Evening pictures
This is what dividend investing is all about! Investing in dividend stocks is permitted You To earn dividend income, the best passive income stream! Bias, you better believe it.
It’s time to dive into Lanny’s May 2024 dividend income results! Have the records been set? I like an end-of-year dividend, just like in a retirement account puffy. Almost to financial freedom? One day and one month at a time!
Dividend
Dividend income is the result of investing your money in the stock market. Furthermore, dividend income is my primary vehicle on the path to financial freedom, which you can see through my account Dividend portfolio.
How do I research and examine dividend stocks before making a purchase? I use our Dividend Diplomat stock screener and trade on the Ally investment platform (one of our financial freedom products) and on Sufi.
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 Tons of money on taxes (aka thousands), allowing me to invest more. Additionally, all dividends I receive are automatically reinvested back into the company that paid the dividend, also known as a Dividend Reinvestment Plan or DRIP for short. This takes the emotion out of market timing Builds On my passive income stream!
Increasing your dividend income takes time and consistency. By investing often, and early, you can let compound interest (also known as dividends) work its magic. I went from making $2.70 in one month of dividend income to over $10,000 in one month. My dividend income record was set in December of 2021. Will it be broken this month?! The power of compounding and reinvesting dividends is a great component of the portfolio. Every month, whether big or small, I continue to report on the passive income that dividend investing provides me. Why?
*Not in the picture is my wife’s earnings income above*
I want to show You Investing profits makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) profits, and keeping them simple, allows you to be much better off than most people. Furthermore, if I can grow this portfolio and income stream, You Can also.
Dividend Income – May 2024
Now, let’s get to the numbers… In May, we (my wife and I) received total dividend income of $1,664.04. Not quite $2000, but in time we will get there.
The amount and number of stocks listed below show you what it means to buy and hold for the long term. I’ve owned most positions for years, letting dividend growth and reinvestment do their work. This is what dividend investing for financial freedom is all about. Your passive income stream is growing at a rate fast a step.
2023 is up 24%. The S&P 500 (SPX) 5 months into 2024 is now down 11%+. Consumers remain strong, but profits have been mixed, to say the least. Moreover, the price wars for fast food and grocery stores are real, with McDonald’s (MCD) and Wendy’s (WEN) competing, as well as Walmart (WMT) and Target (TGT).
The Fed has paused for 8 months, letting the data and rate hikes it has made over the past two years really take their toll. Prices will remain higher for longer. We may see a rate cut in September. It is expected that there will be further interest rate cuts next year. Who knows, I turn off the noise and keep investing.
Below is a breakdown of this month’s dividend income, between taxable accounts and retirement accounts (far right column, under “Retirement”). In addition, “W” means my wife’s account:
This is clearly a big month for telecommunications with AT&T (T) and Verizon (VZ). When you combine my wife’s IRA holding AT&T (T), we’re talking about $220.51 in dividends that came from telecom stocks. All reinvested of course.
United Parcel Service (UPS) is already taking off, with a huge dividend of $165. Remember, you finally managed to surpass 100 arrows from this monster!
Next, I’ve piled on more Starbucks ( SBUX ) stock this year, as its most recent earnings have dropped its stock into the low-to-mid $70 stock range. Therefore, these profits come in heavy across the board. You could say my wife loves Starbucks, she keeps it in her taxable accounts, a Roth IRA and a traditional IRA.
I’ve also broken down my retirement accounts in the far right column and the taxable account earnings are in the two left columns. Retirement accounts consist of HSA, ROTH, and traditional IRA investments, as well as work 401(k) accounts. In total, the retirement accounts brought in total dividend income of $431.26, or 26% of total dividend income. Therefore, almost all of my dividend income came from my taxable account. Let’s go!
Compare dividend income year over year
2023:
2024:
Our dividend income increased… by $335.37, an increase of 25% over last year. Pump! I will definitely take it.
What has changed?
UPS paid this month. Armanino (OTCPK:AMNF) paid in May last year, but not this month. Furthermore, for my wife’s account, Gap ( GPS ) paid a dividend this month as well.
Combined with the dividend coming in May of 2024 versus none in 2023, dividend growth and dividend reinvestment clearly play a major role here. AbbVie (ABBV), Caterpillar (CAT), Deere & Company (DE) and many others all support dividend reinvestment (DRIP) and dividend growth.
In the future, I expect to exceed $2000. Bringing in May 2025 a baby!
Increase profits
You’ve received 6 additional dividend increases in May 2024, matching last month! Which was the best of the month?
I really have to pick LyondellBasell (LYB) here. I wasn’t expecting a 7% increase in earnings and was actually expecting a 3% to 5% increase this year. Therefore, this was quite a surprise.
Another unexpected increase in earnings came from NetApp (NTAP). Good thing I haven’t sold the stock yet.
In total, the dividend increases created $65.66 of additional passive dividend income. I would need to invest $1,876 with a 3.50% dividend yield in order to add this income. Thank you for the raises, as I didn’t have to save up capital to create this type of income!
Dividend income conclusion and summary
The name of the game is applying what you learn through financial education. The next steps are to maximize every investment opportunity dollar and live life on your own terms. Therefore, my plan is to prove that dividends can be a revenue driver. The revenue engine that allows you to do just that 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 makes a lot of sense!
Excited for the future, no doubt. Moreover, all the investments from last year and the moves this year show that my goal is to make it happen Saving 60% of my incomeAnd Make every dollar countand has provided profit growth.
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Editor’s note: The summary points for this article were selected by Seeking Alpha editors.
