Dividend Income June 2020

The following is my dividend history for my portfolio going back to January of 2008. I promise to eventually go back further, but in the meantime…

June of 2020 saw my dividend income top out at $2766.71 an increase of 10.42% from June 2019. This amounts to an increase of $261.09 YOY.  The goal for the year is to increase dividend income 10% and get to $33,000 in 2020 and reach $40,000  by the end of 2023.  The dividend income should double every roughly 7-9 years, providing ample passive dividend income to live off in a normal retirement age.

Dividends are a beautiful thing. I compare dividend stocks to being a landlord. Every month, I collect dividends (rent) and over time I am seeing the value of the stocks (think the property) rise. The beautiful thing of dividends, I don’t worry if the tenant will pay, or destroy the property. If I want to sell the property (stock), it can be executed in seconds to raise capital (actually I don’t even run into any transaction cost anymore). It’s also super easy to get the current value of the stocks, unlike in housing where comp sales can make a difference in value. When you have enough dividend income to live off, it also helps distract you from market fluctuations. Take current market scenario with the global economic shutdown, for example, it is shit. It doesn’t bother me. I stay put, invest in the market, and continued to collect my dividends, even reinvesting the dividends, and occasionally buying some stocks.  It comes back.  Dividend investing is also easier than landlording.  In the current climate, any overextended landlord who has a note on their property and a tenant without a job, should be freaked out about not receiving rent.  I don’t have that same worry with my stocks.

So without further adieu, my portfolios dividend history dating back to January of 2008. Please notice the tabs at the bottom of the excel spreadsheet (monthly, quarterly, annual).

And for now for some charts.




So, why do I even bother sharing this information every month. I want readers to notice a couple things and encourage anyone who is in the earlier stages of building up there financial assets. When you’re starting out it may feel like you aren’t making any progress towards your goals. You may only have a couple bucks in dividends for the month. Don’t give up and keep at it. Notice how the charts are showing a slow and steady progress with the amount of dividend income increasing, slowly but surely over time. In January of 2008, I had no dividend income. Fast forward a little over a decade later and I am getting passive dividend income off my portfolio of $2315.54 (for May 2020), resulting in crazy awesome growth in my dividend income. That wasn’t much time that passed to build up to this point.

The other thing I want you to notice. Look closely at those figures and charts. You see how it is continually growing over time. My lifetime dividend income since starting in 2008 is only $147,295.59. But look again at those charts. Since 2017, I have received a total of $94,872.19 in dividends. Those just over 3.5 years alone account for 64.40% of my dividend income over the last just over a decade. This wasn’t a fluke or luck, it was planned and can be replicated by you. My June 2020 dividends alone were more than I received in all of 2008. So while you may feel like you’re not seeing rapid growth of your passive income, give it time…

It’s like the snowball effect., you just have to start and get it rolling.

How I did it:

There’s no real super secret to growing your passive dividend income. It basically was a few things repeated over time. Really it involves investing on a regular basis. I slowly but surely accumulated positions in stocks, investing at least each month. From here, the companies did the work for me. Most of my positions are dividend growth stocks, meaning these companies slowly but surely increase their dividend each year. Instead of spending these dividends, I reinvested the dividends, this purchases additional fractional shares, and in turn increases my dividend income each quarter. This results in a crazy concept of double compounded growth. Patience is key.

How Has COVID-19 Affected My Dividends

It hasn’t really affected my dividend income.  So far for the year, 22 of my companies have announced dividend increases on the year.  I have only had 1 announced decrease so far (ERIC) prior to the panic and 1 dividend suspension since the panic (TAP).  Looking into the rest of the year, I still expect about 9 more companies to announce increases.  XOM recently announced their regular quarterly dividend and didn’t even give just a 1 cent token increase.  They risk dividend aristocrat status, so what could happen is they give the token increase in Q4 as a way to maintain the dividend growth status, but also preserve capital/not finance the dividend increase with debt.  I like to try to mitigate risk as much as possible using screening measure and looking at cash on hand, profits, profit margins, debt loads, payout ratios.  Wall street likes predictability and so do I.  Looking at my holdings, the companies are less tied to discretionary type of spending and are more related to essential spending.  Companies like CLX, KMB, JNJ, HRL, SJM are largely ignored most years because they lack excitement.  But all of these companies are in favor with wall street during times like these as consumers pile up and prepare for some unreasonable end of world scenario, or just want to avoid walking around with a dirty butt hole.  All other times, these companies are ignored, but a smart investor knows they are slow, steady, and predictable and that’s what gets you to the finish line.

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Readers Comments (16)

  1. How did you decide on all your various companies? I know there were some oddballs like WWE, but it seems like you mostly have held pretty common names. I don’t recall you ever sharing your specific portfolio. I know that you also mentioned having an ETF at one point, but didn’t specify which one. I believe you’ve utilized options as well.

    My TSP is just the S&P 500, and I’m not sure I like having so much in the likes of Amazon, Google and Facebook, but it’s still a relatively small portion of my portfolio, but will be growing bigger as time goes on.

    I’ve had most most of my retirement accounts in VDIGX since it re-opened, I like the the idea that it’s concentrated on 40-50 dividend growers, but who knows if the “time saved” from not having to analyze the stocks is really worth the fee.

    In my taxable account, I’ve mostly just used BRK-B to limit income, Last year, I targeted the Savers Credit but this year I decided it was better to do convert the rest of my IRA to Roth while in low brackets vs. grabbing the $200 savers credit, so it may not even make sense to have so much in BRKB going forward, though it has underperformed lately which makes me feel like it’s a terrible time to sell.

    • Oh, and here’s my own fun Amazon story.

      I was looking at an old tax return. 10 years ago, i bought one share for $189. A month later, I sold for $178. I couldn’t tell you why I had bought or sold the 1 share.

      If I did keep it, $189 would have turned into $3057 instead of $178 and the $11 tax deduction, far dwarfing the ROI on any holding that I have held.

      But Amazon valuation seems ridiculously insane, right?

      • Yeah, I bought AMZN back in 2000 or 2001 at $10, sold a few months later at 16 to pay for books and tuition. Whatever classes I took were not worth the lost opportunity. Hardly sell anymore

    • My sole ETF is SPY. I used to share my top 10 holding back until a year ago, search top 10 holdings. Stopped because it didn’t generate much traffic. Also searching dividend increases, I do write ups on companies dividend growth history, I own those companies. Most of my holdings are pretty basic household names I would say. I like looking at balance sheets, low debt, lots of cash, reasonable payout ratios, profitable and sustainable. Brk.b is basically a no fee mutual fund, just gotta hold it a while. I do trade options as well. Lately have just been selling calls against some consumer staples holding generating extra income in addition to collecting dividends. My IRA with the SEPP set up is largely being covered on withdrawals from the covered calls and reinvesting a lot of the dividends

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