Tag Archives: earning money in pajamas

Earning Money in Pajamas With Real Estate

One of my favorite sayings is that passive income is the best income.  Passive income is money that you don’t have to put any effort toward earning. It’s money that you get just by waking up in the morning. Passive income would definitely be a form of earning money in pajamas. You might wonder where that idea of earning money in pajamas and real estate investing would come in.

You Can Make Money in Real Estate

When most people think of investing in real estate, they think of the common slumlord who owns a property or ten that they bought to make some money of some poor, unsuspecting college student or fast food employee (sometimes these demographics are one and the same).  This is definitely one way that people have made money in real estate–buy a property with other people’s money and then have your renters pay the loan back. After the property gets paid off, the rent that hopefully continues to come in becomes a solid cash flow, or if you don’t want to continue to deal with renters, you can sell the house off and pocket the cash. At least this is how it’s supposed to work.

Real Estate image. Wikimedia Commons via GregoryJ77, Public Domain

You Can Make Money in Real Estate, But…

Many landlords find that they can make money at times, but there is the issue of finding people to rent out the property, or more importantly, the right people to rent out the property. Some renters will stiff their landlords and fail to pay on a regular basis. If you’ve bought the house and still owe on it, this lack of cash flow from derelict tenants can lead to negative consequences for your budget. Then, if this problem becomes habitual, you might find that it’s necessary to evict the renters. I don’t know about you, but getting the courts involved does not really sound like passive income to me.  Furthermore, renters are less likely to treat your property with care. Many landlords have found that they have to clean up big messes when their renters move out, be it voluntarily or in a more forcible manner. Some of this cleaning might require some  light construction work. I’m not terribly handy, nor do I like cleaning up messes. How then did I come to decide that I’d like to become a landlord?

Enter the REIT

As I’ve been noting in recent months, I’m investing in equities in an attempt to slow down how much I have to work for money as more of my money goes to work for me on a daily basis. If landlording sounds like a lot of work, it doesn’t have to be. I’ve decided that my real estate investments (at least outside of my own personal residence) will come through Real Estate Investment Trusts, otherwise known as REITs. These companies own properties that they then rent out to make money. The REITs that I’m investing in directly have businesses that tend to sign multi-year leases with annual increases built in as renters. I’ve owned some shares of Omega Healthcare Investors (OHI) for a few months, and I just pulled the trigger on 10 shares of Realty Income Corp (O) this past week.

Both OHI and O pay out healthy dividends at this point. They are also on sale from the levels that they were at in the summer. Additionally, the dividends that these REITs have been paying have also been growing on a regular basis. Where most companies who increase their dividends on a regular basis do so annually, Omega Healthcare Investors has been increasing its dividend on a quarterly basis for the past few years, and Realty Income has been announcing multiple increases each year. Additionally, Realty Income pays out every single month, much like a property that I’d own outright.  That’s 12 payments a year. I’m planning to build up the position over time, so my income should grow from a small beginning.

I’m getting a dividend yield of nearly 4.5 percent on O and nearly 7.5 percent on OHI. I don’t have to find renters. The management of these companies do that for me. I don’t have to clean up for tenants who move out. The companies will do that for me. Finally, I don’t have to evict anyone. The companies will do so should it come to that point. I don’t have to do anything related to management of the property. I get all of the benefits of being a landlord (as well as some of the risks) without actually having to deal with most of the hassles that come with the territory. Of course, there are risks with any investment, but I feel that the passive income that I’ll hopefully be earning while sitting in my recliner or in my office for years or decades to come will pay off big in the long run.

Disclaimer: Long O and OHI, I am not an investment professional. Information on this site is intended for educational/informational/entertainment purposes. It is NOT a recommendation to buy. Please do due diligence before investing in anything at all. 

Reminder: If you’d like to be entered into my drawing for an Amazon.com e-Gift card code that’s closing down on Christmas Eve, be sure to sign up with my email list via MailMunch. This is the popup that shows up when you first visit the site. If you’re interested in the rules for the Amazon giveaway, be sure to check them out here.

 

Taking the Long View of Personal Finance

Do you want the bad news first, or would you rather have the good news? I’ll start with the bad news. Most people in the United States live for today. The average American is deep in debt, and this debt can really lead to many difficulties in life.  A person’s savings rate is the leading indicator for future wealth. This indicator reached an all-time high of 17 percent of income back in 1975, but by July 2005, the rate was at an all-time low of less than 2 percent. Today, the savings rate for the average American has reached 5.7 percent, which is three times what it was just a decade ago.  The good news is that there are some pretty easy steps to take to improve your personal savings rate and shore up your finances.

The reason for this increase is probably related to what happened between 2005 and today–the Great Recession.  People were shaken by the sudden crash of the economy. While a savings rate of between 5 and 10 percent might seem impressive given where it’s come from just a few years ago, it’s still not all that great. The popular site Mr. Money Mustache has a pretty amazing article on “The Shockingly Simple Math Behind Early Retirement” that looks at how the savings rate can determine how long a person has to work.  A person who saves 5 percent a year will have to work about 66 years to be able to retire comfortably. Fewer teenagers are working today, so this means that a 20-something who starts to work today will need to work until about age 90 before they can let someone else take over their job.

This math presupposes that there is no pension waiting on a worker and that the doomsday scenarios of Social Security that claim it will pay nothing at sometime in the not-too-distant future will come frighteningly to fruition.  This means that the savings rate of American workers is woefully short of what it needs to be. Even the record savings rate in the post-1959 world that was noted above will require quite a bit of work. A 17 percent savings rate means that a worker can retire right around the “traditional” retirement age after working approximately 40 years, again assuming that there is no pension or Social Security payment coming. Needless to say, this is not a terribly comforting situation.

These numbers are why it’s important to take a long view when it comes to personal finance.  Those who fail to plan actually plan to fail, so getting some goals together is a good idea. I don’t know about you, but having to work until 90 would mean that I’d probably be dead before I can afford to quit working on a full-time basis.  That does not seem like a terribly enjoyable path to take. The time to start planning for retirement was 10 years ago. However, if you didn’t put in the effort to plan 10 years ago, the second best time is now.

This is where earning money in pajamas proves to be a great idea. If your main gig barely pays the bills, there are exactly two ways to save money (outside of having a long, lost extremely rich uncle give you a massive inheritance or hitting the lottery, which is a losing proposition because the house always has to win). These first of these two realistic methods is cutting expenses. With the number of high-paying jobs not being what most Americans might wish, keeping expenses down is definitely an important step to take to ensure that you can build wealth over time.

The second option for saving more money involves finding other avenues to make money. With the advent of the Interwebs, the opportunities for making more money are quite extensive. Here are 11 such options that I’ve shared before for making extra moolah online .  Few jobs require employees to work every waking hour, so most workers will have several hours each week to earn more money. The best part about utilizing the Internet means of making money is that you don’t have to leave the house. You can literally sit around in your pajamas on a Saturday afternoon and make a bit of money while watching football. If you have a connection to the Internet, there is absolutely no reason why you shouldn’t attempt to make more money. The link above has some great ways that I’ve been able to make money. I’ve used a few to make more than $1,000.

It’s important to take the long view of personal finance when thinking about making money online because it’s easy to get discouraged. A few hundred dollars a year might not seem like much, but your future self will appreciate that your current self decided to save some money for the future. I’ve noted before that saving just a dollar a day between the ages of 16 and the “normal” retirement age of 65 will yield an account of around $286,000 if an 8 percent return can be realized.  The power of a simple dollar can be quite amazing.  If you can raise this amount to $2 a day in additional income that you can save, you’ll have around half a million by retirement. Only $4 a day will lead to a cool million by 65 if you can start at 16. Discipline is important through all of this, and it’s important to stay in the market.

Those who are able to engage in both of the strategies listed above can super-charge their trek toward retirement. Cutting $4 in spending each day and then making just $4 extra per day and then saving the $8 would lead to nearly $3000 in savings after just a year and nearly $2 million over a 50-year period if you were able to earn an 8-percent return. Those who do not have 50 years to play with can still make some major progress with just a few small tweaks. Even if you’re only looking at 20 years until needing the money, you’ll still be way ahead of what you would have should you never have started to begin with. The time to start making some money in pajamas is now. The sooner you do, the sooner you can start saving and taking advantage of the compounding process.  Thinking of the long terms is the only way to make this happen, however, so be sure to get started today.

Disclaimer: I can receive compensation if you sign up for some of the programs that I’ve reviewed using one of my referral links. I definitely appreciate the support, but in the interest of full disclosure, you can still get the the same benefits without using my link. 

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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.

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August 2016 Passive Dividend Income

Another month has come and gone, and again, it’s time to look over the past month and figure up the passive income that I’ve earned from owning great companies that are willing to return some of the capital that I’ve invested into their success.

I’ve decided to invest in companies that pay dividends, as those companies that are able to increase revenues and earnings over time are also able to increase the amount of their dividends. This is an example of my having my money working for me. This was the first month that I’ve been able to compare my dividend income on a year-over-year basis, as I “earned” my first dividend payment in August 2015. I have earned in quotes because I earned the money that initially went toward the  investment, but I did not have to put in any additional effort to get this passive income. My dollars are working for me, and over time, they should be able to earn even more, hopefully to the point that my money makes more than I can.

I received dividend payments from four companies in August. I received a payment from one new company, as well. Without further ado, here is my dividend income from the month of August 2016:

Starbucks (SBUX):                           $0.18

Apple (AAPL):                                    $2.57

AT & T (T):                                             $6.94

Omega Healthcare Inv. (OHI): $3.60

TOTAL for August 2016:           $13.29

This dividend income brings my total for the year up to $83.40 for the year, which is more than $10 a month. Furthermore, this dividend income for the month was $4.11 more than the dividend income I received in May. This equaled out to nearly a 45 percent increase in just one quarter.  When looking at my dividend income on a year-over-year basis, I went from $0.64 in August 2015 to $13.29 in August 2016. This equals out to a 1976 percent increase in just one year. Obviously, this will not be likely for every year in the future, but it is a nice increase to say the least.

Another point that I’d like to make regarding the dividend income I received in August. I am able to DRIP my dividends in my TradeKing account. This allowed me to purchase 0.097 additional shares of OHI and 0.160 shares of T. My additional fractional share of OHI will add $0.23 to my annual dividend income, and my additional fractional share of T will add $0.31 additional dividend income. These are not huge increases, but over time as they add up, they will make a difference in my dividend income.

My current anticipated annualized dividend income $204.64 after having purchased some additional OHI in an IRA that I rolled a former employer-sponsored retirement plan into. That’s about $17.05 a month on average. I’m getting closer to being able to take an hour off each month (figuring that I need $20 per hour to replace working income after noting that I won’t be paying out nearly so much in taxes at that point).

My dividend income is definitely an example of earning money in my pajamas. The companies that I invest in are making money around the world at any given time of the day. How was your dividend income in August?

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.

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June 2016 Passive Dividend Earnings

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.

How Swagbucks Allows Me to Earn Passive Income from Dividends

My very first post on this site more than three years ago touched on the benefits that users could earn from the site SwagBucks (you can sign up here).  The site allows users to complete a number of different tasks that earn a virtual currency known as Swagbucks. This virtual currency is not like Bitcoin in that the value can vary greatly over time. The Swagbucks pretty much have a fixed redemption value of one cent per Swagbuck. This current post is going to show you how you can cash in and start to earn passive income that could literally last for the rest of your life.

Many people who use the site cash in for things like $5 e-gift cards from retailers like Amazon or Walmart. I do not choose to use this redemption option. The coolest of all redemptions, in my estimation, is $25 in PayPal cash. I use the site to earn money in pajamas, and have been putting my PayPal cash to work earning money on the money I earned in my pajamas.

I need to get 2,500 Swagbucks to cash in on PayPal. I can earn these 2,500 Swagbucks in a variety of ways. One of the most common options is by searching on the web. I use the search bar, and the site randomly provides a number of Swagbucks that generally ranges between 4 and 50. Here is a picture of what a “win” looks like:

I scored 11 Swagbucks with this search.
I scored 11 Swagbucks with this search.

One way that I can earn more Swagbucks is through online surveys. I tend to look at the surveys under “Gold Surveys” the most, as I seem to have more luck getting them to credit. The surveys that pay out 50 Swagbucks for 10 minutes are generally from a site called Opinion Central, and I have had pretty good success from these. They generally take less than the 10 minutes advertised, as well.

I opt for the New Gold Surveys
I usually opt for the New Gold Surveys

Another major way that you can earn Swagbucks in pajamas while watching the TV is by watching videos. There are a couple of options that I’ve found that I can earn quite a few Swagbucks pretty quickly.  I frequently will watch videos by clicking on this dude who’s sitting behind a laptop:

Click on this guy to watch videos that credit on Swagbucks.
Click on this guy to watch videos that credit on Swagbucks.

After clicking on laptop guy, you will then be taken to a screen that invites you to watch the videos. You have to scroll through a few (usually between 5 and 10, although sometimes there will be an ad campaign with just one video). This usually pays out 2 Swagbucks, which is admittedly not much, but I can easily scroll through them while watching TV (this is the maximizing spare time for income, folks). Sometimes around Christmas, the process will pay out 3 Swagbucks per task. You would click through all of the videos. I set up my screen to look like this so that I know when to click the green button:

Swagbucks Videos 2

Another easy way to earn a few Swagbucks while watching TV is through nCrave videos. I like the ones that are highlighted here. I use the ones with the swirling arrow icon that’s circled in red:

Encrave Videos can help you earn some Swagbucks with little effort.
nCrave Videos can help you earn some Swagbucks with little effort.

After clicking on the nCrave video, you need to make sure that the “Discovery Mode” is toggled to the green check mark. This will let the carousel of videos play automatically. Again, you won’t get rich overnight from this process, but it’s a few Swagbucks for very little effort. They do add up over time.

Make sure the Discovery Mode is toggled on to automatically cycle through the videos.

Make sure the Discovery Mode is toggled on to automatically cycle through the videos. 

I work on several of these tasks when watching TV on a daily basis. Most months, I am able to cash in at least $25 toward PayPal cash; some months, I cash out $50. When this cash hits my PayPal account, I can then transfer it to my linked back account and then transfer it to a brokerage account. I’ve been transferring it to Loyal3 each month. When it hits Loyal 3, I can then invest with no commission in one of the 60-some companies that this brokerage allows people to invest in. I reviewed how I use Loyal3 here.

Each PayPal cashout will allow me to get around $0.75 per year for life for each $25 I invest (when estimating a dividend yield of 3%). Over the course of the year, I will get around $10 in dividend income, give or take a few dollars, depending upon the companies invested in. This is where the concept gets pretty cool. That $10 in dividend income can then be put into additional stock, and the compounding process can begin.  The money that I earned in pajamas with Swagbucks can then go toward making its own money, which will then make more money. Over time, even if one or two companies go belly-up (I buy only companies that are paying dividends, and I invest in multiple companies to diversify my risk), I should have a pretty decent amount of income coming in on a quarterly basis. The major factor for success is persistence.  Check out this article on the power of getting just an extra dollar a day to invest.

What Are You Waiting For? 

To get the ball started, you can sign up for Swagbucks here. Please note that should you do so, I could get compensated for referring you. I only share method’s that I’ve used myself that work. I’ve earned more than $1,000 via Swagbucks since signing up, and the majority of this income has been earned by my activity, not referrals. Now the money I’m earning is earning its own passive income. Should you decide to sign up with my link, I appreciate your support. Good luck earning money in pajamas.

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May 2016 Passive Dividend Earnings

It’s again one of my favorite times of the month–the time that I get to recount my passive dividend income that rolled in over the past 30 (or so) days. The month of May is over, and I again made some money while working on my day job and while sleeping at night. My dividend income was already ahead of all of last year at the end of March. April and May have just added to this amount.

While the amount is not terribly impressive, it’s growing over time, and that’s my goal. My goal is to build up a growing stream of passive income that allows me to handle many of my expenses when I get closer to retirement. Pennies today will grow to dollars tomorrow, and then into hundreds in a few years. My current forward annual dividend income is estimated at a total of $142.90. During the month of May, I was able to earn the following dividends:

Apple (AAPL):                               $2.24

Starbucks (SBUX):                     $0.09

AT & T (T):                                      $6.85

TOTAL for May 2016              $9.18

This dividend income from May brings my annual total to $42.46, which is well above my $20.91 total for all of 2015. I’ve currently more than doubled my annual dividend income.  I earned my first dividend from Starbucks in May, and I was able to add to both my Apple and AT & T payment from February. My dividend from AT & T was reinvested into 0.175 additional shares of the telecom giant. This DRIP will add $0.34 to my annual dividend income. I did not buy any new companies in May, and I am currently invested in a total of 10 companies.

My dividends from May were $2.91 more than my payout in February. This was an increase of 46 percent in just three months. I did not have a dividend payment in May 2015, so my year-over-year increase is not available. This comparison will start to be available in August.  The growth in my passive income is really exciting. I’m looking forward to the day when I can earn hundreds every month from my recliner. How did your dividend income look for May?

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?

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?

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.