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.
October was yet another step in the right direction. And that direction is up. It’s all about positive cash flow, folks. Every additional dollar in dividend income can be reinvested back into dividend-paying stocks, thus creating even more future cash flow. Compounding at its absolute finest. Every dividend dollar that hit my account last month was promptly reinvested, allowing the dividend machine that is my portfolio to surely spit out even more dividends in the future.
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 interests other than full-time work. Without further ado:
October 2014 Dividends Received
- Baxter International Inc. (BAX) – $31.20
- The Coca-Cola Company (KO) – $42.70
- Illinois Tool Works Inc. (ITW) – $16.98
- Altria Group Inc. (MO) – $41.60
- Philip Morris International Inc. (PM) – $115.00
- American Realty Capital Properties Inc. (ARCP) – $23.33
- Realty Income Corp. (O) – $12.82
- Medtronic, Inc. (MDT) – $11.29
- Armanino Foods of Distinction Inc. (AMNF) – $14.40
- Sysco Corporation (SYY) – $8.41
- General Electric Company (GE) – $37.40
- Raytheon Company (RTN) – $15.13
- Bank of Nova Scotia (BNS) – $12.58
Total dividends received during the month of October: $382.84
Just another successful month. October has never really been particularly strong for me in regards to dividend income, but I”ll gladly take almost $400 in passive income. What I love about dividend income, though, is that it’s tangible. This is real money. Capital gains oscillate on a day-to-day basis, as stocks go up and down. But this is cash that actually hit my wallet, cash that I can basically spend as I please. I’m not financially independent yet, so I already mentioned that this was all reinvested almost as soon as it came into my possession.
However, I didn’t have to do that. I could have spent it on whatever I wanted – a couple of fancy restaurant visits, a weekend road trip, or a shopping spree. And that’s really the flexibility of dividend income; it’s cash that can be used to spend as you see fit, just like any other cash that comes your way. Of course, I didn’t spend it on any of those frilly things because I already know that owning my own time is worth far more than anything else.
I feel like I’ve crossed a point of critical mass here – the dividends are now coming in fairly heavily, and will propel my portfolio almost all by themselves. I’m projecting about $6,000 in dividend income over the next 12 months, which is an average of $500 per month. Investing $500 per month is actually a pretty solid goal in and of itself for most people, and I can do that with no extra work on my part for the next year. Furthermore, this amount will almost surely increase as I reinvest it and buy more future dividend dollars, and the companies paying dividends also increase their payouts. What’s even better is that it didn’t take me that long to get to this point of almost self-propulsion. I’ve been actively investing for less than five years, and I haven’t even made/invested that much money during this time frame. If I can do this, then I’m quite confident you can as well.
This month’s dividend income was 54.4% higher than what I received during the month of October 2013. That’s a great year-over-year improvement, in my view, but I also know that these kinds of gains in percentage terms will decrease as the dividend income figures grow. And that’s okay, as long as the absolute growth continues.
I was able to cover 20.3% of my personal expenses last month, which is right about where I figured I’d be. I’m still working through some expenses that are inflating my budget temporarily – an engagement ring and the amortization of my all-cash car purchase are weighing on me. However, these temporary expenses will be gone this time next year, while my dividend income will continue increasing. I’m excited to see this number shoot up dramatically in a year’s time.
Looking forward, I expect much of the same for November. A big improvement over last year’s numbers while I reinvest that passive income into more attractive opportunities, thus pushing the snowball further down the hill.
One of my big goals this year is to receive $5,200 in dividend income throughout 2014. October is now over, which means just two months to go. Fortunately, I’m confident I’ll crush this goal and then some. I’ve now received $4,684.60 in dividend income this calendar year. I’ll likely surpass this goal with December’s income alone, so November’s dividends will simply be icing on what is already a pretty delicious cake.
I’ll update my Dividend Income page to reflect October’s dividends.
Full Disclosure: Long all aforementioned securities.
Did you have a great month of dividend income? Was October another big step in the right direction?
Thanks for reading.
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