the numbers a few times, and it looks like I’m about a year or so ahead of schedule. That’s assuming the same kind of progress I’ve been able to make thus far, which may be hard to replicate going forward. However, even if I miss my overarching goal and reach FI at 41 or 41, well, that’s still pretty good.
If you ever find yourself in Florida the beer is on me. 🙂
Take care!
Katz,
You’re absolutely right. We all have different goals and means, and in the end it’s all about making progress towards those individual goals with the means necessary.
Thanks for stopping by!
Best wishes.
moneycone,
Absolutely. It’s easy to chase yield with BDCs and mREITs, but I choose to stick to high quality companies that I’m confident in for the long haul. No sense in locking down a 8% yield if a significant portion of it is return of capital.
Cheers!
AAI,
Sept. was actually higher due to the PEP and BBL payouts. VOD actually paid it final semi-annual dividend in August.
I’m really looking forward to your dividend income reports throughout this year. You invested an obscene amount of money in 2013, and that will be paying dividends literally this year.
Best regards!
Mark,
Thanks. I had a great month. The snowball continues to roll. 🙂
Wow. $9k? That’s tremendous. Really spectacular. I have a long ways to go to catch up to numbers like that! Keep up the fantastic work.
Best wishes.
Wow.
Heckuva month for payers 🙂
Well done.
I hope to hit $9,000 this year. We’ll see. My December 2013 dividend income update should be out this week or next!
Keep up the killer savings rate in 2014!
Mark
My December was great, I made 1k. For the year im at 2750 in dividends that are being reinvested. Good luck in 2014.
Great job in 2013! I’m excited to see how you’ll do in the future. The dividend will keep increasing and you’ll reach your goal before you know it. LO and PM are on my watch list. Good luck in 2014!
Hi Jason,
Awesome snowball effect. I’m looking at HCN a health care REIT that yields nearly 6% near its 52 week low and Line which is Linn Energy that yields 9.5%. I think these will outperform the market. I have a lot of growth stocks so I am trying to balance my portfolio out.
I been buying LLY company and CAT.
EL,
That’s awesome! $2,750 over an entire year is very, very nice. You’re well on your way. 🙂
Keep up the great work, and best of luck to you in 2014.
Cheers!
Joe,
Thanks! It was definitely a great year. I’m really looking forward to what 2014 brings.
I think you have a couple of great stocks on your watch list there. PM is especially well positioned for future growth.
Good luck to you too!
Best regards.
Charles,
Nice picks there. HCN looks good here. Many REITs have been slammed, and this one is no different. Looks a lot like HCP, except without some of the lending activity.
I looked at Linn a while back and passed for some reason. I believe I couldn’t totally understand some of the hedging activity. However, that yield is very nice. Makes for a nice return even without any capital gains.
Best wishes!
Oh, jamming out I will be. Due to my 30 day challenge.
NickD,
Seem like good buys to me. I’ve never followed LLY. I took a good look at CAT in the low $80s. I liked it, but there’s just so many stocks and so little capital.
Take care.
DM,
I have been following GOV for the past month or so. I have never invested in REIT’s before but this one is very tempting, its got an impressive yield. Have you or anybody else heard of them? If rates do rise and this stock takes a hit, I think, I will be a buyer.
PS I also picked up some GIS at 48.85. Like DM said, its a decent value.
Frank
Frank,
I just took a very quick look at GOV. Never looked at it before. While government contracts are likely reliable and stable for many years to come, the small asset base would concern me a bit. The short public history is also a bit of a concern, and I’m not sure management is all that devoted to growing the dividend.
Definitely a very interesting play. I certainly like the fact that the tenants aren’t going out of business, but this is a pretty specialized play. I think it’s a bit akin to DLR in that respect.
Nice buy on GIS. Very high on my list right now. 🙂
Best wishes!
DM.
Wow you summed up that company very fast, I am impressed. (You must share your steps on how you analyze a company with your readers) I agree with all your points. Maybe I will stay away from REIT’s. I haven’t invested in REIT’s because I read if there are special payouts it can lower your cost basis and if you hold the stock longer enough you can actually have a negative cost basis. Also the dividend is taxed at your ordinary income tax rate. It always seems like a disadvantage to me.
Frank
Frank,
Great idea there. I plan to write an article on due diligence in the near future. I’m hoping to put together something really special on that. 🙂
I hear you on REITs. I’m targeting a 5% allocation to them in my portfolio, which is a much lighter allocation than many other dividend growth investors. I think they certainly have their advantages with a high entry yield and solid growth opportunities, but they are debt driven and some of the taxation can result in a negative cost basis and higher dividend taxes as you point out. Overall, they have benefits and drawbacks like anything else. I hope the high yields with some of the higher quality REITs supercharge my dividend income, but at the same time I wouldn’t want a large allocation to them. You have e-commerce growing which can encroach on the business of blue-chip REITs like O, and then you have the fact that many of the big REITs are domestic only, so you have a limit on international expansion there.
Best regards!
Very impressive! Have you considered DUK for your utility sector?
WC
DM –
Do you take all dividends paid out as cash income each time and reinvest as you see fit (other equities), OR do you automatically reinvest the dividends into the stocks they yield from whoich you already hold positions? Or Both? How do you make this decision?
I have been a long term dividend growth investory myself, but have historically reinvested the dividends as they are paid to take advantage of long term compounding of these monies and the stocks that are paying them.
Side note: We hold almost 40% similar companies, so I very much enjoy your perspectives and following along with your actions.
AC
WC,
I haven’t really looked at DUK much, but I don’t follow utilities in general very closely. I find their growth limited with leveraged balance sheets, heavy regulation and geographical limitations. The high yield is nice, but as a young investor I’d prefer larger growth rates.
If I were an older investor I’d probably be more interested in utilities due to the current income they can provide. I’ll try to take a look at DUK sometime and get back to you.
Best wishes.
AC,
I reinvest my dividend income selectively. So what I do is allow the dividends to build up over the course of a few weeks or so and then combine that capital with fresh cash from my day job. I then used the combined sources of money to purchase the most attractively stock(s) I can find, while also keeping portfolio allocation in mind.
Thanks for stopping by. I’m glad we have many of the same companies. Many of these companies are extremely high quality and hard to avoid, even in index funds or ETFs.
Best regards!