Another month has come and gone, and I made some money in pajamas during June 2016. While I do quite a bit of work from home (or on the road) most months, my goal is to get a higher percentage of that income to come from passive sources. The biggest source of passive income that I’ve decided to work on is income via dividends. These payments from quality companies generally come in on a quarterly basis, and they provide me with additional capital to put toward additional stock in high-quality companies that I already own or that I have on my wants list.
My money can work harder than I can over time. I have to put in effort to earn money, but I have a limited number of hours in the day that I can actually work. My money can work day after day after day, 24 hours a day, 265 days a year. While I have a relatively small trickle coming in these days, I am planning to see this tiny stream grow into a rushing river of dollars in the future. It might take several years to get there, but if I’m able to continue on this path that I’ve started, I fully anticipate that my goals can be reached. The companies that I own paid me on several occasions last month, and without further ado, here is the passive dividend income that I didn’t have to work to earn in the month of June:
Unilever PLC (UL) $0.08
Wal-Mart (WMT) $3.02
Kellogg (K) $0.72
McDonald’s (MCD) $3.40
Royal Dutch Shell PLC (RDS.B) $11.63
TOTAL DIVIDEND INCOME FOR JUNE 2016 $18.82
This dividend income might not seem like a massive amount, but it is a record for me. My previous high for a month was back in March, when I received $13.62 from my dividend-paying stocks. This was a 38% increase over just the past three months. This income brings up my total annual dividend earnings up to $61.61. I am now up to averaging a cool $10 per month in dividend income, and I’ve almost passed the $20 mark for a single month. I measure my progress by the number of hours of work that I could theoretically take off were I to replace work with passive income. My estimated annual dividend income at this point is up to $147.57, which is right around 7.5 hours were I to figure that I need to replace $20 per hour (after taxes and retirement contributions that would no longer come out). In June, I could have almost taken off an hour of work at this rate. My hope is that this will only continue to grow over time.
Disclaimer: I am not a licensed financial professional. Be sure to do due diligence before investing in securities. This article is not a recommendation to buy a specific company. It is only for educational/entertainment purposes.
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.
I’ve been putting capital to work over the past couple of months in an attempt to really earn money in pajamas. Stock pay dividends on a regular basis no matter what I do. I could watch TV, sleep, and eat all day long, every day, and the ownership stakes that I’ve paid for in my companies would still pay out. Last month, I gave my first dividend earnings report. I earned a whopping $0.64 from a small dividend from Apple (AAPL). This month, a couple of great companies paid me for owning a small sliver of their operations. My dividend earnings for September were:
WalMart (WMT): $0.69
McDonald’s (MCD): $1.29
These companies paid me $1.98, which adds up to just more than $0.03 per day. That might not seem like much, but with any luck that will add up to a dollar per day over the relatively near future. That $1 will then multiply to $2, and then $10 each day. All that’s needed is time and more capital to put to work. The best thing about this money is that it comes in without my doing any additional work than the work that I put in to get the initial capital to invest. It’s like a snowball that’s adding a little bit each quarter going forward.
With my earnings from August added in, I’ve now reached $2.62 in dividends this year. I’ve already earned my first dividend for October, as Coca-Cola (KO) has already paid out their third quarter dividend. I should also get a dividend from the Bank of Nova Scotia at the end of the month. October should be another record-breaking month, even though I’m not likely to pay for much more than the dollar menu at McDonald’s with my earnings. From this point forward, my income should start really picking up, though. Passive income is the best income.