This is what dividend investing is all about! Investing in dividend stocks allows you to earn dividend income, the best passive income stream! Bias, you better believe it.
Time to dive into Lanny's October 2021 dividend income results! Were records set? Almost to financial freedom? One day and one month at a time!
Dividend Income is the fruit from the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio.
How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally's investment platform (one of our Financial Freedom Products) - commission free.
I also automatically invest and max out, pre-tax, my 401(k) through work and my Health Savings Account. This allows me to save a ton of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend. This takes the emotion out of timing the market.
Growing your dividend income takes time and consistency. Investing as often, and early, as you can allows compound interest (aka dividends) to work its magic. I have gone from making $2.70 in a single month in dividend income to well over $4,000+ in a single month. A new dividend income record was set in March of 2021. Was it broken this month?! The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?
*Not pictured is my wife's dividend income above*
I want to show you that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, you can too.
Now, on to the numbers… In October, we (my wife and I) received a total of $966.97 of dividend income. We were so close to $1,000 in dividend income, what an illustrious mark for passive income that would have been. You better believe we will hit this mark the next go around.
The list below holds many dividend aristocrats but also many dividend growth stocks. 2021 has shown that dividend stocks are resilient, as dividend growth has been very strong this year. Now that the pandemic is mostly behind companies, businesses are returning to crushing earnings expectations & increasing their dividend payouts.
I do hope we get through this pandemic and the delta-variant dies down, with hospitalizations and deaths plummeting. That'll send positive vibes throughout the economy and, in turn, should help businesses continue to be profitable. Supply chain needs to come back to full force, too. Need to make sure the dividend cash flow remains safe!
Here is the breakdown of dividend income for the month of October, between taxable and retirement (far right column, under "Retirement") accounts. In addition, "W" means my wife's account:
$33.03 from $1,000, come on - I can do better! It's okay, I'll break this next quarter and for sure will be over next year. There are approximately 5 dividend aristocrats up there, can't complain about it!
We had a few big hitters with Philip Morris (PM) and Canadian Imperial (CM). I was just chatting with Get Rich Brothers and I cannot wait for the Canadian Banks to increase their dividend, once they have regulatory approval to safely do so.
I secretly love my position with Armanino Foods of Distinction (OTCPK:AMNF), the dividend reinvestment is fun when the share price is below $4. Lastly, Cisco (CSCO) has been very consistent this year. In fact, they are up over 30% this year. Therefore - dividends + appreciation? I'll take it.
I also split out my retirement accounts in the far right column and the taxable account dividends are in the left two columns. The retirement accounts are composed of H.S.A. investments, ROTH and Traditional IRAs, as well as our work 401(k) accounts. In total, the retirement accounts brought in a total dividend income amount of $193.70 or 20% of the dividend income total. This still left over $770 in the taxable account! If there was a comma in there, I'd be financially free. My goal is to have the taxable account reach that each and every month.
Such a solid dividend growth from the prior year. $127.85 higher than prior year or a 15% dividend growth rate. What were the large impacts year-over-year?
Well, in the retirement-based account, Realty Income (O) has been steady with large growth from prior year, all via reinvestment and dividend increases.
Through dividend reinvestment, Canadian Imperial is just massive, almost $20 more this go around. In addition, Philip Morris is almost $15 higher. Truly this appears to be quite a bit from dividend growth and reinvestment. Nothing much else to say/nothing else really sticks out.
I had 3 increases in August, 5 dividend increases in September, and I kept the consistency with 5 dividend increases in October. Which company increased their dividend that exceeded my expectations?
Visa (V) surprisingly blew me out of the water, as dividend growth was slow in 2020, primarily due to the heart of the global pandemic. It tends to make slightly more sense that their increase was solid this year, due to transactions being far higher in 2021 vs. 2020. In addition, Visa is going hard into the Crypto card platforms, think BlockFi and Coinbase (COIN).
The biggest surprise is a tie between WestRock (WRK), as they continue to bring back their dividend from when they cut their dividend during the pandemic. Next, despite negative headlines with their arthritis drug, AbbVie (ABBV) surprised me. They've been able to keep a strong dividend growth rate for so long, and an 8.5% increase is so nice. Love dividend investing!
In total, dividend increases created $41.56 in additional passive dividend income. I would need to invest $1,187 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn't have to come up with the capital to create that form of income!
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 life on your own terms. My plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!
Excited for the future, no doubt. 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 provided the dividend growth.
As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing everyone!
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
This article was written by