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More Passive Income–Bank of Nova Scotia

I’ve been putting a bit of money to work when I’ve had the opportunity in recent months, as I’ve come to the realization that over time, with enough money, that money will start working harder than I can to make more money. Passive income is the best income because it truly allows me to earn money in pajamas. Making money while watching TV or sleeping is the purpose of this blog. My dividend income is not a massive river of income at this point, but I have eight small streams that are coming together to make a somewhat less small stream. My hope is to increase the water (dividends) flowing through each of the channels (companies) that I’ve carved out so that I’ll be able to replace a big chunk of my income when it comes time to retire.

This month, I decided to bring the third of my three companies in my TradeKing account (get $50 for signing up for TradeKing, funding an account, and making some trades) up to right around $300 in total capital invested in each. I made my first purchase of 3 shares of Bank of Nova Scotia stock back in early September. This company has already paid me a dividend, and I decided to increase the forward dividend income that I’ll get from BNS. I purchased another 3 shares at an average cost of $47.04 when adding in the $4.95 transaction charge from TradeKing. This latest purchase will add an approximate  $6.57 to my annual dividend income (the foreign exchange rate will cause this to fluctuate). This additional income brings my estimated dividend income for the next 12 months up to $80.11. While this is not a massive amount of income, it would buy me about 4 hours of freedom next year if I were to figure that my work pays me an average of $20 an hour after taxes are taken out.  Increasing my capacity for earning money while in my pajamas is something that I’m looking forward to achieving.

Disclaimer: I am not an investment professional. Please make sure that you consult an investment professional before investing in securities, as you can lose money on your trades. I may receive compensation when you sign up for the some of the programs promoted on this site. 

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Stock Purchases and More Dividend Income

I had a bit of capital that came in over the past week, and as I’ve noted before, passive income is the best income. It really allows me to earn money in pajamas–day after day, week after week, month after month. The people who work for the various companies that I hold work around the world, and their products are sold 24 hours a day. This permits me to increase my capital over time as the dividends pay out and slowly grow. I put $21 to work in each of my Loyal3 holdings. I do not have to pay out any trading commissions when purchasing stocks through Loyal3 my total purchase was $105. My capital bought me the following partial shares and additional dividend income:

Company                                    Shares Purchased                            Additional Dividends

McDonald’s (MCD)                            0.1906                                                  $0.68

Kellogg’s (K)                                       0.3153                                                   $0.63

Coca-Cola (KO)                                  0.5013                                                  $0.66

Apple (AAPL)                                      0.1863                                                  $0.39

Wal-Mart (WMT)                                0.3675                                                  $0.72

I’ve decided that these were all good companies when I started investing earlier this year, and I’m sticking with my decision even with the recent concerns over Wal-Mart. I’m planning to be in this for the long haul, so I’m not planning to sell unless a dividend is cut. My goal is to get about $500 in capital invested in each of my companies before adding another (although I might diversify more if I find another company that’s a great deal). When adding up the additional dividend income that I’ve added with this latest purchase, I come up with $3.08 in additional dividend income. Apple has a lower yield, but with the massive amounts of cash that the company produces and has on hand, I’m of the opinion that they should be able to grow this dividend extensively over time. Otherwise, I would have had a few more cents.

This additional $3.08 on an annualized basis brings my estimated yearly dividend earnings for the next 12 months to $73.53. Considering that I had an estimated $0 coming in just about four months ago makes me reasonably happy with this big increase. I’ve already set another record for monthly dividend income this month, and I hope to see it grow so that I’m earning more and more in pajamas every quarter (because the income is a bit uneven based upon when my companies pay). Have you made any investments lately? How much passive income have they provided?

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More Passive Dividend Income–RDS.B

Yesterday, I had the opportunity to go shopping again. I didn’t buy anything that is tangible, but something that can provide tangible benefits, hopefully for literally decades to come. I bought some more partial ownership in a company that’s provided stable or growing dividends since World War II.

Royal Dutch Shell PLC (RDS.B) is a company that I already owned a small stake in, but I was able to double my stake in the company with a purchase of 3 shares at a price of $54.49 per share with the $4.95 per trade fee that TradeKing charges. While Shell just posted a pretty big loss in the billions in the last quarter, much of this was related to writeoffs that are intended to position the company for future profitability. I personally do not believe that oil will remain at current levels forever and that the return of higher oil prices will lead to some pretty good profits for major oil companies like Shell.

I did not, however, buy the stock because of expected capital gains. I bought it for the $3.76 dividend that each share provides on an annualized basis. That means that each share that I own will pay me passive income of $0.94 each and every quarter. Shell has promised to keep the dividend in tact for the next year at least, and with its 70-year record of not cutting dividends, many analysts believe that the payout is safe in the short run.  I am among those who believe this.

I’ve noted frequently that passive income is the best income, and I truly believe this. A purchase that I make today could theoretically return more money than the initial purchase every year a within a few decades. That’s a powerful example of the time value of money. Therefore, I’m purchasing stocks for the dividends that they provide. This latest purchase of RDS.B is no different. The three shares that I was able to get should add $11.28 to my annual income, and I’ll have to do no additional work over the next year to benefit from this purchase.

My latest purchase brings my total expected annual dividend up to $69.86. This is nearly $6 per month, and if looking at the income as an attempt to buy time away from work, my dividends should allow me to take 3.5 hours off from work (at an estimated $20 per hour). This might not seem like much, but about three months ago, my expected dividend income was a big, fat goose egg–zero, zilch, nada. I’ll earn this money in my pajamas each night, in my swimming shorts over the summer, and in my business casual clothes during most of the year. The companies that I’ve invested in will continue to make money around the world at all hours of the day and night, and I think that’s pretty awesome. Over time, I believe that dividend income should be able to provide quite a bit of supplemental income in retirement (or even allow for a bit of an early retirement if I can accumulate enough of them.

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More Passive Dividend Income – WMT

I got a belated birthday present this week. It was $20, and I decided to put it to work in my Loyal3 account, which allows for stock purchases with as little as $10. I also had a little over $2 in the account from some passive dividend income that I’d made earlier. This meant that I had $22 to put to work this morning (Loyal3 only allows purchases in whole dollar amounts). WalMart has been hit pretty hard lately, and it’s going for a relatively low P/E ratio that’s less than 14. Its dividend yield is around 2.9 percent at this point, which is well above its historical average. Since I’d already started a position in WMT, I decided that it was a good place for my money.

Therefore, I decided to purchase $22 worth of WalMart stock. This small amount added 0.3332 shares at a cost of $66.02. This also adds a bit of income to my estimated dividend income. While $0.65 might not seem like much, the $0.65 here and $5 there of additional that dividend growth investing provides can really grow to a substantial amount over time. This admittedly small addition brings my estimated 12-month forward dividend total to $58.58, although I’m guessing that this should go up in relatively short order as WalMart and a few other companies that I own should be raising their dividend payments. I should also start to DRIP the stocks that are in my TradeKing account. Frontier Communications is the only company that DRIPs in the Loyal3 stable, and I don’t anticipate initiating a position in FTR at any time in the near future.

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More Passive Dividend Income – T

Today, I had the opportunity to put some more capital to work toward some more passive dividend income that I can earn while in pajamas. I had $150 in additional capital that went into my TradeKing account this morning, and I decided to put it to work. My only regret is that I had to put the money to work on a day that saw a big uptick in stock prices. Of course, prices could go up tomorrow too, and there’s no guarantee that they won’t be 5 percent higher by the end of the week or the month. Prices are volatile, so I decided to put the money to work today and lock in some dividends that should pay off early next month.

In September, I purchased 5 shares of telecommunications giant AT & T. I saw where the ex-dividend date was in two days. I was hoping to add to this position in the near term, so this made my decision a bit easier. Royal Dutch Shell PLC was the other stock on my radar today, and I might try to buy a bit more before their next ex-dividend date if I have some capital to put to work. I had enough to purchase an additional 5 shares of AT & T. My total cost for this transaction was $171.20 with the $4.95 TradeKing transaction fee added in. This purchase brings an additional $9.40 to my annual dividend income based upon the current dividend of $1.88 per share ($0.47 per quarter). I now own 10 shares, and I plan to DRIP the dividends into more shares of T at this point. If the price stays where it is, this should pay of in about 1/7 of another share in early November.

This is nearly $0.80 per month, and it brings my total dividend income to nearly $58 on an annualized basis–nearly $5 per month. This might not seem like much, but it’s a start. If I go based upon an estimate of earning $20 per hour (which is not what I make, but it’s near the average hourly wage for an average American with the favorable tax treatment that dividend payments for middle-class people receives). That means that I can take about 15 minutes off each month, or about 3 hours at the end of the year. Every $20 dollars of dividend income earns me another hour of freedom. And the best part of this income is that I have to do absolutely nothing more to earn it. This is passive income at its finest, and as I’ve noted before, passive income is the best income.

DISCLAIMER: I am not a professional investor. Please consult one before investing in securities. You can lose money on stocks. Past performance is no indicator of future results. 

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Recent Stock Purchases

Last week, I decided to use some money that I’d come into to buy some more stocks with my Loyal3 account.  I had a total of $75 to invest, along with my first $2.62 in dividend income.  I’ve decided to reinvest dividend income so that I can keep the dividend snowball adding additional dividend income, which is a great way to passively earn money in pajamas. As I’ve stated many times before earning money from home is a great thing. The more dividends I can amass over time, the more money I will make in pajamas.

Because you can only purchase whole dollar amounts from Loyal3, this meant that I had a total of $77 to invest. I have positions in five companies through Loyal3, so I decided to pretty much invest an equal amount in each. The exception to this was my position in Kellogg (K), which I just opened with a $25 investment. Therefore, I had $15 going to McDonald’s, Wal-Mart, Apple, and Coca-Cola. I decided to reinvest my dividend income into Kellogg to help this investment catch up in terms of my total capital outlay. My purchases added the following amounts to my positions:

Loyal3 91815 purchase

While this might not seem like I’ve added a great deal to any of these stocks (and that would be a correct assessment), it nonetheless is just another brick in the dividend wall that should help with my expenses as I age. My goal is to supplement any pensions, 401k accounts, and social security payments that I might get. My additional estimated annual dividend income from each of these purchases are:

WMT: $0.46

MCD: $0.52

K: $0.50

KO: $0.50

AAPL: $0.27

Therefore, these small purchases of additional fractional shares of five large cap, blue chip companies add a total of $2.25 to my annual dividend income. My total expected dividend income from my Loyal3 and TradeKing portfolios is now up to $48.53. While this might seem like a pitiful amount of money, it takes time and invested capital to get this income up. Were I not to put any more capital to work in the next year, I should see a bit of an increase from dividend increases. As of now, I’ll average just over $4 in dividend income each month. However, my goal is to add to this as funds become available so that I can earn more money in pajamas because passive income is the best income.