We know what time it is. This is one of the best months to be a dividend investor, as we wrap up a quarter-end. The market finished off an impressive note, closing up 13% for the year, thus far. The weather is finally warming up, as I believe we reached 60 degrees one day or two in the month. This was a fantastic month of investing and earning dividends, which truly shows the power of time and consistency pushes you forward.
I received a total of $594.13 of dividend income in April. Not too shabby right? This is, like a broken record, the most ever earned in April. Additionally, my wife earned $44 this month and I am still debating on how to incorporate that into the analysis; I don't mind this problem, right? Therefore, combined, we earned almost $640 for the month!
Further, the 401(k), Health Savings Account (HSA) and all dividends are automatically invested/reinvested and help take the emotion out of timing & 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, 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 April!
As you can see, the taxable income is on the left and the retirement accounts are under the title to the right. 14 companies paid me in the taxable account and 4 in the retirement vehicles. Philip Morris (NYSE:PM) and big oil Total (NYSE:TOT) fueled most of the dividend income this month, no doubt. Canadian Imperial (NYSE:CM) took the crown, at $110 in dividends for the month. I love those Canadian institutions!
Tupperware (NYSE:TUP) has not been performing well lately and I am considering, which I rarely/if ever do, selling them. They are underperforming for quite some time and recently cut their dividend. They were barely a decimal point of my portfolio, but not sure if they even belong anywhere near my dividend stocks.
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). This shows the portion of my dividend income is coming from retirement accounts that I cannot touch (pre Roth Conversion Ladder) and those that I can.
Here, it shows that I received a total of $77.88 (up from $48.25 last year) or 13.1% of my income from retirement accounts and the other 86.9% was from my individual taxable account portfolio. This ratio increased from last year due to Iron Mountain (NYSE:IRM), a new investment in my HSA and dividend increases/reinvestment. 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
First, a growth rate of 40% is a great metric and one I will try to continue to 2020! Philip Morris' dividend was almost $10 larger from dividend increases and reinvestment. Next, Canadian Imperial grew due to new capital infusions, dividend increases and reinvestment. I am loving this chart.
Further, a few new names are on the list, with Occidental (NYSE:OXY) and Armanino Foods (OTCPK:AMNF). Loving the cash flow that's for sure. Lastly, there are two dividend aristocrats in the taxable account with Leggett & Platt (NYSE:LEG) and Illinois Tool Works (NYSE:ITW). Can't wait to see the April dividend month grow!
Bring on the champagne baby! 6 massive dividend increases above, adding over $61 to my forward dividend income. The big banger, of course, is Kinder Morgan (NYSE:KMI). They have stuck to their dividend growth strategy, ever since they bitterly cut their dividend a few years back. Secondly, Bed, Bath & Beyond (NASDAQ:BBBY) came in with an over 6% increase, which is always nice to see, as their stock price has struggled.
Almost last, but not least, we had 3 dividend aristocrats increase their dividend. W.W. Grainger (NYSE:GWW), Johnson & Johnson (NYSE:JNJ) and Procter & Gamble (NYSE:PG) increased their dividend at a steady clip. Finally, International Business Machines (NYSE:IBM) increased their dividend 3%, after an average assumption of 3% was derived from a 47 person twitter poll! I may have to do that more often.
$61.60 added would require an investment of $1,760 at 3.50% yield, in order to produce that result.
Dividend Income Conclusion & 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 $1,040 per month. Therefore, my current dividend income would cover 57% of my average $1,040 monthly expense. This isn't including my wife's income she earned, which would only help in the equation!
If I keep the same growth rate up, could I hit over $800 going forward? Seems like a steep challenge. I'll strive for that figure, no doubt, and if I don't reach that, I'll be close at least! Further, 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.
Another month in the books. Dividend reinvesting, dividend increases and the power of time is occurring. I can taste it, one month closer baby! Financial Freedom, Financial Independence, insert your freedom phrase here, awaits! Please share your thoughts, questions and feedback below! Excited to read how everyone did this month, as well. Thank you again, good luck and happy investing!
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.