How Much Dividend Income Did We Earn in December 2018?

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At the close of every month, we publish an update of our dividend income portfolio here on The Money Sprout.

This most recent update is the most exciting dividend income post we have ever published. That is because we blew past $1,000 of monthly dividend income for the first time ever!

December was our highest dividend income month … topping $1,500. And those numbers helped push our 2018 annual income over $7,000 for the the first time.

Just a quick overview of our portfolio – it currently consists of 35+ publicly traded companies and is part of our long term financial independence (FI) plan.

One of the things I really enjoy about investing for income is that when the market drops … we don’t freak out. Instead, we buy some awesome companies that will pay us a steady income … all while on sale.

I think this investing philosophy really rings true today … especially after a month like we just had in the market.

Someday in the future … my wife and I plan to use this dividend income stream to help offset some (not all) of our monthly expenses.

As I mentioned earlier … we closed out 2018 with over $7,000 of dividend income. That amount would make 6.5 of our monthly mortgage payments each year!

That is great and all … but we don’t want to settle with that. Instead, we want to grow this income stream to cover the mortgage payments for the entire year. Plus pay for our property taxes and homeowners insurance. And while we are at it … why not covering all our monthly utility bills too!

Based on some back of the envelope calculations, we could expect our dividend income to double every 9 years (or so) if we were to leave it alone. So in less than 10 years, we should be earning $14,000 annually in dividends.

Then if that were to double in another 9 years or so … our dividend income will be earning us $28,000 per year.

So in about 18 years (or less), our dividend income could cover 47% of our overall spending. This is based on our current spending of $60,000 per year.

Today we are reporting our latest monthly dividend income results.

December 2018 Dividend Income – $1,593.10

Here is a breakdown of how we earned over $1,500 last month in dividends.

How We Earned Over $1,500 in Dividend Income Last Month

December 2018 Dividend Breakdown by Company

In total we had 20 stocks pay out a dividend in December, along with our bond fund, total stock market fund, and total stock market ETF.

Just like the every month for the past year … we earned dividend income in both our taxable and tax deferred accounts.

Fantastic dividend paying companies like Consolidated Edison, Aflac, and even Microsoft paid our family a bit of money … just for owning shares in their company.

Here is the breakdown of dividend income (by stock) in December from our taxable accounts.

The following stocks are held in our Robinhood, Fidelity, and Computershare accounts that will be reported as income earned in 2018.

  • Archer Daniels Midland (ADM) – $21.44
  • AFLAC (AFL) – $32.01
  • Best Buy (BBY) – $4.66
  • Consolidated Edison (ED) – $28.14
  • Emerson Electric (EMR) – $24.50
  • Intel (INTC) – $14.87
  • Johnson & Johnson (JNJ) – $47.67
  • Coca-Cola (KO) – $6.15
  • Kroger (KR) – $1.12
  • Lockheed Martin (LMT) – $65.78
  • Mcdonald’s (MCD) – $44.70
  • Microsoft (MSFT) – $38.58
  • Norfolk Southern (NSC) – $21.72
  • Realty Income Corp (O) – $20.07
  • QUALCOMM (QCOM) – $8.06
  • Target (TGT) – $37.38
  • UNILEVER (UL) – $8.77
  • Exxon Mobil (XOM) – $38.67
  • Vanguard Total Stock Market ETF (VTI) – $5.77.
  • Fidelity Total Market Index Fund (FSKAX) – $2.10

December 2018 Taxable Dividend Income = $472.16

Here is the breakdown of dividend income (by stock) in December from our tax deferred accounts. This includes a Rollover IRA we recently built out from several past employer retirement accounts.

  • Archer Daniels Midland (ADM) – $51.36
  • Amgen (AMGN) – $33.64
  • Ingersoll-Rand (IR) – $62.01
  • Johnson & Johnson (JNJ) – $22.96
  • QUALCOMM (QCOM) – $41.46
  • Target (TGT) – $72.09
  • Vanguard Total Stock Market ETF (VTI) – $9.95
  • Fidelity U.S. Bond Index Fund (FXNAX) – $74.28
  • Fidelity Total Market Index Fund (FSKAX) – $753.19

December 2018 Non-Taxable Dividend Income = $1,120.94

Note – All of the dividends we currently receive are reinvested into new shares of the same stock using DRiP regardless the type of account. The only exception right now are any dividends received in our Robinhood account and shares of Ingersoll-Rand (IR). Robinhood doesn’t offer DRiP, but at some point all the funds we earn are invested back into shares of a dividend stock.

December 2018 Total Dividend Income = $1,593.10

Overall, December was our highest ever dividend income month … by over $700!

We won’t see numbers like this again until December 2019.

Growing Future Dividend Income

My favorite monthly personal finance task is to update the dividend income we earned in our tracking spreadsheet.

It is a really cool feeling to watch our dividend income grow month after month and year after year. This is probably one of the best ways to stay motivated in hitting our investment goals.

Even cooler than reporting our dividend income earnings, is tracking our future dividend income growth.

We track this by reporting our future annual dividend income amount in each of our monthly posts.

This is a very simple calculation that takes the number of shares we own of each of our stocks and multiplies it by the current dividend of the company.

The result is the amount of income we could expect to earn over the next 12 months … if we walked away today and never touched our portfolio again. How awesome is that?

Of course this calculation assumes the company’s we own will not cut their dividend, which is unlikely (but not impossible).

There are 3 different ways we can grow our future dividend income – new investments, dividend reinvestment’s (or DRiP), and company dividend increases.

Let’s take a look at how we grew our dividend income in December from these 3 different methods.

New Capital Invested in December

New investments were limited for December in our taxable and non-taxable accounts.

We have been focused on investing more dollars into building our 457 account through my work. Doing so will help us to keep our federal tax bill at $0 for the year.

We still did manage to invest some money in our accounts in December. Here are the new investments we made in December in our accounts (taxable and tax deferred accounts) –

  • $50.00 automated investment in Exxon Mobil (XOM) – $2.01 in future income
  • $241.03 investment in Vanguard Total Stock Market ETF (VTI) – $5.12 in future income
  • $388.39 investment in AT&T (T) – $26.00 in future income
  • $98.64 investment in Fidelity Total Market Index Fund (FSKAX) – $2.04 in future income

In addition to our purchases, we also sold off one of our smaller holdings to consolidate our portfolio. This sale should not have much impact on our taxes and the funds were used to help repurchase stock (listed above).

  • ($233.48) sold investment in Kroger (KR) – ($4.48) loss of future income

Net Future Dividend Income from New Investments and Sale = $30.69

The total net amount of new capital invested in December was – $544.58

Here are the new investment totals for the year –

  • January 2018 Investments – $189.57
  • February 2018 Investments – $373.94
  • March 2018 Investments – $231.72
  • April 2018 Investments – $3,567.56
  • May 2018 Investments – $457.00
  • June 2018 Investments – $309.30
  • July 2018 Investments – $266.77
  • August 2018 Investments – $538.58
  • September 2018 Investments – $2,278.65
  • October 2018 Investments – $489.02
  • November 2018 Investments – $600.03
  • December 2018 Investments – $544.58

We had a goal to invest $10,000 to $12,000 of new money in 2018 in our dividend stock accounts. For the year, we invested $9,846.72 in new money in our accounts.

2018 New Investment Total = $9,846.72

Looking ahead … we are setting a target of $10,000 of new investments for 2019.

Dividend Reinvestment’s (DRiP) in December

Most of the stocks we own are setup to reinvest the dividends back into more shares of the stock. A few exceptions include any stocks we own in our Robinhood account and shares of Ingersoll-Rand (IR).

In December, we were able to bump our future annual dividend income by reinvesting in the following 16 companies, bond fund, and total stock market fund –

  • Archer Daniels Midland (ADM) – $1.52 in future income
  • AFLAC (AFL) – $0.20 in future income
  • Amgen (AMGN) – $0.99 in future income
  • Best Buy (BBY) – $0.17 in future income
  • Consolidated Edison (ED) – $0.96 in future income
  • Intel (INTC) – $0.37 in future income
  • Johnson & Johnson (JNJ) – $1.19 in future income
  • Coca-Cola (KO) – $0.19 in future income
  • Lockheed Martin (LMT) – $2.37 in future income
  • Mcdonald’s (MCD) – $1.12 in future income
  • Microsoft (MSFT) – $0.65 in future income
  • Norfolk Southern (NSC) – $0.44 in future income
  • QUALCOMM (QCOM) – $1.77 in future income
  • Target (TGT) – $3.47 in future income
  • UNILEVER (UL) – $0.31 in future income
  • Exxon Mobil (XOM) – $1.63 in future income
  • Fidelity U.S. Bond Index Fund (FXNAX) – $1.99 in future income
  • Fidelity Total Market Index Fund (FSKAX) – $15.98 in future income

Future Dividend Income from DRiP = $35.13

Company Dividend Increases in December

My absolute favorite way to grow our future income (and the easiest) is through company dividend increases. This is the ultimate passive income opportunity … and every month I get excited when raises start coming in.

The month of December had 3 dividend increases from companies we own shares in.

Companies that announced dividend hikes in December that we own shares in –

  • 0.23% increase from Realty Income Corp. (O) – $0.54 in future income
  • 2.00% increase from AT&T (T) – $0.68 in future income
  • 9.84% increase from Amgen (AMGN) – $13.18 in future income

Future Dividend Income from Company Increases = $14.40

It is because of these company increases that our dividend income stream will continue to grow every year … even if we never invest another penny.

Total Future Annual Dividend Income

We started the new year (2018) with a future annual dividend income total under $6,000. In 12 months, we have grown our future dividend income by almost $1,500 to $7,477.26!

December 2018 Future Annual Dividend Income = $7,477.26

We are looking forward to pushing past the $8,000 mark sometime in 2019. This should help push our future dividend income projections higher by using the Rule of 72.

The Rule of 72 Projections

At the beginning of this year (2018), I started publishing the rule of 72 projections for future dividend income in our monthly reports. For more information about the rule of 72, you can check it out here.

Basically, it is a calculation that shows how often your investments will double.

Using the rule of 72, I have calculated (conservatively) that our dividend income will double every 9 years … without doing anything.

Based on this, I can calculate out how our dividend income could grow (and double) based on our future annual dividend income number of $7,477.26 … that would be earned on January 1, 2020.

Take a look at how our income could double overtime –

  • 01/01/2020 – Annual Dividend Income = $7,477.26
  • 01/01/2029 – Annual Dividend Income = $14,954.52
  • 01/01/2038 – Annual Dividend Income = $29,909.03
  • 01/01/2047 – Annual Dividend Income = $59,818.07

Our updated figures tell us we should be earning over $59,800 per year in dividend income by January 2047.

Keep in mind, this is more of a fun what-if type of scenario. I believe we have figured conservatively … and our income should grow at a faster rate. And it should be fun to watch this number grow every month when we post results.

It is also important to remember that some of this income is in retirement accounts that can’t be accessed until a certain date, while other assets are in taxable accounts.

December 2018 Dividend Summary

In December, we earned $1,593.10 of dividend income from our tax deferred and regular brokerage accounts. This was our largest dividend income month ever!

That amount of income could cover our monthly mortgage payment, plus enough leftover for one car payment … and maybe could also cover our monthly water bill!

My wife and I have set a long term goal from this dividend income portfolio to cover at least half of our monthly expenses … which right now is about $2,500 (our monthly spending is currently around $5,000).

Our family would have a lot more flexibility knowing half of our monthly expenses could be covered by our passive dividend income stream. That is a very cool feeling.

The goal for 2018 was to earn $6,700 in dividend income from all our accounts. After 12 months, we finally hit our target in December.

For the year (2018), we earned $7,113.74 in dividend income. Of that total … $3,998.28 was earned in pretax accounts while the remaining $3,115.46 was earned in our taxable brokerage accounts.

We plan to publish a roundup article soon for a 2018 dividend income recap. In addition, look for our 2019 dividend income goals article very soon.

One last item to cover … we managed to raise our annual forward dividend income in December by just over $80 to $7,477.26. This is basically the dividend income we would expect to earn starting today over the next 12 months … without doing anything.

I look forward to an awesome 2019!

How was your dividend income in December? Are you actively investing and growing your portfolio or maybe waiting for a market correction?

Full Disclosure – At the time of this writing, we owned shares in the following stocks and funds noted in this post – ADM, AFL, AMGN, BBY, ED, EMR, INTC, IR, JNJ, KO, LMT, MCD, MSFT, NSC, O, QCOM, T, TGT, UL, XOM, VTI, FSKAX, and FXNAX. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.

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Antonio - January 4, 2019

Curious to know what is your investment thesis for AT&T. It doesn’t seem to follow your 8 Steps to Selecting the Best Dividend Stocks.

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