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 June 2022 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 and 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, aka Dividend Reinvestment Plan or DRIP for short. This takes the emotion out of timing the market and builds onto my passive income stream!
Growing your dividend income takes time and consistency. Investing as often, and as 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 $10,000+ in a single month. A new dividend income record was set in December 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 June, we (my wife and I) received a dividend income total of $5,355.38. Speechless. Hard work, saving at an alarmingly high rate and putting the money to work into income producing assets is what we’ve been doing. We let the stock market do all the work – growing dividends and reinvesting dividends along the way.
The amount and number of stocks listed below show you what it means to buy and hold for the long term. Most of the positions I have owned for years, letting dividend growth and reinvestment do its thing. This is what dividend investing for financial freedom is all about. The passive income stream is growing at a rapid pace.
2022 is off to a volatile start, the stock market has roared up and also roared down. Interest rates are rising, the Fed starting their quantitative tightening, and oil prices are still all over the place. Inflation is eating away at the purchasing power of consumers, and fears of a recession loom. In addition, the Fed has raised rates by 150 basis points, and we are anticipating another 50 basis point increase in July. Time will tell. In addition, the crypto winter is upon us, which is causing more volatility within the stock market, as well.
Here is the breakdown of dividend income for the month of June, between taxable and retirement (far right column, under “Retirement”) accounts. In addition, “W” means my wife’s account:
So, what happened in dividend income this month? LyondellBasell (LYB) not only increased and paid their normal dividend, but they also sent a $5.20 special dividend for each share held. That led to an almost $700 dividend that all got reinvested back into the stock at over a 5% dividend yield.
Lastly, as you know – we’ve been loving our Vanguard HIGH Dividend Yield ETF (VYM). The ETF grew their dividend double digits in June, and the June dividend was almost $550 when combined. Freedom baby, getting so close.
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 $2,093.25 or 39% of the dividend income total. This still left over $3,000+ in the taxable account! That’s a freedom number, for sure. If only the passive income stream by way of dividends was this sweet each month!
Our dividend income is up approximately $1,678 or 45% from my dividend income in June 2021. That’s some serious dividend growth if you ask me. What caused the huge increase?
VYM is tearing it up for us, due to another full year of investing weekly into the ETF + dividend growth from the exchange traded fund. In addition, the dividend increases from last year and earlier this year, are really showing up here, such as from Target. I have already mentioned the massive special dividend from LYB.
Vanguard funds overall did a really good job and there is nothing to complain about there.
Overall, a solid dividend month. Would be WILD to cross $7,500 this time next year. Keep on investing.
June really surprised me with the size of dividend increases. We had another 3 dividend increases for June 2022 and dividend growth has been very steady and consistent in 2022.
As you can see in the chart below, the dividend increases are insane. Caterpillar (CAT) with an unexpected dividend increase of 8%. Then Target came in with a 20% dividend increase, despite the significant inventory concerns. Lastly, Kroger (KR) said – I see you Target, but we are going even higher, at 23.81%!
The best one for the month has to go to Target, primarily based on the headwinds they are going through. What a dividend aristocrat!
In total, dividend increases created $139.21 in additional passive dividend income. I would need to invest $3,977 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 about the future, no doubt. Further, all 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!
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