Sunday, December 30, 2012

Milestone: $200 in Dividends in a Single Month

Back in March I reached the milestone of getting over $100 in dividends in a single month. It turns out I managed to reach that mark every month thereafter.

My next milestone for monthly dividend income was $200, which I originally did not anticipate reaching until early 2013. However, thanks to a few accelerated dividends that were paid this month instead of in Q1 2013, I have now received over $200 in dividends in December. This represents another important milestone on my road to building a sustainable and rising stream of dividend income.

Looking at my expected dividend payments going forward, there will be more variation from month to month than I experienced this year. I will reach $200 in Mar-Jun-Sep-Dec, whereas in most of the remaining months I will be below that mark. I do not make any special effort to buy stocks to "smooth out" my dividends across months; my main goal is to ensure the dividends keep growing over time.

Sticking with $100 increments, my next monthly dividend income milestone is $300. At this point it is difficult to predict when that might be reached, but it could be possible at the end of 2013.

25 comments:

  1. Congrats on passing $200! It feels great to hit some milestones. Like you I don't purposely try to smooth out my dividends but it is nice that some of my last few purchases pay out on a different schedule than Mar-Jun-Sep-Dec. I averaged over $100 in dividends per month for the last quarter which is great to see. Of course most of that is loaded up in Dec. Congrats on passing another milestone and best wishes for 2013.

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    1. Passive Income Pursuit: Thanks! I like your idea of looking at average monthly dividends over a quarter. That sort of milestone might be more informative in the long run because it glosses over month-to-month variation.

      Best wishes to you in 2013 and happy new year!

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  2. I average that income. My portfolio isn't that large and cultivated, so I also have my income in some months at or above my milestone and in some months below, well, at least that is my anticipation. Currently my average monthly income is at around $56 a month and my plan is to reach $100 average income per month knowing that in some months I will be above 100 and in some months well below that mark.

    Congrats on reaching your goal and many wishes in reaching your next one in 2013.

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    1. Martin: Thanks, I appreciate the feedback. I agree that it might be better to focus on monthly averages within a quarter than on specific monthly amounts.

      Best wishes as you work toward a $100 average per month. Happy new year!

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    2. Thanks a lot. The future looks bright so far.

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  3. DGM,

    Great job my friend. It feels great to consistently hit milestones like this. The progress is occurring at a pretty rapid pace for you.

    Keep up the great work. I hope 2013 treats us fantastic.

    Best wishes!

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    1. Dividend Mantra: Thanks! It's always nice to reach a milestone -- it provides a good way of tracking progress for a dividend growth investor.

      Happy new year and best wishes for your investing in 2013!

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  4. Congrats on another milestone. I love watching the progress of fellow DG investors. It helps me stay motivated. Keep up the good work.

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    1. All About Interest: Thanks! I also find the progress of other investors to be motivational. I think it represents another psychological benefit of dividend growth investing.

      Best wishes for 2013 and happy new year!

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  5. Congratulations on your progress. I remember starting out with a DGI strategy about 10 years ago. Its actually motivating to see the monthly figure slowly increase. I net out about $2000/mth in dividends now and look forward to the day dividends will provide income replacement. If you're not reinvesting dividends, I'd highly recommend doing so to further accelerate. A little leverage also helped along the way :) Best.

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    1. Integrator: Thanks for your comment. Getting $2000 per month in dividends is fantastic -- good job! I also look forward to the day when dividends alone will represent a substantial portion of my income.

      I am indeed reinvesting all dividends -- in fact, I have a rule that not a penny is to leave my brokerage account at this stage in my life. Regarding leverage, I stay away from it. I know it can be used successfully to boost returns, but I also know it can have disastrous consequences. I feel better off investing only when I have the cash available to do so.

      I hope 2012 has treated you well and best wishes in 2013!

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  6. Have you considered a 3- or 12-month rolling average? It has a smoothing effect on the number, cutting out the volatility.

    My T12M average is up around $140/month, and climbing. Really, it's the climbing that's important.

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    1. Michael: Thanks for your comment. I haven't looked at rolling averages yet, but that's certainly something I could do. I agree that the key thing is for dividend income to keep rising over time.

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  7. Congratulations there! I make no attempt to even out monthly payouts either, instead I track progress quarterly. Seeing my income go up every quarter is what keeps me motivated. Believe me there are many things I'd like to spend my money on, but I don't knowing I'm getting a little closer every quarter.

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    1. Compounding Income: Thanks! Indeed, it's motivational to see my dividend income increasing over time. It helps cut down unnecessary spending and think more about what I can achieve through long-term investment.

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  8. Just a quick question. And maybe this is too personal but if you could give me a ballpark, that would be great. About how much do you use to achieve the $100 per month mark?

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    1. Anonymous: Thanks for your comment. I'm not quite sure I understand your question. If you're referring to how much money I needed to invest to get over $100 in dividends per month, then my total portfolio value minus unrealized capital gains and reinvested dividends would provide a ballpark estimate of around $55-60K.

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    2. Thanks for your answer Mr (Mrs?)Machine. I probably should have clarified. Perhaps an example. A single stock (AGNC) has a historical dividend payout of $1.25 per share and a price as of close today of $30.51 and a quarterly payout schedule. Were I to be looking for $100 a month using a 3 month average, I would need to invest $7,322.40. That is before anything is reinvested or taxed. I am not overly close to $100 a month but was curious about benchmarks/milestones that I should be aiming for.

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    3. Anonymous: Thanks for your response. Given that the stocks in your portfolio will have different yields and different dividend growth rates, it would probably be best to focus on the actual dividend income received and how it changes over time. That might also make it easier to think of dividend milestones.

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  9. Congratulations, it's good to see that you acquired that much in dividends. Keep up the good work!

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    1. Brett: Thanks, I appreciate the encouragement!

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  10. I would like to say that dividends are derived from corporate income which has already been subject to tax, there should not be an additional tax assessed on the dividend recipient. To do so is to introduce a cascaded double tax.

    Best Dividend Stocks

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    1. Dividend: It is unfortunate that dividends are subject to double taxation, but hopefully that will change at some point in the future.

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