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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 September 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 allow 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 – September 2022
Now, on to the numbers… In September, we (my wife and I) received a dividend income total of $4,602.61. We crossed $4,000 yet again in the quarter-end month, just as we did in June. This is starting to become a trend. As a dividend investor, you know dividend growth and reinvestment carry so much of this weight! All it takes is time and patience.
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. Lockheed Martin (LMT) and Visa (V) I have owned for over a decade!
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. The S&P is now down over 20% this year, ringing the bear market bells. September was a brutal month for the stock market.
In addition, the Fed has raised rates by 300 points so far this year, which is wild. Do we see another 50- or 75-basis point increase in the future? 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 merge was completed, which was a non-event. The housing market is cooling, inflation is still high and recession still looms.
Here is the breakdown of dividend income for the month of September, 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? So many triple baggers here, with Vanguard’s VYM, buying them each and every week. My wife and I earned almost $600 in total from VYM!
In addition, Dividend Aristocrats, such as Target (TGT), Aflac (AFL), and T. Rowe (TROW) all soared to over $100+ in dividend income.
Scotts Miracle-Gro (SMG) is pretty much reinvested at one full share at this point. I am waiting on Shell (SHEL) to send in another dividend increase as well soon. Intel (INTC) is also being reinvested at a very high yield.
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 $1,413.32 or 31% of the dividend income total. This still left over $3,000+ in the taxable account. C’mon dividends, keep rolling!
Dividend Income Year-over-Year Comparison
2021:
2022:
Our dividend income was up $447.89 or 10.78%. We’ll take it, as there were a few items to note here.
First, my current 401(k) dividend from VFIAX was last year. This year, they transitioned to Fidelity funds and that fund paid out in October. Therefore, my income dragged because of that.
Kroger (KR) is up, simply due to dividend growth and reinvestment. They have been performing exceptionally well since the pandemic.
LyondellBasell (LYB) also has had a large leap, due to new investment, as well as dividend growth. This stock could hit $200 per quarter soon!
Overall, a solid dividend month. The push to $5,000 is on! Keep on investing.
Dividend Increases
In September, we rocked in six huge dividend increases, that really added a punch to the dividend stock portfolio. In fact, we showcase five expected dividend increases in September!
Starbucks (SBUX) really surprised me here with an 8% dividend increase. Given their fight with unionization, inflation increases, and difficulty finding/keeping employees, I did not anticipate such a stellar dividend increase.
Further, STORE Capital (STOR) will be getting acquired. I thought that we were not going to receive a dividend increase, but I was dead wrong. STOR came in hot with a 6.5% increase. I’ll take it.
In total, the dividend increases created $79.91 in additional passive dividend income. I would need to invest $2,283 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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