Passive Dividend Income, May 2017

Another month is in the books. May has come and gone. We are now past Memorial Day, which was traditionally the beginning of summer vacation, although many are still in school. The end of the month is a great time for reflecting on how the previous month unfolded. It’s also a good time to look into passive dividend income.

I started investing for dividend income nearly two years ago. I had been reading popular personal finance blogs like Mr. Money Mustache and popular PF books like Dave Ramsey’s The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness, which I highly recommend if you’ve not yet read it. (You can click the link above or the image below if you want to buy it and support me just a bit). Just about all of these financial gurus recommend spending less (sometimes much less) than you make and then investing the rest.

Then I came upon the old Dividend Mantra site after reading an interview on Mr. Money Mustache. This guy, Jason Fieber, was in the process of documenting the growth of his dividend growth portfolio with a goal to come up with enough passive income to live off of indefinitely, thus making paid work optional. I thought this was a great idea and bought my first dividend-paying stock in July 2015.

Now, I’m nearly two years into this journey. My first dividend was a whopping $0.64 from Apple. I’ve since sold that stock for a profit to pay off some debt, and I’ve now started emphasizing investment through an IRA rollover. My income has grown from that point, exponentially, in fact. However, I’m nowhere near what I’ll need to pay for my expenses. This is a long game.

Why Passive Dividend Income?

You might wonder why I focused on dividend income rather than total return or guessing which stock might take off like Apple or Google. I like the idea that a dividend is a return of some of the capital that I’ve invested. Companies cannot pay them out for the long run without actually having the cash flow and profits to sustain them.

Companies that have long dividend streaks have increased revenue and earnings per share over time. Some of them have done so through multiple recessions. These are the companies that I tend to like the most. I have some relatively high yielders and some that have low yields. But I like the cash coming in each month.

Passive Dividend Income Builds Up Slowly But Surely

Last month, I was in Europe on a (sort of) work trip. I got two separate emails during the trip that indicated dividends had posted to my account. I can literally be anywhere in the world, and I’ll have income flowing in because the companies that I own make money on a daily basis. Passive dividend income flows toward me no matter what I might be doing at a given moment. My money is working for me, and the more money that I put to work, the harder it will work.

Passive Dividend Income For May 2017

During the month of May, I earned (actually received, as it’s unearned income) dividends from three of the companies that I hold in my traditional IRA,. I also received a dividend from one fund in a 401k plan. Here is the income that passively came my way in May 2017:

AT & T (T):                                                                                      $7.35
Omega Healthcare Investors (OHI)                                $31.50
Realty Income Corp. (O)                                                          $2.11

Total for IRA Account:                                                           $40.96

JP Morgan Equity Income R5 (OIERX)                            $3.14

Total Passive Dividend Income for May:                 $44.10

I must say that I’m pretty happy with this amount, but it should grow in August, as I’ve added to both AT & T and Realty Income since the last ex-dividend date. This means that the monthly payout should be even larger.

Year-Over-Year Comparison

Last May, I earned only $9.18 for the entire month. This means that my $44.10 is a 380 percent increase in just over a year. I can’t complain much about that.

My dividend income in terms of the number of hours of freedom that it will buy me is something I really like to track. I could have bought just more than 2 hours and 12 minutes of freedom in May, based upon my belief that $20/hour would take care of my current standard of living pretty well.

I’ve now earned $149.41 for 2017 to this point. That’s just a hair below $30 a month. My forward dividend income for the next 12 months should come in right around $438.45. This is just short of 22 hours of freedom. I like my job and would probably continue to work should I actually get enough passive income to pay for my lifestyle. However, the ability to scale back would be pretty amazing.

I’ve basically gone from $0 in monthly dividend income to $36.53 on average (based on the $438.45 noted above). This took less than two years. With the reinvestment of dividends and new capital added, this snowball should continue rolling and picking up steam into the future.

How was your dividend income in May? Is it going in the right direction? I’ll be updating my dividend income page to reflect this month’s income.

If you’d like to keep up with my progress, be sure to sign up for updates in the email signup box near the top of the page. You can also follow me on Twitter.

Disclaimer: I am not a professional financial advisor. I intend this information for informational and educational purposes only. Perform due diligence before investing in any equities. See my disclosures page for more information. I’m long T, O, OHI, and OIERX.

 

13 thoughts on “Passive Dividend Income, May 2017

    • cp913 says:

      I like the monthly payout that O provides. Also, I’ve been able to buy on two dips so that my yield is higher than it might have been. Thanks for visiting.

    • cp913 says:

      That’s the plan. I enjoy seeing them going in an upward direction over time. I like the snowball analogy.

    • cp913 says:

      I figure that this growth rate will slow down over time, but it’s nice while it lasts. Thanks for visiting.

  1. Man oh man. What a kick ass growth rate EMIP. Congratulations on starting from zero and building one heck of a dividend growth portfolio. I’m so excited to see where your portfolio continues to go from here. Keep on inspiring us and keep on pushing.

    Bert

    • cp913 says:

      Bert,

      I’d love to have a couple of raises like that in the next couple of years. That would put me up to a nice income level. Thanks for visiting.

  2. This is an excellent post. I think our stories are similar. I got my start from coming across Dividend Mantra, and, while I don’t follow Dave Ramsey 100%, I do listen to him on occasion and read his books.

    I started tracking my dividends this year (about a couple of months ago actually) and I made a whopping $2.85 in May. I should be contributing a significant amount to my portfolio within the next couple of months and so I fully expect that number will increase. But, for now, I will continue to draw inspiration from posts like yours.

    Good job on getting $44 in dividend income. I actually have Realty Income and AT&T in my portfolio and I’m seriously looking to add OHI. I just love the yield on OHI.

    Looking forward to more reports.

    • cp913 says:

      My first dividend payment was a whopping $0.64, so I’m pretty happy to be up to more than $40 in a month. I’d like to see that up exponentially over time, but I realize it’s going to be a while. Good luck on your journey.

Leave a Reply

Your email address will not be published. Required fields are marked *