WTRG - Dividend Income Summary: Lanny's August 2023 Summary

2023-09-05 05:37:00 ET

Summary

• 2023 has been one heck of a year. The S&P 500 is close to all-time highs. The Fed raised interest rates in July, as the economy is still on fire.
• The retirement accounts brought in a total dividend income amount of $379.48 or 22% of the dividend income total, similar to last month.
• Dividend increases created $42.95 in additional passive dividend income.

This is what dividend investing is all about! Investing in dividend stocks allows you to earn dividend income, the best passive income stream! Bias, you better believe it.

Time to dive into Lanny’s August 2023 dividend income results! Were records set? Almost to financial freedom? One day and one month at a time!

Dividend Income

Dividend Income is the fruit from the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio .

How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products) and on SoFi.

I also automatically invest and max out, pre-tax, my 401(k) through work and my Health Savings Account. This allows me to save a ton of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend, aka Dividend Reinvestment Plan or DRIP for short. This takes the emotion out of timing the market and builds onto my passive income stream!

Growing your dividend income takes time and consistency. Investing as often, and early, as you can allows compound interest (aka dividends) to work its magic. I have gone from making $2.70 in a single month in dividend income to well over … $10,000+ in a single month. A new dividend income record was set in December of 2021. Was it broken this month?! The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?

*Not pictured is my wife’s dividend income above*

I want to show you that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, you can too.

Dividend income – August 2023

Now, on to the numbers… In August, we (my wife and I) received a dividend income total of $1,711.37. Speechless. Here we go again. The Notorious Investor here, bringing in over $5K. Let's go!

The amount and number of stocks listed below show you what it means to buy and hold for the long term. Most of the positions I have owned for years , letting dividend growth and reinvestment do its thing. This is what dividend investing for financial freedom is all about. The passive income stream is growing at a rapid pace.

2023 has been one heck of a year. The S&P 500 is close to all-time highs. The Fed raised interest rates in July, as the economy is still on fire. There is one looming increase that could happen before the end of the year. Borrowing rates are through the roof, inflation is slightly cooling/less of a surge. However, Americans continue to spend like there is no tomorrow. What am I doing? Investing, not stopping and consistently adding dividend income.

Here is the breakdown of dividend income for the month, between taxable and retirement (far right column, under “Retirement”) accounts. In addition, “W” means my wife’s account:

We crossed over $1,500+ in dividend income this month, which is awesome.

I’ve been building my UPS position to 100 shares. Though I am not there yet, UPS stock sent $141.54 my way and $25.95 to my wife’s account. After reinvesting, I am now over 92 shares, only 8 to go.

As you can see, we love Starbucks ( SBUX ) stock. I brought in $23.37 and my wife brought in $17.45 in the taxable, plus $41.27 in the retirement accounts. Keep on brewing that dividend income!

In addition, National Grid ( NGG ) was a nice surprise. Over $200 in dividends from them, reinvested to bring in another 3+ shares.

Yes, the big telecom stocks of AT&T ( T ) and Verizon ( VZ ) are still packing a nice punch and being reinvested back into the stock, with yields well over 7%. We earned over $175 in taxable dividends from the two stocks.

I also split out my retirement accounts in the far right column and the taxable account dividends are in the left two columns. The retirement accounts are composed of HSA investments, ROTH and Traditional IRAs, as well as our work 401(k) accounts. In total, the retirement accounts brought in a total dividend income amount of $379.48 or 22% of the dividend income total, similar to last month. This still left over $1,300+ in the taxable account! $1,000+ in taxable dividends is great to see, but would prefer an average of at least $2,000 per month.

Dividend Income Year over Year Comparison

2022:

2023:

Our dividend income is up… $364.65, a 27% jump.

This is what dividend investing is about. Increasing your passive income, by consistently investing in the market and letting dividend reinvestment do the trick.

The push for CVS Health ( CVS ) and United Parcel Services ( UPS ) to 100 shares added a big punch to the dividend totals, year over year.

Ready for this observation?

EVERY dividend stock in 2023 that paid me was HIGHER than the same stock that paid me in 2022. That is called PURE growth for a dividend investor and can be rare indeed.

Obviously National Grid ( NGG ) took a huge jump at over $50. I have been buying bank stocks, such as Provident Financial ( PFS ) and Orrstown ( ORRF ) and those dividends also increased mightily year over year. For sure AT&T ( T ) and Verizon ( VZ ) stock paid more, primarily due to being reinvested at over 7% yields. Love the growth all around!

Next stop is $2,000 for me. Time to strive to hit that per month, on the off months.

Dividend Increases

August came in fairly nice with 5 dividend increases. Even receiving 1 dividend increase is great, let alone 5!

The best dividend increase? John Deere (DE). No question there, this is the S E C O N D dividend increase this year. Love them!

I also loved Essential Utilities (WTRG) and their solid increase at 7% and the dividend aristocrat Illinois Tool Works (ITW) at 7% as well!

In total, dividend increases created $42.95 in additional passive dividend income. I would need to invest $1,227 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn’t have to come up with the capital to create that form of income!

Dividend Income Conclusion & Summary

The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live life on your own terms. My plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!

Excited for the future, no doubt. Further, all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count , has provided the dividend growth.

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