Dividend Update - May 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.
My FI Portfolio produced $358.79 in dividends in May with my Folio First portfolio chipping in another $5.07. My Roth IRA added $13.50 while my Rollover IRA contributed another $204.32. That puts my taxable account dividends for May at $363.86 and the total for all accounts at $581.68.
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 May the companies I own paid me $18.76 per day or $2.35 per hour assuming 8 hour work days every day of the month. For the year those numbers are $26.35 per day and $3.29 per hour.
FI Portfolio
As I mentioned above my FI Portfolio produced $358.79 in dividends during May. Compared to February 2020 that's a 2.4% increase. Compared to May 2019 it's a solid 7.2% rise. The year over year comparison gives a better idea of the growth with less possibility for fluctuations due to odd payout schedules.
Compared to May 2019 the YTD total came in at a quite impressive 20.3% due largely to purchases made throughout 2019 and early 2020.
Roth IRA
My Roth IRA generated $13.50 in dividends for May. That's a solid 6.2% increase from February and an excellent 10.2% year over year increase.
The YTD total through May 2020 shows a 42.7% increase compared to May 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 $204.32 in dividends during May which was a 3.1% increase from February. The year over year comparison looks poor at a 25.7% decrease due to a sales made over the last year.
Dividend Raises During the Month
May was extremely slow for dividend increases with just 1 company that I own in my FI Portfolio announcing a raise. That increase boosted my FI Portfolio's forward 12-month dividends by $14.89. Through May I've received 22 increases from 21 of the 54 companies held in my FI Portfolio increasing my forward dividends by $189.13.
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 May was just an increase of $22.43 with dividend increases leading the way. Through the first five months of 2020 my dividends have increased by $337.99 across all 3 sources with raises being the largest contributor.
Looking Forward
My forward 12-month dividends for my FI Portfolio ended May at $7,657.95 while my FolioFirst forward dividends are at $102.67. That pushes the total taxable account forward 12-month dividends up to $7,760.62. My Roth IRA's forward-12 month dividends increased to $677.30. My Rollover IRA's forward 12-month dividends are at $3,004.18. Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $11,442.10 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 is at $626.89 per month which is $39.79 or 6.8% above 2019's monthly average of $587.10.
Roth IRA
My Roth IRA generated $13.50 in dividends for May. That's a solid 6.2% increase from February and an excellent 10.2% year over year increase.
The YTD total through May 2020 shows a 42.7% increase compared to May 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 $204.32 in dividends during May which was a 3.1% increase from February. The year over year comparison looks poor at a 25.7% decrease due to a sales made over the last year.
Dividend Raises During the Month
May was extremely slow for dividend increases with just 1 company that I own in my FI Portfolio announcing a raise. That increase boosted my FI Portfolio's forward 12-month dividends by $14.89. Through May I've received 22 increases from 21 of the 54 companies held in my FI Portfolio increasing my forward dividends by $189.13.
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 May at $7,657.95 while my FolioFirst forward dividends are at $102.67. That pushes the total taxable account forward 12-month dividends up to $7,760.62. My Roth IRA's forward-12 month dividends increased to $677.30. My Rollover IRA's forward 12-month dividends are at $3,004.18. Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $11,442.10 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 is at $626.89 per month which is $39.79 or 6.8% above 2019's monthly average of $587.10.
Dividends Received Breakdown
I've updated my Dividend Income page to reflect May's changes.
Are you continuing to make progress on your passive income? Or have dividend cuts set you back some?
Let me know in the comments below!
Are you continuing to make progress on your passive income? Or have dividend cuts set you back some?
Let me know in the comments below!
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