Dividend Update - August 2023 #Dividend

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.

It's been a bit of a hectic couple months with us welcoming our 4th child into this world and adjusting to a house of 6.  The beautiful thing about dividend growth investing is that, whether I'm paying close attention or not, as long as I did my homework correctly beforehand the businesses I own will just keep sending dividends to me along the way.  So I've been playing catchup since although that's a tradeoff I'm more than happy to make!

August was another strong month, although the middle month of each quarter is noticeably lower than the two bookends.  My FI Portfolio produced $566.09 for the month with my Loyal3 FolioFirst Interactive Brokers portfolio chipping in another $5.11.  My Roth IRA added $69.28 and my Rollover IRA generated $345.81.  For the month I received $571.20 across my taxable accounts and $986.29 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 August the companies I own paid me $31.82 per day or $5.57 per hour assuming 8 hour work days 5 days a week.  YTD that's $44.77 per day and $7.84 per hour.  

FI Portfolio

As I mentioned above my FI Portfolio produced $566.09 in dividends during August.  That came in as a slight 0.6% decline compared to May; however, that was due to Walmart (WMT) paying in my but not in August and Unilever (UL) doing the opposite.

August's results were an excellent 17.7% increase compared to August 2022.  The YTD results compared to 2022 have 2023 coming in 16.7% higher through August.

Roth IRA

My Roth IRA had another solid month during August producing $69.28 in dividends.  Compared to August 2022 that's a strong 12.2% increase.  The YTD results have 2023 17.5% ahead of 2022 through August.   

Rollover IRA

In March of 2019 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.  

My Rollover IRA produced a total of $345.81 in dividends during August which is an excellent 28.9% increase compared to May 2022.  However, that was largely due to United Parcel Service (UPS) pushing their typical September payment to August.  On a normalized basis August 2023 is still showing a strong 9.3% improvement year over year.

The YTD results through August have 2023 just 4.6% ahead compared to the same period in 2022 due to some partial sales and dividend cuts.  Ugh!

Dividend Raises During the Month

August saw more companies, than in recent months, that we own announce dividend raises.  A total of 4 companies in our FI Portfolio increased their payouts combining to boost our forward 12-month dividends by $69.38.  Unfortunately there was also a dividend cut that outweighed those raises reducing our forward 12-month dividends by $81.06.  So far in 2023 I've received 42 total increases which have raised our forward 12-month dividends by $478.74.

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.

Not much changed in August as we still prioritized cash over investments due to the new baby and other potential opportunities.  As such purchases have been lagging well behind where we'd like them to be at; however, the results for 2023 have still been pretty solid all things considered.

That being said I'm still quite happy to see that we're averaging a $66.08 per month increase through August despite very little capital being added to the portfolio.  Even more so considering we've suffered through two significant dividend cuts that further weighed down the results. 

As such purchases have been a non-factor in 2023 adding only $91.62 total to our forward dividends and that's primarily been from cash dividends being used to purchase other holdings.

Luckily dividend growth investing isn't built to rely solely on one source of dividend growth.  When one is lacking you can still rely on the other two to help you out.  

Dividend increases have carried the weight thus far in 2023 with a $59.84 per month average.     

That's what's really cool about finally hitting some scale with your investments and dividends.  Dividend reinvestment and organic dividend growth can do the heavy lifting for you and eventually will far surpass what you can do with savings alone.

During August our forward 12-month dividends rose by just $1.10 but YTD they've increased by $545.59.

The target of $12k in forward dividends is still in sight although it's a bit more precarious after August.  We need around a $220 increase over the remaining 4 months of the year and reinvestment and raises will have to do the heavy lifting to get us there.  I still think we'll cross it, barely, although it's much further away that I'd like at this point of the year.

Looking Forward

My forward 12-month dividends for my FI Portfolio ended August at $11,778.12 while my Loyal 3 FolioFirst Interactive Brokers forward dividends are at $247.39.  That pushes the total taxable account forward 12-month dividends up to $12,025.51.  My Roth IRA's forward-12 month dividends are at $1,215.14.  My Rollover IRA's forward 12-month dividends are at $4,592.12.  

Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $17,832.77 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 August at $942.14 per month which is $86.12 higher or a 10.1% increase compared to 2022's monthly average of $856.02.

Dividends Received Breakdown

I've updated my Dividend Income page to reflect August's changes.

How are you progressing on your journey in 2023?  Have you suffered any setbacks like dividend cuts or has it been smooth sailing?

Let me know in the comments below!