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Typically at the end of every month, I like to publish an update on our dividend income portfolio. We have been tracking the amount of dividend income we earn each month since 2008.
Way back in 2008 … my wife and I started our investment journey with blue chip dividend stocks. Each month since then we have been watching our monthly and yearly dividend income grow.
One day in the future, our goal is to use this passive income stream to cover a portion of our expenses.
Will we be able to cover 100% of our expenses with dividend income? No … but dividend income will be one part of our financial independence (FI) plan.
Based on some back of the envelope calculations, we’d expect to earn around $10,000 per year about the time I plan to retire from my job.
That $10,000 won’t cover everything in our retirement years, but it certainly can go a long way if combined with a pension and healthy retirement portfolio of investments.
Today is our first monthly report of 2020 … and it is a good one. Below I will explain the dividend income we earned last month (January) and any updates to our portfolio.
January 2020 Dividend Income – $185.56
Here is a breakdown of how we earned over $185 last month in dividends.
January 2020 Dividend Breakdown by Company
In total we had 10 stocks pay out a dividend in January.
Awesome dividend paying companies like Sysco, Cincinnati Financial, and Genuine Parts Co. paid our family a bit of money … just for owning shares in their company.
The cool thing is that little bit of money we receive in dividends is steadily growing each and every month.
Here is the breakdown of dividend income (by stock) in January from our taxable accounts.
The following stocks are held in our Robinhood, Fidelity, and M1 accounts that will be reported as income earned in 2020.
- Best Buy Co. (BBY) – $5.34
- Cincinnati Financial (CINF) -$54.46
- Cisco Corp. (CSCO) – $29.75
- Genuine Parts Co. (GPC) – $8.79
- Illinois Tool Works (ITW) – $0.98
- Altria Group (MO) – $19.51
- Realty Income Corp (O) – $20.93
- PepsiCo (PEP) – $1.13
- Sysco Corp. (SYY) – $15.14
- Walmart (WMT) – $29.53
January 2020 Taxable Dividend Income = $185.56
Note – We recently stopped reporting on our dividend income earned from retirement or “tax deferred” accounts. That income is not readily accessible since my wife and I are years away from needing it. Since our focus is on replacing taxable income from multiple sources, we won’t include any dividends from retirement accounts in these monthly reports any further.
Historical January Dividend Income
Looking back at past results, January has traditionally been a slower month than some. This is due to the quarterly payout cycle of most of our stocks paying out in – March, June, September, and December.
If you look at our historical performance, it is clear to see when the majority of our stocks pay dividends.
This doesn’t mean that earning dividend income in January isn’t possible. A historical look over the past 9 years shows the upward growth of our dividend income earned during the first month of the year.
January Income (2012 – 2020)
- January 2020 Taxable Dividend Income – $185.56
- January 2019 Taxable Dividend Income – $160.51
- January 2018 Taxable Dividend Income – $125.94
- January 2017 Taxable Dividend Income – $140.12
- January 2016 Taxable Dividend Income – $111.51
- January 2015 Taxable Dividend Income – $85.44
- January 2014 Taxable Dividend Income – $70.11
- January 2013 Taxable Dividend Income – $24.74
- January 2012 Taxable Dividend Income – $11.29
Note – Prior to 2018, we reported Lockheed Martin (LMT) dividend income usually in January based on when we received the payments in our Computershare account. Once we transferred our shares to Fidelity, we began reporting that dividend income in December when the money hit our account. This explains the noticeable decrease January 2018 dividend income.
As you can see, our dividend income just in the month of January has really compounded since we first started tracking our results.
Just in the past year, we were able to grow our monthly dividend income by 15.6%. I don’t know about you, but I have never received a raise that big from my employer.
Growing Future Dividend Income
One of the fun parts of reporting our dividend income each month is looking at our future dividend income.
Based our 12-month forward dividend calculation, we would earn approximately $3,677.93 in income over the next year from our portfolio.
This calculation doesn’t include any reimbursement of income back into more stocks. Nor does it include any new investment dollars or dividend increases made by the companies in which we own shares.
The only assumption in earning this income is that we don’t sell any of our stocks in our portfolio. And the companies we own do not cut or lower their dividend payout.
Since buying our first dividend stock back in 2008 … we’ve never had a year that our dividend income decreased. And we don’t expect one anytime soon!
Speaking of companies raising dividends, I would like to briefly mention a few fabulous stocks that we own who announced dividend increases last month.
- Consolidated Edison (ED) – 3.4%
- Intel Corp. (INTC) – 4.7%
- Realty Income Corporation (O) – 3.1%
Note – Realty Income increase is compared against the dividend paid at the same time last year. They had multiple increases throughout the year.
A quick note … Consolidated Edison (ED) which raised it’s dividend recently was our very first stock purchase for our portfolio back in 2008. It has been a steady fixture in our growth of the income stream.
These annual increases play a big role in allowing our dividend income stream to grow on it’s own overtime.
January 2020 Dividend Summary
In January, we earned $185.56 of dividend income from our taxable brokerage accounts. This was our largest January dividend income month ever!
While an extra $185.56 may not seem all that exciting for some people, I think it is awesome. I did not have to spend any working hours making that income. And I won’t have to spend any hours working to get the same (plus any growth) income next year.
To be honest, an extra $185+ can go a long way in our budget too.
That will about cover our monthly gas bill to heat our home in the winter. Or it would cover our monthly electric bill to cool our home in the summer.
And it is important to point out that we are not just sitting still earning $185 per month in January from now until who knows when. No … instead we are setting new goals to continue actively growing our dividend income.
For example, in 2019 we had a goal to earn $3,500 in dividend income from our taxable accounts. We hit that goal back in December by earning just over that amount.
So now in 2020, we want to get better by earning $3,850 in dividend income over the next 12 months.
By earning $185.56 in January, we have taken our first chunk out of that annual goal. Now the question is over the next 11 months, can we earn an additional $3,664.44 of dividend income?
One last item to cover … we managed to raise our annual forward dividend income in January to $3,677.93. 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 great opportunities for the remainder of 2020!
How was your dividend income in January? 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 noted in this post – BBY, CINF, CSCO, GPC, ITW, MO, O, PEP, SYY, and WMT. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.
