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.
I continue to remind myself every single day just how fortunate I am to be in this position. There was a version of me that existed just a few short years ago that earned exactly $0 every month in passive income. If the Jason of early 2010 didn’t wake up and trot off to the dealership at 7 in the morning, he didn’t get paid. When he was sleeping, he was making nothing. When he was sick and stayed home, there was no benefactor dropping money into his bank account. These days, however, I’m getting paid when I sleep, when I’m sick, and, frankly, when I’m doing anything I want. I did absolutely nothing for all the dividend checks that were deposited into my brokerage account this month. Sure, I made great decisions in the past by investing in these wonderful businesses in the first place. But in August? I didn’t lift a finger to collect this income. How wonderful is that?
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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:
- Verizon Communications (VZ) – $21.45
- Toronto-Dominion Bank (TD) – $14.08
- Deere & Company (DE) – $18.00
- AT&T Inc. (T) – $47.00
- Vodafone Group PLC (VOD) – $94.88
- Raytheon Company (RTN) – $16.75
- General Dynamics Corporation (GD) – $13.80
- Clorox Co. (CLX) – $26.95
- Air Products & Chemicals, Inc. (APD) – $16.20
- Apple Inc. (AAPL) – $5.20
- ONEOK, Inc. (OKE) – $45.38
- Kinder Morgan Inc. (KMI) – $88.20
- Realty Income Corp. (O) – $13.30
- Procter & Gamble Co. (PG) – $33.81
- Omega Healthcare Investors Inc. (OHI) – $41.25
- Caterpillar Inc. (CAT) – $11.55
- Orchids Paper Products Company (TIS) – $21.00
Total dividends received during the month of August: $528.80.
Man, it just feels great to add that up and put that kind of result out there. This is now the 10th time I’ve eclipsed $500 in dividend income in a single month. The progress is real.
Like I wrote above, there was a time – and it wasn’t that long ago – that I couldn’t even earn one penny that I didn’t work for. Nothing. Nada. Well, I might have found a penny on the street here and there. But let’s just say that doesn’t count. Meanwhile, I managed to collect more than 50,000 pennies this past month for just waking up and being me. I didn’t even have to bend down and pick a penny up off the ground. And I’m not sure I’d much want to bend down 50,000 times anyway!
The predictable and practical nature of dividends is so wonderful in general, but especially so when Mr. Market gets a little moody. Deere’s stock, for instance, is down something like 15% over the last month. Was the dividend down 15%? Nope. I still collected every red cent I anticipated. So do I care what Deere’s stock price is doing? Do you think Warren Buffett cares about the day-to-day price of the 17,310,090 shares of DE that Berkshire Hathaway Inc. (BRK.B) owns?
Doubtful when he’s collecting more than $10.4 million (an amount that will very likely increase all by itself fairly soon via a dividend increase) in cold, hard cash (that he can deploy as he desires) every quarter via Deere’s dividend, regardless of what Deere’s stock price is doing. And it’s that juxtaposition – the lack of volatility in dividend payments against very volatile stock prices – that further illustrates the value in this strategy.
Overall, no big surprises with the dividends here. The aforementioned Deere hasn’t increased its dividend yet this year, but I’m not overly concerned about that. They’re still working through reduced demand in the cycle. And Deere shareholders will still collect more income in 2015 than they did in 2014, regardless.
The midstream energy companies keep piping those big dividends into my account, which is comforting with everything that’s going in in the Energy sector.
Orchids Paper Products has changed somewhat radically since I first invested in the company, but I remain pretty excited about their prospects as they grow their production and distribution capabilities on both sides of the country. This has limited the company’s ability to grow its dividend simultaneously, but I’m pleased with the direction they’re moving in as a business.
Otherwise, everything is pretty much humming along as expected.
The dividend income for this month added up to 20.6% more than the dividend income my Freedom Fund generated in August 2014. Another big step in the right direction here.
I was able to cover 22.3% of my personal expenses this month via passive dividend income alone. Slightly disappointing there, but it was lower than expected due to the fact that I had to have some rather expensive dental work performed in August. Four fillings will do that. Didn’t feel great spending money on fillings rather than stocks. But while I love buying stocks, I love having teeth even more. However, I feel pretty good about being able to cover almost 1/4 of my expenses via passive income even when I had to shell out more than $800 for my teeth. Not too shabby.
Looking forward, I expect another busy month for stock purchases in August. It’s all in the name of pushing that snowball further and faster, turning cash into cash flow, and reaching financial independence as soon as possible. And that means, of course, that next August will be even more impressive and I’ll cover even more of my expenses with passive dividend income.
One of my goals this year is to receive $7,200 in dividend income. That was an aggressive goal at the outset of the year, but I’m holding myself accountable for it. We’ve now completed eight months of the year, and I can report that I’ve received $4,344.64 in dividend income thus far. That’s 60.3% of the way toward my goal, which is a great number to be sitting at now that we’ve completed a similar percentage of the year. I have a strong finish left in me with two big months (September and December) still left in the tank. Can’t wait to see how it turns out. Stick around and let’s find out together. Let’s continue fighting for freedom!
I’ll update my Dividend Income page to reflect August’s dividends.
Full Disclosure: Long all stocks mentioned in the article except BRK.B.
What about you? Have a great month of dividend income? Still on pace for your 2015 goal?
Thanks for reading.