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.
I’m including my dividend income from the month of February. The dividends received during February were slightly lower than January, but as my portfolio grows and expands the monthly differences will smooth out and matter less as time goes by.
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:
February 2012 Dividends Received
- AT&T Inc. (T) – $22.00
- Vodafone Group Plc (VOD) – $54.23
- General Dynamics Corporation (GD) – $9.40
- Abbott Laboratories (ABT) – $34.08
- Procter & Gamble Company (PG) – $26.78
Total dividends received during the month of February: $146.49
Not bad! This final tally compares very nicely with the total dividends received during February 2011 of $34.90. I hope to continue to have the good fortune and perseverance needed to grow this source of passive income over time. I consider myself pretty lucky to have received nearly $147.00 in income that came without me having to wake up at 6 a.m. and drive into work for a grueling 10-hour workday. The dividends I received this month covered 10.9% of my expenses this month. I’m happy with that!
This is another solid month towards my goal of receiving $2,000 in dividend income through the year of 2012. So far with January and February recorded, I’ve received $312.18 in dividends through 2012. That’s 15.6% of my goal, and I fully expect to exceed $2,000 in dividends this year. I’m extremely excited to be on this journey!
I’ll update my dividend income page to reflect February’s dividends.
How did the month of February treat you?
Full Disclosure: Long all aforementioned securities.
Thanks for reading.
Photo Credit: sscreations
it would be good if you can list down all these div in transactions in a Google Spreadsheet so that the folks can check it once in a while. do let me know if you need help on that.I got one working already.
nice work dude. It’s awesome to see that you are already making 0ver 10% of your expenses in passive income. That makes early retirement seem so palpable! Keep it up.
Great job! It’s especially nice to see the increase over last February. You’re making solid progress toward your goal for 2012.
Good to hear! Keep up the good work!
Nice work Mantra,
Let me know when you want to talk active trading! 🙂
DividendPartisan
11% of expenses (with a car!), that is awesome. It’s amazing how much progress you’ve made in a year. Are you targeting 100% of expenses or do you want a cushion too?
To go along with Compounding Income’s question of a income cushion, are dividends going to have to cover mortgage, car, line of credit, etc… things that will expire? Are you focusing much on decreasing those types of expenses so that dividends will not need to pay for as many expenses?
Good progress Mantra!
Do you track dividends on cash basis (i.e. as received) or on accrual basis (i.e. take annual dividend and divide by 12 to estimate average monthly income)?
How much of the YoY increase came from dividend increases and how much from your savings/new investments?
Drizzt,
Thanks for the offer. So far, I’m happy with providing the updates and totals in an article format as well as providing them in a page with a hyperlink back to each corresponding article. I may move to a spreadsheet format at some time in the future, however, and you’ll be the first person I contact. I really appreciate the kind offer!
Keep in touch.
The Money Monk,
Thanks man, I appreciate the support. I think these updates do show how realistic early retirement and using dividends as income is. I’m anxiously awaiting the one day I can post one of these updates showing dividends as 100% of income. That will be a great day!
Best wishes.
Deedubs,
Thanks for stopping by!
Yeah, the YOY increase was great and just shows how much progress can be made if one sticks to a plan. We’re both making solid progress towards our goals for 2012 and I look forward to tracking our success together.
Best wishes!
The Kechi One,
Thanks for staying in touch. Hope all is well on your side of the world. I see you’ve recently started receiving dividend payments. I hope your new investments treat you well.
Take care!
Partisan,
Hey, you know me. I believe old school is new cool. I’m a buy and hold guy at heart, but if I start to play with options or swing trading I’ll give you a shout. Hope all is well!
Best wishes.
Compounding Income,
Thanks for the support and comment. I’ve been both extremely lucky and determined over the last year to get to where I’m at. I’ve definitely worked for it. We’re both making great progress and it’s fun to watch some of us young guys (you, me and deedubs) grow our wealth together.
As far as your question, I’m targeting 100% expenses over a 12-month moving average. The month I exceed that moving average with dividends, I’ll consider myself retired, but I’ll likely want to have 6 months to 1 year of cash in expenses just to buffer any issues as I move to my new lifestyle. Of course, part-time work is also on the table as is moving to a cheaper country (like Ecuador, the Philippines or Thailand) if it’s necessary. We’ll see how it goes. My expenses are a moving target, but a cushion would of course be nice. I also consider the fact that the dividend income will likely rise faster than my expenses as a cushion.
Hope that helps. Take care!
Poor Student,
Thanks for stopping by and asking that question.
Most of my expenses are not going to change dramatically when I’m retired as the bulk of all of it is rent and food. Transportation also makes up a small portion, and that may change. The only expenses that will likely be gone completely is my student loan payments as I fully expect that will be $0 per month when I retire. That frees up ~$180 per month, but by that time rent and food will rise so I consider it moot.
As far as decreasing expenses I don’t think I can get them dramatically below $1,000/mo. without negatively affecting my quality of life. As I posted above, part-time enjoyable work or moving to a low-cost locale are options as I’m pretty open minded.
Hope that helps! Take care.
AverageCFA,
I track dividends as received. I track all income, expenses and dividends through my Mint.com account, and they are posted there as I receive them. I then post this article at the beginning of every month highlighting what I received the prior month. These are down-to-the-penny figures.
As for your second question, it’s a little bit of both but more of the latter. VOD, GD and T are all new positions for me since last February so that certainly accounts for a bulk of the difference. I also added to my positions with ABT and PG since last year. PG and ABT increased their dividend payouts since last February, so that also helped. While I’m in this accumulation phase most of my gains will come from my own money as the compounding affect of reinvested dividends don’t have a lot of time to take affect.
Keep in touch! Best wishes on your own journey.
Great work! February was good to me, hopefully March will be even better!
MOA,
Thanks for the support!
I agree. Let’s hope March is even better than February was. Onward and upward!
Take care.
How about health care ? The payments go up the 1st of each new year, & as you age it really steps up the cost. Just wondered how you factored it, or did I miss something.
Thanks! I am on a lookout for another Derek Foster. Someone who has already done and lives off his/her portfolio, thereby enjoying each dividend increase as an actual bump to income.
Will you retain both companies when Abbott splits? I have not looked into it, would be curious to know your throughts.
Paul
Paul,
I’m a huge fan of Derek Foster, and I’m basically trying to emulate him to a degree. I’m doing it a bit differently, most notably more conservatively. He made some serious money on his Philip Morris bet, but of course he has some higher expenses due to being married with many children.
I’ll be watching ABT closely both before and after the split. I’ll give the spin off a fair chance, but if I feel it doesn’t agree with my investing fundamentals then I’ll likely move on to better opportunities.
Best wishes!
Anonymous,
I plan on having a HDHP, which is basically a form of self-insurance with catastrophic coverage. I plan on having a high deductible (over $5k), which will limit my monthly costs. It’s basically a form of asset protection should some kind of major health issue befall me.
Take care!
Can’t wait to see your post of hitting the $100,000 mark. Should probably happen sometime next year.
I’m now earning over $100 per month in dividends and feeling very motivated. Keep up the good work DM!
Dividend Collector,
Yeah, I can’t wait to see that post either! I hope it happens sometime next year for sure. If I keep up at this rate it will definitely happen.
Great job on earning over $100 per month in dividends. I do stop by your site occasionally and I’m really glad to see your progress. You’re sticking to the plan and doing an awesome job.
Keep up the great work on your end. I’ll be excited to see that $100k post from you one day as well!
Best wishes!
Nice amount of dividends. I am far from you!
Can’t wait til I can get to that point. I’m slowly building up my portfolio. Your blog is one that I visit a lot to check on your progress. It actually inspired me to start my own blog so I can document my path and hopefully pay forward the inspiration.
FoodieFC,
Stay on track. We all start somewhere, and I started at $0 just like everyone else.
Stay on track and you’ll be richly rewarded.
Best wishes!
jonathanmcurry,
I’m really glad this blog inspired you to start your own. That’s fantastic. It feels good to track your progress and know that you’re getting to where you want to be.
It wasn’t that long ago that I was receiving $10-20 per month in dividends, so the progress can actually happen quite quickly if you’re focused.
Best wishes!