November 2017 Dividend Income (Trimming Weeds, Watering Growers)

I received $73.10 in taxable November dividend income. My November portfolio restructure continued my trend toward higher growth, lower payout ratio holdings. My overall yield has therefore dropped down to 2.22%, but heavy contributions and large dividend raises have kept my total dividend payments about the same as this time last quarter.

TXN (Texas Instruments) is one of my larger holdings. Its 24% dividend increase was a home run for me this month! My yield on cost is now already up from 2.5% to 3.1% and hopefully Texas Instruments has a lot more room to grow.

I received my final dividends from HCP and OHI in November. They are both popular dividend-paying REITs, but were casualties of my portfolio restructure. Together, they paid me $21.78 in November dividends. My dividends at this time next quarter may be down again, but I will continue to contribute and build a portfolio more focused on dividend growth like the 24% bump that TXN just gave me.

November Dividend Increases

VZ increased their dividend 2.16% earning me $0.85 more per year.

TXN increased their dividend 24.00% earning me $6.24 more per year.

OHI increased their dividend 1.56% earning me $0.68 more per year. I recently sold my OHI but collected this last dividend.

$7.77 in November raises is the equivalent of investing $259 for a 3% yield that I don’t have to invest!

November Taxable Dividend Income

 

Head on over to my portfolio page if you’d like to see what companies pay me in other months!

November 2017 – Monthly Purchases (Fall Cleaning)

I did yard work almost every day this month. It felt great to get outside and do some projects I’ve been wanting to do for months. I did a little fall cleaning in my portfolio as well!

My dividend growth strategy has been in motion for a while now, but I had some stocks left over from my high-yield, tax-inefficient early days. I sold a lot of holdings this month and re-invested the funds into some of my favorite dividend growth stocks. This was a crazy month for me, and my portfolio looks a lot stronger now.

Sold Some Portfolio Clutter

I hope to have set myself up for years of dividend growth with this month’s moves, but I also cleaned up some of my “portfolio clutter.”

Sold 14 shares of CALM @ $43.51/share ($609.14)

Cal-Maine Foods was one of the first purchases I ever made a year ago. I mistakenly believed they had a high dividend yield, when really they had just cut it completely. I held onto it this long anyway because I got lucky with my entry price and believe people will always want to eat eggs! The one-year mark passed and I sold to minimize capital gains.

Sold 20 shares of CTL @ $15.38/share ($307.60)

Centurylink has been painful to own over the last year. I still love my Centurylink internet service at my house, but I guess that doesn’t translate to a good stock price. I purchased this early on based on high yield and “buying something I know and use.” The lesson here is that I really don’t know the nuances of a business like this! Also, I tried to catch a falling knife.

Sold 17 shares of OHI @ $28.01/share ($476.17)

I’m selling my REITs as part of my fall cleaning. I was initially attracted by their high yield. I’m not as fond of REIT dividends being taxed at ordinary income rates in my taxable account. I’ve also seen very little capital appreciation in my REITs compared with the rest of my portfolio. From now on, I will not include REITs in my portfolio.

Sold 29 shares of HCP @ $27.09/share ($785.61)

The juicy dividends offset some of the price loss in the past year, but I’m moving on from REITs. I like the buy and hold strategy, but would rather buy and hold other stocks.

Sold 14 shares of RCS @ $8.63/share ($120.82)

I originally picked this high-yielder out of a hat because I had a few dollars left over. I managed to come out ahead, but it was time to remove it from my portfolio and

Bought Some Portfolio Backbone

All the fall cleaning left me with substantial funds to play with. I generally bolstered holdings I already own, but I did open new holdings in Apple and Accenture.

Bought 7 shares of VTI @ $132.40/share ($926.83)

Another month of sticking to my goal of balancing individual stocks purchases with a broad market ETF (Vanguard Total Stock Market). I can’t wait for the last month in each quarter when VTI pays out its dividend.

Bought 3 shares of AAPL @ $172.66/share ($517.98)

Apple was maybe the most glaring omission in my portfolio. I recently took a trip to China and was amazed to see the brand strength there. Apple has grown their dividend recently and has a lot of room left to go if they choose. I may be late to the Apple party, but I feel good getting in now.

Bought 4 shares of AAPL @ $169.02/share ($676.08)

After some of my stock sales posted in my account, I immediately increased my Apple holding to among my highest.

Bought 1 share of DIS @ $103.45/share ($103.45)

Despite the uncertainty around ESPN, I still love Disney’s brand and think it is generally getting stronger. It is one of my favorite holdings already, and it was time to add a little to it.

Bought 1 share of CSCO @ $33.98/share ($33.98)

Cisco is becoming my go-to stock when I just have a few bucks left over or accumulate enough dividends. I’ve slowly picked up 9 shares in 8 purchases and am growing a nice holding.

Bought 5 shares of SBUX @ $56.59/share ($282.95)

I have a few holdings that I feel confident adding to any time, and Starbucks is one of those. I love bolstering these high dividend growth stocks!

Bought 4 shares of AAPL @ $169.02/share ($676.08)

Apple was maybe the most glaring omission in my portfolio. I recently took a trip to China and was amazed to see the brand strength there. Apple has grown their dividend recently and has a lot of room left to go if they choose. I may be late to the Apple party, but I feel good getting in now.

Bought 1 share of MMM @ $227.59/share ($227.59)

3M has been one of my best performers. I love their product diversity and believe they will be around a long time. It was easy to add another share of 3M.

Bought 2 shares of TRV @ $267.04/share ($267.04)

Travelers Companies exceeds so many of my metrics and it gives me good exposure to the insurance industry. I am always tempted to open a new holding in Aflac, but decided to grow my Travelers holding a bit more. I am sure I won’t regret it. 13 years of growth, 2%+ dividend yield, and about 10% dividend growth per year. Only a 32% payout ratio. This is a no-brainer.

Bought 1 share of V @ $110.79/share ($110.79)

Visa is another no-brainer. It has gone up nicely in value since I first bought it, but it seems to always go up in value. Glad to strengthen my Visa holding!

Bought 5 shares of Low @ $79.04/share ($395.20)

Another one of the best dividend growers out there – 55 years running and 20%+ dividend increases recently. I don’t spend much in retail, but a lot of it is at hardware stores.

Bought 1 share of HRL @ $33.20/share ($33.20)

Along with Cisco, Hormel Foods is one of my go-to stocks when I have enough dividends accumulate or a few dollars left over after some purchases. 51 years of dividend hikes, great growth lately, and a 42% payout ratio. These all sound good to me. I’ve now picked up 10 shares in 9 instances and they’re turning into a significant holding for me.

Bought 5 shares of ACN @ $146.50/share ($732.50)

Accenture has been on my watch list for the longest time and I’m glad to now see it in my portfolio. 13 years of dividend growth, about 9% dividend increase per year, and 49% payout ratio. Accenture helps businesses do what they do better and works with 75% of the Fortune Global 500.

October 2017 – Monthly Purchases

I made two large purchases this month. The first was Vanguard’s Total Stock Market ETF (VTI). The second was Northrop Grumman (NOC). This continues my objective to offset individual stock picks with a total market index fund.

8 shares of VTI @ $131.10/share ($1,048.76)
1 Share of CSCO @ $33.82/share ($33.82)
3 shares of NOC @ 295.11/share ($885.33)
2 shares of MGA @ 54.40/share ($108.80)
1 Share of CSCO @ $33.34/share ($33.34)

October was a slower month for my dividend income. Nevertheless, I made two Cisco (CSCO) purchases using dividend income for the month. My CSCO holding is getting closer to the size of some of my other holdings, and it was funded all with dividends.

VTI is a no-brainer choice. I like to increase my VTI holding each month if possible.

Northrop Grumman (NOC) is my newest holding. 1.34% dividend yield, 30% payout ratio, and dividend increases for 13 years in a row. Its dividend growth rate has hovered around 12% for the last five years consistently. This fits all my requirements. I already own Boeing, Raytheon, and Lockheed Martin, but adding NOC gives me a little more diversification in the aerospace/defense sectors.

Magna International (MGA). Last but not least, I had some money left over and decided to bolster an existing position. I chose MGA.

October 2017 Dividend Income – One Year of Investing

I received $66.61 in taxable October dividend income. Compared to $130 a month ago, it’s a bit of a letdown, but I never buy dividend growth stocks based on what month they pay. The first month of the quarter just happens to be my slowest.

I’m also slightly below my July total, mostly due to Disney paying twice per year instead of quarterly.

I’m excited to see CSCO paying me $2.03 this month. My CSCO holding is made up entirely of purchases funded by prior dividends. Robinhood doesn’t offer a dividend reinvestment plan, so I buy Cisco shares when my dividends accumulate enough to afford one share. Not exactly a traditional dividend reinvestment plan, but it works for me and I come out commission-free.

This month also marks my taxable account’s one-year anniversary. I finally start seeing some year-over-year comparison data starting with November’s update. Dividend growth investing is the investment strategy I’ve actively stuck with the longest, and I have no intention of slowing down. I can’t wait to keep reinvesting and growing my income stream every month.

 

Dividend Increases

IFF increased their dividend 7.81% earning me $1.51 more per year.

MO increased their dividend 8.20% earning me $4.54 more per year.

RSG increased their dividend 7.81% earning me $1.94 more per year. PFG has been increasing their dividend quarterly.

That is the equivalent of investing $266 for a 3% yield that I don’t have to invest!

October Taxable Dividend Income

October Retirement Dividend Income

I also received $14.10 in non-taxable dividends which were reinvested into my retirement accounts.

Not much to look at this month. My retirement account dividends are mostly paid in the third month of each quarter or at the end of the year. My Vanguard Bond and International Bond index funds do pay monthly, so I have a little income/reinvestment from them.

I recently detailed my 401(k) situation and why I still want to contribute despite no employer match.

Head on over to my portfolio page if you’d like to see all my holdings. I hope everyone else had a great October too!

Seven Stages of Grief: Google Finance Portfolios Feature Discontinued

“Google Finance is under renovation.¬†As a part of this process, the Portfolios feature won’t be available after mid-November 2017. To keep a copy, download your portfolio.”

Stage 1: Shock and Denial

This cannot be. I track all my Robinhood stocks through the Google Finance portfolio feature. Google would not remove one of the most useful features when it comes to monitoring finance, right? I continued on as if everything was normal for a few weeks. Maybe it would just be renovated and temporarily unavailable.

Stage 2: Pain and Guilt

I check Google Finance every day. The beige rectangle of doom was not going away. I slowly realized the portfolio section was going to be discontinued – not just renovated. It was difficult to imagine visualizing my Robinhood account without Google Finance. I love sorting my holdings to see what I am most invested in and where I might invest more.

Those days were coming to an abrupt end.

Stage 3: Anger and Bargaining

Ugh! Who made this decision? Aren’t they going to lose all their users? I wanted to lash out. Maybe I could just wait and see what the new Google Finance had to offer? Aside from “renovation,” there’s no description of what the new Google Finance will offer or look like. I didn’t want to wait around to find out.

Stage 4: Depression, Reflection, and Loneliness

It’s fully sunken in. My favorite way of tracking my stocks will be gone, and soon. I remember my first foray into stocks back in 2008. I could look up any stock and quickly see its performance. The layout was so clean and easy to navigate for a beginner like me. Even today in 2017, the layout is very unchanged. It’s simple, clean, and while it doesn’t offer as many functions as other sites, it is my favorite to use. I will miss Google Finance.

Stage 5: The Upward Turn

Maybe this will push me to explore other options. I love my tracking spreadsheet I’ve come up with, but what was I missing besides basic price movements? I got a bit excited and checked out some other options.

Stage 6: Reconstruction and Working Through

I’m at step 6 as I write this. I checked out a few alternatives and decided to transfer my Google Finance portfolio over to Morningstar. I’ll detail this process below, but so far I am enjoying what they have to offer (for free!) and I believe I duplicated what I had at Google Finance.

Stage 7: Acceptance and Hope

It’s going to be a sad day for many people when Google Finance Portfolios shuts down. Maybe it will be back in the future. Whatever Google Finance is doing, I imagine it is going to be a massive upgrade and improvement. It seems a bit secretive, but I can’t wait to see what Google Finance unveils.

Meanwhile, Morningstar (and other services) offer some great tools. As a dividend growth investor, I’m already in love with some of the Morningstar features, such as 1-, 3-, and 5-year dividend growth rates displayed next to all my stocks! At the same time, I’m excited for Google – one of the most innovative companies in history – to revamp their finance page.

Transferring From Google Finance to Morningstar

There are a number of alternatives to Google Finance. Yahoo Finance, Sharesite, SigFig, and Wikinvest are a few.

Yahoo Finance has so many ads. I couldn’t imagine trying to load it on my phone (or on my computer).

Sharesight seems to charge to track more than 10 stocks in a portfolio. I tried importing my Googe Finance portfolio to Sharesight and got this message:

Can not draw information for British American Tobacco (BTI)

This might have a solution, but I decided to move on from Sharesight and look at other options.

Morningstar looked promising. I already use Morningstar for information on ETFs and mutual funds, but I’ve never made an account. I registered, chose the basic (free) option, and began to import my .csv Google Finance portfolio.

I ran into some vague error message when importing my portfolio into Morningstar. What worked was rearranging the columns into “Symbol, Date, Action, Shares, Price.” I then wrote a formula to combine these values into a comma-separate format.

Check out the formula if you’d like to duplicate this process. Then copy/paste all cells in the F column into a notepad file, and save as .csv. Morningstar will ask you to identify the columns. Voila!

If you do a “My View,” you can pick from a long list of information to see in column format.

Morningstar does everything I used to do with Google Finance. I just want a simple column layout of all my holdings, and the ability to enter new purchases when I make them. I’m loving the 1-, 3-, and 5-year columns. I’m already seeing stocks that I wouldn’t mind adding to in the future.

What about the mobile format?

Morningstar looks exactly the same on mobile as it does on a computer. It moves smoothly, sorts the columns, zooms in/out, and does everything I need.

Morningstar also has a mobile app. The app doesn’t bring in your “My View” portfolio columns, but it does let you customize it with all the same variables. No real loss, just redundant work to set it up. I will probably stick to the web version.

So far I’m enjoying Morningstar, and that must mean I’m working towards acceptance and hope, fully through the grieving process for Google Finance portfolios.

September 2017 Dividend Income

I received $130.98 in taxable September dividend income. This was my biggest month yet thanks to my recent VTI purchases. After having broken my first $100 month in June, I’m ecstatic that I’m already well above that in September. I’m not that keen on CTL, but I have some of my favorite companies paying me this month (BA, HD, JNJ, MGA, MSFT, V). No wonder the third month of every quarter is shaping up to be my best one.

In June, received my final dividends by Ford ($6.15), ORI ($0.95), and BP ($8.40). I have now sold those and redirected the funds into companies like Starbucks and Visa. Much lower yield, but better potential for dividend growth. I expected my income to drop after selling those high yielders, but thanks to some more contributions, my income actually rose from $108.30 to $130.98!

Dividend Increases

WFC increased their dividend 2.63% earning me $0.74 more per year.

NDSN increased their dividend 11.11% earning me $0.80 more per year.

PFG increased their dividend 2.17% earning me $0.37 more per year. PFG has been increasing their dividend quarterly.

That is the equivalent of investing $64 for a 3% yield that I don’t have to invest!

September Taxable Dividend Income

September Retirement Dividend Income

I also received $659.37 in non-taxable dividends which were reinvested into my retirement accounts.

Once I buckled down on my investment tracking, my retirement accounts really stood out. My taxable income is nice, but my retirement accounts are fully automated and are the real powerhouses of my portfolio. They are mostly out of sight, out of mind, but including them in my dividend income summary keeps me motivated.

I recently detailed my 401(k) situation and why I still want to contribute despite no employer match.

Head on over to my portfolio page if you’d like to see all my holdings. I hope everyone else had a great September too!

Should You Make 401(k) Contributions if There is no Match?

We all know to pay off debt and build an emergency fund. Usually, the next step is to maximize any available 401(k) match.

I turned off all 401(k) contributions after losing my company match

Life always come up and it’s easy to neglect the 401(k). I work in the energy industry which has been in a downturn for over two years. My employer quickly halted the company match on the 401(k). This was disappointing, but I knew there would be tough times ahead.

At the same time, I had also recently bought a house in a high cost-of-living area. I used a piggy back 80-10-10 loan and planned to quickly pay it off in less than five years.

Along with other unexpected expenses that come along with buying a house, my budget was rocked. I was still paying into my 401(k) with 0% company match. I decided to discontinue all 401(k) contributions and redirect them towards my house.

Now two years later, I have payed off my piggyback 80-10-10 loan. I refinanced my mortgage and lowered my interest payment substantially. I built up my emergency fund and things seemed pretty great. I wasn’t paying into my 401(k) at all, but with no company match, I didn’t think I should.

I was leaving money on the table

Meanwhile, I caught on to dividend growth investing and began saving/contributing in a regular, taxable stock trading account. My account grew and grew, but I had a nagging voice in my head that I wasn’t doing something right.

It was time to revisit my 401(k). Fewer investment options and no company match were not appealing to me. However, my whole dividend growth investment strategy was geared toward building an income stream of dividends. I realized the available 401(k) funds paid dividends too.

The tax advantages would be very small though, right? My taxable dividend income would only be taxed at a low 15%. If my overall portfolio dividend yield is 3.0%, taxes biting 15% out of that would be almost negligible.

There are good reasons to pay taxes and not contribute to a 401(k). If someone was saving up for a house down payment or expected large expenses, a taxable account allows withdrawal any time without penalties.

I already had a house, and I already had an emergency fund built up. I had no excuses. I had to do the responsible thing for my own self and begin my 401(k) contributions again.

In the past, I contributed to a 401(k) and never looked at that money again. This time around, I check my account after each pay period. Tracking my progress keeps me inspired. I am contributing less now to my taxable stock account, but I am fortunate to be maxing out my 401(k) limit. There’s still no company 401(k) match, and I don’t expect one any time soon. The good news is that my account (and my future income stream) is growing slightly faster thanks to the portion that is growing tax-free in my 401(k).

Looking at the numbers

Let’s look at an example.

Let’s say I contribute $1,000 to my 401(k), and my friend contributes $1,000 to his regular taxable stock account. Let’s also say we both get 3% in annual dividend yield and we both reinvest our dividends. Only he has to pay 15% tax on his dividends received, so he reinvests a little less than I can.

After the first year, my account grew $30 and his grew $25. $5 is hardly any difference he says, and he also likes having immediate access to that money if he were to need it.

The years go on and no one makes any additional investments. The dividends are reinvested and both accounts grow. My taxable friend has grown his initial $1,000 into a nice $1,614 after 20 years. He wants to know how I am doing.

I reached $1,605 after 17 years. I can get almost a 3-year head start on him in retirement!

Or, I can keep my money in for 20 years like he is doing. After year 20, my original investment will pay $53/year in dividends, and his will pay $41/year in dividends.

That fraction of a fraction of a percent really adds up when it comes to multi-year growth and reinvestment. Everyone’s situation is different, but I’m glad I am catching up on 401(k) investments this year and hope to max it out every year.

I haven’t even mentioned one of the biggest 401(k) benefits. I was able to deduct that original $1,000 investment from my taxable income that year. Even without considering the initial tax write-off, or a company match, the 401(k) outperforms regular taxable investing after a number of a years.

August 2017 Monthly Dividend Income (looking back)

August generated $70 more for me to add more stocks. It keeps on rolling. I’m shifting my portfolio a bit to focus on lower-yield stocks with higher dividend growth rates. I’m expecting my monthly income to fall a bit, but I’ve grown more disciplined in my long-term dividend growth strategy.

It’s great to think that I have an extra $70 to spend on stocks that I didn’t have at this time last year.

August 2017 Dividend Income

July 2017 Monthly Dividend Income (looking back)

After breaking $100 last month, I’m well below that in July. A large reason is that I’m buying stocks with lower (and hopefully safer) dividend yields. After holding these for a few years, I’m expecting the yields will grow as my dividend growth companies continue to hike their dividend payments.

July 2017 Dividend Income

June 2017 Monthly Dividend Income (looking back) – $100 milestone

I broke the $100 milestone. $108 in June! Wow. It’s obvious March, June, September, and December will be my best months! More heavy contributions and stock purchases are fueling my portfolio right now, but I’m getting increasing help from investments I made months back. $108 will be reinvested into more stocks.

June 2017 Dividend Income