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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?

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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?

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Stock Purchases and More Dividend Income

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

Company                                    Shares Purchased                            Additional Dividends

McDonald’s (MCD)                            0.1906                                                  $0.68

Kellogg’s (K)                                       0.3153                                                   $0.63

Coca-Cola (KO)                                  0.5013                                                  $0.66

Apple (AAPL)                                      0.1863                                                  $0.39

Wal-Mart (WMT)                                0.3675                                                  $0.72

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

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

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More Passive Dividend Income–RDS.B

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

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

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

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.