Dividend Update - December 2020
It's the end of one month and the beginning of another so it's time for my favorite update: my dividend update. These dividend updates reflect all dividends that I receive through my investing pursuits. I hope they can help inspire you to take control of your own finances and invest to build a passive income stream. What you use that stream for is up to you, whether it's to fund early retirement, just provide some FI/FU money, or even to provide for an annual vacation; the key is that it can provide options and open up all sorts of possibilities. You can check my dividend income or progress pages to see what dedication to an investment plan can give you.
2020 is now officially in the books and what a crazy year it was. I'm most thankful for the fact that neither my wife or I lost our jobs so things have been pretty smooth here. It was definitely shaky there for a bit for my job as my employer was going through various rounds of layoffs, but I made it through and we've gotten really busy over the second half of 2020.
With December over and done with it's time for my final dividend update post for 2020. My FI Portfolio produced $1,145.81 in dividends during December with my Folio First portfolio chipping in another $50.59. My Roth IRA added $100.25 with my Rollover IRA generating $399.66. All told I received $1,196.40 across my taxable accounts and $1,696.1 across all accounts.
Making Money While I Sleep
The power of joining the ownership class is that those companies can work much harder for you than you can. Think about it. By myself I have to devote my own time to a job in order to make money. However, by buying a stake in a high quality business I now get to leverage my own time that I exchanged for money into companies that are working around the clock to make products or provide services for their customers. Those companies are working 24/7/365 which means that I make money even when I sleep.
During December the companies I own paid me $54.72 per day or $6.84 per hour assuming 8 hour work days every day of the month. For the full year 2020 those numbers are $30.77 per day and $3.85 per hour.
FI Portfolio
As I mentioned above my FI Portfolio produced $1,145.81 in dividends during December. That's a disappointing 5.5% decrease from September and a 9.0% decrease year over year.
Making Money While I Sleep
The power of joining the ownership class is that those companies can work much harder for you than you can. Think about it. By myself I have to devote my own time to a job in order to make money. However, by buying a stake in a high quality business I now get to leverage my own time that I exchanged for money into companies that are working around the clock to make products or provide services for their customers. Those companies are working 24/7/365 which means that I make money even when I sleep.
During December the companies I own paid me $54.72 per day or $6.84 per hour assuming 8 hour work days every day of the month. For the full year 2020 those numbers are $30.77 per day and $3.85 per hour.
FI Portfolio
As I mentioned above my FI Portfolio produced $1,145.81 in dividends during December. That's a disappointing 5.5% decrease from September and a 9.0% decrease year over year.
The quarterly and yearly declines were primarily due to dividend cuts due to the pandemic and some changing of my portfolio as I had closed out some positions and exchanged them for others. Some of the discrepancy is due to payment timing changes which of course I'm not worried about at all.
Compared to full year 2019, the YTD total is still showing a solid 7.7% increase which I'm pretty happy with.
Roth IRA
My Roth IRA generated $100.25 in dividends during December which is a solid 1.6% increase compared to September and a passable 4.8% increase compared to December 2019. Considering that's all from organic dividend growth and dividend re-investment and accounts for the dividend cut from Wells Fargo, I'm pretty happy with those results.
Total dividends received in 2020 shows a 26.3% increase compared to 2019.
Rollover IRA
In March of last year I mentioned that I would start reporting on my Rollover IRA. The bulk of those funds are invested in dividend growth companies, although there's a few that aren't, so to give the cleanest picture I will show just the dividend growth investments during my monthly reports. That being said I'm not too worried about any particular month/quarter of dividends since my current plan is to be a bit more active with these funds than I would in my taxable accounts.
Companies fall in and out of favor with market participants throughout the year and I want to attempt to capture some of that change in emotion. If I feel a company is undervalued I'll purchase shares and won't sell until the story changes or the market price hits what I feel is at least 1.3x "fair value". This is just a little experiment that I wanted to try and if I feel it's too much hassle or that I'm constantly taking 2 steps forward and 1 step back then I'll revert back to my bread and butter buy and hold strategy.
As such the time period comparisons are less important for this account since I want to take a more active approach.
That being said, my Rollover IRA produced $399.66 in dividends during December which was a 26.0% increase from September. Compared to December 2019 it's an even better 29.8% increase with the full year total showing an excellent 25.8% rise. Much of the year over year and year to date rise is due to capital being invested over the last year rather than being tied up in options.
Dividend Raises During the Month
December was another slow and steady month for dividend increases with 4 of my FI Portfolio holdings announcing a pay raise. Those 4 raises combined to boost my forward 12-month dividends by $10.69. Throughout 2020 I received 43 dividend increase that boosted my forward 12-month dividends by $301.54.
Dividend Increase Source
I've started breaking down the monthly dividend increase into its components: purchases, re-investment and dividend raises. This lets me see what is the bigger contributor each month in my pursuit of financial independence. I'm only tracking this for my main FI Portfolio since that is the portfolio that I want to ultimately provide the bulk of our income.
The grand total for December was an increase of $54.42 with new purchases far and away the leader for the month. For all of 2020 dividend increases and new purchases were neck and neck for the pole position in terms of increasing my dividends although all 3 sources boosted the forward dividends by at least $100 throughout the year. My forward dividends increased by $727.03 for my FI Portfolio across all 3 sources for the full year 2020.
Looking Forward
My forward 12-month dividends for my FI Portfolio ended December at $7,660.43 while my FolioFirst forward dividends are at $106.91. That pushes the total taxable account forward 12-month dividends up to $7,767.34. My Roth IRA's forward-12 month dividends are at $679.71. My Rollover IRA's forward 12-month dividends are at $3,248.75. Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $11,695.80 in dividends over the next year.
Monthly Average
The following chart shows the monthly dividend totals for each year that I've been investing as well as the monthly average. It's not always an increase as some companies have weird payout schedules, as we saw above, and eventually some positions will get dropped, but the long-term trend is what matters.
The rolling 12-month monthly average for my FI Portfolio ended at $632.13 per month which is $45.03 or 7.7% above 2019's monthly average of $587.10.
Roth IRA
My Roth IRA generated $100.25 in dividends during December which is a solid 1.6% increase compared to September and a passable 4.8% increase compared to December 2019. Considering that's all from organic dividend growth and dividend re-investment and accounts for the dividend cut from Wells Fargo, I'm pretty happy with those results.
Total dividends received in 2020 shows a 26.3% increase compared to 2019.
Rollover IRA
In March of last year I mentioned that I would start reporting on my Rollover IRA. The bulk of those funds are invested in dividend growth companies, although there's a few that aren't, so to give the cleanest picture I will show just the dividend growth investments during my monthly reports. That being said I'm not too worried about any particular month/quarter of dividends since my current plan is to be a bit more active with these funds than I would in my taxable accounts.
Companies fall in and out of favor with market participants throughout the year and I want to attempt to capture some of that change in emotion. If I feel a company is undervalued I'll purchase shares and won't sell until the story changes or the market price hits what I feel is at least 1.3x "fair value". This is just a little experiment that I wanted to try and if I feel it's too much hassle or that I'm constantly taking 2 steps forward and 1 step back then I'll revert back to my bread and butter buy and hold strategy.
As such the time period comparisons are less important for this account since I want to take a more active approach.
That being said, my Rollover IRA produced $399.66 in dividends during December which was a 26.0% increase from September. Compared to December 2019 it's an even better 29.8% increase with the full year total showing an excellent 25.8% rise. Much of the year over year and year to date rise is due to capital being invested over the last year rather than being tied up in options.
Dividend Raises During the Month
December was another slow and steady month for dividend increases with 4 of my FI Portfolio holdings announcing a pay raise. Those 4 raises combined to boost my forward 12-month dividends by $10.69. Throughout 2020 I received 43 dividend increase that boosted my forward 12-month dividends by $301.54.
Dividend Increase Source
I've started breaking down the monthly dividend increase into its components: purchases, re-investment and dividend raises. This lets me see what is the bigger contributor each month in my pursuit of financial independence. I'm only tracking this for my main FI Portfolio since that is the portfolio that I want to ultimately provide the bulk of our income.
Looking Forward
My forward 12-month dividends for my FI Portfolio ended December at $7,660.43 while my FolioFirst forward dividends are at $106.91. That pushes the total taxable account forward 12-month dividends up to $7,767.34. My Roth IRA's forward-12 month dividends are at $679.71. My Rollover IRA's forward 12-month dividends are at $3,248.75. Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $11,695.80 in dividends over the next year.
Monthly Average
The following chart shows the monthly dividend totals for each year that I've been investing as well as the monthly average. It's not always an increase as some companies have weird payout schedules, as we saw above, and eventually some positions will get dropped, but the long-term trend is what matters.
The rolling 12-month monthly average for my FI Portfolio ended at $632.13 per month which is $45.03 or 7.7% above 2019's monthly average of $587.10.
Dividends Received Breakdown
I've updated my Dividend Income page to reflect December's changes.
How were your dividends during this crazy year? Better or worse than you had expected?
Let me know in the comments below!
How were your dividends during this crazy year? Better or worse than you had expected?
Let me know in the comments below!
All in all this is still a great month PIP! Congrats and a belated happy New Year!
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