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 publish articles updating my 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, getting closer to covering one’s expenses.
Every time I sit down and go over these numbers I’m reminded how fortunate I am to be in this position. I remember flipping past late-night infomercials on “creating passive income” and “living out your dreams” back when I was in high school and college. Seemed like a concept from another planet at the time. And now here I am actually creating passive income and living out my dreams.
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 interests other than full-time work. What you’ll see below is a list of every dividend I collected over the prior month, which company paid the dividend, and the amount of the dividend. Without further ado:
- The Coca-Cola Co. (KO) – $46.20
- Baxter International Inc. (BAX) – $31.20
- Illinois Tool Works Inc. (ITW) – $16.98
- Philip Morris International Inc. (PM) – $115.00
- Altria Group Inc. (MO) – $41.60
- W.P. Carey Inc. (WPC) – $47.70
- Realty Income Corp. (O) – $13.30
- Medtronic PLC (MDT) – $14.06
- Armanino Foods of Distinction Inc. (AMNF) – $14.40
- General Electric Company (GE) – $39.10
- Walt Disney Co. (DIS) – $9.90
- Bank of Nova Scotia (BNS) – $21.08
Total dividends received during the month of July: $410.52.
I guess I didn’t need to call up some 1-800 number from an infomercial after all. I think those programs could be summed up by informing people that they simply need to work hard, live below their means, stick to an intelligent investing strategy that’s proven to work over long periods of time, remain patient, stay consistent, and always be persistent. However, that doesn’t sell.
But that’s why I’m so happy to share everything along the way – I’m able to provide a real-time look into the journey to financial independence. These are real numbers. Real victories. Real setbacks. And this is real life.
It is indeed possible to generate enough passive income to live your life without the need to work ever again. It’s not just some sexy concept to sell to people that don’t have a chance. It’s real. And I’m proving it every single month with these reports.
Really, really pleased with this past month. Disney recently surprised investors (me included) with a move to semi-annual dividends. They’ve been paying annual dividends for about 15 years now, so this was a nice change if only to smooth out the cash flow. So I unexpectedly received a nice dividend from DIS. They also announced a 14.8% dividend increase at the same time, which came about a little more than six months after the 33.7% dividend increase the company announced in December 2014. Dividend growth investing at its finest!
However, that good news was offset with the unfavorable change in dividend policy that Baxter announced. After the spin-off of Baxtala Inc. (BXLT), both companies announced their new respective dividends that, in aggregate, added up to significantly less than what the legacy Baxter was paying. Unfortunate, but I’m hoping that dividend growth will in time make up for that. We shall see. I’ll continue holding shares because I really like the combined business models and the Healthcare sector is an area of the economy that I’m angling for more overall exposure to, not less. If dividend growth doesn’t live up to expectations or doesn’t come at all, then I’d have to move on.
All in all, great things here. The dividends this month added up to 30.3% more than what the Freedom Fund generated in July 2014, which is really excellent year-over-year growth. As my dividend income rises, the large YOY changes in percentage terms will naturally fall even while the absolute growth in dollar terms increases.
I was able to cover 23.6% of my personal expenses this month via passive dividend income alone. What an incredible spot to be in. Covering about 1/4 of my expenses even on a month where the dividend income isn’t particularly high is so reassuring. It takes so much stress away when I know that approximately 25 cents of every dollar I spent this last month was paid for before I even attempted to generate income to cover those liabilities.
Meanwhile, I continue to remain aggressive in regards to rolling my snowball down the hill. I’m giving this journey everything I’ve got, day in and day out. The dividends get selectively reinvested fairly quickly, and I’m buying stock hand over fist in high-quality businesses that reward shareholders with regular and reliably growing dividends. Life is very, very good.
One of my goals this year is to receive $7,200 in dividend income. Sitting now at seven months in, I’ve received $3,815.84 in dividend income this calendar year. That’s 53% of my goal, which is a really solid result. Puts me behind where I want to be, but I’m pretty confident I’ll catch up toward the end of the year. Expressed differently, I’ve averaged just over $545 per month in dividends this year. That alone is already covering a good chunk of my expenses, moving me fairly far along the spectrum of freedom. Looks like I won’t be calling any 1-800 numbers from any late-night infomercials. And I know you don’t need those infomercials, either. We’re too busy making our dreams come true!
I’ll update my Dividend Income page to reflect July’s dividends.
Full Disclosure: Long all aforementioned stocks.
Was July’s dividend income great for you? On pace for your goals this year?
Thanks for reading.
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