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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 – 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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September 2015 Passive Dividend Earnings

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.

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Stock Purchases

Last week, I wrote about the way I’ve earned money in pajamas with my first dividend in my passive income account. Passive income comes in whether I’m working or not. While I only earned $0.64 on my first earnings report, I’ve continued purchasing stock in some pretty strong companies the past week. I’ve been buying stocks through a Loyal3 account before this week.  I intend to continue buying the companies that Loyal3 services through their platform because of the fee-free structure. However, the biggest weakness with this broker is the fact that purchases are limited to the 65 companies that Loyal3 works with.

To broaden my horizons and purchase stocks that are not offered by Loyal3, I decided to open up an account with TradeKing, which is a low-cost online broker that allows users to make straight-up stock purchases for $4.95. They also offer options, but I am not comfortable utilizing this service at this point. Many passive income bloggers advocate saving up around a grand to minimize the cost. This is a good idea, but I had just $500 to invest after cashing in some US savings bonds that were purchased for me more than 20 years ago.  If I were to throw all of the funds that I had available at one stock on Loyal3 or on TradeKing, that would have put all of the money at risk if the one company I bought into were to go belly-up. I try to invest in solid companies with solid earnings and solid track records, but changes in the market can lead to crazy things like Bear Stearns becoming a non-entity in really short order.  I wanted to diversify quickly to cut down on the risk that comes from having all of one’s eggs in a single basket.

I threw between $150 and $200 into all of my Loyal3 holdings, with the exception of my latest purchase in Kellogg, which I am hoping to build to that level. I wanted to move into three different sectors of the economy that I had no exposure to. I wanted the companies to have a strong history of paying dividends. I also wanted to see that I was able to get stocks at a relatively good price after the recent drop in the market. The price/earnings ratio of each of these stocks is attractive based upon the broader market and based upon their own P/E ratio from earlier this year.

Oil and energy stocks have been hit hard in recent months as the Saudi government has been trying to squeeze American suppliers out of the market. I went back and forth between a purchase of Exxon-Mobil and Royal Dutch Shell. I decided to go with the latter. Shell (RDS.B) has not cut a dividend since World War II, and this includes all sorts of market conditions. With my $4.95 brokerage fee, I bought 3 shares at a total cost of $156.72, or just over $52 per share. The current annual dividend is $3.76 per share. I do not expect this to increase this year because of the market conditions in the energy sector. However, I also expect oil prices to rebound in the coming year or so.

via Wikimedia Commons, Ralf Roletschek, CC BY 3.0
via Wikimedia Commons, Ralf Roletschek, CC BY 3.0

My second purchase was in the financial sector. I decided to go with a Canadian Bank that started paying out dividends more than 25 years before the US Civil War started. The Bank of Nova Scotia has been paying investors since 1833, and they just announced an increase of their dividend to $0.70 in Canadian dollars per quarter. From what I’ve been reading, Canadian banks are more conservative than American banks because of regulatory requirements. Despite this conservative bent, the banks are quite profitable, and the “Big Six” Canadian Banks (a group that includes BNS) controls about 90 percent of the banking industry in our northern neighbor. BNS held their dividend steady during the 2007-2009 financial crisis, but they’ve been steadily increasing their payments to shareholders in the years since. I was able to purchase 3 shares, and with my brokerage fee, the total cost was $140.31. My 3 shares should bring approximately $2.19 per share in terms of the dividend payout, although this is subject to vary with fluctuations in the currency exchange rate.

My final purchase was an American telecom giant. AT &T (T) has been increasing dividends each year for more than three decades. They just purchased DirecTV, and along with Verizon, they are definitely a leader in the telecommunications industry. I went back and forth between VZ and T, and finally decided upon T. I purchased 5 shares of T, and these shares set me back $171.35. The annual dividend that AT & T pays out is currently $1.88 per share.

These three purchases give me international diversification in three solid companies from three different countries (four if you count the Anglo-Dutch nature of RDS.B). These companies have a strong history of rewarding their shareholders. They also gave me exposure to three different sectors of the economy. I chose to enroll in dividend reinvestment in each. Although my dividends will be small in the short term, each payment will go toward buying additional shares of these stocks. These partial shares will pay dividends as well, which will supercharge the rate of compounding. I don’t expect Shell to yield more than 7 percent for long, but in the short term, that should help me build my position a bit quicker than usual.

Combined, at the current payout rate, I should earn approximately $27.25 in additional dividends over the next year. This brings my annual total for expected passive income from dividends to $46.27, which is just under $4 per month. This is obviously well below my budget, but I plan to put additional capital to work and anticipate these companies increasing their dividends over time. I figure that I’ll need to supplement my retirement accounts and Social Security, and passive monthly income from dividends will be a great way to do just that. I now have positions in eight different companies, and I hope to build upon this in the future.

DISCLAIMER: I am not a licensed professional advisor, and the information on this site is merely for informational and educational purchases. Make sure to consult a professional before investing in securities, as you can lose money. 

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August 2015 Passive Dividend Earnings

Earning passive income is really one of the best ways to earn money from the office, home, the store, or wherever you might be, because it comes in at all hours of the day no matter what you might be doing at any given time. Getting more and more passive income is one of my goals. I’ve started to buy stocks that provide me with dividends on a regular basis. I’m focused on stocks that have paid steady or increasing dividends over a period of years through all sorts of economic conditions.

In late July, I opened an account with Loyal3, which is an online source for purchasing stock. The platform is pretty cool because you’re able to become a partial owner in some really profitable companies like Apple, Coca-Cola, Nike, and McDonald’s without paying any fees. I’ve also recently opened another brokerage account with another outfit because Loyal3 only has around 60-65 companies from which you can purchase stock. If you want to branch out into a sector or company that’s not included, you have to do it with another broker. Regardless, one of my purchases from early in August paid a dividend after I bought in, so without further ado, here is my dividend income from the month of August:

Apple, Inc (AAPL)  $0.64

You’ve read this right. I earned a whopping 64 cents in dividends, which was a regular quarterly dividend of $0.52 per share. When multiplied by my 1.2313 share stake in Apple, you get 64 cents. This is admittedly a very small chunk of change, and many people might wonder why I’d even bother. However, I would argue that the journey of a thousand miles begins with the first step. Without the first 64 cents, the first $1,000 or $10,000 cannot be earned. Unless I put more money into Apple in the next couple of months, I’ll get another $0.64 in November. I also intend to build up positions in additional great companies with great products over the upcoming months and years while also adding to existing positions over time. I also intend to use my dividends to accelerate the purchase of additional stock. The goal is to have this regular income pay for some of my expenses when I hit retirement age in a few decades. The earlier I start, the more the admittedly small dividends will start to grow exponentially.

How many dividends did you get for not working in August?

Disclaimer: I am not a professional financial advisor. This site is for informational/educational/motivational purposes. Be sure to contact a certified financial advisor or accountant before making investment decisions. 

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Stock Purchase–K

Disclaimer: I’m not a professional investment advisor. The information on this site is for informational and educational purposes and should not be viewed as investing advice. Before investing in securities, you should check with an investment advisor. 

As I’ve noted before, the best form of income is passive income. This is income that truly comes in while you’re at work, on the road, watching TV, sleeping, eating, or basically anything else. This is the ultimate method of earning money in pajamas. As I’ve just started buying stock in the past month or so, I decided to use some excess cash to buy a bit of stock via my Loyal3 account.

While my previous purchases were a bit larger, I did not have the access to a similar amount of money for this particular purchase (although I might be making a fairly sizable buy in the next week or so in an account that charges for trades). Although I did not hit the major drop well, I figured that time in the market is better than trying to time the market. Regardless, Loyal3 only makes trades in a couple of batches a day, so getting the absolute best price is unlikely.

I had already set up positions in KO, AAPL, WMT, and MCD. I figured that these are some of the biggest companies in the world. As I’ve noted, I’ve actually utilized a couple of these while outside the good ol’ USA. This purchase expanded my portfolio to 5 positions. I decided to put $25 toward Kellogg’s (K). The good news is that $0.64 of this was actually dividend income that I received earlier this month, which means that my dividends are starting to get put to use, albeit on a very small scale. I’ve eaten a number of Kellogg cereals, and I frequently eat Pop Tarts for breakfast. Like Coca-Cola and McDonald’s, Kellogg’s is basically available around the world. I’ve bought Pop Tarts to eat for breakfast while in Aruba and Honduras. Pringles potato crisps are also a brand that Kellogg’s sports that is popular in many parts of the world.

While $200 got me nearly 5 shares of KO, my $25 got me substantially less when it came to purchasing K. I now own 0.3741 shares of the cereal giant. According to NASDAQ, the P/E ratio is is estimated to be in the 17 range for the next couple of years (for what it’s worth). I’m hoping to add similar amounts to my recent purchase over the next couple of months to build up my position to $100 or $150, which would be close to my other positions. The dividend yield that I locked in for this purchase was just south of 3% at 2.97%, as the current annual dividend is $2.00 per share. My 0.3741 shares will add right around 75 cents to my annual estimated dividend income. With my previous purchases this year, my estimated annual dividend income should now be around $19.03. This is just more than a buck fifty per month. I’ll definitely need more than this to aid in retirement, but small steps can add up to big nest eggs over time.  A couple of months ago, my estimated dividend income was a big, fat goose egg. $1.50 is literally an infinite improvement over 0 in my goal of earning money in pajamas.

 

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Earning Passive Income with More Dividends

The past couple of weeks have been rough on stocks. It’s now down 9 out of the last 10 sessions. I’ve put more money to work, though. Could it go lower? Sure. Will it eventually come up if it does? Most likely. Regardless, as I’ve said before, passive income is the best income, and I’ve decided to buy more of solid companies that have long histories of paying out dividends. My first two buys in the last few weeks were in WalMart and Apple. WalMart has been basically sideways, and Apple has been hit pretty hard in the days since I purchased them.  Day-to-day fluctuations are not a big concern, as I’m not looking to sell these stocks in the next few months.

Last week, I put $150 to work in McDonald’s stock through my Loyal3 account. This purchased 1.5196 shares in the Golden Arches. McDonald’s has a current annual dividend level of $3.40 per share, which gives a dividend yield of just above 3.4 percent on my cost. This added $5.16 to my estimated dividend cash flow for the next 12 months. I’ve eaten at the big M all across the US, and I’ve also eaten at this company’s restaurants in England, the Czech Republic, and Honduras. They are literally making money every day all across the planet.

Yesterday, I decided to buy again. I had $250 to put to work. I again bought WalMart with a purchase of $50. This purchased an additional 0.6973 of a share. At an annual dividend payout of $1.96 per share, this added another $1.37 to my estimated dividend payout over the course of a year. $1.37 might not sound like a huge amount, but the $1.37s will start to add up over time. It’s also possible that WalMart’s stock will increase in price over time, which would further enhance net worth.

My final purchase was in one of Warren Buffet’s holdings: Coca-Cola. This Atlanta-based company has increased its dividend for 52 straight years. This is one of the largest such streaks that are around. This stock is tied to another of my purchases, as McDonald’s sells Coke products around the world. I’ve also had Coke in various places that I’ve visited. This includes places as remote as small towns in Kenya. The footprint of Coke is huge. I put $200 into Coca-Cola through my Loyal3 account. This bought 4.8804 shares of the soft drink giant. Coke currently pays out $1.32 per share for a dividend, and this is a yield of more than 3 percent. This purchase bought me an additional estimated dividend payout of $6.44 on an annualized basis.

There you have it. I’ve bought a small slice of three massive companies that have huge global footprints. All of these companies are able to handle their dividends at this point with their current level of earnings per share. My hope is that they will continue their long streaks of paying out to shareholders and also add to the dividend on an annual basis. My current dividend income portfolio now has an estimated annual payout of approximately $18.28. Of course, this could go up or down, but my goal is to reinvest dividends into companies that also provide income, which will hopefully lead to an ever-growing amount of capital and income. This will definitely be an example of earning money in pajamas.

Disclaimer: I am not a professional investor or a financial advisor. All information in this article are merely for entertainment purposes. People can and do lose money in the stock market. Consult a professional before deciding to make any investments. 

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Stock Purchase–AAPL

This week, I added another position toward my goal of earning money in pajamas with dividend stocks. My first purchase of $100 went toward WalMart Stock. My second purchase was a bit larger because I wanted to make sure that I was able to purchase a whole share of another company with my Loyal3 account. This stock is one of the biggest and most popular in all the world. I decided to buy some stock in Apple Computer. Of course, the best time to buy some Apple stock would have been around 1999, but I was not really into stocks at that point. However, with some money from previous birthdays still available to put to work, I decided to jump in now.

My goal is to earn additional money without actually putting in additional hours for it. Therefore, buying Apple would not have been on my radar had I started just a few years ago. In 2012, however, the company started paying dividends again after a long hiatus. The dividend has been steadily growing since its resumption. The current yield is not terribly high, as it is in the 1.7 percent range, but it has shown growth to the upside. The P/E ratio and the payout ratio for the dividend are both solid, and everyone knows that iPhones and iPads are all the rage with kids these days.

I put in a total of $150 into AAPL, and this bought me 1.2313 shares in the company. Currently, the dividend on this stock stands at $2.08 per share after a big 7-for-1 split last year. My current holdings should net me about $2.56 in dividends over the next year. When added to my anticipated dividends from my WalMart purchase, my current estimated dividend income for the next year should be right around $5.60. Both of these stocks could raise their dividends in the next year, so that increase would be added to my $5.60. I also plan to buy a few more positions in the near term, and I have some plans for utilizing some passive income to buy even more, which will give even more passive income. My hope is to increase my dividend income each year until I can replace a significant percentage of my expenses by retirement. They say that the journey of a thousand miles begins with the first step, and I look at these purchases as the first two steps in my journey.

I’ll plan to give updates on any future purchases, as well as any income as it starts to come in.

Disclaimer: I am not a financial professional. The information on this site is for educational/informational purposes only. Investors in the stock market can lose money, up to and including all of their investment. Please consult a financial professional before making any investments in the market.

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Can You Still Make Money Blogging in 2014?

Dads can make money in their spare time while watching television.
Earning Money on a Blog is Still Possible, even in 2014!

One of the biggest questions that is probably on the mind of those who are reading a blog about making money is whether it is still possible to make money blogging. I would argue that yes, it is still possible to make money blogging in 2014.

My First (Feeble) Attempts at Blogging

I was late to the game when it came to blogging. I actually started blogging in 2010, hoping to supplement my meager income as I transitioned into a job as a graduate assistant.  Some of the leading bloggers, like Darren Rowse,  who make money started five or ten years before my foray into the “business” of blogging.  Yet, after reading a post on Rowse’s becoming a six-figure blogger, I decided to give it a try.

I realized that the money would not roll in automatically, so I was surprised that I got a click on Google’s AdSense worth a whopping $0.59 within a week. I expected my blog to gather steam because I had something worth saying.  I got a handful of visits for each post, but soon became frustrated because I had earned a total of $0.64 by the end of the year for my efforts.

My first blog was a random, stream-of-thought type of blog that did not really draw much in the way of search traffic. I then learned about the importance of setting up a niche and trying to get search engine traffic that way. Since I was a wannabe academic, I decided to post information on my major field of study. My second blog is still up and getting much more traffic than my first effort.  Yet, it has not really drawn the income that I’d hoped. I also have a third blog on saving money on travel that I’ve not updated much.

Changing to a Paid Platform

My first three blogging efforts were set up on Google’s Blogger platform. This platform is free, but has some limitations as to what you can do with it. I read up on blogging for money on sites like ProBlogger and ChristianPF. Just about every post that I read recommended that would-be bloggers set up with a paid blogging platform with WordPress through a hosting agent. ChristianPF recommended the use of HostGator. Finally, after over two years of little success at drawing traffic with a blog, I set up this blog on earning money online. I took the recommendation of ChristianPF, and set up a WordPress account through HostGator. (Continue below the image)

I paid for my domain name and my hosting through HostGator, and they allowed me to download the WordPress software that I use on this blog. You can get a good introductory deal on this service by clicking the link on the sidebar that looks like the one above. (Please note that I can get a referral if you do, but also please note that I use this hosting service myself with no complaints in a year.)

My First Post on My New Earning Money Online Blog

I set up my first post on earning money in pajamas without leaving the house via the Internet in early January last year. I posted a couple of backlinks on sites like RedGage and Twitter to attempt to draw some traffic. That first month, I averaged a grand total of four visitors per day.  This was a pretty inauspicious start. The next month, my traffic grew by 25 percent to a whopping five visitors per day.

Traffic and Earnings Growth

After a few posts and a few months, my traffic really started to pick up. By the end of the year, I had over 50,000 visitors to the site.  I’d also started to earn money. I estimate that I’ve profited well over $500 in 2013 on this blog alone, and I’m still earning money every day so far this year. My hope is that I’ll be able to grow the traffic and continue to earn and see an increase for 2014.

While I’ve made a few bucks here and there off of my earlier blogging attempts, I’ve really started to draw a more regular income from this site. This proves that it is still possible to make money online through blogging. What are some steps that you can use to earn money by blogging?

1. Select a niche that interests people. (earning money online from home in my spare time was my niche)

2. Set up a paid blogging account. (you can do this through HostGator by using the links on this page)

3. Treat the blog as a business. (i.e., you have to sell something–a referral program or an e-book is a good start)

4. Interact and get your blog promoted on various social media sites.

Can you still earn money by blogging in 2014? Yes, you can. However, I have to give the caveat that it is not really all that easy. Additionally, it is very competitive, and it might take some time to draw an audience. With some trial and error, it is possible to earn money with your own website. The sooner you start, the more time to learn and give yourself an opportunity to start earning money without leaving your home.