Dividend Income Update – January 2014

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.

January was yet another great month in the saga that is my journey to financial independence. Think “As The Dividends Turn (or churn).” Thirteen companies paid me completely passive dividend income this past month. That was thirteen companies that continue to take me as a shareholder/investor and our relationship as business partners seriously. And with that, I’m a pretty happy camper!

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:

January 2014 Dividends Received

  • PepsiCo, Inc. (PEP) – $43.70
  • Walmart Stores, Inc. (WMT) – $17.86
  • Baxter International Inc. (BAX) – $22.05
  • Illinois Tool Works Inc. (ITW) – $14.70
  • Philip Morris International Inc. (PM) – $94.00
  • Altria Group Inc. (MO) – $38.40
  • Digital Realty Trust, Inc. (DLR) – $50.70
  • Realty Income Corp. (O) – $12.75
  • American Realty Cap Prop Inc. (ARCP) – $7.83
  • Sysco Corporation (SYY) – $8.41
  • Medtronic, Inc. (MDT) – $10.36
  • General Electric Company (GE) – $15.40
  • The Bank of Nova Scotia (BNS) – $11.81

Total dividends received during the month of January: $347.97

Hell yeah, now that’s a great start for the year right there. My compounding snowball is now almost $350 larger than it was last month without any input from me. And that’s one thing I really love about dividend growth investing: it’s the inaction that sometimes makes it so rewarding!

This January’s tally was my largest January ever, and a full 121% higher than what I took in during the same time frame last year. My progress won’t see huge, double-digit gains year-over-year often from here on out, because as my totals get bigger it will be impossible to maintain the high percentages. However, I am looking forward to big improvements going forward when looking at the absolute numbers.

I just continue to get more and more motivated as time goes on because the tangibility of dividends allows me to continue seeing my success right in front of my face. It’s hard to argue with cash, and that’s exactly what dividends are. And that’s another thing I love about dividend growth investing: success begets success. And by that, I mean the more dividends you receive the more encouraged you are to keep reaching for more. And it gets easier to do so because the larger dividend totals allow for greater compounding ability.  

Inaction + ever-greater cash = happiness.

I was only able to cover about 14% of my expenses this month because January ended up being one of the most expensive months I’ve had since I first started living frugally. I had to finally get a root canal done on a tooth that’s been giving me trouble for a number of months. I was putting it off, but it had to be taken care of. That’s $1,200 I could have put to great use with a high quality company, but, obviously, health comes first. I’ll be discussing the disappointing month very soon when I release January’s budget. Hint: it ain’t pretty.

One of my big goals is to receive $5,200 in dividends during the year of 2014. This is a great start for the year, and I’m now 6.7% of the way there. I expect a big month in March to keep me on track, as well as a big push toward the end of the year. I wanted a difficult goal to push myself, so we’ll see how I do!

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

Full Disclosure: Long all aforementioned securities.

How was your January? Off to a great start for the year?

Thanks for reading.

Photo Credit: sscreation’s/FreeDigitalPhotos.net   

Edit: Corrected year.

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67 Comments

  1. Well done! Your progress has been extremely inspiring leading me to finally take the leap into dividend investing at the start of 2014. I pulled in a whopping $14.91 for my first ever dividend payments in January, not much but we all have to start somewhere! Keep fighting the good fight and good luck on your goal of $5,200 this year. I look forward to following your progress.

  2. That $350 is nothing to sneeze at. It is the equivalent of about half a week’s pay for you ( based on your last month’s earnings). However you didn’t have to work for that cash.

    Keep up the good fight man. The compounding is doing its work for you!

  3. Nice job Jason! Pulling in some fantastic dividends, and as you say, the best part is the lack of effort for those dollars to continue to compound and grow for you.

  4. Nice looking month DM. My January is very weak. In fact none of my companies pay me in January. Most of mine are February and March. Maybe I need to prioritize buying some January div payers. PM, MO, and ITW are all on my watch list.
    -RBD

  5. Pursuit,

    Thanks so much, man. It’s a great start for the year, and the progress is encouraging.

    I’m quite sure you could catch up to me in a heartbeat if you wanted to. But I know you have some rental property ideas tying up capital, and if done right that could comfortably outpace my returns. 🙂

    Excited to see how that progresses for you!

    Best wishes.

  6. DGI,

    You got it. It’s very good money, and even better when you factor in the fact that I didn’t have to work for it. I’d rather have $350 passively then $350 actively any day of the week! 🙂

    You keep up the good fight too, and keep up the great work. I’m excited for what the rest of 2014 brings us!

    Best regards.

  7. Great start to your year. Because of your blog, I decided to set goals for myself in 2014. I invest in real estate, so my goal is to increase my take home by $1,000/month. It’s going to be really difficult for me to do that, so I’ve started early and am networking with some sellers who have a property which would drop nearly $400 to the bottom line, pushing me to almost half of my goal.

    Good luck in 2014.

  8. Dividendasaur,

    Hey, congratulations for starting your own journey! I just see your site (cool name, btw) and see you’re off to a great start! $8k is just a little more than I started my own portfolio off with. I think if you can get your spending down a tad that will provide you with just a little more to invest every month. Combine that with the dividends that will start rolling in and you’ll be off to the races in short time.

    Glad you’ve found some inspiration here in what I’m doing. And don’t worry about the $15 for January. I only pulled down $33 in January of 2011 and that was after almost an entire year of goind at it:

    https://www.dividendmantra.com/2011/03/dividend-income-update-januaryfebruary.html

    Keep up the great work. I’ll be rooting for you! 🙂

    Take care.

  9. Investing Pursuits,

    Thanks so much! Yeah, I don’t like the idea of leverage. Can’t go bankrupt if you don’t owe anyone anything. I know that I can acheive my goals without it so I don’t bother. But I’m a bit conservative in that manner, and I started out in debt so I have a negative attitude towards it. I don’t mind investing in companies with moderate debt, but I try to avoid it in my personal finances.

    Thanks for the continued support. I hope you had a great January!

    Cheers.

  10. In my experience the people that are not impressed with an extra $350/mo from a reliable passive source have no idea about money (there are many out there, one born every minute or was that every second?)!

  11. w2r,

    Lack of effort is always good in regards to money. I’m trying to slowly move towards “no effort”, but I’ve got a ways to go. 🙂

    Looks like you had a great December to finish last year off! Congrats. 🙂

    I’ve been a little slow to comment around the blogosphere because the WordPress deal was slowing me down quite a bit (no sleep this weekend), but I’m still following your progress!

    Take care.

  12. The Dividend Guy,

    Thanks so much. I hope it’s inspiring for others out there, like Dividendasaur above. We all had to start from somewhere, but the progress is real. 🙂

    Hope you had a great January, too!

    Take care!

  13. RBD,

    Nothing wrong with lumpy dividend payments. Mine are getting better in that regard, but early last year it was all over the place. It really doesn’t matter too much in the end, however, if you’re good at budgeting and can easily put aside excess dividends for the following month(s).

    Although, PM, MO and ITW are all great companies. ITW in particular has performed well for me. PM was doing great until the recent dip, but that simply provided me a great opportunity to add (which I did).

    Cheers!

  14. Liam,

    Nice work there! $1,000/mo increase would be phenomenal! I’m nowhere near that kind of level, but I’m slowly making my way there. Your website reminds me of the old tortoise/hare fable, and I’m definitely the tortoise. However, I’ll eventually cross that finish line. 🙂

    Good luck with the goal! I hope you get there!

    Best wishes.

  15. Excellent progress! I had a decent January as well, around $220 (though the annual projection is ~$3,600 for 2014) in dividends. I agree with you completely, having a solid passive income stream definitely makes me want to keep growing it!

    If I could reach $1K/mo in dividends, I think I would be quite satisfied. Of course once I reach that, I’ll want even more, so I suppose My ultimate goal is to be able to cover my (future) primary home expenses (think mortgage interest, tax, insurance, etc) through various passive streams including dividends and rental income. Right now, I’m netting around $500/mo in rental income after budgeting for all expenses and a maintenance allowance.

    A stretch goal for being comfortable with retiring would include ALL basic monthly living expenses like car expenses, health ins, food, home expenses, etc. I hope we can all get there some day!

  16. Katz,

    You make a great point there. I think I’ve done a good job showing how much work goes into accomplishing something like this on a middle-class income. It’s been a tough journey to this point, but the rewards are well worth it. Passive income is the holy grail, baby! 🙂

    Thanks for the support, and thanks for the emails as well! 🙂

    Best regards.

  17. Ravi,

    Great month there! $220 is solid money. That covers my cell phone, utilities and my gas for a month! 🙂

    That stretch goal is what I’m aiming for: covering everything through dividends. I’m still a long ways away, but anything in life worth having is worth working hard for.

    $500 in rental income is awesome! Although not completely passive in most cases, that’s still fantastic money that you’re not going to a 9-5 for. And that’s pretty close. So you’re at over $700 in cash you don’t have to go to work for. Keep it up! Most people would kill for that. You’re in a great position.

    Cheers!

  18. Dividend Mantra,

    You are absolutely right about trying to get my monthly spending down. Hopefully within the next few months I can find a new place to live because 1050 a month for rent +300 to keep the house above 60 Fahrenheit is completely excessive.

    It is fun to go back and read those old dividend income updates. I think the next hour or so will be dedicated to a motivational Dividend Mantra dividend income update binge read.

  19. DM,

    Keep up the good fight. $350 is a healthy chunk of change. I think you’re going to smash you $5200, from memory the MJSD is your big paying schedule? Looking forward to your expenses post, I bet even with some ’emergency’ expenses you still managed to save a healthy percentage of your income. My wife and I actually had our best month to date for expenses, income not so good (wifey quit her job because her conditions were BS and not explained when she took the job) but expenses are still coming down which were we strive to succeed as this will determine how much we need, not how much earn. February is actually shaping up to be even better and 2014 will be good as I can finally start investing in some ownership stakes in high quality companies.

    KM

  20. Quite a start to 2014. Congrats on all the dividends! You keep us all motivated!

    Best wishes
    R2R

  21. That’s awesome! $350 in January is pretty sweet. I love the feeling of waking up one day and having even more money working for me than I did yesterday – all without me doing anything. What’s your payment schedule look like? Are you evenly spaced throughout the year or more weighted to the quarter-end periods?

  22. Very nice passive income,Jason. I surely think u will hit the target of $5200 in yearly dividends. and good luck on the move to wordpress.
    Dividend Mom

  23. Heh! i got 4$ dividend from Nike! that’s all for me on jan. Luckily my Novo Nordlisk rose 23% at January, at least something going the right way. Also sold my FFIV (F5 Networks) with nice 15% value increase. I will update my portfolio on my blog quarterly based on this year as there is not so much happening yet.
    Anyway Nice work!
    regards!

  24. Hi Jason, That’s all good !
    I have an account at Ameritrade. As a foreigner I don’t pay tax on the stock value increase, but I pay 30% tax on the dividend which is retained by Ameritrade. Do you think it is still OK to aim for dividends or rather stock growth ? Thanks for your insight, Patrick

  25. DM-

    I have considered purchasing PM, LO and MO but have not bought them. Part of me is bothered owning tobacco stocks that harm people. Have you ever considered selling and not owning tobacco stocks for moral reasons? This post is not judging because I have contemplated buying these stocks and I might in the future…just curious on your thoughts? I sometimes think alcohol companies, gambling companies and heck you can argue soda drinks without moderation cause great harm to people….guess just leave it up to people to do as they please and not judge.

  26. Hi Jason,

    congratulation for your dividend income in January!
    350 USD is great!
    And now: 400 USD is the next target for January 2015 😉

    I have received only 10 percent from your amount, precise 32,33 EUR.
    But maybe I can reduce the distance slowly?

    Best regards
    D-S

  27. Nice work Mantra! My January dividends are light compared to my March, June, Sept, and Dec. those are my money months! Keep us posted.

  28. Roadmap2Retire,

    Thanks, man. I do appreciate it. I think 2014 is going to be a big year for many of us. There’s those of us that have been at this for a while and are now starting to make serious headway, and then there’s new followers and those just starting their journeys. It’s a great mix. 🙂

    Best of luck to you throughout the year!

    Cheers.

  29. KM,

    Congrats on having a great savings month. And I’m happy your wife quit a job she didn’t like. I’m all about working hard and persevering, but there is a limit to that. If it was causing her undue stress and misery then there’s always something else out there. Every time a door has closed for me, a new, better door has opened up.

    And good luck starting the investments this year. I’m sure you have some healthy capital set aside to jump start that portfolio! 🙂

    Best regards.

  30. Frihestfonden,

    I just checked out your post. We did indeed hit very similar numbers. How cool is that?!

    Keep up the great work. You’ve got a very solid base of passive income there. It’s onward and upward, right? 🙂

    Take care!

  31. Matt,

    Heck yeah, it’s a great feeling to know you’re getting paid while you sleep. And that’s the great thing about money: it never sleeps.

    My payout schedule is still a bit lumpy, as the last month of each quarter tends to be much larger than the other two. But, generally, I’m okay with that. I’m pretty good with budgeting and I don’t mind have a surplus one month and a deficit the next. I can balance it out. 🙂

    Best wishes!

  32. Dividend Mom,

    Thanks! The move to WordPress is much more difficult than I originally anticipated because of all the data that’s currently on my site from being live for three years. It’s definitely a good problem to have, however. 🙂

    I appreciate the support. You’re off to a blistering start this year as well. I think you’ll have a great 2014!

    Cheers.

  33. D-S,

    Thanks so much. It was a great start to the year. My best start by far!

    You’re off to a great start as well. It was only a few years ago that I was hitting similar dividends to that. The progress happens slow at first, but builds and builds. It’s like a stream of water that starts as a trickle, then a stream, then a river and then a deluge. 🙂

    Take care!

  34. investingIdiot,

    I looked at Nike quite a while ago and passed due to low yield. It’s been a fantastic investment since then, so I missed out. Good for you for recognizing the potential there! 🙂

    Nothing wrong with looking at dividend income quarterly. That smooths out the small months and it’s easier to actually see the growth when you’re taking larger samples like that.

    Best regards.

  35. Moorea9,

    This is what you’re talking about:

    http://www.investopedia.com/ask/answers/06/nonusresidenttax.asp

    At that rate you’d be better off focusing on stocks that do not pay a dividend, although growth isn’t guaranteed. And that’s really at the heart of why many of us choose this strategy. Also, what taxes are you subject to for realized capital gains where you’re from? Does Tahiti charge you? If you get a free pass on all capital gains I’d look for a few great index funds with minimal dividends, and that way you’re broadly diversified and not subject to the extreme volatility of some popular growth stocks out there.

    I’m no tax expert, so I hope this helps?

    Best wishes!

  36. myself I will never buy tobacco stocks. There is a difference in indirect way of harm like Div U mentioned above but thats no reason to buy stocks that you know you money will be contributing to peoples health and lives directly. Even if its good for portfolio and may go up 100%, still not for me.

  37. Anonymous,

    Div U summed this up pretty well. I concur for the most part.

    I think I should write a post on this some time, as this is a question that is comes up fairly often.

    A far as smoking goes, this has been going on long before Philip Morris was incorporated. People choose to engage in activities that aren’t always best for them, and I say live and let live. I don’t really judge people. If people want to smoke they have a right to do so. If people want to eat cheeseburgers and drink a Coca-Cola then so be it. I don’t get the thought process behind trying to control what others do. As long as I’m not getting hurt I’m okay. And you could point to a stretched health care system from sickos, but let’s be honest and just admit that the services and products our health care system provides are grossly overpriced.

    People attack tobacco like crazy, but what about everything else in our life? What about cars and car accidents? What about weapons? And, best of all, what about people? The human species is probably what plagues this planet the most. We continue to populate even as our own ecosystems strain to continue to provide for us. Should people be outlawed?

    Just some thoughts off the top of my head. 🙂

    Best regards.

  38. Captain,

    Haha, thanks for stopping by.

    I think it’s a good equation. I know, for me at least, that I do find great happiness in getting money for nothing. What was that old music video – “money for nothing and the chicks for free?” 🙂

    Looks like you had a very solid January as well. Keep up the great work!

    Take care.

  39. Anonymous,

    Those are my money months too! I’m looking forward to those months this year. I’m going to need all the help I can get. 🙂

    Thanks for stopping by!

    Best wishes.

  40. Pipeline,

    You’re off to a great start and you have a huge portfolio. Reinvesting those dividends will help you greatly in your quest. I think 2014 is going to be a great year for many of us. 🙂

    Take care!

  41. This topic comes up a lot, so I’ll chime in, too. With very few exceptions, most any business could be viewed as having questionable “morals.” Heck, even some of the most well-known non-profit organizations have business models that don’t necessarily fall in line with their story or mission statement.

    Name a big blue chip company, and you will find moral issues, depending on what you consider to be a moral issue. You will find “harm,” of varying types and degrees.

    MCD/KO/PEP/YUM – Obesity
    XOM/CVX/BP – Pollution/Greenhouses Gasses
    PM/LO/MO – Cancer
    Too many to name – Outsourcing

    Not to get political, but I do think it’s important to let people make their own decisions, so long as they aren’t directly harming another individual. If they choose to drink Coke, fair enough. If they object to the product, they have no requirement to buy it. If they choose to fuel up their V8 SUV at a Chevron station, fair enough. If they want to avoid the greenhouse gasses, they can ride a bike. And on your topic, if they choose to smoke, fair enough. Just don’t do it around me or my family (and with the current restrictions in public places, this really isn’t an issue for me anymore).

    The same can be applied to stocks. If you have a genuine problem with a business, don’t buy their stock. For what it’s worth, I own most of the stocks I’ve listed above, including all three of the tobacco stocks you are considering. All three have been very good to my portfolio.

  42. Congrats Dividend Mantra,

    That’s a great way to start the new years! I definitely agree the monthly dividends are a great encouragement to obtaining more. Every time I add more dividend companies, I am motivated to continue as I tally up my future monthly dividends. Seeing the monthly dividends go up just encourages me reach the next hundred dollars for each month!

    looking at your list of dividend companies, we share quite a few similarities. I was wondering what are your thoughts regarding DLR for the future? Being a REIT, I thought they won’t be able to grow if interest rates starts moving up. In addition, with Amazon and Google cloud solutions, how do you think this will affect their earnings and ability to increase distributions? Just some midnight rambling but any input is much appreciated :)!

    Once again, great work on January!

  43. “Inaction + ever-greater cash = happiness” Hehe! That’s the best equation since E = m*c^2!

    Your dividend income is now consistently in the hundreds of dollars. That’s a tangible benefit that no one can deny.

  44. @DM … and the same reason I dont invest in defense companies. I dont want my money to be part of the system that kills people or ruins their health. Never done it, wont do it no matter how good of an opportunity those companies/industry presents.

    What you and Div U are saying are making excuses and finding a reason that it has nothing to do with whether you invest in those companies or not. Thats all is fair in just saying, but doesnt change the fact that it does. Those who dont find it morally correct to invest in such companies, should not.

  45. Spot on, DM. And the fact that heart disease/obesity is literally neck and neck with smoking for the leading cause of preventable deaths in the U.S., I’d hardly consider consumption of highly processed, sugar laden foods to be an “indirect” cause of harm. It’s a personal choice… just like smoking and just like investing.

  46. DM and I are not making excuses. We are simply stating our opinions on a topic that is regularly discussed.

    My overall point was that if moral issues are your method of screening investments, you could easily talk yourself out of every investment available. There are a lot more companies harming the world than just tobacco and defense. And realistically, if you are that heavily against them, you also need to research and avoid investing in any of their partners/sales channels/suppliers/etc.

    And I’ll say again. At the end of the day, it’s a personal choice, just like smoking and eating junk food.

  47. Great progress. You are truly an inspiration to others. I say you get up to $700 per month in stock dividends then switch to a few good diversified mutual funds. I think within 3-4 years you could call it quits at your job. You definitely need to have about 30k in cash for travel or a future house purchase as well IMO. It would be perfect if you could come up with some type of freelance work as well. I wouldn’t wait 8-10 more years to semi-retire. Life is too short and there are a ton of countries where you can live well off of 1k per month.

  48. Irwin,

    I’m not making excuses. I’m simply pointing out that tobacco companies and defense companies are far from the only examples of businesses that provide products and/or services that are either harmful for other people or the environment. In fact, you’d be hard pressed to find ANY business that does not somehow harm people and/or the environment.

    But that’s what makes it a market: you can choose not to buy, and I can choose to buy. It’s choice that makes life and this country so wonderful. Just like people have the choice to smoke if they want to. 🙂

    Best regards.

  49. young Income,

    Glad to hear you’re getting more and more encouraged as the monthly dividend tallies continue to rise. That’s the name of the game. Just like dividend income is exponential, I also believe the tangible benefit of encouragement this strategy provides along the way is also exponential. I’m even more motivated to keep going today than I was when I was only earning $30 or so in dividends. You’d think I would have been more hungry back then, but it’s not so.

    In regards to DLR I must confess that there is no way I can comprehend their entire business or anticipate major changes in technology. As such, I remain wary of tech in general and I also plan to keep DLR a rather small position in my portfolio. That being said, from what I understand of it Amazon is targeting a different customer. DLR primarily caters to large businesses who have major needs – especially for turnkey operations. Amazon is going to cater to smaller businesses that do not have such demands. Furthermore, I don’t think cloud demand is a zero-sum game where all of Amazon’s and Google’s gains are DLR’s losses. As more and more data is consumed and the need for cloud-based business increases I think the entire pool of business gets bigger. Will DLR’s market share be impacted? I’m not sure, but so far they’ve been okay and from what I know of it they’re going after different customers.

    I hope that helps!

    Thanks for the support, and I appreciate you stopping by.

    Cheers!

  50. Spoonman,

    Haha! Thanks. I don’t know about anyone else, but that formula definitely works for me. 🙂

    Yeah, from here on out it’s all upside. The snowball is rolling itself downhill whether I contribute or not. I’ve got a way to go before I catch up to you guys, but I’m looking forward to the journey!

    Stay in touch.

    Best wishes.

  51. Monty,

    Great points there. I’m working on the freelance stuff right now as I continue to branch out and write. This blog certainly makes some nice side income right now, but that’s all based on advertising dollars that could go away at any time. I have no control over it. So I’d like to cement some success in writing because I enjoy it and it’s somewhat within my control.

    I’m not sure if I’ll ever buy a house, but even if I were to I don’t think I’d need $30k set aside. If I were to buy a place it would likely be well under 100k – probably in the range of $60k or so. At that point, I’d only need around $15k for 20% down and some money for closing/furniture. But we’ll see. Travel is something that’s still definitely in the mix, and I’d need some cash set aside for that too. I’m excited for what the future holds. 🙂

    And I hear you in regards to not waiting 8-10 years. I don’t want to wait that long either. I’m being as aggressive as I possibly can, so I’m hoping I’ll get there even faster!

    Thanks for stopping by.

    Take care!

  52. Dan,

    Haha! Thanks so much. I guess I’m still stuck in 2013 since it was such a great year for me…I just don’t want to let go. 🙂

    I edited the post. Thanks so much for catching that. I feel like a dummy!

    Cheers!

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