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.
Although April is never one of my biggest dividend income months, it’s still spectacular to be in a position where I’m receiving totally passive income for decisions I made a long time ago. One investment in one high-quality company can provide you with rising income for the rest of your life. Repeat that decision over and over and over again, and all of the sudden you’re drowning in income. What a wonderful life!
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:
April 2014 Dividends Received
- Wal-Mart Stores, Inc. (WMT) – $18.24
- The Coca-Cola Company (KO) – $42.70
- Baxter International Inc. (BAX) – $22.05
- Illinois Tool Works Inc. (ITW) – $14.70
- Altria Group Inc. (MO) – $38.40
- Philip Morris International Inc. (PM) – $108.10
- Realty Income Corp. (O) – $12.77
- American Realty Cap. Prop. Inc. (ARCP) – $8.33
- Medtronic, Inc. (MDT) – $10.36
- General Electric Company (GE) – $15.40
- Sysco Corporation (SYY) – $8.41
- The Bank of Nova Scotia (BNS) – $12.32
Total dividends received during the month of April: $311.78
I’ll gladly take it! That covers more than half my rent and utilities. How cool is that?
Dividend growth investing is just a fantastic strategy, in my opinion. Rising dividend income is easy to track against one’s expenses, making it a visual feast to see financial independence literally becoming more realistic with every passing day. And in a bull market you get the rising portfolio value as well, making it psychologically easier to keep at it. In a bear market, however, you’re still coming out ahead because you’re able to reinvest rising dividend income, as well as fresh capital, into cheaper stocks which have a higher yield, and consequently more dividend income. As Charlie Sheen would say: Winning!
Dividend income for this April was 33.8% higher than what I received in April 2013. That’s solid, tangible progress that provides me a lot of options already. Although I’m nowhere near finished with my journey to financial independence, the fact that I’m receiving this kind of passive income means my life is pretty flexible. Since I invest my funds in a 100% taxable account, there is nothing that prevents me from accessing this income at any time in my life, which is wonderful to know. If I were to lose my job tomorrow, this is real-life income that means I’m able to meet my expenses much easier than if I were without it.
I was able to cover almost 15% of my expenses this past month via the dividends that rolled in. Not bad, but I hope to continue to improve on these numbers as my income rises and simultaneously my expenses drop. I’m still amortizing a major expense in the form of the used Toyota Corolla I purchased late last year, and that’s having a major effect on my budgets. But that will drop off at the beginning of next year, so I’m anxious to return to some pretty solid frugality in 2015.
Looking forward, May is probably going to be a low point for me. I usually see rather light dividend totals in May of every year. But I’m not the type of investor that needs to see the same amount coming in every month. Through careful budgeting, I’ll easily be able to save more of my dividends in up months, and less in down months once I’m living off of my dividend income. However, I do hope to smooth things out a little more over time.
One of my major goals this year is to receive $5,200 in dividend income. We’re now four months into the year, and with April behind us I’ve received $1,705.17. It looks like I’m solidly on pace to exceed my goal this year, so I’m truly excited about that! I’m now 32.8% of the way there, and I hope I’m able to continue pushing the pedal to the metal.
I’ll update my dividend income page to reflect April’s dividends.
Full Disclosure: Long all aforementioned securities.
How was your April? Another solid month of passive dividend income?
Thanks for reading.
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