I'll say it. I am ready for winter to be over. However, I'll have to say something else. Collecting dividends never gets old! This is what is keeping the warmth during January going, as we know how hard it is to step foot outside. Cannot wait for the sun to shine a little brighter as we reflect on our dividend income from the first month of 2019! Did we all start the year off with a bang? Let's see how I did and check out my January 2019 dividend income.
I received a total of $777.63 of dividend income in January. Setting another dividend income record for the month of January - and typing that out never gets old. Additionally, my wife earned $37.85 this month, and I am still debating on how to incorporate that into the analysis, but I don't mind this problem, right? Further, the 401(k), Health Savings Account (HSA) and all dividends are automatically invested/reinvested and helps take the emotion out of timing and making a decision. Also, to find out why I max out my 401(k) and HSA - please refer to the 3rd part of my tax series (though I have the breaks on the 401(k), as I recently posted due to the 6-month waiting period, a few days away baby (first contribution on the 8th)!), as that describes the magnitude of benefits to increase the amount you can invest due to reduction in taxes. Here is the breakdown of dividend income for the month of December!
Interesting month, to say the least. A few new companies here, such as Iron Mountain (IRM) coming in with a nice dividend in the retirement account - love having high yielders there and not having to pay tax on that. Further, Bed Bath & Beyond (BBBY) came in with a solid dividend with a decent reinvestment. In addition, Illinois Tool Works (ITW), Leggett & Platt (LEG) and Occidental Petroleum (OXY) are newer positions and fun seeing the first few dividends coming in from them. Then, of course, there is the big whopper in Philip Morris (PM), and it came in swinging with the triple banger. Similarly, there was solid reinvestment on the stock.
I have split out between the individual stock amounts and the retirement accounts, as the " - R" indicates a retirement account dividend (or the furthest column to the right). I separate these two, as I like to know what portion of my dividend income is coming from those retirement accounts that I cannot touch until 59.5 (barring any other usage rule I could use). Here, it shows that I received a total of $71.27 (up from $37.19 last year) or 9.2% of my income from retirement accounts and the other 90.8% was from my individual taxable account portfolio. This ratio increased from last year due to Iron Mountain, primarily. Lastly, this shows from retirement accounts that I'm all ready for my set it and forget it mentality to keep that income going. To see my portfolio - one can go to our portfolio summary page.
Dividend Income Year-over-Year Comparison
Now, I will compare the previous year's linked month to this month. Not only did I cross $500 from last January, but I frick'n eclipsed $700, wow! In regards to the actual growth rate, my dividend income was up 86%! My goal is to be well over $900, if I can, in dividend income next year. Quite a few names here, such as
Armanino Foods (OTCPK:AMNF), Bed Bath & Beyond, Occidental and Leggett & Platt. So many new players that are paying income now, and I almost left out Iron Mountain. In addition, all the new players increased their dividend in 2018, so I have dividend growth backing the new players as well. The list continues to grow, which is awesome, and outside of damn Tupperware (TUP) cutting its dividend, everyone else is pushing stronger ahead with their payouts. The remaining increase in the taxable account was due to the other two legs of the dividend stool, which are reinvestment and increases.
A month wouldn't be a month without high-quality companies increasing their dividend! See the small chart below for the details on the dividend increase announced this month from my portfolio.
What a great start to the year! Three strong dividend increase announcements. Further, this does not include BHP Billiton (BBL)'s massive dividend announcement of $2.04, versus the $1.26 paid last time. I think we can calculate a growth rate on that. Did anyone also see that from BBL? Feel free to correct me here. Realty Income (O) continued its first month of the quarterly dividend increase at 2%. This was slightly lower than anticipated, and I would believe the company may only reach an approximate ~3% growth rate this year (as it is usually around ~0.25% at the other quarters). Lastly, the big surprise - Aflact (AFL) - and big shoutout to DivvyDad for first bringing this up. The company went off of its normal schedule and gave us a nice 3.85% increase! Further, in order to add $33.03 to my dividend income, I would have to invest $943.71 at 3.50%! I needed this, especially after a nice little TUP dividend cut. This is the smallest company I have, so the dip in forward dividend income was negligible - good thing for owning a 50+ basket of stocks!
Dividend Income Conclusion and Summary
The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live a balanced life. My plan is to show that dividend income can be a revenue engine - a revenue engine that can allow you to take back control of your life. Dividend investing, once you learn the right way, becomes easier and starts to make quite a bit of sense!
There is a nice adjustment to my most recent monthly expenditures article. My property taxes increased by 14%. Therefore, my new average is around $1,040 per month on the mortgage/property tax/insurance. Therefore, my current dividend income would cover almost 3x my average $1,040 monthly expense, which includes the mortgage, property taxes, insurance and utilities. If only this was all taxable and happening each month, I would be financially free, no doubt! What a month, everyone, what a month. In similar fashion - all of the investing from last year and moves this year, shows that my aim to
save 60% of my income, and making every dollar count, has allowed promising results already this year.
We are warming up now that the vortex has passed us! Further, we are one month out of twelve down... how wild is that? We are doing this, it's real and it's live. I can see the power of dividend investing, can't you? Investing, reinvestment and dividend increases work their magic, oh so much. I cannot be any more thankful for this journal, community and being able to share this with everyone. I truly hope that you can see the power of this, in hopes of brightening your financial journey. Thank you again, good luck and happy investing!
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.