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.
This past month’s dividends were one of my highest ever. Right now I have larger monthly dividend tallies during the last month of each quarter, but as I grow my portfolio this number will smooth itself out over time. I’m not real concerned about it right now, and actually wouldn’t be that concerned if it never smoothed itself out. Through consistent budgeting, my expenses are relatively static from month to month, so ups and downs with dividend totals wouldn’t really affect my ability to pay my monthly liabilities once I’m actually living off my dividends. I’d simply save the excess dividends from the higher months to make up for the slightly lower totals in other months. This is something to consider for other dividend growth investors out there that have similarly irregular monthly dividend totals.
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:
- ConocoPhillips – $36.30
- Aflac Incorporated (AFL) – $35.00
- Intel Corporation (INTC) – $54.00
- Phillips 66 (PSX) – $8.44
- Emerson Electric Co. (EMR) – $24.60
- Chevron Corporation (CVX) – $36.00
- Lorillard Inc. (LO) – $33.00
- Norfolk Southern Corp. (NSC) – $35.00
- Johnson & Johnson (JNJ) – $61.00
- Southside Bancshares, Inc. (SBSI) – $12.60
- McDonald’s Corporation (MCD) – $46.20
- Avista Corp. (AVA) – $16.78
- Harris Corporation (HRS) – $14.80
Total dividends received during the month of March: $413.72
This month is noticeably higher than the $251.35 in dividends I received in March 2012. That’s a full 64.5% increase over one year. That’s great progress, and I hope I can keep up similar levels of success as I go!
I was able to cover just over 24% of my expenses this past month through the power of dividends. It’s really great to know that I was able to cover a quarter of my monthly expenditures by way of complete passive income. The progress of dividend growth investing is real and tangible. The market can decide to mark up or mark down the value of a company day by day, but the dividends will still roll into my brokerage account just like usual. Dividends are reliable just like my expenses, and that’s one of the reasons I plan to use this strategy as my primary income generator through early retirement.
With the first quarter of 2013 behind us, I’m now three full months into one of my goals to generate $3,500 in dividends during the year. The year is 25% over and I am 22.5% on my way to completing my primary goal. So while I’m a little behind, I’m confident I’ll be able to close the gap as the year progresses. I’ve now received a total of $786.31 in dividends for the year of 2013!
I’ll update my dividend income page to reflect March’s dividends.
How are your dividend tallies progressing? Everything progressing the way you had planned?
Full Disclosure: Long all aforementioned securities
Special note: PepsiCo, Inc. (PEP) is listed as paying out its dividend on 3/29/13, but the monies did not hit my brokerage account until 4/1/13. I record the dividends as I receive them.
Thanks for reading.
Photo Credit: sscreation’s/FreeDigitalPhotos.net
My Financial Independence Journey says
April 4, 2013 at 1:22 amStrong work on your March dividends! That’s probably almost half your expenses for the month.
Dividend Growth Investor says
April 4, 2013 at 1:54 amSo after 3 years of dividend investing, you are covering a quarter of your expenses with dividends? This means that in 7 – 8 years you should be able to reach financial independence. Just keep going and it, and buy cheap stocks in the process.
Dividend Mantra says
April 4, 2013 at 2:00 amMFIJ,
Thanks so much! This month’s dividends would have actually covered about 33% of my expenses under normal circumstances, but I bought a rather expensive ticket to fly home to Michigan to see my father for his 50th birthday. I factored that one-time expense in, and that made it look worse than it was.
Hope your dividends are rolling in too!! 🙂
Best regards.
Dividend Mantra says
April 4, 2013 at 2:04 amDGI,
Thanks for stopping by! Much appreciated.
Yeah, I’m covering about a quarter of my expenses through dividends if you extrapolate both out over a year’s time. This month, my dividends actually covered closer to a third of my normal expenses, but it was worse on paper due to a one-time charge to fly home for a (once-in-a-lifetime) birthday party. Factoring that out, it was rather spectacular in regards to my passive income to expense ratio. I’ll be posting my income and expenses for March in the next couple days.
I certainly hope you’re right about the 7-8 year mark. I think that’s pretty accurate. Every time I calculate it, the numbers look better and better. I’m anticipating complete financial independence somewhere around 38 years old, which would be right in line with what you’re thinking. I could probably just assume to work part-time before then if I wanted to delay complete freedom, but I’m hoping it won’t come to that.
I hope all is well with your journey as well! Keep up the great work.
Best wishes!
Passive IncomePursuit says
April 4, 2013 at 2:21 amGreat job DM! I ended up around 27% for the month but for the quarter it was just under 11%. Like you I’m not too worried about the uneven dividends but i would like to get them a bit spread out since the market doesn’t decide to take dips on my schedule. The budgeting now will just make it easier to deal with the irregular payouts. Congrats on a great month and keep up the good work. Its very inspiring and motivating. Hopefully I can catch you soon.
Steve says
April 4, 2013 at 2:42 amDM
Stupendous!! Your consistency in following your strategy is extremely encouraging. Personally, I’m on track to reach my goal of $700 in dividends for the year. This is my first entire year of aggressive dividend growth investing and I’m very happy with my progress so far. I have a family, house, advanced degree I’m paying for, etc. so I’m not able to dedicate as much cash to DG as you do but I consistently save between 30% and 50% of my income every month and have no debt except a little bit left on the house. I’ll take the victories where I can get them.
Question: do you find that tracking the percentage of your expenses covered by dividend income each month is discouraging? For me, the yearly total seems more impressive. When I look at my monthly expenses and realize that my monthly dividend income won’t even cover one of my utility bills, it’s kind of discouraging. The fact that I have nearly doubled my dividend income over last year is exciting. I guess for me, looking back at how far I’ve come in this marathon is more energizing than looking at how much further I have to go.
Thanks for posts. You’re helping a lot of folks stay focused on the prize! Keep on truckin’!
Steve
writing2reality says
April 4, 2013 at 2:43 amDM, that is really fantastic! Just a few more years and you will really see those dividends payments really start to snowball!
Jeremy @ GoCurryCracker! says
April 4, 2013 at 4:39 amNice 1st Quarter!
We haven’t really noticed the varying monthly payouts. We keep a few months cash in our main spending account, and the dividends just refresh that.
Anonymous says
April 4, 2013 at 4:45 pmThis blog is tremendously inspiring.
How much did you start investing with and do you cash out your dividends or reinvest them?
Would like to pursue a dividend driven portfolio as well.
Thanks.
Pretired Nick says
April 4, 2013 at 5:00 pmWow, I’m not sure if I’m inspired or jealous. I’ve got a long way to go, starting with selling off a fourplex so I can reallocate some funds. Congratulations!
Dividend Growth Machine says
April 4, 2013 at 10:14 pmNice! Having over $400 in dividends cover nearly 1/4 of your expenses is great progress toward financial independence. At the rate you’re going, it won’t be long until dividends cover more than 50% of your expenses. Good job!
Aspenhawk says
April 4, 2013 at 6:33 pmCarry on, I’m proud of you. I’d like to be as good as you. Maybe someday I’ll do ?
Dividend Mantra says
April 4, 2013 at 10:59 pmPursuit,
Great job to you too for hitting 27% coverage of expenses by way of dividends. Great stuff!
I’m sure you’ll catch me very soon. You make a lot more money and your savings rate is off the charts. Keep it up!
Best regards.
Dividend Mantra says
April 4, 2013 at 11:03 pmSteve,
Thanks so much for the kind words! I would definitely say that consistency is one of my stronger traits. I’ve been blessed to stay true to my journey over the last few years.
Congrats to you on your success so far. $700 in annual dividends is a nice, solid start and it’s easy to build from there!
I always recommend to use whatever strategy/outlook/perspective that keeps you most motivated and on track. I use expense coverage ratios on a monthly basis simply for reference, but overall a yearly number would be much more accurate since dividends and expenses both fluctuate a bit month to month.
The fact that your dividend income doubled from one year to the next is very exciting. That’s one of the most exciting parts about starting out – the percentage gains in the beginning are wonderful, and that’s something to definitely focus on. Once your snowball starts to really roll downhill, then you can focus on absolute numbers.
Keep up the good work, and I hope you continue to visit the blog and stay in touch!
Best wishes.
Dividend Mantra says
April 4, 2013 at 11:10 pmwriting2reality,
Thanks!
The snowball has started to roll downhill. I can see the progress moving quicker and quicker, and it feels great to log into my brokerage account and see new money all the time. It seems like every time I log in to check on things, there is new money there. That is a wonderful feeling.
I see you’re doing well on your end, especially with the P2P lending. Keep it up!
Take care.
Dividend Mantra says
April 4, 2013 at 11:12 pmJeremy,
Thanks!
Yeah, I’m with you on that. I keep a healthy cash balance in my checking account, so I don’t really notice irregular dividend payouts. Right now, it’s all getting reinvested anyway. By the time I’m actually living off my dividends it’s likely that it will be slightly more consistent.
Best wishes!
Dividend Mantra says
April 4, 2013 at 11:14 pmAnonymous,
Thanks for stopping by! Glad you find inspiration here. That’s what this blog exists for.
I started with $5,000 three years ago. You can read about that here:
https://www.dividendmantra.com/2013/03/dgi-case-study-5k-to-100k-in-three-years.html
I reinvest all dividends currently. One day I’ll be living off my dividends, but financial independence/early retirement is still a long ways off.
I hope you pursue a dividend driven portfolio as well, and let me know how it goes if you so decide to do so.
Stay in touch.
Take care!
Dividend Mantra says
April 4, 2013 at 11:20 pmPretired Nick,
I like the name! Never heard ‘pretired’ before. Great stuff!
I hope you’re inspired here! That’s why I write. 🙂
I stopped by your site. Good luck on your journey! I hope we both get to where we’re looking to go, while still enjoying the journey along the way.
Take care!
Dividend Mantra says
April 4, 2013 at 11:21 pmAspenhawk,
So very kind of you! I do appreciate your support.
You’re doing a fantastic job over there as well. Keep it up and you’ll reach your dreams!! 🙂
Best wishes.
Dividend Mantra says
April 4, 2013 at 11:23 pmDGM,
Thanks!
It looks like you had a great March as well, increasing your dividend payout by 100% YOY. That’s wonderful!
I do hope to cover 50% of my expenses via dividends within the next 2-3 years. I’m definitely going to give it my best shot! 🙂
Best regards.
S. B. says
April 5, 2013 at 3:50 amI agree that the irregularity of the dividend income in retirement is not a major issue. I’ve seen strategies where people try to find stocks that pay dividends each different week of the year. In my opinion, this is a mistake. It’s better to focus on getting into great stocks at good prices, and forget about the payout dates. Most U.S. stocks pay quarterly dividends. So worst case, I’ll need a 3-month cushion in the checking account to start and then no worries.
$25000 says
April 5, 2013 at 10:45 amLove it. We both hit $400 in March. What a feeling!
Freeyourchains says
April 5, 2013 at 8:14 pmAren’t you tempted to short Sell NSC at all and take 35% gains? Then again it is a solid railroad company with growing dividends and not a change in business model at the slightest, and the stock may just keep growing over time either way.
I guess Exxon stock holders didn’t get emotional over 35% gains in 1988, if they bought in Feb of 1987 and are still holding to this day.. even with 3 splits, countless dividend revenues, and 792% price run up…
Dividend Mantra says
April 6, 2013 at 12:09 amS.B.
Thanks for stopping by!
I agree that it’s a mistake to focus on buying companies based on when they pay out their dividends. That should really be one of the last concerns.
Something I should have noted in the post above is that one should also have a margin of safety with dividend income. If your expenses are averaging $1,500 a month, you should probably only consider yourself FI once you have a 20% margin of safety or so – which would mean you’re FI once you’re receiving about $1,800/mo in dividends. That margin of safety will also provide a little extra wiggle room in the budget when the expenses are slightly higher than normal and dividends are lower. The cushion in the checking account should also be considered.
I, like you, focus on great stocks at good prices! 🙂
Best wishes.
Dividend Mantra says
April 6, 2013 at 12:10 am$25,000 dividends,
Great job! It feels good hitting similar milestones at the same time. That’s fantastic!
Congrats also on hitting the $100k mark. You’re investing at a rapid pace, and if you’re able to continue that you’ll be breaking through all your goals in short order.
Best regards!
Dividend Mantra says
April 6, 2013 at 12:20 amFreeyourchains,
Yeah, I don’t look at gains as a signal to take profits off the table and sell. In fact, going forward I’m going to aim to sell even less than I already have. I haven’t sold often, but I do regret selling XOM for instance.
I’d rather just let the capital gains stack up while the dividends continue to rise.
Take care!
Rico says
April 13, 2013 at 3:45 pmHi, i am also working on my own passive income so far, but at the moment i am simply stuck. Although i am just two years younger than you are, i find myself in the same situtation starting to invest. Honestly, my income is not as big as yours.
I am glad to see your dividends increasing. gives me more energy to go on too. For now i just have roughly about 200 euro per year of passive income. Hope i can increase that soon, after i paid off all my debt.
can i ask you: are you married or have a girlfriend? how is she supporting your goal? i think its going to be far more difficult having a family member on your side who does not support the track.
Dividend Mantra says
April 13, 2013 at 7:45 pmRico,
Your dividend income doesn’t need to be as big as mine. As long as the success you’re having is consistent with your own personal goals is all that matters! 🙂
I do have a girlfriend, and we live together with her child. She is very supportive of my goal, and in that regard I’m very lucky. It’s very important to have a partner that supports you fully in any endeavor in life, and that is never more true than when we’re talking about finances and potential early retirement.
Keep up the great work and stay true to your path!
Best wishes.