Dividend Growth Update – Third Quarter 2015

growingtreeWelcome to another dividend growth update!

Earlier this year, I started publicly tracking dividend growth as it relates to my portfolio. I’ll update this information every quarter, which will provide relevant and important information on dividend raises announced by the companies I hold equity in, the size of those dividend increases, and how that affects my bottom line with real-life numbers in real-time.

What you see below is every company that I currently own a stake in that declared a dividend increase during the second quarter of 2015. So the ex-dividend date or pay date won’t be counted here. In addition, I only count stocks if I was long before the increase was announced. If I buy a stock shortly after a dividend increase was announced, then I don’t count it here. So this is a true reflection of an actual increase in my income, down to the dollar.

This is really exciting stuff. Dividend growth is what I refer to as the “secret sauce” in building and rolling a snowball. It provides a huge exponential compounding effect, especially as the dividend income grows. And now you’ll get to see how that works with real numbers here.

So let’s see which stocks in the Freedom Fund announced dividend increases this past quarter and how that affects the dividend income I’ll be able to generate moving forward.

CompanyTickerOld Per-Share DividendNew Per-Share Dividend% Increase$ Increase (Annual)
Armanino Foods of Distinction Inc. AMNF$0.018$0.0195.6%$3.20
Bank of Nova ScotiaBNS$0.68 CAD$0.70 CAD2.9%$2.40*
ConocoPhillipsCOP$0.73$0.741.4%$2.20
Harris CorporationHRS$0.47$0.506.4%$4.80
Hershey Co.HSY$0.535$0.5839%$2.88
ITC Holdings Corp.ITC$0.1625$0.187515.4%$3.00
Illinois Tool Works Inc.ITW$0.485$0.5513.4%$9.10
Kinder Morgan Inc. KMI$0.48$0.492.1%$7.20
Altria Group Inc.MO$0.52$0.5658.7%$14.40
Microsoft CorporationMSFT$0.31$0.3616.1%$5.00
Realty Income Corp.O$0.19$0.19050.3%$0.42
Omega Healthcare Investors Inc.OHI$0.54$0.551.9%$3.00
Philip Morris International Inc.PM$1.00$1.022%$9.20
Reynolds American, Inc.RAI$0.335$0.367.5%$1.40
Verizon Communications Inc.VZ$0.55$0.5652.7%$2.34
W.P. Carey Inc. WPC$0.954$0.9550.1%$0.30
Q3 Totals:6%$70.84
YTD Totals: 7.5%$270.78

*These amounts are reflective of current exchange rates.

It’s just amazing. Secret sauce, indeed. Since the start of the year, my annual dividend income has basically increased by more than $270 by way of dividend raises alone. And that’s a number I can pretty much count on moving forward, other than fluctuations with currency affecting my foreign holdings (that tends to even out over the long haul). What you see in that chart is essentially, in aggregate, 16 “pay raises”.

And guess what I had to do to receive these pay raises?

Absolutely nada, other than own stock in the above companies.

I didn’t have to show up early, stay late, deal with office politics, make phone calls, manage an email list, or meet quotas.

I just had to sit back and wait.

Patience is tough sometimes, but my progress thus far is proof that patience and persistence works. Since I started investing in 2010, I’ve received countless pay raises every single year. It takes a little time for this to start noticeably working, but the additional cash flow is real.

An extra $270 per year might not sound like a lot of money.

But consider that it would take over $7,700 invested at a 3.5% yield to achieve the same effect.

Said another way, that’s $7,700 less I have to invest now to generate that same increase in my annual passive income. Wonderful!

And even better, every dividend raise increases the base upon which future dividend raises will stand. An annual $1.00 dividend that turns into $1.10 is a 10% dividend increase. But if that respective company announces another 10% raise the following year, that means you’re now collecting $1.21, or $0.11 more. Repeat that and you’re looking at $1.33, or $0.12 more. Rinse, repeat, become wealthy.

I once compared my portfolio to a tree, whereby each position is a branch. And each branch produces bountiful fruit. That fruit – the dividends – is what I’ll eventually live off of, choosing to pluck the fruit and leave the branches intact rather than cutting the branches, possibly slowly killing the tree

Well, this is where the tree starts to tend to itself. It’s growing branches all by its lonesome.

Not only that – wait, there’s more – but dividend reinvestment continues to become more powerful when combined with dividend growth. Using the above example, you’re at first reinvesting a $1.00 dividend. Before factoring in any dividend reinvestment, your dividend goes up to $1.10 pretty quickly just with dividend growth alone. But when you reinvest your dividends, you’re buying more shares with capital you didn’t have to work for, meaning the dividend growth will become exponential. You’re receiving ever-growing capital with which to buy more shares which are also simultaneously increasing their dividends, allowing you to buy even more shares.

I could theoretically stop investing today and the dividend income the portfolio generates along with dividend raises and dividend reinvestment would still eventually render me financially independent – I’m a guaranteed millionaire at this point. The snowball is starting to move along without me. The good news, however, is that I’m not tired yet. I’m not done pushing. So these results will just continue to exponentially improve with every dollar of fresh capital I invest.

Out of the 70 stocks in my portfolio, this update represents 16 of them that increased their dividends this year. The first quarter update discussed another 19 that increased their dividends. And the second quarter update discussed another 18 dividend increases. But there’s some overlap involved – BNS, KMI, O, OHI, WPC, and SBSI have all shown up in multiple reports this year due to multiple dividend increases announced by these companies in 2015.

However, six companies I initiated positions in over the course of the third quarter – United Technologies Corporation (UTX), Colgate-Palmolive Company (CL), Fastenal Company (FAST), HCP, Inc. (HCP), ACE Limited (ACE), and Diageo PLC (DEO) – announced dividend increases before I purchased stock. While those increases aren’t represented in the chart because I didn’t own them prior to the pay raises behind handed out, they still have a material effect on my passive dividend income moving forward and I still count them as dividend increases for the year when looking at the total number of stocks in the portfolio that have handed out “pay raises”.

This quarter was pretty solid, all in all. Although the overall dividend growth percentage for the quarter was lower than my annual running total, it was brought down by a few small increases by companies that tend to raise their dividends multiple times per year (like Kinder Morgan). I will say that Philip Morris International’s dividend increase was disappointing, although not totally unforeseen due to currency effects. In addition, W.P. Carey’s dividend growth this year has been disappointing. But that’s why we diversify. And big raises from companies like Microsoft, Illinois Tool Works, and Altria have helped balance that out.

Looking at all of that, 53 out of the 70 stocks in the portfolio have increased their dividends this year. That’s a great result thus far. And the overall dividend growth is outstanding in percentage terms across the portfolio. I expect that a few stocks will end up disappointing me by not announcing dividend raises this year, though. But I’ll factor any of that in with the last update, as zeros will bring the overall percentage down. Nonetheless, I’m pretty happy here. If I can finish the year with ~7% overall dividend growth, I’ll be smiling.

Notably, many of the stocks that are included above generally increase their dividends more than once per year. As such, the YTD total for the percentage increase will continue to factor in YTD increases in stocks’ respective dividends, which will be more accurate than averaging out the quarterly totals. However, I’m also including the quarterly totals so you can see true quarter-to-quarter incremental increases in income through dividend growth.

One last important aspect here is keeping perspective on the increase in dividend income in percentage terms. The YTD increase is somewhere around nine times the inflation rate of 0.8% we experienced last year. So not only is my purchasing power increasing, but it’s doing so at an incredible rate.

Full Disclosure: Long all aforementioned stocks.

Have a great quarter for dividend growth? Dividend raises living up to your expectations? Overall income growth up to where you need it to be? 

Thanks for reading.

Photo Credit: atibodyphoto/FreeDigitalPhotos.net

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140 Comments

  1. Thanks for always posting your holdings, dividend amounts, and progress Jason – it’s a real help (and I can attest from many other people I’ve talked to regarding DM).

    Have you received the DEO dividend yet? It says today is the payment day but nothings shown up in my account.

  2. Wow! Congratulations on the dividend growth! This is great inspiration for us up-and-coming dividend investors. We already have 4 months of investing in our own ‘Freedom Fund’, and it’s a great feeling. Thanks for posting your update, it shows all of us what we have to look forward to!

    -Mr. RB35

  3. Awesome DM! You are, in my humble opinion, the BEST at explaining, teaching, and enthusiastically promoting DGI. Keep it up. Love it!

  4. Jason,

    Thanks for sharing and inspiring the DGI community why we invest in dividend stocks – especially when the market is doing its thing.

    Dividend growth is indeed the secret sauce.

    D4s

  5. Excellent quarter even if the total increase did come in a bit on the low side. 6% is still awesome. Looking forward to seeing g how the end of the years shapes up for you. My dividend growth has been pretty solid thus far this year and I’m looking forward to seeing how it ends up for the year.

  6. Hi Jason!

    Thanks for sharing and inspiring! Makes me want to push my own snowball even harder 🙂 What companies do you anticipate will not be raising their dividend from your portfolio this year? I know it’s speculation at this point but maybe there are some raises that have typically ocurred at a certain month but have not yet happened.

    Thanks for writing and hope you are enjoying the extra time now that your writing schedule isn’t so tight. I saw your tweet about playing Call of Duty. Do you have new games that you’re waiting for? I’m looking forward to Fallout 4 and maybe Battlefront if it turns out good.

  7. Thanks for the nice summary.

    What source do you use for your dividend increase information? I am starting to develop an (ideally free) app to track such things for the DGI community. I am trying to find the best source to automatically extract the information.

    DGI Novice

  8. Steve,

    Thanks. I’m glad it helps. I never noticed anyone else going through the raises like this and showing it like I do, which is what motivated me to do this in the first place. I wish I would have tracked it all along, but it just never occurred to me. Hoping to continue doing it for the foreseeable future. 🙂

    I didn’t initiate a position in DEO until last month, which means I came in after the most recent ex-dividend date. I do notice that sometimes my dividends from foreign holdings come in a day late. I’d check again tomorrow. If it’s still not there, I’d call up your brokerage.

    Thanks for dropping by!

    Best wishes.

  9. Lunesnegro,

    You’ve got it. Some might think the secret ingredient is a pinch of sugar. But it is indeed dividend growth, which is also pretty sweet. 🙂

    Cheers!

  10. Mr. RB35,

    Gotta love income growing much faster than inflation, especially when you don’t have to lift a finger for it. If you can see ~7% growth in aggregate, that’s pretty fantastic. Better than the raises a lot of people get at their day jobs. 🙂

    Thanks for the support!!

    Best regards.

  11. RTM,

    Thank you very much. Really appreciate that. Means a lot to me!

    I’ve done my best to be an ambassador for using this strategy to achieve financial independence at a relatively young age. And I’ll continue to inspire for as long as I can. 🙂

    Hope you’re enjoying the extra income over there!

    Best regards.

  12. Nicola,

    Rolling a snowball is already fun. But it’s a lot more fun when the thing starts to accelerate all by itself. 🙂

    Thanks for dropping by. Hope all is well!

    Best regards.

  13. JC,

    I’m with you. It’ll be fun to see where it stands at the end of the year. I’ll probably have to factor in a few zeros, but anywhere near 7% will be good for me.

    Let’s keep it rolling, my friend!

    Best wishes.

  14. Increases that keep you well ahead of inflation can’t be beat. Pay raises for workers are usually between 1-4%, so you are beating that handily without lifting a finger! Hopefully the 4th quarter will result in 100% of your holdings announcing at least 1 increase for 2015. Good luck.

  15. You know Jason when you started posting these quarterly updates I knew they would be awesome and you have more than met my expectations. Who doesn’t love talking about making more money, you get to talk about making more money for doing nothing but being patient and making good decisions long ago just wow.
    My “snowball” is tiny tiny tiny in comparison but it feels good to be starting just the same. Speaking of I was hoping you are still doing the coaching and seeing how to enroll if you are still doing it?
    Tyler

  16. Thanks for keeping us inspired Jason!

    This is truly the secret sauce and even if I miss a lot of potential growth right now, I will add them over time.
    Thanks for reminding me about the essential ingredient to be a real Dividend Growth Investor!

    Cheers
    DivRider

  17. Your post today explains one of the big reasons I decided to start investing in dividend stocks that increase payments over a lengthy period of time.

  18. This is an idea for an end of year post I think others might find interesting too. Looking at your total dividend income for the year and breaking it down for example 70% of the dividends in 2015 where from shares that you held on 12/31/14, 25% of dividends in 2015 came new capital/reinvested dividends added to the portfolio, 5% of dividends were generated from dividend growth. You could also back calculate this for prior years to watch the changing trends and show less and less of your dividends have to do with adding new capital as your money snowballs. Anyways just an idea, not sure how difficult it would be to do, but I think it would be neat to see. Best of luck!

    Also just curious do you ever look at and evaluate your portfolio compared to indexes. Youve had a multi year runway of investing now so plenty to judge against. Would be worthwhile to look back and see how you have compared and evaluate what’s the best path forward. Such as taking a look at total return, yearly dividend growth, what your total dividend income and total portfolio value would have been had you gone down the different route of indexing. Basically saying, if you were a fund manager (which you for yourself! Kind of a second job that get to enjoy doing) how have you faired for your investors.

  19. Sampo,

    Well, I think a couple of the supermajors are in doubt for dividend raises this year. Specifically, BP and Shell. We’ll see if Chevron comes through. BHP Billiton already announced both dividends this year, and no increase this year (even though the overall annual divided payout increased YOY). In addition, Orchids Paper Products is unlikely to increase their dividend in light of some changes to the business model. Just a few off the top of my head. Mostly higher-yielding stocks, which is why I’m not particularly disappointed with the lack of dividend growth. They’re still mostly doing what I want them to do.

    I actually don’t buy a lot of video games. I tend to play one over and over again until I’m pretty good at it. My K/D ratio in COD Ghosts, for instance, is over 3. I’m rarely not the best player in any one game. I guess I like being really good at what I do. Or is it that I end up spending time at things I’m really good at? 🙂

    Thanks for stopping in!!

    Cheers.

  20. GRT,

    I actually use Seeking Alpha’s alerts. I get an email on dividends, and from there it’s a simple copy and paste. But if you do develop an app, let me know. I find the system with Seeking Alpha as really simple, though.

    Take care!

  21. Vawt,

    You’ve got it. Not only is a 7% increase in income fantastic by itself, but it’s made even more attractive when comparing it to average increases for typical workers, especially when factoring in the fact that I didn’t do anything for it. 🙂

    It’s great to be a dividend growth investor.

    Best regards!

  22. Great article! I’m considering adding CMI to the portfolio given their recent dividend increase and valuation and was wondering if you’ve ever considered the stock?

  23. Tyler,

    “Who doesn’t love talking about making more money, you get to talk about making more money for doing nothing but being patient and making good decisions long ago just wow.”

    You’ve got it!

    I still take coaching clients, but I was overwhelmed by the demand. That’s why I took the page down. Demand simply overwhelmed very limited supply.

    But if you’re interested, shoot me an email via the contact form and make sure you note that you want it forwarded to me. The emails are handled by my partners now, but they forward any emails directed specifically at me. Otherwise, you can contact me via Twitter or a private message on Facebook.

    Cheers!

  24. DR,

    Absolutely. It’s the secret sauce. Knowing that you have to invest that much less capital to achieve the same increase in income is amazing. That organic growth well over the rate of inflation should keep that purchasing power increasing year after year. 🙂

    Thanks for dropping by!

    Best regards.

  25. Hi Jason,

    That is some serious passive income growth in Q3. It is great to see updates like this outlining the passive income gain from each dividend hike in your portfolio. It is also very helpful to see the comparable figure required ($7,700 at 3.5%) to generate an equivalent gain. If I understood correctly, 73% of your holdings increased their dividends this year. This is a very substantial boost for your dividend reinvestments and passive income!

    Cheers

  26. Chris,

    I’m glad it helps. Seeing the actual hard numbers puts a lot of it in perspective. It’ll be fun to see the full-year results. Should have that out in January. 🙂

    Best of luck over there. Have fun!!!

    Cheers.

  27. Jordan,

    Yeah, I actually find breaking it down even further than this unnecessary. Any of the dividend growth above and beyond this will naturally be from reinvestment and fresh capital additions. That’s it. You only have those three areas for income growth. And everyone can see exactly how much I’m reinvesting (100%) and how much fresh capital I’m putting to work via the transactions I publicly track. So it’s just a quick tour around a calculator at that point. But it’s the organic dividend growth via dividend raises themselves that will propel increases in purchasing power once fresh capital is no longer being added (once the accumulation phase has ended), so I like showing what that might look like going forward (based on how large your income base is).

    As far as total returns go, I don’t compare myself to any indexes, benchmarks, or investors. I’ve gone over that pretty in-depth a number of times here at the blog, so I don’t see a reason to belabor it any more.

    Take care!

  28. Mike,

    That company has excellent fundamentals. And the valuation seems pretty appealing. Just not sure that’s the right business for me. They’re not particularly diversified, and I’m not sure I want to be real heavy into engines. So it’s just a business model call at that point. And I already have a lot of exposure to diversified Industrials.

    Good luck if you invest there!

    Cheers.

  29. dividendniche,

    I agree. I think framing it in the sense that you know how much you’d need to invest to achieve the same result really hammers the point home. That’s why I do that.

    Glad you found it helpful. That organic growth is really the secret sauce behind this strategy. 🙂

    Best wishes!

  30. You are going gang buster with almost 70 companies, DM. And almost 53 gave you a pay raise w/o you working even little extra. Great job getting bonus w/o working 🙂 Keep racing.

  31. Cool, great stuff here! My favorite segment for sure. I actually remember asking for this before you started doing, although you had indicated it was in the works when I asked for it.

    What’s up with O”s raise? Do they raise monthly or something? 0.3% seems awfully disappointing if that’s the only raise on the year. The rent escalators alone should count for more than that.

    One last question, I noticed my comments started needing approval. Is that something that happened with the recent transition? I guess it makes sense that the new ownership would want to be able to filter some comments out.

  32. R2R,

    I’m all for it. While most workers just have one pay raise per year to look forward to – if that – I have dozens. Works for me. 🙂

    Cheers!

  33. Took2Summit,

    Well, Realty Income has actually given out a pretty solid YOY dividend raise. I mentioned in the article that while I was showing true incremental quarterly dividend growth, the annual tallies would include actual YOY growth. A few stocks tend to hand out quarterly or monthly increases, which is very nice. Realty’s dividend as of right now is 3.9% higher than what it finished 2014 at. That’s right in line with their 10-year dividend growth rate.

    As far as the comments go, I’m not sure. I noticed that I was occasionally approving comments. Might be an IP address thing or maybe it’s the settings with Akismet. That’s just one more reason I didn’t want to worry about management anymore. 🙂

    Cheers!

  34. Am I missing some (most likely) KMI only has a 2.1% increase? I thought projected 10% increase every year until 2020.

  35. Sunny,

    As I wrote in the article:

    “Notably, many of the stocks that are included above generally increase their dividends more than once per year. As such, the YTD total for the percentage increase will continue to factor in YTD increases in stocks’ respective dividends, which will be more accurate than averaging out the quarterly totals. However, I’m also including the quarterly totals so you can see true quarter-to-quarter incremental increases in income through dividend growth.”

    And…

    ” But there’s some overlap involved – BNS, KMI, O, OHI, WPC, and SBSI have all shown up in multiple reports this year due to multiple dividend increases announced by these companies in 2015.”

    It’s all in the content. 🙂

    You’ll see KMI show up multiple times this year because they increase their dividend more than once per year. Their current dividend is about 14% higher than the same quarter last year.

    Take care.

  36. This is the best part of dividend investing for me. More than 6% higher growth rate than inflation. And in a year that the stock market hasn’t done anything. That’s incredible! How do you think that compares to previous years?
    Also, that’s why I prefer the living off dividends approach. Someone trying to spend down their portfolio by 4% a year has to worry about downturns like the recent months, but instead you got a hefty raise.

  37. even better ohi increased thier dividend again it is now 0.56 this why ikeep adding to evan though it is alarge position in my income portfolio

  38. Mantra,

    Secret sauce indeed. Incredible that $270 in increases has come from an announcement alone this year – nice feeling and the growth rate you have is very sound and appears to be the rounded average that one should see on the entire portfolio as a whole. Congratulations and we appreciate the clear/clean cut format you have it in. Hope October is going well!

    -Lanny

  39. bluegrassdividends,

    Couldn’t agree more. This is one big reason why I’d prefer not having to worry about spending down my portfolio. Income that I can count on, and income that’s growing without my input, works really well against expenses I can count on. Just because the stock market is tanking doesn’t mean my expenses are as well. I’d rather not have to worry about adjusting my spending on the fly.

    Thanks for dropping by. Keep growing that passive income over there!

    Cheers.

  40. Lanny,

    Thanks so much. I’ve done my best to provide the information in as concise a way as I can. If you don’t see how it works now, I’m not sure you’re going to. 🙂

    Keep up the great work over there. You and Bert are having a fantastic 2015!

    Best regards.

  41. Tom,

    Omega is a machine. I’m with you on having it as a large position. Not sure I want any more than 150 shares, but it’s just about as consistent as it gets right now. Let’s hope that continues on for the next couple decades or so. 🙂

    Cheers!

  42. IP,

    Thanks!

    Getting a raise feels awesome no matter what. But it feels that much better when you don’t have to work for it. 🙂

    Thanks for stopping by.

    Best regards.

  43. $270 in annual pay raises is incredible! And that’s just one quarter’s worth! That would be a raise of $1080 in a year…………if those dividends weren’t destined to snowball and increase faster.

    Financial freedom is around the corner. Honestly, I’d argue that you’ve been there since leaving your job last year.

    Sincerely,
    ARB–Angry Retail Banker

  44. ARB,

    Ha! Well, the $270 is YTD. I separated out the quarterly income growth and the YTD income growth in the chart. You can see that at the bottom. And then I also noted that it was YTD in the article as well.

    I feel closer and closer every single day. A good chunk of my expenses are also pretty flexible as well, and I know I could drop expenses way down if I really had to. The light is getting brighter every day. 🙂

    Thanks for dropping by. Let’s keep it rolling!

    Best wishes.

  45. Looking good Jason! I just love to see those raises and follow your progress. We are hoping to make our first buy soon and join you on this adventure!!

  46. Well, that’s what happens when you don’t read carefully.

    One day you’ll get to $1080 in dividend increases in a year.

  47. Peter,

    I picked up another 5 shares today. That’s about as much of a commitment to WMT (now 60 shares) as I’d like. I’m modestly sanguine about their long-term prospects, but I do think the near-term headwinds are concerning. The good news is that management doesn’t have their heads in the sand about it and they’re actively tackling necessary changes. Moreover, the $20 billion buyback couldn’t come at a better time, in my opinion. Buybacks aren’t always very timely, but WMT is fairly consistent with it.

    But, overall, my opinion hasn’t really changed since I last looked at (and analyzed) the stock a few months ago. I think it’s undervalued here, with a somewhat substantial margin of safety built in now. I would moderate my dividend growth expectations over the near term, though.

    Best wishes.

  48. These raises are the same reason I began building a DGI portfolio. A $270 raise from 16 total companies in a single quarter is awesome! We see 5 companies out of the 16 that we recognize from our family’s dividend stocks portfolio.

    Cheers to continued raises while we sit back and do nothing. AFFJ

  49. Jason,

    This and the dividend updates are my favorite posts.

    Whenever I get a dividend raise I update my spreadsheet that looks out to the next rolling year’s forward income. It is really inspiring to watch these number continually tick upwards.

    At present I’m targeting an approximate 15% year on year increase in dividend payouts. 6% of this is coming from organic dividend increases, 4% is coming from my dividends that are reinvested promptly, and 5% is coming from fresh capital additions (although I try and do more when I can). It is really promising to know that the organic dividend increases are in excess of what I can generate from putting in fresh capital. It’s like having another invisible worker continuing to push for more productivity and more growth standing right beside me!

    Keep up your amazing journey. My numbers may be different but I’m right alongside here with you on the same journey, and boy is it fun.

    -Mike

  50. Great results and your comment about how much capital it would take to generate that amount in dividend increases speaks volumes. Dividend growth = secret sauce to long term dividend investing.

  51. Hi Jason,

    Once again, thanks for sharing 🙂 I have to say I have never gone through and looked at what the dividend increases are, I just see the amount I am taking in each year increases, but I think I know what I will be doing this weekend for sure!

    The reinvesting is always a good point to. I recently stopped the automatic reinvestment, as my (relatively!) large holdings were growing faster and faster (a nice exposure to the snowball effect!), which meant I was getting more and more overweight in some areas. I am now taking the income from them, and reinvesting in other shares so it adds more branches, rather than heavier fruit (or some similar comparison!).

    Keep up the good work! 🙂

  52. I’m glad that you’re explicitly keeping track of you dividend growth as it is a powerful feature of the DGI strategy. As you point out, you would have had to invest several thousand dollars to achieve the same effect. I think by the end of the year I will have achieved a 7% increase relative to the end of 2014, which in absolute terms would translate to around $30K of invested capital to achieve the same effect. That’s right, diviend growth is doing all of the heavy lifting at this point =).

  53. Jason:
    Great ! the snowball even grows in all seasons, that’s a special kind of snowball.
    The data you present on dividend increases is quite meaningful. It really shows folks the power of your snowball. Have you graphed it yet.? When people see it in that form it may be a bit easier to visualize.
    That snowball can roll anywhere it desires , even uphill.

    The sky’s the limit.!

  54. Hello DM, let me explain my current position. I ran into your site while browsing through Financial Samurais comments, and this style of investing seems like the way to go for me. I am a 19 year old currently working part time at Lowe’s in which i usually get paid a little bit above $200 weekly (50% of my pay goes to my 401k). I currently have around 16k in cash and i’m sick of just having it sit there earning next to nothing. My parents have an account in Vanguard in which they have become flagship members meaning their first 25 trades are free, and any subsequent ones are $2. what would be the difference between opening an account under their account and getting their benefits, or starting my own account at say Scottrade. My concern being i have no clue what the difference would be since i know Vanguard is more known for their low cost funds. Additionally, i notice when you buy shares, you always post a round number, i thought that you could simply buy a dollar amount of stock (say you buy $200 worth of Mcdonalds shares and you get something like 1.987 shares). Also, how much do you think i should start to invest with. I currently live at home with no outstanding expenses (i only pay for maintenance on the car) i’m fortunate enough to have parents willing to foot the bill for college so i can’t see any foreseeable events where i would need a lot of cash. Finally, i know you reinvest once a month but if you were in my shoes, how often or what amount would you save up to until you reinvest. I know this was quite the long read so anyone else please feel free to chime in or link me some articles you think would be helpful in getting started!

  55. Sir DM,
    Many Many moons ago I began investing in companies that paid me while I waited for their stock price to climb…several missteps along the way I must admit. I did not track my increases over the years just collected them and reinvested back into the company. Several months ago after reading your website and following how you kept a record of what was happening…I decide to track as well….I was happy to discover part of our retirement plan is coming along nicely…..1qtr dividends=$3487, 2qtr dividends=$3700( nice little increase), 3qtr dividends=$3830. YTD=$11017….can’t wait to see the total at the end of the year….I think we have created our own social security check…..
    Go in Peace

  56. Your posts always motivate me to keep expanding my dividend portfolio. What I need to do is start tracking my dividend payouts more carefully to see the real growth. Keep up the good work Jason!

  57. I just had a question, what would you say to someone who says that, as a professional investor, you don’t really add anything productive to society by buying/selling stocks? I get that said to me a lot. Thanks!

  58. Recently found your blog and I love it. I love the transparency! I’ll definitely be checking in regularly. Do you buy or have you bought any divdend ETF’s? What’s your thoughts on that?

  59. Wow thanks for this bit of information! I haven’t realized the the true power of compounding through dividend increases. It is amazing especially when you don’t have to do anything else but just own these shares. I really like your chart and it gave me an idea of which stocks to purchase next.

    I recently sold my NEM gold minings and took its short term profit and bought more WMT (Walmart) yesterday on the big drop! I love these fire sales. 🙂

  60. Hey Jason.. How hard did you work to earn that $270 increase in income. Let me guess, you probably are putting more energy into writing a response to this comment haha Congrats! A 7.5% increase is impressive considering some of the lower than usual dividend increases have been announced this year.

    I think my favorite company in your chart is Armino, the company that left as all saying “WHO???” when you purchased them. It looks like the continue to step their game up and support your rave reviews of the company.

    Cheers!

    Bert

  61. Jason, I think I got a 1% raise at my job this year.. Talk about motivation I didn’t even need to keep investing. It must be nice watching your little employees work hard for you, so hard in fact they get an annual raise. I love posts like this! Just a note, I averaged down a bit in WMT and started a position in PAAS today.

    -Andrew

  62. Hi Dm,

    Great rate of dividend growth. 270$ extra without lifting a finger is awesome.
    Hopefully you can end the year strong.

    Cheers,
    G

  63. AFFJ,

    Well, the $270 is YTD. But it’s still rather outstanding when you look at the numbers. It’ll be fun to see what 2015 finishes at, and then kind of compare that against how much capital I would have had to invest to achieve the same result.

    Cheers, indeed, to getting pay raises for doing nothing. It’s a hard life, but someone has to do it. I’m sure you’re enjoying some pay raises over there as well. 🙂

    Best wishes!

  64. Mike,

    I’m with you all the way. It’s awesome to see that forward number just increase after every dividend raise. More income without lifting a finger. It’s incredibly motivating.

    What’s great about this is that even without fresh capital contributions, one should see something like 10% or so dividend income growth via organic dividend raises and reinvestment alone. As that base increases (as you know), that income grows to the level equivalent of adding thousands and thousands of dollars of your own money. While it takes those thousands to get the ball rolling, that snowball does eventually start to move on its own at a pretty incredible rate. It’s just awesome seeing that work in real-time. I remember when I first started, it was very hard to come up with $7,000+ to invest, even over an entire year. Now I get the same effect without doing anything.

    Keep it up over there. It’s definitely a lot of fun. 🙂

    Cheers!

  65. London Rob,

    Yeah, I’m with you there on selectively reinvesting. I’ve never used a DRIP, preferring to allocate the dividend income just the same as I would fresh capital. That’s allowed me to build out the portfolio to my exact specifications. All in all, it’s worked out really well.

    Have fun this weekend. It’s definitely nice to see how all of those raises look in the holistic sense.

    Best regards!

  66. Spoonman,

    Wow. Congrats. That’s awesome!

    Just think how hard it was when you first started to come up with $30k worth of scratch to invest. That took a lot of hard work. Literally blood, sweat, and tears. At least for me. I remember how hard it was just to come up with $1,000 per month back when I first started. And now you’re receiving an increase in income effectively on par with adding $30,000 of fresh capital. But you didn’t have to do that. The snowball is now rolling along all by itself, and it’s exponential. That’s the end of the asset accumulation journey. You’re in the light. 🙂

    Best wishes!

  67. Amegalo,

    I haven’t graphed it out, if only because of my general distaste for putting together spreadsheets, charts, and graphs. That sounds like work to me, which is something I aim to avoid.

    But I like raw numbers. If knowing that you received the same benefit of adding more than $7,000 of fresh capital without actually having to invest a dime doesn’t grab your attention and get you moving, I’m not sure a graph would, either.

    This snowball definitely rolls in all seasons. It’s the Abominable Snowball!! 🙂

    Cheers.

  68. Retire Early,

    Hey, you’re in a great spot there for your age. Most 19 year olds are more concerned with partying, I think. But it’s great you’re already thinking about your future. Time is an incredible advantage if you can get compounding working for you really early.

    I’m not familiar with Vanguard’s rules, so I’d check with them on how it would work in terms of you somehow receiving your parents’ benefits.

    As far as buying a round number of shares, it’s generally pretty easy for me to do that because I’m oftentimes investing at least $1,000 per transaction. I sometimes receive free trades, which means I might invest less than that, but even then it’s not hard to buy 5 or 10 shares at a time of most stocks. But you don’t have to do that. You could buy 1.85 shares or whatever as well as long as your brokerage (and the stock in question) allows for fractional shares. Scottrade doesn’t, as far as I’m aware. And it’s never really been an issue for me anyhow. But there are some brokerages out there that allow for fractional shares as well. So if that’s a preference for you, you could go that route as well. Although, if you were to slowly invest your cash hoard, you’d probably be looking at decent-sized transactions anyway.

    I can think of a couple articles that might be helpful based on your questions:

    https://www.dividendmantra.com/2014/05/if-i-were-starting-all-over-again/

    https://www.dividendmantra.com/2014/03/selective-dividend-reinvestment-vs-drip/

    Keep in mind that in the first article, the stock recommendations aren’t evergreen.

    Hope that helps. Keep in mind that your situation won’t last indefinitely, so you’ll want to be financially flexible and prepared for the next step as well.

    Best wishes!

  69. Sittingbull,

    You’ve definitely created your own SS check over there. Add that to an actual SS check and you have a really, really nice source of income right there. 🙂

    Keep it up. That’s a great dividend tally right there. And with your base being as large as it is, those raises will make a big difference.

    Cheers!

  70. Mrs. Budgets,

    Thanks so much. Glad these posts motivate you. If I can inspire just one person to change their life for the better, I succeeded. 🙂

    Best wishes.

  71. Larry,

    Well, I’m not a professional investor, so I’ve never really had anyone ask me that. I’m guessing you are, so maybe that’s why your experience is different. Even so, that’s an awfully odd question.

    I can only really say that Capitalism is the best economic system in the world in regards to promoting prosperity and opportunity. That’s my view, and I think it’s a view that most people share. So if someone doesn’t see the value in participating in that system and providing capital, then I can only say they’re not really in tune with how the world works. And they’re likely suffering because of that.

    If anyone were to ever ask me that question, my assumption would be that they’re envious of my position and/or ignorant about general economics. And it’s just not a conversation that has any value in taking on. That’s about as far as I can take it.

    Take care!

  72. Steve,

    Dividend growth is pretty amazing. When you frame it in the sense of knowing what you’d have to invest to effectively achieve the same net effect, it’s pretty crazy. As the income grows, it becomes crazier. It’s a lot of fun!

    I also recently added to WMT as well. I probably have about as much as I want there, but it definitely appears to have a somewhat significant margin of safety baked in now.

    Best regards!

  73. Bert,

    Ha. You’ve got it. Lifted exactly zero fingers to collect that extra income. 🙂

    Armanino has been fantastic. I’m so glad I uncovered them last year. I had never heard of them before, and I don’t think anyone else had, either. I remember seeing some other investors jump on the wagon there and buy stock after I did, but it was definitely unheard of before that. Great little company. Conservatively run with excellent metrics across the board. Wish I would have bought a little more, but I have to manage that risk.

    Thanks for stopping by. Have a great weekend!

    Best regards.

  74. secondhandmillionaires,

    A 1% raise for busting your butt or 7% for doing nothing? Choice is obvious, right? 🙂

    Great job over there. I also bought a little more WMT. Tough to pass up here. Great value, though they do have some serious concerns to tackle.

    Have a great weekend!

    Best wishes.

  75. DD,

    Well, the alert service is already out there. If you input your portfolio over at Seeking Alpha and select the alerts, you’ll receive an email anytime there is any news, announcements, or articles relating to those stocks. I get the dividend notices in my email, and from there it’s just a second to copy and paste the information. 🙂

    Cheers!

  76. Hey Jason,
    I appreciate your blog and your book. I’m just getting to the second half of your book at this point, and I’m hoping that you lay out the ‘how’ of how to analyze which stocks to consider, since I am a noob at this.
    I do have a pretty sizable 401K (I’m 47 years old), and I’m seriously considering investing in dividend stocks, but I’m hoping I’m not too old for the dividends to add up to be substantial enough to help me in retirement? I’d love to retire in 10-15 years or less, and I do have some capital that I could work with (possibly up to 100k).
    thanks again!

  77. Wow, thanks so much for the advice! i will give those articles a read, and you have definitely earned me as a regular visitor!

  78. Retire Early –

    You might consider Loyal3.com or Robinhood.com for commission free trades. Loyal3 allows for partial shares, but is limited to what stocks are available. Robinhood is more flexible as far as stocks go, but you buy full shares. I’m just starting out and learning as I go, but both Loyal3 and Robinhood have been very easy to use and the lack of commissions is a bonus when you don’t have much to start with. Good luck!

    csillagok

  79. Hey Jason
    isn’t it great to get a pay increase with out having to do nothing but own a stock. Congrats on the pay increases. Keep up the good work and enjoying the writings.

    Cheers

  80. Not a huge fan of big retail, but value is value. It will take a year or three for things to get rolling in a better direction, but this could be a great value as they are being forced to transition their competencies.

    Wasn’t really on my watchlist for a while, but added it to the list today! May be in the cards at some point, though, as quite a few other stocks have run up quite a bit in the past few weeks. 🙁

  81. Looks great! $270 doesn’t sound like a lot, but you’re right. You’d need $7,7000 invested to get that back. And you didn’t have to do anything for it. I love dividend growth. 🙂
    I’m going over my portfolio now and about half had increased their dividend. Many companies are struggling and they might not be able to do it this year. At least none of my companies have cut their dividend yet.

    Best wishes
    -Joe

  82. Initiated position in ETN with 4.35% current dividend plus they might be announcing an increase soon. With this purchase, I am done with Industrial sector.

  83. Wow you’re very smart, I did not understand that but I tried too it’s hard with all those numbers are you a doctor or scientist or teacher thank you God bless

  84. Jason, did you ever talk about the tax expenses involved in your strategy? I mean, the dividend income received is really impressive, but how much of that goes away to the government with every paycheck?

    Are there any ways to reduce taxes on dividends maybe through deductions from interest expenses, brokerage fees or any other losses? I am from Germany and here we pay income tax of 30% on every dividend payed. There are no tax advantages at all. So with every dividend I reduce my potential capital by 30%.

    I feel that with every dividend you receive you put a big amount of your wealth out of your pocket to the tax. That does make sense if you use the income for your daily expenses, but I do not see why should I focus on earning dividends, paying taxes on it and putting the lower amount back into investing. In that case it would make more sense to keep ALL the money invested so that compounding works best.

  85. Good work!!! In just those few shorts years you’ve managed to do something people won’t achieve in a lifetime. Well played sir.

    I have a question, for those of us who are interested in becoming investors, and start working our way up the dividend-ladder. In my case, I know nothing of stocks, and do not feel I will have time to sit down, review companies and make decisions about how to invest my money. I could simply just follow others, but hey ..

    Could dividend-paying etf’s be an option? I know there’s a cost to it, and that I will “loose” money this way. But I have made an portfolio I hoped could work. The dividends are less, but its more “secure” if you will, especially for someone like me. Whats your honest opinion on how to proceed further?

    Thanks!

  86. Todd,

    Thanks for picking up a copy of the book. Hope you’re really enjoying it and finding a lot of value in it. 🙂

    I do discuss stock analysis in the latter half of the book, but it’s not something that I took a real in-depth look at. I approached the book as a holistic look at financial independence. So it’s kind of the “big picture”. As such, it was difficult to concentrate on too many meaty subjects with a lot of detail without losing the spirit of the book/message. That said, I’d like to put another product together that specifically discusses stock analysis and valuation.

    I definitely don’t think you’re too old, my friend. You can see what kind of progress I’ve made in five years, so if you were to put something similar together, you’d have a nice source of passive (and growing) cash flow to help you get out of the rat race as soon as possible. But if your plan is 10-15 years, as you state, then great things are indeed possible. My overall time line was planned out for 12 years, but it looks like it’s going to be even faster. With your sizable 401(k), you’d then just have to think about how much income you might need to cover your lifestyle until you have access to other funds (401(k), SS, etc.). So you’re probably in a much better position than you think. 🙂

    Best of luck over there!

    Cheers.

  87. Joe,

    I love dividend growth, too. 🙂

    You’re doing really well over there with the portfolio. Just imagine where your dividend income is going to be in a few years. Pretty exciting stuff!

    Keep it up. Thanks for stopping by.

    Best wishes.

  88. AJ,

    I just love those diversified high-quality Industrials. The fact that many of them are offering these monster yields right now (historically more in line with Utilities) is just nuts. I’ve been all over them lately, so I might be pretty much done as well. We’ll see. Maybe I’ll make room for one more.

    Cheers!

  89. ronaldcheef,

    It’s not really all that difficult if you take the time to apply yourself. The great thing about investing is that it’s not something where only those with a high IQ can participate and do well. 🙂

    Take care!

  90. muskel,

    Well, individual stocks aren’t for everyone. No doubt about that.

    You could certainly go the way of funds. I think building up a portfolio of individual high-quality dividend growth stocks is a superior way to go about it, but funds can be a great way to approach things as well.

    I discussed some of the differences between this strategy and funds here:

    https://www.dividendmantra.com/2013/04/why-i-vastly-prefer-dividend-growth/

    Buying funds is a pretty straightforward process. I can say that one of the best funds I’ve found that mimics the dividend growth strategy is SCHD. You may want to take a look at that.

    Otherwise, buying a plain vanilla S&P 500 index fund is another great way to go. You’re going to nearly match the index, but you’re probably going to have to sell off assets to produce enough income to live off of down the line, which is another consideration. I’m probably not the best guy to seek out in-depth information on buying funds because it’s not something I concentrate on or believe in, but I hope that helps!

    Best regards.

  91. Would you mind sharing the source of your online income? Is it through AdSense or affilate marketing? Do you have a split of your online income?
    Thanks a lot!
    pcg

  92. Hi Jason

    Excellent blog you have, I very much enjoy your writing your style. Clear, concise, no wasted words – I am really “picking up what you’re putting down”! I just stumbled on this and I am really enjoying it.

    It is interesting that there is so much focus in North America on dividend investing. Down here in Australia there is not so much of a focus, but the payout ratio average is around the 70% mark compared with 30 or 40% (I think?) over where you are. It must be the way the culture has evolved over there, I find it fascinating to compare different cultures like that. We also get tax breaks on dividends (franking credits), so the gross yields are up around the 7% mark – not a bad return in the current low interest rate/inflation/growth environment.

    I agree with choosing companies that have a growing dividend stream, but that’s not really the whole picture. The earnings stream growth is far more important, a company can grow their dividends as much as they like – they can just take that payout ratio from 30 to 60 to 120% if they want! It is a subtle difference but a pretty vital one to understand I feel.

    I have a different perspective on investing though – I hope you don’t mind me sharing. “All debt is bad.” I disagree with this in some circumstances. I will concede if people don’t understand investing and get into credit card debt to purchase depreciating consumer goods and paying 15+% interest for the privilege, that is the height of foolishness. But for someone like yourself who is investment savvy, I would say it could be a good tool to increase your returns.

    For myself (and comparing two asset classes) I prefer share investing over property investment. If debt can be brought into the equation, however, I prefer the latter because you can safely gear this asset class.

    For arguments’ sake let’s say the shares will grow at 10% while property will grow at 8% – most would prefer the shares.

    If you start with 50k to invest you can have a share portfolio that is worth 55k in a years’ time – a 5k return, not too shabby.

    However, if you can take that 50k and use it as a deposit for a 500k property (which can be done in Australia), you then have a 40k return for the year (500k @ 8%), take away the interest on the 400k debt (at 4.5% will = $18,000) and you are still 22k ahead.

    Makes more sense to me. I used a lot of generalizations but I am just trying to illustrate a point.

    By the way I am not knocking your way of investing in any way, just trying to generate some good robust debate. It never hurts to critically analyse your way of thinking (and feel free to do the same to my argument).

    Anyway, great blog mate and congrats on your success so far!

    Cheers
    DK

  93. ronaldcheef,

    Tough to say since I own equity in a few different real estate investment trusts that really all offer something different to like. Different risks and rewards, pros and cons. But I do like OHI quite a bit. They’ve just been knocking it out of the park in terms of expectations and execution. Not as cheap as it was recently, though.

    Cheers!

  94. DK,

    Agreed with you on earnings growth. That’s why I go over that with every analysis/buy I post here on the site. Without EPS growth (or, more accurately, FCF growth), the dividend will at some point cease to grow as well. I’d never buy into a company if I felt that, long term, they weren’t going to grow at a rate attractive enough for me relative to what I expect and what I’m paying.

    As far as yields go, that’s true. That’s also something you see in the UK. Over there, you’ll commonly see stocks with higher yields and higher payout ratios. Over here, we have more (many more) stocks that routinely grow their dividends. So it’s just something different. I own quite a few UK-listed stocks because I do find those higher yields attractive, especially when the companies are routinely growing their dividends in native currency. That’s a win-win. Our market here in the US is far more robust than what you have there in Australia, so it’s just pros and cons. I wouldn’t want to have any other market than what we have here, however.

    Taking on debt is really a personal call. It’s just risk and reward at that point. I’m already taking on a pretty aggressive investment strategy here with 100% stocks, at least according to most people. I don’t view volatility as risk, so it works for me. But I don’t think leverage is necessary. What my results prove is that you don’t need to complicate things or add a bunch of risk to get to where you want to go. If you’re able to save a good chunk of your net income and invest that excess cash flow in high-quality assets that pay and grow income, you’ll do really, really well. I think it was Buffett who said something to the effect of (I’m paraphrasing), “Nobody ever went bankrupt that didn’t owe anyone anything.” I sleep well at night knowing my stocks are mine free and clear. Different strokes for different folks.

    Best regards!

  95. Hi DK, Yes the interest will be $18K, Here in the states, we have property taxes as well. The taxes will be about 13K (caries by the location) plus insurance (2K) and pkus all the repairs costs .

  96. Nice job as always.
    What are your thoughts on the GE swap furor Synchrony shares?
    Are you biting at all?

  97. Bill,

    Thanks! 🙂

    I’m planning on holding my GE shares as of now. SYF doesn’t pay a dividend. That may change, but all I’ve heard is speculation. And I really prefer more diversified financial services firms when looking at lending, whereas Synchrony is more of a pure play on retail credit.

    Best wishes.

  98. Jason,

    Great attitude you have there, there are certainly plenty of ways to invest and you have clearly done well with the strategy so far.

    I do agree with you on the US market, it is fantastic that you have exposure to some truly world class companies with decades of growth in front of them. I grew up only learning about Australian companies in the Aus. sharemarket, it is mainly resource companies and banks over here. Not a great deal of diversification, although there are some good smaller stocks to keep on the radar.

    It sounds like we are in a fairly similar position financially. I am 30 right now, have been saving and investing consistently for about three years and have about 135k currently. I wish you all the best in your future endeavours – it looks like you are close to that tipping point where the reinvested gains will really begin to compound and snowball for you, hopefully we both get there soon!

    Cheers
    DK

  99. Hi Tony, sounds like a bit of a different investing environment for property in the states. Property taxes would take up a lot of your profit – the comparable expenses in Australia would be land tax, council rates and water rates, this would probably be about 5k per year.

    Better to be investing in Australian property and US shares I think!

    Cheers
    DK

  100. DK,

    I’m also hopeful we both get there soon. 🙂

    Congratulations on your success over there. You’re in a great spot, especially for your age. I can’t imagine you’re not in a position to work substantially less or even not at all in under a decade. That kind of freedom is something very few people ever get to taste.

    Keep it up!

    Best regards.

  101. RTR,

    Thanks so much. It being motivational and informational means the world for me. That’s why I take the time to put all this together, and, believe me, it took a lot of time to put this post together. 🙂

    Thanks for dropping by!

    Cheers.

  102. Question if dividends growth is so high and compounding every year how come the average dividend in the s&p only ~2%.?

  103. Brian,

    Well, that’s where price increases/capital gains come into play. Johnson & Johnson has been increasing their dividend for more than 50 years. But they don’t have a yield of 40% or 50% because the price has increased over time as the company’s revenue, profit, and dividend have all increased. And so you don’t see JNJ selling for $5/share or whatever it might be.

    The market generally won’t allow stocks (or the broader market) to be priced at a level that would allow for yields that high, and so you get that yield support which generally results in not only prices for high-quality dividend growth stocks having a lot of downside protection, but also that upside as well as those dividends increase.

    That’s really just the basic gist there. I’d encourage some heavy reading about investing in general (there are a number of books recommended here on the site) and then go from there. 🙂

    Hope that helps!

    Cheers.

  104. Jason – I’m new to the Seeking Alpha website. I’m assuming the generic company alerts will give you news on dividend raises? I didn’t see any specifically mentioning that, but would guess that it would be covered.

    Great article, as always. Thanks for all that you do for the community.

  105. PF Geek,

    Happy to help! 🙂

    What you have to do over at SA is add a stock to your portfolio there, after you sign up for a free account. So you click the ‘Portfolio’ tab at the top left and then add a stock. When it asks you if you want to “Get Alerts”, select yes. At that point, SA will email you alerts any time there’s any news at all pertaining to that stock, as well as articles that are relevant. So you’ll get news, earnings reports, and dividend declarations emailed off to you, which I find to be a great (and free) service.

    Cheers!

  106. Hey Mantra,
    Thanks for these updates…great stuff. The snow ball effect is a wonderful thing, and happy to see the tangible progress you are making. A couple of questions:
    1. What’s the thought process around having so many names in the portfolio? Doesn’t this make it difficult to really understand each company? Why not invest in fewer, higher conviction names. Studies show that the diversification benefit provides severely diminishing marginal benefit beyond 15 or so names that vary by industry.
    2. Why don’t you simply purchase a Dividend Aristocrats ETF?

    Thanks for all the great insight…keep it coming!

    Best of luck,
    Wes

  107. Wes,

    Thanks for dropping by!

    To answer your questions:

    1. I’m going to be living off of my dividend income here within a few years. So it’s in my best interest to limit the loss of income that could/would occur if there are any adverse changes in any company dividends. The less companies I own, the more my income is negatively affected by a dividend cut. I’ve discussed how that works here:

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

    I’m not out to outperform anyone. That said, Lynch owned something like 1,000 stocks in the Magellan fund at one point. So to say that owning a lot of stocks hurts total return is silly, in my view. I have a lot of conviction in all of the companies I invest in. But concentrating based on conviction could go really wrong if something negative happens to a company you’re invested in. In the end, I have to think about income sustainability/safety. And diversification means I sleep really well at night. Just a risk/reward call, but I like to limit risk whenever possible, especially when considering I’m 100% stocks here.

    In addition, it’s not really that difficult or time consuming to manage a large portfolio:

    https://www.dividendmantra.com/2014/11/is-managing-a-large-dividend-growth-stock-portfolio-time-consuming/

    2. By the way, I always find it strange/funny/interesting that those who think following 70 or so stocks must be difficult or time consuming but then in the same breath wonder why I don’t just own an ETF. So following 70 stocks must be hard, but following 500 (or so) stocks by owning, say, the S&P 500 isn’t? My point being that owning an ETF means you do own equity in dozens or hundreds of companies. And just like if you own an ETF, you’re not following these companies every single day.

    But I discussed why I don’t like funds here:

    https://www.dividendmantra.com/2013/04/why-i-vastly-prefer-dividend-growth/

    I could add even more points to that article if I were to address the discussion today, but that covers the basics.

    Cheers!

  108. I’ve been following your blog for several months and you’ve made some great progress. Very inspiring.
    Have you given any thought to how the impending interest rate increase will affect dividend stocks, especially compared with the overall stock market?

  109. ilan,

    Thanks for following along. Appreciate the support. Hope you continue to find inspiration here. 🙂

    You know, Warren Buffett was asked a similar question about interest rates and investing at this year’s meeting in Omaha. And his answer was that he’s never once in all of his years ever thought about interest rates for even one second when considering buying a stock or a business. My answer is much the same. I think about interest rates exactly zero seconds per day. Over the long run, it shouldn’t really make that much of a difference either way. It’ll ebb and flow like most things. Certain companies will become more profitable and certain companies less profitable over the short term, but everything has a way of right-sizing itself under reasonable conditions.

    Cheers!

  110. Great blog, Jason!
    Curious what your thoughts are on Kinder Morgan; short and long term.
    Keep up the excellent and informative work!

  111. Well since they just slashed their dividend by 75% most people will sell. I currently hold 30 shares and will hold for now. Kinder will now be able to pay back more towards their debt. So long term they are great and short term no.

  112. No!

    I absolutely refuse to visit your site! This is nothing more than shameless plugging and I won’t stand for it! I encourage all others to join me and rise up against this!

    I absolutely, steadfastly, 100% will not go!

    Good day!

  113. Excellent. Dividend Miracle has weighed in with his opinion and now those that were unsure can take decisive action!

  114. No fear here. I calculate if I hold my current 6.32 KMI shares and reinvest all dividends I will be worth nearly $1400 dollars in 2084…. FI here I come!

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