May 2017 Monthly Dividend Income (looking back)

It has taken some dedication. All these dividends are a result of large contributions and stock purchases. I’m trying to catch up after not investing for most of my life. In May, I received about $65 in dividends. That’s a significant chunk that will be reinvested at no cost to me! Between more contributions, re-invested dividends, and dividend payment growth, I’m feeling good about where I’m headed.

May 2017 Dividend Income

September 2017 Monthly Purchases

I focused on my quest to balance my individual stock portfolio with a broad market index fund.

At the end of September, my taxable portfolio is roughly $44,000. $9,250 is in VTI and $34,750 is in individual stocks. I’d like to keep growing my VTI holding for the near future. This month was a good step in that directions.

I also received my first VTI dividend this month! That will help me stay motivated to keep adding to it.

7 shares of VTI @ $126.52/share ($885.68)
8 shares of VTI @ $128.48/share ($1,027.88)
1 Share of HRL @ $30.98/share ($30.98)
1 share of HRL @ 31.78/share ($31.78)
1 share of CSCO @ 32.59/share ($32.59)

September was a great month for my dividend income. A lot of it was reinvested into VTI through a DRIP. I took the rest and strengthened my HRL and CSCO holdings a bit. I’m looking forward to the day when these are equal to my other holdings in my portfolio. The great thing is that those positions will be almost fully-funded just by dividends.

Another encouraging sign is that 5% of my total September purchases were funded by reinvested dividends that I didn’t have to work for.

February 2017 Monthly Dividend Income (looking back)

Still coming along. I have yet to match my December total, but it’s better to compare quarter by quarter rather than month by month. Some good ones and bad ones in here. I’ll eventually clear out some of the higher-yield stocks and refocus on lower yield with higher dividend growth potential.

February 2017 Dividend Income

January 2017 Monthly Dividend Income (looking back)

It’s coming along. January 2017’s dividends were lower than December, but I like these dividend growers much more. Part of the reason for the lower payout is that these stocks have a lower dividend yield. The only two that stick out are RCS and STAG. They don’t have a place in my strategy and I will plan to sell them eventually.

January 2017 Dividend Income

December 2016 Monthly Dividend Income (looking back)

December was eye-opening. Almost $41 in my second month. These are all high-yield stocks and I’d later remove all but KO from my portfolio, but I’m starting to get excited.

December 2016 Dividend Income

Investments I had made back in October were starting to pay off in December. My portfolio was small, but starting off is a hard part and I’m glad to have that behind me. From here on, I can expect a steady stream of dividends depositing into my account, which I can reinvest and earn more dividends.

Playing 401(k) Catch-Up

Photo by Dafne Cholet

I started 2017 with no 401(k) contributions

Since focusing on retirement saving a year ago, I’ve aimed to maximize my tax-sheltered options. My company provides a 401(k) with no match. I can still benefit from it in the form of a huge tax deduction up front along with tax-free dividend growth within the account.

I had lots of room to improve my saving habits. My company discontinued my 401(k) match a few years ago around the same time I bought my house. I discontinued my 401(k) contributions for a period of time. I only decided to resume 401(k) contributions in April of 2017 (this year).

My income allows me to max out my 401(k). In April, I set my employee 401(k) contribution to $1,500 per month, which would come out to the IRS maximum of $18,000 per year.

At this point, I gave myself a huge pat on the back

Great job, Mr. Dividend Dozer. I was now contributing what I thought was the maximum I could. Four months went by and I felt great about my discipline in saving. And then in August, I realized I was not actually maxing out my 401(k). In fact, I would have been leaving over $4,000 of potential tax-deductible investments on the table.

Realizing another beginner mistake

After realizing I did not max out my Roth IRA for 2016, I am glad I realized my 401(k) mistake while I still had time to correct it. I only began contributions in April. Contributing $1,500/month amounts to $18,000 over twelve months, but I only had April-December to work with for 2017.

I bumped my monthly contribution to $2,466 for the last half of August through the end of the year. My 2017 401(k) will be maxed out. I’ll have to contribute less to my taxable accounts, but this is another step towards financial independence. When 2017 is over, I can scale back my 401(k) contributions to $1,500 per month. I look forward to that! It might be painful now, but I will be happy to maximize another one of my 2017 tax-sheltered accounts.

 

August 2017 Monthly Purchases (looking back)

After this post, I will be all caught up until September is over. It’s been fun looking back. I thought I might learn some lessons, but the realization that I didn’t max out my Roth IRA in 2016 is still making my stomach feel uneasy. It’s been a great experience going back through my purchases and reasonings.

My portfolio began with an approximate yield of over 4%. Today, it’s closer to 2.7%. I’m still very happy with the current return I get in the form of dividend payments, but I am more more enthusiastic about what my dividend payments will be in 5 years or 20 years. I think I’ve laid a good foundation and am making proactive steps towards someday having a nice retirement.

August seemed to be a quiet month. I had some house maintenance come up which required spending money on something other than investing. Very sad! However, not investing in home maintenance will cost me in the long run. I also am saving up for a few more big purchases in the future, and my investing slowed down a bit.

Here’s what I came out with in August 2017.

I am writing this looking back from September 2017.

1 share of CSCO (Cisco Systems, Inc.) @ $31.51/share ($31.51)

The dividends keep slowly piling up and I keep slowly buying CSCO/HRL/PFE when I accumulate around $32 of dividend payments. My CSCO/HRL/PFE holdings are starting to actually pay me significant dividends themselves. The power of compounding interest!

1 share of CSCO (Cisco Systems, Inc.) @ $31.74/share ($31.74)

Another happy customer buying CSCO/HRL/PFE. If anyone has any other suggestions for good dividend growth stocks around $30/share, please leave them in the comments. This has been a great strategy while avoiding trading fees with Robinhood.

1 share of HRL (Hormel Foods Corp) @ $33.45/share ($33.45)

This was a good month for dividend payments. I was again able to pick up another share in my HRL/CSCO/PFE collection.

1 share of ADM (Archer Daniels Midland Company) @ $41.93/share ($41.93)

Again! The dividends just keep coming. Another purchase of a low cost share in a good dividend growing company. Only this time, it was ADM instead of HRL/CSCO/PFE.

18 shares of SBUX (Starbucks Corporation) @ $52.97/share ($953.46)

This is a fun one. The average age of companies in my portfolio is probably around 100 years old. Starbucks is a popular recent addition to the dividend growers club. It fits my requirements – sustainable 1.83% yield and 49% payout ratio. It’s going on 6 years of dividend growth, and increases are typically around 25% each year. We will see if I am late to the party, but I am excited to be invested in a company that has terrific dividend growth potential, as well as share value potential too!

1 share of HRL (Hormel Foods Corp) @ $34.29/share ($34.29)

I’m seeing some significant income from dividends that is gradually increasing each month. The result is a growing holding in my low share cost trio of HRL/CSCO/PFE.

1 share of HRL (Hormel Foods Corp) @ $30.98/share ($30.98)

It really seems like every few days that enough dividends roll in to pick up another HRL/CSCO/PFE.

1 share of HRL (Hormel Foods Corp) @ $31.78/share ($31.78)

For a month low on new contributions, my dividend income is actually picking up some of the slack, and I picked up another low cost HRL/CSCO/PFE.