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At the end of each month, I post an update on our dividend stock portfolio. The portfolio of 35+ publicly traded companies is part of our overall plan to reach financial independence (FI).
This year alone (2018), we expect to earn over $6,500 from our dividend income portfolio.
We estimate that if we never invested another dollar in this portfolio, in 10 years we would be generating over $14,000 in dividend income per year. This is a direct result of the power of compounding interest. In less than 30 years … that number would explode to earning dividend income over $55,000 per year!
During the month of June (2018), we set many new records for our dividend portfolio. First … we broke a new milestone by earning over $800 for the first time ever in dividends for a single month! It won’t be long until we celebrate our first $1,000 month.
We also blew past $3,000 in dividends in total for the year so far … and it is only half way over! This is another big milestone for us and our plans to become financially independent one day.
So … today we are reporting our June 2018 dividend income results.
June 2018 Dividend Income – $807.07
Here is a breakdown of how we earned over $800 last month in dividends … which makes this our highest month ever!
June 2018 Dividend Breakdown by Company
Overall, we had 20 stocks pay out a dividend in June, along with our favorite bond fund and ETF. As always, we earned dividend income in both our taxable and tax deferred accounts.
Awesome dividend paying companies like Johnson & Johnson, Emerson Electric, and Lockheed Martin wrote my family a check (well not exactly a real check) for simply owning shares in their company.
Here is the breakdown of dividend income (by stock) in June from our taxable accounts. These include stocks held in our Robinhood, Fidelity, and Computershare accounts that will be reported as income earned in 2018.
- Archer Daniels Midland Co. (ADM) – $21.44
- Aflac Inc. (AFL) – $31.91
- Consolidated Edison Inc. (ED) – $27.61
- Emerson Electric Co. (EMR) – $24.25
- Hanesbrands Inc. (HBI) – $1.80
- Intel Corp. (INTC) – $14.70
- Johnson & Johnson (JNJ) – $47.32
- Kroger Co. (KR) $1.00
- Lockheed Martin Corp. (LMT) – $59.06
- McDonald’s Corp. (MCD) – $38.44
- Microsfot Corp. (MSFT) – $34.95
- Norfolk Southern Corp. (NSC) – $19.36
- Realty Income Corp (O) – $19.76
- Qualcomm Inc. (QCOM) – $8.06
- Target Corp. (TGT) – $36.01
- Unilever (UL) – $9.31
- Walmart Inc. (WMT) – $28.05
- Exxon Mobile Corp. (XOM) – $34.95
- Vanguard Total Stock Market ETF (VTI) – $4.22
June 2018 Taxable Dividend Income = $462.20
Here is the breakdown of dividend income (by stock) in June from our tax deferred accounts. This includes a Rollover IRA we recently built out from several past employer retirement accounts.
- Archer Daniels Midland Co. (ADM) – $50.64
- Amgen Inc. (AMGN) – $33.00
- Ingersoll-Rand (IR) – $52.65
- Johnson & Johnson (JNJ) – $22.64
- Kroger Co. (KR) – $5.65
- Qualcomm Inc. (QCOM) – $40.96
- Target Corp. (TGT) – $68.80
- Vanguard Total Stock Market ETF (VTI) – $3.03
- Fidelity U.S. Bond Index Fund (FSITX) – $67.50
June 2018 Non-Taxable Dividend Income = $344.87
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. They currently don’t offer DRiP, but at some point all the funds we earn are invested back into shares of a dividend stock.
June 2018 Total Dividend Income = $807.07
Growing Future Dividend Income
One of my absolute favorite personal finance tasks to do each month is to update the dividend income we earned in our tracking spreadsheet. It is an awesome 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.
Besides reporting our dividend income earnings, we also like to track how we grow our future dividend income. We actually track this by reporting our future annual dividend income amount.
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.
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 June from these 3 different methods.
New Capital Invested in June
We didn’t invest a lot of new money in June. And we sold all our shares in Hanesbrands (HBI) … due to a lack of dividend increases. Those funds were used to buy additional shares in Hormel Foods (HRL).
Those two transactions (selling HBI and buying HRL) was a simple case of consolidating into a better dividend paying stock. This is something we usually wouldn’t do … but the short term impacts are minimal and we feel HRL is a better long term option for earning dividend income.
Here are the new investments we made in June in our accounts (taxable and tax deferred accounts) –
- $50.00 automated investment in Exxon Mobil Corp. (XOM) – $1.40 in future income
- $361.18 investment in Hormel Foods Corp (HRL) – $7.50 in future income
- $50.00 automated investment in Cincinnati Financial (CINF) – $1.56 in future income
- $100.00 investment in Vanguard Total Stock Market ETF (VTI) – $1.64 in future income
As noted earlier, we sold our small position in Hanesbrands (HBI) last month and used the funds to buy more shares of Hormel Foods (HRL).
- ($251.88) sold 12 shares of Hanesbrands (HBI) – ($7.20) decrease in future income
Net Future Dividend Income from New Investments = $4.90
The total net amount of new capital invested in June was – $309.30
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
Note – all new investments in April were made from a bunch of our federal tax refund in case you are wondering why the big jump that month.
We have a goal to invest $10,000 to $12,000 of new money in 2018. So far, we have invested $5,129.09 in our accounts for 2018.
2018 New Investment Total = $5,129.09
Dividend Reinvestment’s (DRiP) in June
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.
In June, we were able to bump our future annual dividend income by reinvesting in the following 15 companies and 1 bond fund –
- Archer Daniels Midland Co. (ADM) – $1.53 in future income
- Aflac Inc. (AFL) – $0.19 in future income
- Consolidate Edison (ED) – $1.09 in future income
- Intel Corp. (INTC) – $0.32 in future income
- Johnson & Johnson (JNJ) – $1.38 in future income
- Kroger Co. (KR) – $0.13 in future income
- Lockheed Martin Corp. (LMT) – $1.56 in future income
- McDonald’s Corp. (MCD) – $0.93 in future income
- Microsoft Corp. (MSFT) – $0.58 in future income
- Norfolk Southern Corp. (NSC) – $0.37 in future income
- Qualcomm Inc. (QCOM) – $1.71 in future income
- Target Corp. (TGT) – $3.37 in future income
- Unilever (UL) – $0.32 in future income
- Walmart Inc. (WMT) – $0.70 in future income
- Exxon Mobil Corp. (XOM) – $1.40 in future income
- Fidelity U.S. Bond Index Fund (FSITX) – $1.81 in future income
Note – Dividends earned from stocks we own in our Robinhhood account were not directly reinvested through DRiP. Any dividend income earned throughout a given month from Robinhood will eventually be reinvested at some point.
Future Dividend Income from DRiP = $17.39
Company Dividend Increases in June
My absolute favorite way to grow our future income (and the easiest) is through company dividend increases. This is the ultimate passive income opportunity in my opinion.
The month of June had several impressive dividend increases from companies we own shares in. A total of 6 companies gave us an awesome raise just for being shareholders.
Without question, this was the best month ever for increasing future income from dividend increases.
Here are the companies that announced dividend hikes in June that we own shares in –
- 17.0% increase from Lowe’s Companies (LOW) – $21.38 in future income
- 3.2% increase from Target Corp. (TGT) – $13.61 in future income
- 10.3% increase from Caterpillar (CAT) – $6.40 in future income
- 17.8% increase from Ingersoll-Rand (IR) – $37.44 in future income
- 0.2% increase from Realty Income Corp. (O) – $0.54 in future income
- 12.0% increase from Kroger Co. (KR) – $3.20 in future income
Future Dividend Income from Company Increases = $82.57
Note – In addition to our June increases … January started out with 6 dividend hikes, a total of 8 in February, 3 in March, 4 for April, and May with 2 … which has provided us with an awesome boost so far in 2018.
It is because of these company increases that our dividend income stream will continue to grow every year … even if we never invest another cent.
Total Future Annual Dividend Income
We started the new year (2018) with a future annual dividend income total under $6,000. In just 6 months, we have grown our future dividend income by well over $1,100 to $7,106.81!
June 2018 Future Annual Dividend Income = $7,106.81
It would be awesome to grow our future dividend income by another $1,000 or more for the remainder of the year (6 months) … but that would be a little difficult I think.
The Rule of 72 Projections
At the beginning of this year, 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 $7,106.81 … that would be earned on July 1, 2019.
Take a look at how our income could double overtime –
- 07/01/2019 – Annual Dividend Income = $7,106.81
- 07/01/2028 – Annual Dividend Income = $14,213.61
- 07/01/2037 – Annual Dividend Income = $28,427.22
- 07/01/2046 – Annual Dividend Income = $56,854.45
Our updated figures tell us we should be earning almost $57,000 per year in dividend income by mid-2046!
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.
June 2018 Dividend Summary
In June, we earned $807.07 of dividend income from our tax differed and regular brokerage accounts. While that kind of money won’t cover all our monthly expenses … it would be enough to make both of our monthly car payments. Or we could cover over 75% of our mortgage payment from those dividends! That is a very cool feeling.
Our goal for 2018 is to earn $6,700 in dividend income from all our accounts. After 6 months, it appears we are slightly behind the pace we need to be at to hit our goal.
For the first 6 months of the year, we have earned $3,120.05 in dividend income in 2018 (January to June).
In order to hit our annual goal, we will need to earn $3,579.95 in additional dividends over the next 6 months. That is an average of $596.66 per month. The good news is that our income will have time to compound a little before we reach the end of the year. Plus all the new investments we made this past month (and earlier in the year) will start earning dividend income. And we still have 2 big dividend paying months to go this year – September and December.
Not only did we post solid dividend income results in June, we managed to raise our annual forward dividend income by over $100 to $7,106.81. 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 a very second half of 2018.
How was your dividend income in June? 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, CAT, CINF, ED, EMR, HRL, INTC, IR, JNJ, KR, LOW, LMT, MCD, MSFT, NSC, O, QCOM, TGT, UL, WMT, XOM, VTI, and FSITX. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.