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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 May 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) – 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 – May 2022
Now, on to the numbers… In May, we (my wife and I) received a dividend income total of $1,209.48. Very thankful to continue to cross the 4-digit threshold consistently. I just continue to buy assets that produce passive income. I reinvest the dividends and then have the 8th wonder of the world, dividend growth baby!
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.
2022 is off to a volatile start, stock market has roared up and also roared down. Interest rates are rising, the Fed starting their quantitative tightening and oil prices all over the place. Inflation is eating away at the purchasing power of consumers and fears of a recession loom. In addition, the Fed has raised rates by 75 basis points and we are anticipating another 50 basis point increase in June. Time will tell.
Here is the breakdown of dividend income for the month of May, 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? Telecommunications has really carried the load here with Verizon (VZ) and, a name we haven’t said in a while, AT&T (T). Combined, the dividend total is over $150!
Between my wife and I, our Procter & Gamble (PG) dividend income stream is now over $100 when combined. A Dividend King pumping passive income our way. We will surely take it!
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 HSA 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 $395.96 or 33% of the dividend income total. This still left over $813 in the taxable account! That’s a significant amount and allocation for a passive income stream, as most of the dividend income received can be used right away.
Dividend Income Year over Year Comparison
2021:
2022:
My dividend income is up approximately $103 or 9.3% from my dividend income in May 2021. For this type of “off-month” cycle, that’s a significant increase and is the second time we’ve crossed $1,000 in dividend income in May! What exactly happened?
Obviously the AT&T dividend is significantly lower, due to the spin-off to Warner Bros. Discovery (WBD) stock. This reduced the dividend significantly, which reduced the amount of dividend income I received.
What I do like to see is the Kinder Morgan (KMI) dividend continue to climb. The combination of DRIP and growth has really increased the KMI dividend output for me. Doesn’t hurt that oil is near all-time highs right now.
Overall, a solid dividend month. If we are at $1,209 for May, would more than welcome a $1,500 next May. $1,500 would be an aggressive goal, too.
Dividend Increases
May really surprised me with the number of dividend increases. We had another 5 dividend increase month for May 2022 and dividend growth has been very steady and consistent in 2022.
My #1 pick obviously has to go to John Deere (DE). Why? It was unexpected, period. During a volatile year within the stock market and John Deere just came out hard with an increase. That’s not to shame LyondellBasell (LYB) with their 5.3% increase, because they also announced a $5.20 special dividend.
In addition, the other stocks you see above were consistent and met expectations. Cool to see Royal Dutch Shell (SHEL) come back with their dividend each year, since they cut their dividend during the global pandemic.
In total, dividend increases created $78.22 in additional passive dividend income. I would need to invest $2,235 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.
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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