Chonlatee Sangsawang
Chonlatee Sangsawang
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 January 2024 dividend income results. Were records set? I love the end of the year dividend tally, as the retirement account is pumped up. Almost to financial freedom? One day and one month at a time.
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 and screen for dividend stocks before 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 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. My dividend income record was set in December 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.
Now, on to the numbers. In January, we (my wife and I) received a dividend income total of $1,441.30. Always nice to start off with a 4-digit dividend income month. The first month of the year is in the books, and we'll have to see what caused this amount of passive income and the change from the prior year.
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 was up 24%. 2024 is one month down and the S&P 500 is already up 6%, setting all-time highs almost daily now.
The Fed has now paused for 4 months, as they let data and the interest rate hikes they've done over the last 2 years really sink in. Expectations are rate cuts next year. Will it be 2? Will it be 3? Who knows? I turn off the noise and keep investing.
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:
Philip Morris International Inc. (PM) brought in a big bag here for me, over $160. This reinvested and grabbed almost 2 full shares, adding more passive income.
What is wild, I had 4 other stocks pay me over $100. Broadstone Net Lease, Inc. (BNL) paid a nice $106 dividend, as well as National Grid plc (NGG). I love the utility players.
Further, let's not forget about energy. TotalEnergies SE (TTE) paid a handsome dividend, not to mention a dividend increase already announced this year.
Lastly, one of the big Canadian banks sent the most my way. Over a $200 dividend payment from the Canadian Imperial Bank of Commerce (CM). If you're a dividend investor, more than likely you own a Canadian bank… or two.
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 $247.48, or 17% of the dividend income total. This still left over $1,100+ in the taxable account. Hard to get these non-quarter end months to $2,000 I tell you. Next year, maybe?
2023:
2024:
Our dividend income is up… $176.62, a 14% increase from last year. That beat inflation, right? I believe so, I think inflation was 3.4% for the year.
To start, Paramount Global (PARA) had a big dividend cut, which was a drag on the growth year-over-year.
Next, MDU Resources Group, Inc. (MDU) spun-off Knife River Corporation (KNF), and that right-sized, aka decreased, their dividend as well.
It was nice to see that Armanino Foods of Distinction, Inc. (OTCPK:AMNF), TotalEnergies SE (TTE), and Canadian Imperial Bank of Commerce (CM) all have sizable dividend increases year-over-year. That's all dividend reinvestment and dividend growth right there.
Main Street Capital (MAIN) is really the only new stock in the portfolio versus last year. Would like their stock price to drop, so I can buy more.
In total, if we keep this growth rate up - we are talking over $1,600 in forward income in 2025 for January, which may put me 2 years away from $2,000, dang it.
5 dividend increases to jumpstart 2024 baby. I'll take it.
The best dividend increase below is Archer-Daniels-Midland Company (ADM), without question. An accounting scandal, but still increasing the dividend by over 11%. Wild.
I love Elevance Health, Inc. (ELV) as they continue to churn and put out dividend increase results. Double-digit growth rates every time.
In total, dividend increases created $74.98 in additional passive dividend income. I would need to invest $2,142 at a 3.50% dividend yield 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.
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 about the future, no doubt. Furthermore, all 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.
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Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.