How Much Dividend Income Did We Earn in September 2018?

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My wife and I have a goal to use passive or side income streams to eventually cover 100% of our expenses.

Within the next 10 years, we would like to have enough money coming in every month to cover all our expenses. Based on our currently spending, that is around $5,000 per month we plan to cover.

One of the income streams that will help cover some of our expenses is a dividend stock portfolio. This portfolio of stocks consists of 35+ publicly traded companies and is part of our long term financial independence (FI) plan.

This year alone (2018) we are expecting to earn close to $6,700 of dividend income.

That would cover approximately 11.7% of our current spending. Not a bad start, but still a ways to go.

Based on our current dividend growth calculations for the stocks we own, we anticipate earning $14,000 annually in dividends within the next decade. If our spending is still $5,000 per month in 10 years … that would cover 23.3% of our bills.

That is actually a very conservative estimate and doesn’t include any new money invested. We are only factoring in dividend reimbursement and company increases in these estimates.

Now on to our latest monthly dividend income results.

September 2018 Dividend Income – $820.78

Here is a breakdown of how we earned over $800 last month in dividends … which is getting really close to cover our monthly mortgage payment!

September 2018 Dividend Breakdown by Company

Overall, we had 19 stocks pay out a dividend in September, along with our single bond fund. Just like every other month, we earned dividend income in both our taxable and tax deferred accounts.

Awesome dividend paying companies like Emerson Electric, Norfolk Southern, and even Microsoft gave my family a raise just for simply owning shares in their company.

Here is the breakdown of dividend income (by stock) in September 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 (ADM) – $21.44
• Aflac (AFL) – $31.96
• Consolidated Edison (ED) – $27.89
• Emerson Electric (EMR) – $24.25
• Intel (INTC) – $14.78
• Johnson & Johnson (JNJ) – $47.50
• Kroger (KR) – $1.12
• Lockheed Martin (LMT) – $59.45
• McDonald’s (MCD) – $38.68
• Microsoft (MSFT) – $35.09
• Norfolk Southern (NSC) – $21.62
• Realty Income Corp (O) – $19.80
• Qualcomm (QCOM) – $8.06
• Target (TGT) – $37.36
• Unilever (UL) – $8.88
• Walmart (WMT) – $28.22
• Exxon Mobil (XOM) – $36.81

September 2018 Taxable Dividend Income = $462.91

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

• Archer Daniels Midland (ADM) – $51.02
• Amgen (AMGN) – $33.24
• Ingersoll-Rand (IR) – $62.01
• Johnson & Johnson (JNJ) – $22.81
• Kroger (KR) – $6.36
• Qualcomm (QCOM) – $41.12
• Target (TGT) – $71.58
• Fidelity U.S. Bond Index Fund (FSITX) – $69.73

September 2018 Non-Taxable Dividend Income = $357.87

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.

September 2018 Total Dividend Income = $820.78

Growing Future Dividend Income

At the end of every month, I track and update our future dividend income growth. Reporting our current monthly dividend income is nice, but projecting our future dividend income is way more fun.

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 September from these 3 different methods.

New Capital Invested in September

We have switched focus a bit in the second half of 2018.

Instead of investing all our money into dividend stocks … we are trying to build up our pre-tax accounts. This allows us to fully optimize our taxes for 2018 and keep more of our money.

We did manage to invest a little sum of money in September and even sold a bit of our portfolio off to purchase other assets.

One big set of transactions that we made involved my Roth IRA. I held over 40 shares of Kroger (KR) in this account along with a bunch of cash.

In order to simplify our investments a little … I sold off our KR shares and used the funds plus the additional cash to buy shares of FSTVX.

I really wanted to make things easier with my Roth IRA account. Plus … selling the Kroger shares didn’t trigger any kind of taxable event.

• $1,443.70 sold in Kroger (KR) – ($25.56) in loss of future income
• $3,417.68 investment in Fidelity Total Market Index Fund (FSTVX) – $63.06 in future income

The net result of these transactions was $1,973.98 of new money invested and an increase of $37.50 in future income.

Here are the other new investments we made in September in our accounts (taxable and tax deferred accounts) –

• $122.30 investment in Altria Group (MO) – $6.40 in future income
• $50.00 automated investment in Exxon Mobil Corp. (XOM) – $2.04 in future income
• $32.37 investment in Omega Healthcare (OHI) – $2.64 in future income
• $100.00 investment in Vanguard Total Stock Market ETF (VTI) – $1.57 in future income

One last item to cover … we currently hold shares of TGT and LOW in a taxable CapitalOne account. These assets will be moved to E*TRADE later this year. In order to prepare for the move … CapitalOne sold off all partial shares of stock.

The net result of this taxable event was a loss of ($2.65) in future income.

The good news is the capital gains earned on these partial shares won’t cause much of a stir on our taxes. And the extra cash will soon be invested again. Once our shares are moved to E*TRADE, we plan to consolidate them into our Robinhood account.

Net Future Dividend Income from New Investments = $47.50

The total net amount of new capital invested in September was – $2,278.65

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

We have a goal to invest $10,000 to $12,000 of new money in 2018 in our dividend stock accounts. So far, we have invested $8,213.09 in our accounts for 2018.

2018 New Investment Total = $8,213.09

Dividend Reinvestment’s (DRiP) in September

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 September, we were able to bump our future annual dividend income by reinvesting in the following 15 companies and 1 bond fund –

• Archer Daniels Midland (ADM) – $1.37 in future income
• Aflac (AFL) – $0.19 in future income
• Amgen (AMGN) – $0.89 in future income
• Consolidated Edison (ED) – $0.99 in future income
• Intel (INTC) – $0.37 in future income
• Johnson & Johnson (JNJ) – $1.26 in future income
• Lockheed Martin (LMT) – $1.38 in future income
• McDonald’s (MCD) – $1.02 in future income
• Microsoft (MSFT) – $0.64 in future income
• Norfolk Southern (NSC) – $0.39 in future income
• Qualcomm (QCOM) – $1.39 in future income
• Target (TGT) – $2.63 in future income
• Unilever (UL) – $0.31 in future income
• Walmart (WMT) – $0.61 in future income
• Exxon Mobil (XOM) – $1.50 in future income
• Fidelity U.S. Bond Index Fund (FSITX) – $1.88 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 = $16.82

Company Dividend Increases in September

Getting a raise from companies we own shares in, is the best way to grow our passive income … in my opinion.

These raises come in the form of annual dividend increases and September was a really (really) good month. Overall, 5 companies in our dividend income portfolio announced annual increases.

Some of these increases were huge and will allow our dividend income to grow exponentially … without any work from me or my family.

Here is the list of increases we got in September –

• 2.10% increase from Verizon Communications (VZ) – $1.46 in future income
• 0.23% increase from Realty Income Corp. (O) – $0.54 in future income
• 9.50% increase from Microsoft (MSFT) – $13.42 in future income
• 14.90% increase from McDonald’s (MCD) – $23.12 in future income
• 10.00% increase from Lockheed Martin (LMT) – $24.25 in future income

Future Dividend Income from Company Increases = $62.79

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 9 months, we have grown our future dividend income by well over $1,300+ to $7,311.89!

September 2018 Future Annual Dividend Income = $7,311.89

I would like to see our future income grow by a couple hundred dollars more by the end of the year.

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, check out this post – How to Double Your Dividend Income. 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 the rule of 72, I can quickly calculate how our dividend income could grow (and double) based on our future annual dividend income number of $7,311.89 … that would be earned on October 1, 2019.

Take a look at how our income could double overtime –

• 10/01/2019 – Annual Dividend Income = $7,311.89
• 10/01/2028 – Annual Dividend Income = $14,623.79
• 10/01/2037 – Annual Dividend Income = $29,247.58
• 10/01/2046 – Annual Dividend Income = $58,495.16

Our updated figures tell us we should be earning close to $58,500 per year in dividend income by 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.

September 2018 Dividend Summary

In September, we earned $820.78 of dividend income from our tax differed and regular brokerage accounts.

This is a new all-time high for our dividend income earnings!

We expect to soon break this record when December comes around … so be sure to check back in then.

The long term goals we have set from this dividend income portfolio is to cover at least half of our monthly expenses … which right now would be around ~$2,500 (our monthly spending is currently just under $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.

A shorter term goal for 2018 that we set … is to earn $6,700 in dividend income from all our accounts. After 9 months, we are still slightly behind the pace we need to be at to hit our goal.

For the first 9 months of the year, we have earned $4,740.64 in dividend income in 2018 (January to September).

In order to hit our annual goal, we will need to earn $1,960.50 in additional dividends over the next 3 months. That is an average of $653.50 per month.

The month of December should bring in about half of what we need in order to hit our target. There is a slight chance we see our first $1,000+ dividend income month … but we shall see.

In addition to posting solid September dividend income results, we also managed to raise our annual forward dividend income by an amazing $129 to $7,311.89. 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 strong remaining 3 months of dividend income for 2018.

How was your dividend income in September? 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 – September ADM, AFL, AMGN, ED, EMR, INTC, IR, JNJ, KR, LMT, MCD, MSFT, NSC, O, QCOM, TGT, UL, VZ, WMT, XOM, and FSITX. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.