Dividend Update - January 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.
How has January already come and gone? Can that really be true? I know for many the beginning of a new year always seems to drag on, but for me I feel like I blinked and it was over.
January didn't come close to matching December's record dividend haul, but there's nothing to complain about how 2020 got started off.
My FI Portfolio produced $467.02 in dividends with my Folio First portfolio chipping in another $12.89. My Roth IRA added $49.87 while my Rollover IRA contributed another $92.86. That puts my taxable account dividends for January at $479.91 and the total for all accounts at $622.64. Not a bad way to start the new 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 my regular 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 January the companies I own paid me $20.09 per day or $2.51 per hour assuming 8 hour work days every day of the month.
As I mentioned above my FI Portfolio produced $467.02 in dividends during January. That was our first time over $400 for the first month of a quarter and hopefully there will be no looking back. Compared to October 2019, January saw a whopping 21.6% increase.
The year over year comparison gives a better idea of the growth with less possibility for fluctuations due to odd payout schedules. Compared to January 2019 the increase came in at an even better 38.6% due largely to purchases made throughout 2019.
My Roth IRA generated $49.87 in dividends for January. That's a solid 2.5% increase from October.
Compared to January 2019, last month showed just a 4.2% increase year over year. The lackluster year over year growth was due to a trim of one of the positions that in hindsight I probably shouldn't have done.
In March 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 $92.86 in dividends during January which was a 140.8% increase from October 2019. The year over year comparison surprisingly looks worse at just 66.5%.
Dividend Raises During the Month
January kicked off the new year with 4 dividend increases being announced. Combined the 4 companies in my FI Portfolio boosted my forward 12-month dividends by $48.78. Through the first month of 2020 I've received 4 increases from 54 of the companies held in my FI Portfolio.
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 January was an increase of $112.23 with purchases and raises doing the bulk of the heavy lifting. I'm pretty stoked with the results from January although I do expect purchases to slow a bit over the coming months.
My forward 12-month dividends for my FI Portfolio ended November at $7,829.28 while my FolioFirst forward dividends are at $101.25. That pushes the total taxable account forward 12-month dividends up to $7,930.53. My Roth IRA's forward-12 month dividends increased to $649.67. My Rollover IRA's forward 12-month dividends are at $2,363.73. Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $10,943.93 in dividends over the next year.
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 is at $597.95 per month which is $10.85 or 1.8% above 2019's monthly average of $587.10.
Dividends Received Breakdown
|Dividends Received Breakdown January 2020|
How were your dividends for January? Did you get 2020 kicked off right?
Let me know in the comments below!