We may earn money or products from the companies mentioned in this post.
Did you get a raise this year? I got one last month, but it wasn’t from my full time job. I haven’t gotten a raise in over 3 years from my job. But that doesn’t mean I don’t get a raise every single month (or close to it).
Anytime a company that we own in the Money Sprout Index raises its annual dividend – my family gets a raise. For now, these are small raises, but added up together they can be sizable.
Each time these companies raise their dividend, our forward income increases.
Dividend increases are just one way that our future dividend income rises. Buying new shares of stock also helps to push our future dividend income higher. Since we are in the allocation phase of building our stock portfolio, this is where we see the most growth in future income.
The third way these future dividend income numbers grow is from reinvesting dividends into new shares of stock. My wife and I don’t like any lazy money lying around, so all dividends we currently receive are used to buy more and more stock.
Because we believe that our future dividend income is important to our financial goals, we have started tracking our growth each month.
In order to calculate our future income, we take the number of shares we own for each stock and multiply it by the current annual dividend for the company. We run this simple calculation for each individual stock in our portfolio and then sum the results to get our 12 month forward dividend income.
Reporting 12 Month Forward Dividend Income
There is nothing guaranteed about future dividend income. However, since we are investing in top dividend paying companies, there is a very strong probability our future dividend income will continue to grow.
By estimating our future dividend income, we are also able to take the necessary steps to reach our investment goals.
Here are the first four 12 month forward dividend income results that I have previously published.
- Update #1 (March 2015) – $1,239.21
- Update #2 (April 2015) – $1,288.31
- Update #3 (May 2015) – $1,501.44
- Update #4 (June 2015) – $1,551.65
Note – These numbers are also posted at the end of each month in our dividend income results. I like to do this to show the growth of our future dividend income from the new investments we are making.
As you can see from the numbers above, there was a huge jump between April and May, which was a direct result of investing most of our tax refund earlier this year. Then we jumped another $50+ between May and June as our available capital to invest was much smaller.
My wife and I expect our future dividend income to grow by about $30 to $50 per month for the remainder of the calendar year. That would set us up nicely for next year to virtually be guaranteed to earn over $1,750 in dividend income. And that amount is with no action or new investments on our part!
Our goal for 2016 is to earn a minimum of $2,000 in dividend income. If we start the year with $1,750 in almost guaranteed future dividends, then we should be able to hit our $2K target.
July Updated Future Dividend Income
Our future dividend income has grown a good amount since we last reported our June dividend income results. A combination of reinvested dividends, annual dividend increases, and new money invested has allowed our future dividend income to grow to $1,580.05!
At the time of this writing today, our future dividend income has risen by another $28.40 since last reporting our numbers in June. The good news is that we have several weeks of July remaining and more investments to make. There are going to be more dividends reinvested into new shares of stock and maybe even a few dividend increases coming in this month.
July 2015 Future Dividend Income Projection – $1,580.05
The awesome thing about growing our future dividend income is that is doesn’t just happen for one year. There is a very high probability that we will get that same income the following year and the year after, etc. Actually, there is a good chance the dividend income will grow – all on its own without any help from my wife and I.
It is awesome to know that we can do absolutely nothing to earn that income!
There are certainly no guarantee’s that we will receive $1,580.05 in future dividends in the next 12 months. However, the chances are very good that we will earn at least that amount and probably more based on the companies we have invested in.
The companies that we have purchased all have a strong history of annual dividend increases. Even if one company were to freeze or even cut their dividend, there are several others that will make up for one bad apple. That is why it is important to diversify the number of dividend stocks we own.
Do you track future dividend income? How is fast is your future dividends growing?