With the month of January just about over, it’s time to look back over the month and review my stock purchases for the month. I was able to deploy some capital toward earning my favorite type of income–passive income. I’m a long way from being able to successfully support myself on passive income, but Rome was not built in a day and everyone has to start somewhere.
I made five separate purchases in my Loyal3 account over the month. These took place on three different days. I’m working on topping off all of my companies to have $300 of capital invested in each. I’d already reached that level with my first stock (Wal-Mart/WMT), and I then started to work with the rest of these stocks. My second purchase was Apple (AAPL), and two purchases this month brought me up to $300 invested. I purchased an additional 1.0394 shares of the tech behemoth. This additional purchase added a total of $2.16 of further dividend income going forward.
My next purchase was on the same day as my second Apple purchase. This purchase went toward Coca-Cola (KO) stock. My investment in KO brought me up to $300 invested in this as well, so three of my five companies have now reached this level. I was able to deploy enough capital to add 1.5326 shares to my stash of Coke stock and $2.02 to my forward expected dividend income.
My last two Loyal3 purchases did not allow me to reach my goal of $300 in the final two companies. I was able to buy 0.4468 shares of McDonald’s (MCD) and 0.2248 shares of Kellogg’s (K). At the current dividend rate that these companies provide, the purchases added $1.59 and $0.45 to my forward dividend income, respectively. Overall, these purchases should bring an additional $6.22 to my expected dividend income for the year.
My final purchase of the month came in my TradeKing account (sign up for a TradeKing account, and we could both get a free $50 added to our accounts provided you meet the requirements). With the recent drop in energy stocks, I decided to double down on my holdings in Royal Dutch Shell B shares (RDS.B). I was able to purchase 5 shares at an average cost of $41.04 with the $4.95 transaction expense added into the cost basis. This purchase added $18.80 to my estimated dividend income for the year. While this might be a bit risky as the cost of oil continues to lag near decade-long lows, it’s not likely that Shell is going anywhere and management has gone on record that they will pay the same dividend for 2016. Additionally, there’s not been a dividend cut since the end of WWII, and that’s a long time. When the cost of the black gold finally does go up, there is a chance for some serious capital appreciation in my Shell holdings.
Going forward with these purchases, my total dividend income for the year should be approximately $108.79 (BNS pays in Canadian dollars, so this could be off a bit because of exchange rates). This is more than $25 more than I would have expected to make just a month earlier. Should I be able to keep up this rate over the course of the year, I’ll add about $300 to my estimated dividend income.
While this might not seem like a huge amount of money, it’s a start to a journey that began with my first purchase of $100 of Wal-Mart stock in my Loyal3 account. I now have positions in 8 different companies and hope to add 2 or 3 more this year to my portfolio. My goal is to consistently add capital to my stash so that my passive income can grow exponentially over time. I’ve set a goal of getting my forward income up to $250 by the end of the year. It’s not quite as much as the number noted above, because I’m not likely to buy much with a yield as high as Shell currently has. This will definitely be money that I’ve been able to earn while doing just about nothing at all while others work (and spend) to make this money for me. How much have you decided to set your goal for? I’ll be updating my first month of dividend income for the year 2016 in the next few days.
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