NTAP - Dividend Income Summary: Lanny's October 2023 Summary
2023-11-21 06:00:00 ET
Summary
- Growing dividend income takes time and consistency.
- The Fed paused a rate hike in September and will likely remain in a holding pattern for November, with a modest chance of an increase in December.
- Increase passive income by consistently investing in the market and letting dividend reinvestment do the trick.
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 October 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 of 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 401k 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 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 of 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 - October 2023
Now, on to the numbers... In October, we (my wife and I) received a dividend income total of $2,010.65 . Boom! Finally, over $2,000 in this off-month. Pumped. All dividends are reinvested, as well.
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, let dividend growth and reinvestment do their 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 market has swung up and lately has swung down, and - thanks to the Fed and everyone's interpretation that the rate hikes are over, has swung back up. The S&P 500 has popped again, over 4,500, and is up 18% for the year.
The Fed paused a rate hike in September and will likely remain in a holding pattern for November, with a modest chance of an increase in December. Inflation continues to rock upwards, beating expectations continuously. What are we doing? Always buying dividend stocks and ETFs, of course. Turning off the noise always.
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:
My Vanguard S&P 500 ETF ( VOO ) is paying off nicely. This was a quarter-end dividend payment that was paid in October versus September. It happens and it helps boost my October results. I buy $60 every day, no matter what. Churning out well over $400 per year is bittersweet.
Philip Morris ( PM ) continues to pay a heavy dividend, over $160. This reinvested and acquired almost 1.5 more shares. The yield is still over 5.6% at the time of this writing. Dividend growth for PM has been soft, at under 2.50% this year.
My other real estate investment trust, Broadstone Net Lease ( BNL ) has really started to stack. I moved most of my proceeds from STORE Capital after they were acquired, into BNL. They've now increased their dividend 2x and yield between 6.50-7.00%. Love it.
My wife has higher quality stocks - Coca-Cola (KO), Oracle (ORCL), etc. She keeps it steady.
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 $844.17, or 42% of the dividend income total, similar to last month. This still left over $1,100+ in the taxable account. I look forward to when this is $2k next year, hopefully.
Dividend Income Year-over-Year Comparison
2022:
2023:
Our dividend income is up... $298.15, a 17.40% 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.
Paramount's ( PARA ) dividend was demolished, as they had a severe dividend cut this year. Streaming is costly, especially with interest rates and stiff competition. We'll see where this stock goes.
Medical Properties Trust ( MPW ) also had a dividend cut, brutal. Tough year for dividend cuts.
Other dividend increases made up strong ground with Canadian Imperial (CM), up $21, Philip Morris ( PM ) up $12, Illinois Tool Works ( ITW ) up $3, and many others. This is dividend investing in motion.
Lastly, the big piece was over $500 from my 401k mutual fund investment - Fidelity S&P 500 (FXAIX). Steadily growing no doubt.
The next stop is $2,500, and I'll be there, no doubt.
Dividend Increases
7 dividend increases, with dividend growth ranging from 4.40% to 15.56%
The best dividend increase? Visa ( V ). Why? The dividend growth is consistently strong, year after year after year.
The biggest surprise? Honestly, McDonald's ( MCD ) dividend growth rate. Not that they increased the dividend, but the almost 10% dividend increase they announced.
In total, dividend increases created $109.72 in additional passive dividend income. I would need to invest $3,134 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. Therefore, 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. Furthermore, all of the investing from last year and moves this year, show that my aim to save 60% of my income , and making every dollar count , has provided the dividend growth.
As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing everyone.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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Dividend Income Summary: Lanny's October 2023 Summary