Pennies

Splitting Funds For Paying Debt And Making Investments

I’ve frequently argued that passive income is the best income. I’ve attempted to build it up extensively over the past couple of years. One of the best methods for building up passive income, in my opinion, is through dividend-paying stocks. However, when building up passive income, paying debt aggressively can take a back seat.

I had some debts that built up from graduate school, and I’ve made quite a bit of progress over the past four years or so. Most of these debts arose from basic living expenses. I really hate this debt, even though many people argue that it’s “good” debt. There is no doubt that these debts allowed me to increase my earnings capability, and my income has gone up.

However, I still don’t like these debts. I’ve consolidated the debts into 0% interest credit cards, finally getting down to one. Until the last month, I’ve been paying slightly more than the minimum each month after having the debt drop to about $8,600. This is not a huge debt when compared to the debt that other people have, but it’s still an annoyance.

Paying debt needs to be a priority!
Erasing debt is a goal.

Investments Can Pay More, But…

One of the reasons I was paying so little each month was the fact that investments generally pay more than 0% in dividends. Therefore, I thought that paying debt down aggressively would keep me from increasing my passive income. I was right. However, watching this debt go down by a whopping $100 a month did not seem like much progress to me.

Additionally, there’s a 3% to 5% balance transfer charge every time that I make a transfer (about once a year). This is effectively a once yearly interest payment that would add between $30 and $50 per $1,000 to the balance each and every year.

At this rate, I figured that I’d have the debt paid off in somewhere between 8 and 10 years, and the balance transfer fee would actually add back 2 or 3 months of payments that I’d already made in the earlier years of the process. I really hate having this debt, even though I’m really happy with the progress I’ve made thus far.

Paying Debt Is A Priority

I believe that cash flow is even better than cash, and debt takes part of my cash flow every month without giving me anything in return. Because there is some opportunity cost in paying debt, I’ve decided to take a hybrid approach. Whereas I was putting more money toward investments each month, now I’m splitting up some of my side hustle income into both the investing bucket and the paying debt bucket.

I figure that if I can put an additional $50, $100, or $200 a month into paying off my debt, I’ll pay it off in less than one-half the time that it would take by paying a minimal amount. Then, my cash flow will increase by the amount that I was putting toward paying it off. This is exciting.

If you’d like more advice on how to accelerate debt payments, I’d refer you to Dave Ramsey’s Total Money Makeover. You can purchase this great resource by clicking the image of the book below.

So Is Investing

I still want to build up my investments, however. Therefore, I’m splitting up the side hustle income that does not go toward bills between paying debt and investing for the future. This allows me to build passive income while also cutting the interest that I’ll pay. Additionally, I’ll improve my cash flow more quickly.

I can invest my side hustle income and get dividend income that will probably yield between 2 and 5 percent. I can also pay down my debt and get a “dividend” of between 3 and 5 percent. The dividend that I get from paying down the debt is the interest that I will not have to pay.

While this strategy is not going to maximize my success in either the area of passive income or debt repayment, it will hopefully allow me to make some solid progress in both areas. I’m happy to live with this compromise.

In the first month of this strategy, I was able to double up the credit card payment that I’d made for the past few months. My debt dropped from $8,600 to $8,400 in the first month as a result.  I made a few smaller payments rather than one big payment to see the progress come more quickly. I hope to keep this up in the months to come so that I can aggressively cut down the debt.

The closer I get to paying the debt completely off, I’ll be more likely to become more aggressive in paying it off as opposed to saving. I realize that paying debt is a good investment for the future. However, I still want to see some passive income and take advantage of the power of compounding.

What strategies have you used for paying down debt?

Other Posts That Might Help

Earn Money From Home To Pay Off Debt
Ways To Make Money Online Without Spending A Penny

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Pennies

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.

 

Pennies

Setting Goals To Achieve Success

Those who fail to plan, plan to fail. This is a common refrain that I’ve heard many times in my life. Another example is the statement that those who aim for nothing will hit it every time. I don’t know about you, but I definitely don’t want to fail to hit anything. This is why I’ve decided to start setting goals. The beginning of a new year is a good time to set up new goals.

Consider How To Get There

The most important step in setting goals is knowing where you want to go in life. Perhaps you want to become an engineer. This would require going to school for an engineering degree. The same goes for becoming a teacher, a lawyer, or a doctor. If you’d rather become an entrepreneur, schooling might not be quite so necessary. There are many successful entrepreneurs who haven’t completed a degree, among them are such billionaires and Bill Gates and Mark Zuckerberg. However, these innovators had big ideas and the technical know-how to achieve their goals.

Set Up Checkpoints To Measure Success

It’s a good idea to break up major goals into smaller chunks. This is where short-term, medium-term, and long-term goals come into play. In the example of getting an engineering degree, the long-term goal is getting the degree and getting licensed. A good short-term goal might be passing Calculus 1. After getting through the short-term goals, the medium-term goals will become the new short-term goals. Evaluating goals is a constant necessity.

Here are some goals that I’ve been interested in.

Setting Goals for Passive Income Can Lead to Financial Success

I recently read the book Your Money or Your Life by Vicki Robin. Questioning some of the purchases that we frequently make can help us cut expenses that require life energy to pay for. When we make more money than we spend, what’s left over is capital that we can use toward an emergency fund or toward building passive income. I’ve decided after reading up on blogs like Dividend Growth Investor that trying to build up a portfolio of dividend growth stocks like Omega Healthcare Investors and Coca-Cola can provide a growing stream of passive income through growth in the annual dividend payments and through the deployment of additional capital. My long-term goal is building up enough passive income to pay for living expenses. My short-term goal might be to get to $1,000 in forward dividend income by the end of the year.

Setting Goals Can Lead to Passive Income
B&O Stock Certificate, public domain via Wikimedia Commons

Online Earning Could Be A Smart Goal

While it’s possible to build up passive income with many jobs, many people will have a problem having enough excess capital to grow much passive income on their main salary. This is where earning a bit of money on the side can help. This excess money can then go toward savings if it’s not required for paying ordinary living expenses. It’s also possible to earn quite a nice sum from making money online. There are many lists online that offer ways to make money, some without spending a penny. I’ve used these methods to earn thousands over the past few years.

Paying Off Debt

Debt can really be a drag. The more you have, the closer you might be to financial ruin. It’s hard to grow a strong stream of passive income and a solid net worth with massive amounts of debt. Setting goals for paying down debt over time can lead to a great achievement that can definitely aid in your overall financial success.

Achieving Travel Goals

I love to travel. Therefore, some of my goals have to do with visiting some cool places around the US and the world. I had a goal of taking my family to Europe on the cheap, and I was able to do so. However, before I could, I had to figure out a way to pay for most of the trip’s possible expenses with frequent  flyer miles and hotel loyalty points. I achieved this goal with some well-timed credit card signup bonuses like the ones offered on these five credit cards that you could get in 2017.  I’m already strategizing two trips ahead with the credit cards I’m using.

The process of setting and achieving goals can be a great process that can help you gain the success that you’re looking for.  Setting up mileposts along the way can help you gauge how you’re doing in the process. If you don’t set any goals, one thing is certain. You won’t accomplish them.

Have you set any goals this year? Let us know in the comments.

Also, if you’d like to keep up with new posts and ideas for maximizing your resources in life (including time), be sure to sign up for email updates in the box at the top of the page and via our Twitter account @moneyinpajamas.

Pennies

November 2016 Passive Dividend Income

Another month is in the books. November 2016 has come and gone. While I’m not terribly happy that the wind is kicking up from the north and bringing cold weather, I am happy that some great companies continue to provide me with money from dividends that I can deploy to buy more income. Over time, I hope to build a nice stash of dividend-paying stocks that could take care of a nice portion of my expenses each and every month.

One of the greatest things about dividends is the fact that they come in whether I work or not. I had a few days off for Thanksgiving, but the companies that I own continued to do their thing, earning revenue that will hopefully be turned into profits, that will in turn come my way in the form of additional dividends. I have made a few sales to pay off some debt over the past couple of months, so I did not get as many dividends as I would have expected in November.  Additionally, Starbucks, which usually pays out in the second month of the quarter, is going to be paying off in early December. I’ll still get paid, just in a different month than usual. In spite of these facts, I busted through the $20 number in a month for the very first time since I started this journey last year. Here are the two payments I received in November 2016:

Taxable accounts:

AT & T (T)                                                                    $7.01

IRA

Omega Healthcare Investors (OHI)        $18.30

TOTAL for November:                                   $25.31

As you can see from the listing above, I not only smashed through the $20 mark, I received a Jackson and a Lincoln along with some change (that’s a $20 and a $5). My $25.31 set a new record for my dividend growth investing history. It now brings my total dividend income for the year up to $141.48, which is well above the $15.08 that I had earned at this time last year. Additionally, I only earned $5.41 in November 2015, so I earned nearly five times the dividend income that I earned in the same month just one short year ago. That’s a pretty impressive increase, from my standpoint, as I would have to earn about $125 next year if I were able to duplicate this jump for 2017. I don’t think I’ll quite get to this point, but it would definitely be nice to achieve.

My estimated dividend income for the next 12 months is now at $252.49. This is more than $20 a month on average, which would allow me to take off slightly more than an hour a month with my estimation that I’d need to replace $20 an hour if I were to live solely off of dividend income.

How did your dividend income shape up for the month of November? Did you have a year-over-year increase? Let me know in the comments.  I have updated my monthly dividend page to reflect these payments.  Also, if you’d like to follow my progress on a monthly basis, be sure to sign up to get updates.

Disclaimers: Long OHI; I am not a financial professional. Information listed in this post does not constitute a recommendation to buy or sell. It is intended for educational and informational purposes only. Equities can increase or decrease in value, and losses up to and including all money invested can occur. Consult with a licensed professional before making an investment decisions. 

Pennies

October 2016 Passive Dividend Income

Well, another month is nearly in the books. We’re now at the end of October, and now less than two months from Christmas. The market has been up and down over the course of the year, but most people have been able to make money if they’ve stayed invested in dividend-paying stocks. This is the type of investment that I’ve decided upon, as these companies actually pay me to own a part of them.

October was a pretty good month for me, going well in excess of my dividend income from the same month last year.  My dividend income should go up over time, but in the short term, it will probably go down a bit, as I’ve decided to sell most of my taxable holdings. I’ll probably explain this further in another post at a future date. I’ve rolled over a tax-deferred account from a previous employ into a traditional IRA, and I will be putting more money toward that in the future year after reading some really good information on tax-deferral from the Mad Fientist’s web site.  You can look at some cool stuff from the Mad Fientist regarding taxes and super charging your retirement portfolio here and here.  Basically, the less that you pay in taxes means more capital for saving for retirement. Therefore, I’m going to shift my focus up a bit and use my taxable account as more of a (hopefully) growing emergency fund that pays out a growing stream of dividends while I wait to need the money while leaving my IRA (and possibly other tax-deferred accounts) to grow until retirement.

Overall, I had four great companies that paid me over the course of October. Three of these should continue to pay me into the future. I trimmed Coca-Cola, but I completely sold out of Bank of Nova Scotia, although it will be on my radar for future purchases in a tax-deferred account. I’ve decided to utilize Loyal3 for my taxable purchases because of the low (i.e., free) transaction costs. I will also up my average purchase through TradeKing, which charges only $4.95 per purchase, to between $500 and $1,000 per transaction to keep the fee below 1%. You can sign up for TradeKing here and possibly get a $50 bonus after meeting some funding and purchasing requirements. I use TradeKing for my non-Loyal3 purchases.

Without stringing you along, here are the great companies that paid me during the month of October. I’ve broken them down by taxable and retirement accounts.

Taxable Accounts

Coca-Cola (KO)                                       $4.19

Kraft-Heinz (KHC)                                $0.34

Bank of Nova Scotia (BNS)               $5.11

Retirement Plan Dividends

General Electric (GE)                            $4.60

TOTAL Dividends for October       $14.24

These dividends bring my total dividend income for 2016 up to $116.17, and my $14.24 for the current month showed a 144 percent growth rate on a year-over-year basis. I should be ahead of this next year at this point again, if all goes as planned and I am able to continue putting more capital to work over time. Because of the stock sales that I noted earlier, my estimated dividend income for the coming year dropped to $130.31, but again, this should go up and exceed where it was as I make periodic purchases within my IRA. I plan to purchase between $500 and $1,000 a month until my transfer amount runs out. If the market crashes and burns before that, I’ll accelerate the purchases, as the best time to purchase stocks is the same as most as just about any other purchase–when they are on sale.

How did your dividend income look in October? Let me know in the comments.

If you’d like to keep up with my dividend income over time, feel free to go to the top of the page and follow me. You’ll only get emails when I actually make a new post, which is usually around five times in a month. In other words, your inbox will not get inundated with random emails.

Disclosure: I am long all stocks mentioned with the exception of BNS, which I sold in October.

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.

 

 

Pennies

Using Dividends to Buy More Dividends

One of my long-term goals is to build up a decent amount of wealth that can produce a nice level of passive income over the long haul. While I’m not likely to get to the $1 million per year in passive income, I believe that several thousand, if not tens of thousands in annual income, is definitely doable over the next couple of decades. When trying to earn money in pajamas, one of the best ways to make this happen is through dividend income. This is passive income that accumulates as a return on capital from allowing great companies to use said capital to operate and grow their businesses.  As I’ve said before, passive income is the best income.

Earning more money is always a good thing. The bad thing about earning more money is the time that it usually takes to do so. There are, however, some strategies that can be used to make more money without putting in any additional effort. Investing for dividends is one such strategy. Here is an article that lists three great reasons for investing in dividend paying stocks. The final reason is key. Even stable dividends pay out more over time. “How can this be?” you might be wondering. The answer is simple–COMPOUNDING.

There is one step and one step alone that is required to compound the your gains, provided that the dividend is left stable by the company paying it out. This one step is reinvesting. There are a couple of different avenues that can accomplish the reinvestment of dividends. The first is through a DRIP program. The DRIP stands for Dividend ReInvestment Program, and in this situation, an investor automatically reinvests the dividend into additional shares of the company that originally paid out the dividend. This will basically increase the dividend payout by the annual yield. A dividend yield of 3 percent that gets reinvested will see the annual dividend payment raise by about 3 percent over the course of a year because the number of shares that our hypothetical investor has should increase by about 3 percent. This is an increase in income that’s more than inflation has been over the past few years–all without lifting a finger.

Several brokerages, such as TradeKing, allow you to automatically DRIP your dividends into companies that permit dividend reinvestment. TradeKing is currently offering a $50 bonus for new signups under my referral link listed above.  You would get $50 for meeting the requirements, and I would also get $50. You don’t have to sign up with my link to invest through TradeKing, but I greatly appreciate any support you might feel like giving. This bonus could be used to buy a share or two of many great dividend-paying stocks.

Automatic reinvestment is one strategy, but there is another. I use the DRIP in my Tradeking account, but I have to use the other strategy in my Loyal3 account because DRIPing is not an option. This involves stocking up on dividend payments until a certain minimum amount of cash is reached. The minimum investment through Loyal3 is $10, and I pay no fees for my investments on this site. You can check out my review of Loyal3 here.  Those who invest through a TradeKing, Scwhab, or any other investment account can also pool dividends to diversify. It’s probably best to pool until a decent amount of money is available so that you can keep the transaction cost to a minimum. For example, a share of AT & T costs around $40 a share right now. Through TradeKing, if you were to purchase only one share, you’d pay $4.95 in transaction fees, which effectively adds about 12 percent to your purchase price.  It would also eat up more than the $1.92 in dividend income you’d get in the first year. It would be year three before dividend income would exceed your transaction cost. If you were to hold off until you could buy 10 shares, the transaction fee would drop to slightly more than 1 percent of the purchase price, which will definitely help long-term returns.

loyal3-logo

I decided in January to use my dividends from my Loyal3 account to diversify. Any additional purchases would come from new funds, while dividend income would just sit until I reached $10 in the account. During the first week of April, I reached the requisite level to make my first purchase from my dividend income stash. I decided that I would buy shares of Unilever (UL), which is a massive international consumer goods company that produces everything from butter to deodorant. I again started to pool the dividends after making this small $10 purchase, except now, I would be adding the small dividend from Unilever into the equation. My first payment came in June, and added $0.08 to my account.  Admittedly, this was a very small amount of money, but it allowed me to inch toward another purchase a little bit more quickly.

I hit $13 worth of dividends in my account by the first week of July, as my payment from Coca-Cola pushed me across the necessary $10 threshold. Again, I put the accumulated dividends toward more UL. Last week, I got my second payment from Unilever, and it was up to $0.17 over the course of a quarter, still not a huge amount, but an increase over the course of three months that allows me to edge ever closer to another purchase. This morning, I awoke to find that a dividend payment of nearly $4 from McDonald’s had posted into my account. This brought my account total $11.49, and I made my third purchase of Unilever stock for $11. If all goes according to plan, I will see a payment of around $0.25 for the fourth quarter in December.

I admit that I’ve put more capital toward my account with Loyal3 over the past nine months, but it’s been great to see that my dividends are growing and allowing me to purchase additional dividends. Even if I never added any additional capital to my account, I should be able to grow my dividends as companies decide to give dividend increases and I reinvest my dividends. This is the power of compounding. Of course, I’m hoping to have enough capital available to pay my bills and to invest each and every month going into the future, but seeing additional dividend income come in without doing more than making a few clicks and keystrokes is positive reinforcement. It’s exciting to see my dividend payments going higher and higher over time.

Disclaimer: I am not a financial advisor. This article is not a recommendation to buy any security. It is intended only for educational/entertainment purposes.

I am long all stock listed in this article.

If you’ve found this article interesting, be sure to sign up to receive updates to the site at the top of the page. You can also follow me on Twitter.

Pennies

April 2016 Passive Dividend Income

Another month has come and gone. Today is the first day of May, and on this past Friday, I got my last dividend notification for the month of April. I’m now about nine months into the dividend growth investing journey. My goal is to build up passive income over time so that I can enjoy a reasonable retirement in a couple of decades. I believe that long-standing dividend payers who have solid cash flows should be reasonable investments for the long term.

I added a couple of small positions over the past month, but neither of these has paid out a dividend yet. I started pooling my dividends in my Loyal3 account in January, and I reached $10 early in April. I then immediately put that $10 to work in a very small starting position in Unilever PLC. My hope is that my growing stream of dividends will enable me to add to this small start each quarter to start with. As my core positions add more in dividend payments, I plan to increase the frequency of these purchases in UL.

I also cashed out some more funds from Swagbucks and started with a $25 position in Starbucks (SBUX). My hope is to alternate Swagbucks payments and build up some smaller positions. Starbucks does not pay a huge dividend at this point, but the company has been increasing its payout rapidly over the past few years. Additionally, the company is still in the growth phase, so I’m hoping that my eventual yield on cost is much higher than my current ~1.4 percent.

I received three dividend payments during the month of April, so without further ado, here they are:

Coca-Cola (KO):                         $2.95

Wal-Mart (WMT):                       $2.48

Bank of Nova Scotia (BNS):     $3.47

Total dividend payments for March:   $8.90

Dividend income for 2016:                      $33.28

My payment from BNS was subject to a 15 percent withholding tax, so only $2.95 went into my DRIP. This purchased another 0.057 shares of BNS, and it will add about $0.12 to my annual dividend income, although this will vary because of foreign exchange rates. I put the other dividends toward the aforementioned  purchase of Unilever. My current forward dividend income for the next 12 months should be right around $131.67 (although this is possibly a slight bit off because of the BNS forex issue). This way more than the grand total of $0 that I expected in yearly dividends at this same time last year. Earning dividends is truly earning money in pajamas. I do no more work after earning the capital. Then my capital goes to work for me.

If you want to keep up with my progress or learn about my other life hacking achievements and goals, be sure to sign up to follow the blog.

Disclaimer: I am not a licensed financial professional. Please use the information on this site for educational/entertainment purposes only. Be sure to check with a financial professional before purchasing equities.

Disclaimer 2: I may receive compensation if you decide to sign up for any of my affiliate links. This post mentions Swagbucks. I usually get $25 worth of PayPal cash each month from this site, and I use it to buy more stocks that then earn me more dividends that can then go and buy more stocks that then pay more dividends…and so forth. Should you choose to sign up, I thank you for your support.

Pennies

February 2016 Passive Dividend Income

Well, it’s my favorite time of the month. It’s time to look back and see how much passive income I was able to get from owning high-quality companies during the month of February. I owned no individual dividend stocks at this time last year, so anything is infinitely better than what I got from dividends in February 2015. I was able to deploy a little bit of capital over the month, so my income will hopefully grow even more in future months. I earned two dividends in February, and here they are, without further ado:

Apple (AAPL)                    $1.40

AT & T (T)                          $4.87

TOTAL for February:    $6.27

This was up from $5.41 in the second month of the last quarter, which was an increase of nearly 16 percent over the past three months. My AT & T dividend purchased 0.135 additional shares, which will add about $0.26 to my dividend payout when T forwards money to my DRIP in May. My total dividend income thus far in 2016 is up to $10.75, which is $10.75 ahead of this time last year. I also added some capital to Apple since the last payout, and it should grow. March should be a good month, as I will get paid by three different companies, including my largest holding. I should cross over the $10 mark for a single month for the first time. Hopefully, I can add a couple of zeros to this in the not-too-distant future.

I’m hoping to cross $10 of dividend income in my Loyal3 account that I can then use to open up another position. Starbucks (SBUX), Disney (DIS), or Unilever (UL) are the most likely subjects for this new position, but I’m waiting until I can make the purchase to decide for sure. Unilever has a higher dividend yield at the moment, and they sell stuff that people buy every day. However, the other two are likely to be able to grow their dividends more rapidly in the future because of low payouts. What would be the best buy in this circumstance? Let me know your thoughts?

Pennies

Passive Dividend Income for December 2015

The month of December is just about over, as is the year 2015. I started out the year with basically no expectation of passive income from dividends, and I’ve now deployed enough capital to get to the place that I expect at least $83 next year from dividends without adding a single dollar to what I’ve already invested.

I have been able to invest in companies that provide dividends on a schedule that ensures that I should not miss a month of getting at least a little bit of passive income going forward. Passive income is the best income, as I’m able to earn it every month while at work, while sleeping, and while lounging around the house. The companies that I’ve allowed to put my money to work have many employees that work around the clock and around the world to make money, a portion of which the companies are able to return to me each quarter.

A couple of the companies I’ve invested in have given me good news in the last couple of months with dividend raises, which means that my capital will pay out even more over the next year. McDonald’s raised its dividend payment from $0.85 per quarter to $0.89 a quarter, and AT & T raised its dividend from $0.47 to $0.48 each quarter. These raises are 4.7 percent and 2.1 percent, respectively. I was able to experience one of these raises during December, so without further ado, here are my passive dividend earnings for the month of December 2015:

Kellogg’s (K):                              $0.47

McDonald’s (MCD):                  $1.66

Coca-Cola (KO):                        $1.90

Royal Dutch Shell (RDS.B):     $5.64

TOTAL DIVIDENDS for 12/15 $9.67

This $9.67 in a single month is a new record for me, nearly doubling my previous record of $5.41 in November. Also, this dividend income brings my final total for dividend income for 2015 to $20.91. This might not seem like too much, but it is more than $0. It’s been said many times that the journey of a thousand miles begins with a single step, and I’m hoping that this $20 in 2015 will grow exponentially in 2016. Any income that I get for the first seven months of the new year will be infinitely better than the amount that I got in the first seven months of 2015, when I earned $0 in dividend income. No one knows which way the market will go in 2016, but I plan on deploying additional capital that will hopefully grow my passive income.

How much were you able to earn in passive income in December or in the year of 2015?

Pennies

Recent Stock Purchases for Passive Income

I’ve had the opportunity to make a couple of purchases this month that have added passive income to my forward dividend income. These two companies have been hit hard by the market in recent weeks, in spite of being major cash cows. These two companies are Wal-Mart and Apple. My goal is to get $300 of capital invested in all of my companies, and my recent purchases in Wally World have gotten me to this position. All of my purchases were through Loyal3, so I incurred no transaction fees on these purchases.

Overall, I made two separate purchases in Wal-Mart (WMT) that deployed enough capital to buy an additional 1.5405 shares of the retail giant. With the current dividend payment of $1.96 per share, this adds a total of $3.02 of forward income. Of course, Wal-Mart is likely to announce a dividend increase within the next couple of months to keep its streak of around four decades of dividend growth in tact.

My other purchase was a small $12 deployment into Apple (AAPL) stock. This capital purchased only 0.1120 shares of the tech giant, but it will add an additional $0.23 in forward annual dividend payments based upon the current dividend of $2.08 per share. Again, it is likely that Apple will announce a dividend increase at some point in the coming year. Previous raises seem to come with the May payment if recent history is any indicator.

Combined, these purchases will add $3.25 to my forward dividend income. Along with a recently announced $0.01 per quarter raise that was announced by AT & T, my estimated forward dividend income for 2016 is up to $83.77 (about 4 hours of freedom based upon an estimated $20 of net income per hour of work). This should go up as I make additional purchases during the next year. My hope is to get my estimated income for 2017 to more than $200, but this will remain to be seen as I come into additional capital to deploy or as companies might pull a Kinder Morgan and cut their dividends. (I was fortunate not to have bought any KMI before the drop, and I’ve not bought any since.) I believe that my current stable, with the exception of Royal Dutch Shell should be safe, but the market and profits can shift pretty quickly. My next post will update my final dividend income update for 2015. Here’s to a great 2016.