Khanchit Khirisutchalual
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 2022 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), as well as SoFi’s investing application – commission-free.
I also automatically invest and max out, pre-tax, my 401(k) 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!
Growing your dividend income takes time and consistency. Investing as often and early as you can allows compound interest (aka dividends) to work its 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 2022
Now, on to the numbers… In August, we (my wife and I) received a dividend income total of $1,346.72. Another 4-digit banger! We are now consistently seeing over $1,000 in dividends, which is awesome. Thank goodness for dividend growth and dividend reinvestment, as that does most of the work!
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 its thing. This is what dividend investing for financial freedom is all about. The passive income stream is growing at a rapid pace. I know Canadian Imperial (CM) may be one of my oldest stock positions.
2022 is off to a volatile start. Stock market has roared up and also roared down. Lately, though the stock market had attempted to make a resurgence, the Fed’s comments about their aggressiveness appear to have pushed the stock market back down. We have had consistent red days and finished off September 2nd in the red!
In addition, the Fed has raised rates by 225 basis points and we are anticipating another 50, possibly a 75-basis point increase in September. Time will tell. Student loan forgiveness is in full swing, allowing borrowers to remove $10,000 and up to $20,000 of their debt. In addition, Ethereum’s merger should be underway at some point. The housing market is cooling, inflation is still high, and recession still looms.
Here is the breakdown of dividend income for the month of August, between taxable and retirement (far right column, under “Retirement”) accounts. In addition, “W” means my wife’s account:
So what happened in dividend income this month? National Grid (NGG) really shines here. So much, in fact, that I have been consistently adding to that dividend stock position.
AT&T (T) dividend is still felt and seen here. Why? Because it’s lower than what the dividend payout has been before the spin-off from WarnerMedia.
Citizens & Northern (CZNC) is definitely keeping the lights on for the month across the dividend stock portfolio. I love community banks and this is getting to be a fairly large dividend payout – growth driven by DRIP and dividend increases.
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 $337.87 or 25% of the dividend income total. This still left over $1,000+ in the taxable account. C’mon dividends, keep rolling!
Dividend Income Year-over-Year Comparison
2021:
2022:
Our dividend income was barely up from last year by $39 or 3%. We’ll take it, as there were a few items to note here.
One, AT&T dividend is the largest impact here, with a $58 dividend decrease. AT&T right-sized their dividend in the post spin-off era. However, Verizon (VZ) is making a run to make up for it, as the dividend income was up over $30 from their dividend.
I was speaking of community banks earlier, but Provident Financial (PFS) dividend is quite a bit larger, due to adding to my stock position and the power of DRIP! The impact was approximately $15.
Overall, a solid dividend month. The push to $2,000 is on! Keep on investing.
Dividend Increases
August was a quiet month for the second month in a row (July, we only showcased one dividend increase). Only one strong dividend increase this month, as September should have a better month. In fact, we showcase eight expected dividend increases in August!
Illinois Tool Works (ITW), the dividend aristocrat themselves, came through with an amazing dividend increase. When all is doom and gloom, a dividend aristocrat stock ITW just brings in the heat!
In total, the dividend increase created $9.45 in additional passive dividend income. I would need to invest $270 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, show that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.
As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing everyone!
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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