Dividend Income Update – April 2014

rising-dividendsAnother 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.

Although April is never one of my biggest dividend income months, it’s still spectacular to be in a position where I’m receiving totally passive income for decisions I made a long time ago. One investment in one high-quality company can provide you with rising income for the rest of your life. Repeat that decision over and over and over again, and all of the sudden you’re drowning in income. What a wonderful life!

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 2014 Dividends Received

  • Wal-Mart Stores, Inc. (WMT) – $18.24
  • The Coca-Cola Company (KO) – $42.70
  • Baxter International Inc. (BAX) – $22.05
  • Illinois Tool Works Inc. (ITW) – $14.70
  • Altria Group Inc. (MO) – $38.40
  • Philip Morris International Inc. (PM) – $108.10
  • Realty Income Corp. (O) – $12.77
  • American Realty Cap. Prop. Inc. (ARCP) – $8.33
  • Medtronic, Inc. (MDT) – $10.36
  • General Electric Company (GE) – $15.40
  • Sysco Corporation (SYY) – $8.41
  • The Bank of Nova Scotia (BNS) – $12.32

Total dividends received during the month of April: $311.78

I’ll gladly take it! That covers more than half my rent and utilities. How cool is that?

Dividend growth investing is just a fantastic strategy, in my opinion. Rising dividend income is easy to track against one’s expenses, making it a visual feast to see financial independence literally becoming more realistic with every passing day. And in a bull market you get the rising portfolio value as well, making it psychologically easier to keep at it. In a bear market, however, you’re still coming out ahead because you’re able to reinvest rising dividend income, as well as fresh capital, into cheaper stocks which have a higher yield, and consequently more dividend income. As Charlie Sheen would say: Winning!

Dividend income for this April was 33.8% higher than what I received in April 2013. That’s solid, tangible progress that provides me a lot of options already. Although I’m nowhere near finished with my journey to financial independence, the fact that I’m receiving this kind of passive income means my life is pretty flexible. Since I invest my funds in a 100% taxable account, there is nothing that prevents me from accessing this income at any time in my life, which is wonderful to know. If I were to lose my job tomorrow, this is real-life income that means I’m able to meet my expenses much easier than if I were without it.

I was able to cover almost 15% of my expenses this past month via the dividends that rolled in. Not bad, but I hope to continue to improve on these numbers as my income rises and simultaneously my expenses drop. I’m still amortizing a major expense in the form of the used Toyota Corolla I purchased late last year, and that’s having a major effect on my budgets. But that will drop off at the beginning of next year, so I’m anxious to return to some pretty solid frugality in 2015.

Looking forward, May is probably going to be a low point for me. I usually see rather light dividend totals in May of every year. But I’m not the type of investor that needs to see the same amount coming in every month. Through careful budgeting, I’ll easily be able to save more of my dividends in up months, and less in down months once I’m living off of my dividend income. However, I do hope to smooth things out a little more over time.

One of my major goals this year is to receive $5,200 in dividend income. We’re now four months into the year, and with April behind us I’ve received $1,705.17. It looks like I’m solidly on pace to exceed my goal this year, so I’m truly excited about that! I’m now 32.8% of the way there, and I hope I’m able to continue pushing the pedal to the metal.

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

Full Disclosure: Long all aforementioned securities.

How was your April? Another solid month of passive dividend income? 

Thanks for reading.

Photo Credit: sscreation’s/FreeDigitalPhotos.net 

Comments

  1. Mathew Walker says

    Progress, progress progress.
    Nothing new to say that I have not said a dozen times before.
    You’re doing great and keep up the good work
    – I really just stopped by to bust your April Dividend Income updates Comment Cherry.
    Always good to see “I’m not the type of investor that needs to see the same amount coming in every month. Through careful budgeting, ..”
    I was not like that at first – and fell into day trading like a complete fool.
    But through ambition and personal growth realized that if I wanted to make a real change in life and positive progress at the maximum potential available – I needed to educate myself.
    Something good would be maybe a bi-quarterly update of financial literature that you could share with us as well, some of the books that helped you form the decision basis for your investment strategy.

    /figured I would chock up a more relevant comment aside from my common
    ‘wow oh yay free money!, thank you past continuum version of me for giving future me a much brighter future,’

    • says

      Mathew,

      Thanks so much for the supportive and thoughtful comment. :)

      And I may take you up on your suggestion there in regards to good financial literature that has helped me in the past, or that continues to assist me as I go forward. I tried to put those resources together in my ‘Getting Started’ page, but it might be good to review them more regularly, as many of these resources are timeless.

      And I’m glad to hear that you dug yourself out of your trap and educated yourself. I made some mistakes early on in my journey, and luckily realized the err of my ways pretty quickly. I’ve been “sober” ever since. :)

      Best wishes!

      • Ravi says

        Without making the mistakes, you may never have changed your ways and righted the ship so soon. Even tough situations leave us with good lessons. Hopefully…

  2. KeithX says

    Nice. I have never tracked the dividends received like you do, Jason. Makes me think that maybe I should start. I do look at the annual totals, however, since I keep a spreadsheet of my wife and my investments. I also noticed that I share investments in six of the twelve that paid you this month (WMT, KO, BAX, O, ARCP, GE), so I guess I had a pretty good month, too. :)

    • says

      KeithX,

      Well, tracking the dividends as carefully as I do isn’t really necessary. I do so because it makes it easy to track my progress, and it’s inspiring to myself and others. However, it’s not imperative.

      But I think you’d have a hell of a good time doing so if you took up the task. :)

      And it sounds like you did indeed have a great month there!

      Take care.

        • says

          Dina,

          I think tracking is indeed a good idea. Plus, it’s just plain fun! :)

          It’s wonderful to see the income rise against expenses, and see the crossover point come into focus. It’s still a few years away, but it’s getting closer and closer.

          Best wishes.

          • KeithX says

            It’s a little bit different since I enrolled in automatic dividend reinvestment in my 401k. I see additional shares of stock now, instead of cash. It’s working well, though. I have received over 10 shares on AT&T this year, for example.

    • says

      DivHut,

      $175 in dividends last month is very, very solid. That’s fantastic! :)

      More money leads to more money, right? And who doesn’t love more money??

      Best regards.

  3. Big Nick says

    Every few days I check out your blog, get excited them over whelmed with getting my feet wet. I max out my 401k at Work 17500k per year, put 5500 in both my IRA and my wife’s and then have a few vanguard funds. So long term I am putting 28500 per year then an extra 7 or 8k into vanguard. Last month I opened a Sharebuilder account and was going to buy 2000k of Coke but just didn’t pull the trigger. Any thoughts, I have read your getting started and what not but sometimes feel like dividend champs are over priced.

    Nick

    • says

      Big Nick,

      I wouldn’t be feeling too overwhelmed if I were you. You’re already off to a fantastic start. You’re investing about as much as I do per year, except you’re targeting tax-advantaged accounts. This will work out to your benefit over the long haul, so keep it up!

      Any money you have left over is just icing on the cake. If you feel more comfortable as an index investor then keep up with Vanguard. You can’t go wrong there. If you are looking at individual stocks, however, I’d recommend you educate yourself on how to value stocks from a quantitative fundamental basis and also view them qualitatively. From there, you should start to get a feel for where you want your money to go. As far as dividend champions, they’re not all valued the same, just the same as the broader market doesn’t value every stock the same. With that being said, KO is not your cheapest option. However, AFL looks very solid here.

      Best wishes!

      • says

        I’m also curious as to what your feelings around Coke are. There has been a lot of news lately about declining soft drink consumption around the world. I understand that there is a war of sorts surrounding the management compensation plan (this was brought up at the Berkshire meeting).

        With that said, I fully admit to now knowing much about the stock. I’d be interested in knowing how much of Coke’s business is soft drinks versus other stuff.

        • Ravi says

          Every company has to reinvent itself eventually. If you don’t think they can innovate, then don’t invest. Coke will have to learn to compete in other categories (snacks, nutritional drinks, tea, something new…) eventually to either grow, OR to soften a secular decline/change in consumer tastes.

          Take as an example MO, which made tons of money for itself and investors by selling tobacco products. Tobacco use has been slowly declining and will continue to do so. It may eventually level off, but no one really knows. They have a position in SABmiller as well as having positions in smokeless cigs.

          Point is, every company will have to keep up with something new at some point. Confidence in management is worth a lot.

        • says

          Mr. 1500,

          Thanks for stopping by!

          I haven’t been able to find the breakdown across the entire company in terms of carbonated soft drinks (sparkling drinks) against all others. They break volume down by operating segment, however, which is useful for comparisons from quarter to quarter. At least, this is what I’ve seen. And volumes are up across the company, thanks to their broad diversification across beverage types. Furthermore, of their 16 $1 billion brands, 11 are not carbonated soft drinks.

          Overall, I think they’ll continue to shift and adapt to changing tastes, while still aggressively marketing their core brands. In the end, people have to drink something, and as the world’s largest beverage brand, Coca-Cola is well positioned to be the company people buy their non-alcoholic drinks from.

          Cheers!

        • says

          KO is just fine. Bumps and blips short term KO knows how to evolve their business. KO is so much more than soft drinks. They are Minute Maid, Powerade, Dasani, Glacéau Vitaminwater, Honest Tea, ZICO… in other words, whether it’s the vitamin water trend, tea trend or coconut water trend Coke has a piece or buys out those trends.

          • says

            DivHut,

            Great points there. As I pointed out above, the majority of their 16 $1 billion brands are actually not soft drink related. They’re broadly diversified across many types of beverages, and I see no reason to worry here.

            Cheers.

    • Zol says

      Big Nick,

      I get a free match in my 401k so do NOT want to give up free money. I, as well as you, max out the 401k and do the best i can with low cost index/funds. In the last 2-3 years i’ve been starting the taxable portion of my savings via the DGI method.

      I’m in a similar boat today with having a hard time finding good value priced stocks. The method i’m using today is to slowly dollar cost average into the market at 1k to 2k increments every month. I try to find the best value “at the time of my investment”. Granted that’s becoming harder to find today. However, the goal of the DGI method i’m employing is that i want a rising stream of dividend income. I could give two hoots what Mr. Market prices a given security assuming the fundamentals are sound. I’m even willing to pay a slight premium because the focus is on the dividend not price.

      My personal initial screening criteria (in no particular order):

      1) 60% or less payout ratio
      2) Dividend Growth Rate of at least 6-12%
      3) ~2.5% dividend (less ok if sustained DGR is high enough)
      4) PE less than 20
      5) Strong fundamental moat

      Don’t get me wrong, attractive pricing is nice. And nobody likes to see their “absolute #” on any given day go down. But since i’m focused on the the rising dividend stream, i can sleep a little easier at night. I also don’t think i can predict the market, so i’m just gonna keep doing the best i can to find value every month and pull the trigger when things look attractive.

      As for diversification, having an allocation 50% index/funds 50% equity is not unreasonable. For the equity portion everyone has a different threshold. Good article and discussion thread here if you were curious. I was a little morose that i couldn’t be all in on DGI but there’s also a part of me that feels comfortable pursuing dual strat’s.

      http://seekingalpha.com/article/2191193-diversifying-the-perfect-retirement-portfolio-heres-how-part-3

      And as always the David Fish dividend spreadsheet is a perfect starting point if you haven’t seen it yet :)

      http://dripinvesting.org/Tools/U.S.DividendChampions.xls

      • says

        Zol,

        Thanks for sharing that.

        I have a similar criteria to you, although it shifts a bit with the market to allow me to jump into opportunities that I find attractive. For instance, IBM’s low yield was a bit of a stretch, and sometimes I find stocks with even lower yields that I might get into at some point (DIS, V, SBUX).

        And I don’t think a 50% allocation to index funds is a bad way to go. Many have no choice as they’ll be exposed to funds via a 401(k) or another account.

        Cheers!

  4. says

    Another solid month of Dividends, Jason.
    Congrats on the income that you didnt have work for (well, except doing the research on the investment :)

    Best wishes
    R2R

    • says

      Gareth,

      Thanks!

      Yeah, I think I might actually exceed my goal. However, it’s going to be a bit closer than it might look because I don’t know how much capital I’m going to have to invest with in the latter half of the year. If I was able to keep the pedal to the metal I know I’d crush it. But I’m hopeful I can invest here and there and pick out some great opportunities.

      Hope all is well with your journey! :)

      Cheers.

  5. Phil says

    Wow! From the days of driving around with expensive cars we couldn’t afford or the gas to put in them, you’ve make some killer progress. Keep up the good work, proud of you bro!

    • says

      Phil,

      Hey, man. Your first comment here! Thanks for stopping by.

      It’s been a total turnaround, huh? I do remember those days! They were a lot of fun, but not very sustainable. Glad I finally got my act together and made some necessary changes.

      Talk to ya soon.

      Take care.

  6. Spoonman says

    That’s some solid progress you are making. Your dividend engine is steadily coming online, it’s encouraging to see it cover a huge chunk of your rent and utility expenses. I’m sure that can give you a certain degree of peace of mind.

    Again, your progress is impressive. You are doing what you have to do, and you are rolling with the punches as they come. You’re being rewarded with money in your pocket! How cool is that?

    • says

      Spoonman,

      The dividend engine is humming along nicely now, but I hope to be able to continue feeding it fresh fuel. :)

      And your engine is going to be propelling your freedom here pretty soon. Just months away now! I’m very excited for you guys.

      Cheers.

  7. says

    Great work DM! Solid year over year gain! I too am seeing the solid results after I completed my conversion of my prior portfolio.

    On a related note, do you know what brand of car is most popular with the Millionaire Next Door? Toyota. If you haven’t read that book it’s a good quick read.

    Take care!

    • says

      ILG,

      Haha, I knew Toyota was high on the list, but I didn’t know it was #1. That’s a fantastic book. I read it few years ago, and find it really interesting in how counterintuitive it is.

      And congrats on your solid gains. Keep it up!!

      Best regards.

    • says

      PIM,

      Thanks so much for the encouragement and support. I certainly hope you’re right in your prediction. Faster is better!

      Keep up the great work on your end, too. $150 in dividend income for April is very, very solid. :)

      Take care!

  8. Winston says

    Awesome work! Always great to hear you making progress towards your goal.

    April was a solid month for me, received $491 in dividend income. Thus far, I am well on the way of reaching my target of $6K in dividends by the end of the year. I have only started dividend investing in 2010-2011 but it is amazing to see the progress now compared to then.

    Best of luck to all of us.

    • says

      Winston,

      Thanks so much. It feels good to make solid, consistent progress.

      And great job over there with the dividend income. That’s awesome! $491 for April is very, very nice. Best of luck hitting $6k! I hope to be right behind you. :)

      Best regards!

    • says

      AFFJ,

      Thanks so much. I’m really blessed to be in this position, but I also continue to work really hard.

      I wish you the best of luck with your goals, too. May we both continue inching closer to freedom! :)

      Take care.

    • says

      Dividend & Whisky,

      Haha. I actually think with the slowdown in capital allocation that is coming here pretty soon that I set a pretty aggressive goal, but I’m doing better than anticipated. I’ll gladly take it! :)

      Thanks for stopping by. Appreciate the support. And congrats on your April dividend income. Looks like you had a great month over there!

      Best regards.

    • says

      Under The Money Tree,

      Thanks!

      And I couldn’t agree more. What’s more fun than watching income hit your account when you didn’t even have to wake up and go to work for it? I definitely know why Rockefeller was such a fan of dividends. :)

      Cheers!

    • says

      Trader,

      I’m glad you enjoy these posts. They’re certainly my favorites. This is where the rubber meets the road, if you will. The dividend income is the tangible proof that this strategy is working, and freedom is closer than ever.

      Hope all is well on your side of the ocean. :)

      Take care.

  9. says

    Hi DM,

    Congratulations on yet another successful month for you. Are these getting boring yet? :-)

    A 33.8% increase YOY is impressive, and you’re now well on your way to chasing down that $5,200 dividend goal. It looks like it’s going to be a tight finish. Do you have enough to cover the goal in forward dividend payments? Are you confident of hitting it?

    Best of luck to you either way my friend, and I’ll be excited to read about how you get on!

    Cheers
    Huw

    • says

      Huw,

      Boring is beautiful! And these are never boring to me. They’re truly exciting. :)

      I think $5,200 is going to be tight. I’m just over that number in forward dividends last I looked, but that included recent investments. We’ll see. I know fresh capital for new investments is going to be hard to come by over the next few months, but at the same time I’m extremely excited for what the future brings.

      And keep up the great work over on your end. You’re off to a fast start! :)

      Best wishes.

    • says

      Viisikymppisenä eläkkeelle,

      Great job! Being on track for your individual goals is all that matters. I know there are many investors out there collecting 10x the dividends I’m receiving, but that doesn’t really matter to me. As long as I’m financially independent by 40, then I’m a very happy camper. :)

      Cheers.

  10. says

    This is just more proof that DGS investing will set you free!

    Jason, I would like your thoughts on Chuck’s recent article on diversification over on Seeking Alpha and how fewer positions might actually provide greater total returns if you pick a few dividend champions, some fast growers, REITS and MLP’s. I think he was suggesting no more than 30 positions. I also liked the idea of investing up to 50% of your DGS portfolio in your best positions. So maybe trying to balance your holdings at 2% each for 50 positions is not necessary. Just let the best positions keep growing and add to them when the value is right.

    • says

      luckydog17,

      Well, I agree that a more concentrated portfolio where one is able to identify winners will have much better total returns than I will.

      But two things come to mind:

      What if the winners don’t turn out to be winners? We all think Coca-Cola will be a fantastic investment for the next 20 years, but what if it’s not? The whole point of diversifying, in my view, is to mitigate potential losses. And nobody invests to lose money, so every position is theoretically in the portfolio to make money. However, we never know to what degree these companies will perform. For instance, ITW has been one of my strongest performers to date. Did I think it would outperform the likes of PM? No. But it did.

      Second point is income diversification. I’ve addressed this before, but my diversification is not used for total returns, but rather income diversification. With a smaller portfolio, every dividend cut creates a larger loss of income in percentage terms. If I own 20 stocks and two eliminate their dividends I’m out 10% of my income. With 50 stocks, two eliminations leads to a loss of just 4%.

      I expanded on this topic (and my reasoning for a large portfolio) here:

      http://www.dividendmantra.com/2014/04/why-i-eventually-want-to-be-invested-in-50-companies-income-diversification/

      Best regards!

  11. Ravi says

    Incredible! Tracking progress is a great way to enjoy the journey and see small, but important, steps toward your goal.

    I’ve also been satisfied with the rising amount of passive/semi-passive (rental) income. It now stands around $350/$550 (total $900) avg per month. It really is shocking when I say that out loud (or write it out).

    I suppose I don’t really see the investment income as any different from my W-2 income, and it all ends up being factored in to how much I save/invest. I still would like to have more cash on hand, call me paranoid, but will try to save ~$1k/mo for the rest of the yr and leave it in savings. I’d like to reduce my taxable stock portfolio to 1/3 of my overall investments from the 1/2 that it is now. I wish I had more time to track investments and new opportunities, but work has been unpredictable lately.

    I do still make the occasional investment when something I understand goes down and I believe is undervalued(like GM earlier this yr @ $35). I also got rid of my MLP holdings this yr after finishing taxes. They were in net gain positions, so it wasn’t a bad thing, but I think in the future I just don’t want to deal with the tax headache of K-1s.

    Inspiring as always. Keep it up!

    • says

      Ravi,

      Wow! Congratulations on the serious rental income. That’s fantastic! I’ve read of so many success stories regarding rental income that it makes me wonder sometimes if I’m really missing out on something. But then I look deep down inside myself and realize it’s just not for me. We all have our limitations, and that’s one of mine.

      I’m going to have a lot more than 1/3 of my overall wealth tied up in equities; I’ll likely have about 95% of my wealth in dividend growth stocks as I continue to build my wealth, unless I eventually purchase a residence. We’ll see!

      Keep up the great work. Very solid work there with the passive income. :)

      Take care!

      • Ravi says

        It actually wasn’t meant to be a rental. I bought it in 2011 (2br/2ba condo) to live in and picked up a roommate to cover some costs (ended up costing me a comparable amount to just renting an apt with a roommate after netting the 1 room rental income).

        Then about 2 years later, ended up getting a new job in a new town and moving away. Fortunately, I was able to find another friend to live with my former roommate, so things have worked out so far.

        Trust me, the $550 is great, but will likely go down to $400 or so when my friends eventually move out and I have to get a property manager.

        Fortunately, it was a small condo during the crash so it was sub-$100K and I’ve paid it off now. I think I could liquidate it for $130 if I needed to get rid of it. Maybe $10K in minor repairs and agent commissions, so probably sitting on $20K in unrealized gains.

        For now, I like the extra cash flow, but I know a headache is inevitable… I just don’t know when.

        I think for most people, especially early retirees, having your OWN residence is a great idea. Rent will rise over time, but a mortgage does not. Operating exp (taxes, maintenance, etc) will rise more slowly than your rent would over 20+ years. It’s not really a way to build wealth, but it does (almost) give you a fixed housing cost with sub-inflation cost growth. It’s best if you know you want to stay in the house for >5 years, and also if you can rent it out should you need to move for any reason, OR that it is fairly priced so you can sell it if necessary.

        • Ravi says

          Short version: Buy your own house to save yourself loads of money in rent over the long term (obviously has to be a quality property at a reasonable price), but rentals really are not for everyone.

  12. BCS says

    Very exciting DM! Always fun to watch your money grow and I am always impressed with the way you go about it! April was another good month for me too. I had $107 in dividends which was 86% better than April 2013. However, I didn’t focus on dividend investing until this past December/January when I totally overhauled my portfolio. Still, after this month, I have already surpassed my total dividend income for 2013, which is very gratifying to me. I’m slightly off pace for my goal of receiving $1,000 in dividends for 2014, but maybe I’ll pick up the pace as the year progresses.

    • says

      BCS,

      Great job moving over to this strategy and getting off to a great start. $107 is the start of something truly wonderful. Trust me! :)

      I hope we get a pullback in the broader market, which would surely provide you better opportunities to generate more dividend income as the year progresses.

      Best regards.

  13. says

    So how big is your dividend growth money tree now? 6 feet? 10 feet? Because it sure is bringing in some heavy fruits. Hehe.

    Stay hungry.

    Until next time.

    • says

      DividendVet,

      Well, I want this thing to eventually be a massive Redwood! But I’ll never forget it started off as a little seedling. Consistency, persistence, will, and belief have been the water and sunlight that has allowed it to grow.

      Thanks for the ongoing support. You’re doing great over there as well. :)

      Cheers!

    • says

      Mr. Jiggy Fly,

      Thanks for stopping by!

      Unfortunately, I don’t follow HE at all because it doesn’t increase its dividend on a regular basis. As such, I really can offer no opinion good or bad. I’m sorry I couldn’t be of more help.

      Take care.

  14. Shmuel says

    Happy your making progress. My portfolio has a growing trickle of dividends but hopefully it will be a stream then a river (like yours is now) then a waterfall. May I ask you your thoughts on KMB?

    • says

      Shmuel,

      That trickle will definitely turn into a waterfall one day. Keep at it and you’ll grow it beyond your dreams!

      I like KMB. I haven’t looked at it in a while, but I wish I would have bought a while ago. I really missed the train on that one. I picked PG over KMB a while back, and while PG has done well KMB has done fantastic. KMB isn’t particularly cheap, but considering where the broader market is at it’s probably not a bad buy here, either.

      Best regards.

  15. Chuck says

    Tracking dividends on a monthly basis is critical to your success. Actually, regularly tracking your results relative to your projections in anything you do will actually help you hit your goals!

    If you don’t track regularly, how do you know if you are not falling off the rails and need to make an adjustment? Checking your results only occasionally (perhaps end of year) is like driving while looking through the rear view mirror.

    Our goal was to hit $45K in dividend income in 2014 (an increase from $38K in 2013). I had ABSOLUTELY no idea how we could achieve this growth. A few days into the month of May and I can see that we will hit $50K by year end; I can extrapolate the dividends received to date in 2014 all the way out to Dec 31, 2014. The growth has been fueled by dividend reinvestment, the deployment of additional capital, and the strengthening of the US $ relative to the CDN $ (we live in Canada and hold several US stocks).

    Keep up the great work Jason!!! You are an inspiration to those who follow your progress.

    Chuck in Ontario.

    • says

      Chuck,

      I agree. Tracking your progress on all levels is incredibly important and helpful. I think one can succeed without doing it, but it certainly reinforces one to keep at it when you can see the numbers rise month after month.

      Man, you’re on another level there with the dividend income. $50k in dividends! That’s simply wonderful. I hope to hit that type of dividend income in the next couple decades. We’ll see!

      Thanks for the kind words and support. I appreciate it from someone who’s obviously been at this a while. :)

      Best wishes.

    • Ravi says

      Incredible! You must be sitting on a very sizable portfolio at this level. With such a large portfolio, you have many more possibilities since transaction costs are such a tiny amount.

      • Chuck says

        Our transaction costs are minimal in the great scheme of things. We don’t trade frequently as we buy and hold…pretty much foerever; we also do NOT chase yield. We have a number of holdings where the yield was well below 3% when we made our purchase (eg. V, CHD, ADP, HSY, WMT) but by holding on and watching the dividends grow, the yield on cost has risen over time to the extent where some yields on cost are north of 5%. I know some of Jason’s followers tend to focus primarily on stocks which offer a high yield. Be forewarned, this practice WILL come back to bite you at some stage. I just don’t know when.

        My suggestion is that you invest in good solid companies with a track record of increasing their dividends. Patience and time will take care of the dividend growth.

        Wishing you all the very best in your journey to financial freedom!

        Chuck in Ontario

        • says

          Chuck,

          Great advice there. Thanks for sharing.

          And I agree in regards to higher yielding securities. I’ve avoided mREITs and BDCs because of this. Although, I have dabbled in some REITs with higher yields that have so far treated me pretty well.

          Wishing you the best in your journey as well!

          Take care.

  16. ToughMother says

    Hey DM! Great month! My own dividend income in April was $421.39 with a year-to-date total of $1521.78. Go us!!

    A couple of issues are of going to slow down my dividend income building this year, alas: (1) a number of divvy stocks that I’m interested in are running hot & overvalued, so I’ve been hanging back in the purchase department and (2) capital for purchases are way down as I’ve started shoveling income into my 457 plan at work. It’s pre-tax and you can get the $ as soon as you leave employment (no waiting around until 59.5 or 62 or 65!). At least they have low-cost index funds in that 457 which eases the burn a bit of having less after-tax income to invest in our fav kind of stocks.

    • says

      ToughMother,

      Nice job there! And $1,500+ in dividend income so far is fantastic. You’re going to have a great year. :)

      And I hear you on the headwinds. I’m facing the same. Reduced income at work has definitely impacted my free cash flow, while expensive stocks makes it difficult to allocate what capital I do have. But not every month is full of good news, and I knew going into this 12-year journey that I’d have ups and downs. Right now I’m going through a rough patch, but I’ll look back on this time a few years from now with pride. Persistence is extremely important.

      And great job taking advantage of the 457.

      Cheers.

  17. says

    DM,

    That’s a very nice increase YoY and total there. I should have my car paid off by October. Looking forward to that and hopefully don’t need much in major repairs for awhile.

    Now is just figuring out how to invest and fund a Bachelor’s degree while working without debt.

    • says

      SWAN,

      Congrats on almost having your car paid off! Although I paid cash for my car, I’m anxious to have the amortization off the books early next year. Having car payments, virtual or not, sucks! It’ll be nice to have that capital so you can invest it instead of paying off a depreciating asset.

      And great job getting your education without going into debt. Unfortunately, I made the mistake of taking on student loans that I’m still tackling to this day. The me of 14 years ago was not very intelligent!

      Best regards.

  18. says

    Great job Jason! I didn’t receive any dividends in april unfortunately but I’m confident it will happen someday… Maybe next year. ;)

    At least I have reached the first step toward financial freedom, my cat’s food is now fully covered by passive income ah ah! Hey and he eats fancy food that has been prescribed to him not the cheap commercial brand! Ahhh lucky him! One day it’s gonna be me!

    • says

      Hi Allan,

      That’s how I look at my dividend income. What dos it pay for now. I said my div income pays for gas for the month, or pays my electric bill. My real fist big goal is to have rent fully covered each month. That would be something, knowing that I have a place to live every month covered by divs. So if it covers cat food for now… awesome. One day it will cover your food, rent, utils, etc.

      • says

        Good point! I think that most humans need to just “do something” and as Warren Buffett pointed out, that’s how we make mistakes as an investor. He said that we should just buy stocks and stop looking at them for ten years. But… It’s hard! And I think it is even harder now because we’re in a society where we can go on the internet, order a pizza and get it delivered at our door in 30 minutes… But financial freedom can not be obtained fast… I can’t go Wal Mart and buy it. I can only buy Wal Mart shares and wait… I’d like to be financially free tomorrow even though I understand it’s gonna take some time…

        That’s what I like about this dividend strategy. It keeps me occupied and motivated because I can see the income growing and relate it to my everyday life expenses. It’s not like looking at a bond or an index fund… There’s no action, nothing to talk about, no cash flow…

        So, like you I calculate what my div income can cover. By the end of 2014, I should have enough not only to cover my cat’s food, but also my cell phone bill. And I’ll still have some extra cash to cover part of my internet connection bill…

        I don’t rent. I own a house. And I now have a plan to be mortgage free in 7 years. This will be a great milestone reached in my journey. So I know what your talking about! Having a place to sleep and eat and keep our stuff has become so expensive nowadays… Having that expense covered by either passive income or by having a mortgage-free house will be something!

        Keep going my friend. You have already reached a nice 2000$ stream of income per year as I could see on your blog! Nice job!

      • says

        DivHut,

        Exactly. The dividend income slowly rises to the point where it covers your fuel, cell phone bill, utilities, food, etc. And all of the sudden you’re thinking to yourself “This might actually work!”

        At least, that’s how it’s been for me. :)

        Cheers.

    • says

      Allan,

      I hear you on the cat food! My girlfriend’s chihuahua sometimes eats better than me, as I’m munching on PB&J at night. :)

      And don’t worry. The progress happens. If this blog is proof of anything, it’s proof that slow and steady wins the race. I’ve had many months where I earned a big fat $0. But those months laid the groundwork to get to where I’m at now. :)

      Best wishes!

  19. says

    DM,

    Great stuff! Love tracking your progress and best of luck in reaching your goal of $5200 this year. I’m sure you’ll knock it out of the park. You are as consistent as they come.

    Cheers!

    • says

      FI Fighter,

      Thanks so much. I’m hoping I can hit my goals. I’m giving it 100%, as usual. :)

      And consistency has been a hallmark of my strategy. I’ll soon be making some changes that will limit my consistency in the short term, but should result in long term success still. We’ll see how it goes!

      Keep up the great work over there. You’re a real estate mogul!

      Best wishes.

  20. Kingkang says

    DM,

    I just have to ask you…..what are your thoughts on COACH (COH)? Value investor’s pick or value trap?

    Disclosure: Long at $45 (but thinking about picking up more!)

    • says

      Kingkang,

      Hmm, I see the value there. But that’s probably an investment I won’t make. I just can’t forecast the winds of change when it comes to fashion. This is all anecdotal, but I have family members that used to be big Coach fans, and now they’ve moved over to Michael Kors products, saying that Coach is no longer a big deal. I don’t know what that’s worth. Probably nothing.

      The numbers look good and what not, but it’s just not a product I want to invest in.

      I wish you the best of luck with it, however. It may turn out great. :)

      Take care.

  21. Ravi says

    Value trap. Not because they can’t grow earnings, but because fashion/luxury goods change so much that an equivalent yield from a different industry would be better.

    Example: 3% yield from a luxury stock is riskier than 3% from GE. Why? GE can more easily maintain revenues & earnings (and by extension, cash flows) than COH.

    My opinion, anyway.

  22. says

    Hi!
    My April was good and will probably always be strong month for me, but that’s only because i received dividends from my European holdings as most of them pay at April, and they pay full year’s dividend in one payment. I think i got something around $400-500. I have to say i’m not a fan of that: pay only once a year dividend i do think that quarterly payed dividend is better as an investors point of view. what do you think ?

    cheers
    investingidiot

    • says

      Anytime you can get more payments versus less its better. The math of compounding works much faster with 12 payments compared to 4 payments compared to 2 payments or 1.

    • says

      investingidiot,

      Congrats on such a solid April! Even if it doesn’t happen often, that’s still something to be proud of. :)

      Honestly, I prefer to have the payouts quarterly so that I can reinvest regularly. However, you’d think one would be better off if a company paid out all of its dividends at the beginning of the year. That way you could compound even faster. But dividends that are spread out makes it easier to combine with fresh capital and reinvest on a set schedule. In the end, I honestly don’t think we’re talking about major differences in terms of how much wealth you’ll have at the end until we’re talking about dividends well into the thousands of dollars. And by that time your snowball is already rolling downhill with some speed anyhow.

      Keep up the great work!

      Take care.

    • says

      Quarterly payments help spread income much easier along the year. I only have one stock paying full dividends at a time (Deustche Telekom). On the other side Realty Income (O) pays monthly. European stocks are quite different in that regard,

  23. PP says

    Hi, just came across your blog. I certainly appreciate your willingness to open your books to the public, and for spending the time to keep the blog updated.

    I caught the dividend bug 2 years ago and now all my investment decisions are made based on the dividends.

    I am currently enrolled in DRIP for all the companies, and can see small amount/fraction of shares added to account. Is there a consensus on whether to DRIP or take the cash and re-invest elsewhere (considering my yearly dividend payout is approx. $1000 currently)?

    Thanks and keep up the good work.

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