Chase Freedom

January 2016 Passive Dividend Income

The first month of the year ended yesterday. I’m working on building up a passive income stream that can provide additional funding when it comes time to retire in addition to Social Security and any pension funds that I’m able to get. Dividends that consistently grow are a good sign that a company has adequate income to build their business and provide monetary benefits to its shareholders.

In the past six months, I’ve been able to build small positions in eight different companies that pay dividends each quarter. In January, two of my companies paid out dividends to me. I own a few shares of Wal-Mart (WMT) stock in an account with Loyal3. I also own a few shares of stock in the Bank of Nova Scotia (BNS) in a TradeKing account. The former pays cash into my account, while the latter allows me to automatically reinvest my dividends. This means that my BNS dividends should grow each quarter (at least in Canadian funds) without my doing anything else. I earned infinitely more in dividend income this month than I did at this time last year, as I was not investing in dividend-paying stocks. Any income whatsoever is an improvement over last January’s total of a big, fat goose egg. Without further ado, here is my dividend income for January 2016:

Wal-Mart (WMT)                            $1.48

Bank of Nova Scotia (BNS)          $3.00

TOTAL for January:                    $4.48

My BNS dividend purchased an additional 0.065 shares of stock in the company, which should add approximately $0.14 to my dividend next quarter given a similar exchange rate. I’ll be looking to add additional shares as funding comes available.

My $4.48 is not a massive amount of money, and it would allow me to take about 15 minutes off if I were to try and use my passive income to replace active income at this point. However, it’s a start, and as it’s been said many times before, the journey of a thousand miles begins with the first step. I’ve taken more than the first step, but I’m early in the journey and hope to add shares and passive income going forward. At this point, my forward dividend income is nearly $109. Hopefully, this will grow to $250 or more by the end of the year.  I’ve added this income summary to my monthly dividend income page.

Chase Freedom

January 2016 Stock Purchases

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.

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

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Chase Freedom

Recent Stock Purchases for Passive Income

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

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

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

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

Chase Freedom

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?

Chase Freedom

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.

Chase Freedom

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.