This is what dividend investing is all about! Investing in dividend stocks allows YOU to earn dividend income, the best passive income stream! Bias, you better believe it.
Time to dive into Lanny’s August 2023 dividend income results! Were records set? Almost to financial freedom? One day and one month at a time!
Dividend Income
Dividend Income is the fruit from the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio.
How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products) and on SoFi.
Related: Dividend Diplomat Stock Screener
Related: Financial Freedom Products
Related: 3 Financial Freedom Products
I also automatically invest and max out, pre-tax, my 401k through work and my Health Savings Account. This allows me to save a TON of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend, aka Dividend Reinvestment Plan or DRIP for short. This takes the emotion out of timing the market and BUILDS onto my passive income stream!
Related: Tax Strategy – Part 3 to Reduce Taxes & Increase Investment.
Related: The Power of Dividend Reinvesting
Related: Why I Don’t Time or Predict The Market
Growing your dividend income takes time and consistency. Investing as often, and early, as you can allows compound interest (aka dividends) to work it’s magic. I have gone from making $2.70 in a single month in dividend income to well over … $10,000+ in a single month. A NEW dividend income record was set in December of 2021. Was it broken this month?! The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?
*Not pictured is my wife’s dividend income above*
I want to show YOU that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, YOU can too.
dividend income – August 2023
Now, on to the numbers… In August, we (my wife and I) received a dividend income total of $1,711.37. Speechless. Here we go again. The Notorious Investor here, bringing in OVER $5K. LET’S GO!
The amount and number of stocks listed below show you what it means to buy and hold for the long term. Most of the positions I have owned for YEARS, letting dividend growth and reinvestment do it’s thing. This is what dividend investing for financial freedom is all about. The passive income stream is growing at a RAPID pace.
2023 has been one heck of a year. The S&P 500 is close to all-time highs. The Fed raised interest rates in July, as the economy is still on fire. There is one looming increase that could happen before the end of the year. Borrowing rates are through the roof, inflation is slightly cooling/less of a surge. However, Americans continue to spend like there is no tomorrow. What am I doing? Investing, not-stopping and consistently adding dividend income.
Here is the breakdown of dividend income for the month, between taxable and retirement (far right column, under “Retirement”) accounts. In addition, “W” means my wife’s account:
We crossed over $1,500+ in dividend income this month, which is awesome.
I’ve been building my UPS position to 100 shares. Though I am not there yet, UPS stock sent $141.54 my way and $25.95 to my wife’s account. After reinvesting, I am now over 92 shares, only 8 to go.
As you can see, we love Starbucks (SBUX) stock. I brought in $23.37 and my wife brought in $17.45 in the taxable, plus $41.27 in the retirement accounts. Keep on brewing that dividend income!
In addition, National Grid (NGG) was a nice surprise. Over $200 in dividends from them, reinvested to bring in another 3+ shares.
Yes, the big telecom stocks of AT&T (T) and Verizon (VZ) are still packing a nice punch and being reinvested back into the stock, with yields well over 7%. We earned over $175 in taxable dividends from the two stocks.
I also split out my retirement accounts in the far right column and the taxable account dividends are in the left two columns. The retirement accounts are composed of H.S.A. investments, ROTH and Traditional IRAs, as well as our work 401(k) accounts. In total, the retirement accounts brought in a total dividend income amount of $379.48 or 22% of the dividend income total, similar to last month. This still left over $1,300+ in the taxable account! $1,000+ in taxable dividends is great to see, but would prefer an average of at least $2,000 per month.
Related: Maximizing your Roth for 10 Years… Then Set It & Forget It!
Dividend Income Year over Year Comparison
2022:
2023:
Our dividend income is up… $364.65, a 27% jump.
This is what dividend investing is about. Increasing your passive income, by consistently investing in the market and letting dividend reinvestment do the trick.
The push for CVS Health (CVS) and United Parcel Services (UPS) to 100 shares added a big punch to the dividend totals, year over year.
Ready for this observation?
EVERY dividend stock in 2023 that paid me was HIGHER than the same stock that paid me in 2022. That is called PURE growth for a dividend investor and can be rare in deed.
Obviously National Grid (NGG) took a huge jump at over $50. I have been buying bank stocks, such as Provident Financial (PFS) and Orrstown (ORRF) and those dividends also increased mightily year over year. For sure AT&T (T) and Verizon (VZ) stock paid more, primarily due to being reinvested at over 7% yields. Love the growth all around!
Next stop is $2,000 for me. Time to strive to hit that per month, on the off-months.
Dividend Increases
August came in fairly nice with 5 dividend increases. Even receiving 1 dividend increase is great, let alone 5!
The best dividend increase? John Deere (DE). No question there, this is the S E C O N D dividend increase this year. Love them!
I also loved Essential Utilities (WTRG) and their solid increase at 7% and the dividend aristocrat Illinois Tool Works (ITW) at 7% as well!
Related: The Impact of The Dividend Growth Rate!
In total, dividend increases created $42.95 in additional passive dividend income. I would need to invest $1,227 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn’t have to come up with the capital to create that form of income!
Dividend Income Conclusion & Summary
The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live life on your own terms. My plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!
Excited for the future, no doubt. Further, all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.
If you are just starting out on your investment journey and you aren’t sure to start – please see the articles mentioned throughout this post. We are trying to bring you financial education and help you reach your financial goals.
Further, if you are interested in our dividend stocks to buy heading into September, please see our YouTube video (below), subscribe to our channel and check us out! We’ll help break down further investing topics not only on this blog, but by showing you through video!
As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing everyone!
Nice income Lanny!
Enjoying that new J&J/Kenvue video now.
I actually liked KVUE (hanging strong, going into SP 500, good brands, & they don’t carry the talc liability burden) and you got it at 7% off and us small holders (odd lots, less than 100 shares) got our full amount.
But it is not like KVUE is unavailable. You can just put it on the Diplomat Watch List.
I like some of these pharma spin offs like HLN, KVUE, VIATRIS, etc.. Might be a video on these ..
Thanks Mike –
Exactly, you can just buy the KVUE stock and boom! Wouldn’t mind holding some eventually, have to make room with a lot of these smaller companies I still own, you know?
-Lanny
It looks like you’re on your way to dividend freedom, I was able to retire early (not as early as I would have liked, but earlier than 65) having taken advantage of my employers 401K plan where they matched contributions made as well as the HSA. The HSA was a blessing as it paid for health insurance for both my wife and I before we were old enough to go the Medicare Route. It continued to pay the medicare supplemental / dental and odds and ends medical expenses and will continue to do so until the end of this year.
I rolled my 401K into my self managed IRA and I think my highest dividend month is in April where I’ll make $1600.00. My lowest month is about $900 and my annual payout is a hair over $12,000.
Except for a couple of instances, I haven’t had to touch the IRA. My wife has her own retirement account that is broker managed and she’ll have to start making mandatory withdrawals next year.
It’s nice knowing that the dividend paychecks will continue to hit the books no matter what happens to the stock price (in most cases). I’m looking forward to your retirement party invite. 🙂
Jim…
WOW… first off – that is awesome to hear about the power of your HSA – ours has been massively building up over the years and we look forward to using that as well, in the in-between phase.
$1,600 is so rock solid. You are also benefiting from dividend growth every single month/quarter/year.
I am sure each year has just been getting better and better for you. Anything you would have then done tactically different at a younger age?
-Lanny