Dividend Update - January 2021

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.

And just like that 2021 already has 1 month in the books.  It's crazy just how fast time seems to go as you get older.  Of course that's a big reason why most of us are pursuing a financial independence strategy because the earlier you reach your "number" the more of your time that you get to truly call your own.

During January, my FI Portfolio produced $517.14 in dividends with my FolioFirst portfolio chipping in another $8.72. My Roth IRA added $54.70 while my Rollover IRA generated $178.86.  All told I received $525.86 across my taxable accounts and $759.42 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 January the companies I own paid me $24.50 per day or $3.06 per hour assuming 8 hour work days every day of the month.  




FI Portfolio

As I mentioned above my FI Portfolio produced $517.14 in dividends during January.  That's a solid 21% increase compared to October 2020 and a solid 11% increase compared to January 2020.

Roth IRA

My Roth IRA generated $54.70 in dividends during January which is a solid 3.0% increase compared to October and a strong 9.7% increase compared to January 2020.  

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.  

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 $178.86 in dividends during January which was a 6.5% decrease from October 2020.  That fall was entirely due to Nike moving its January payment up to December.  Excluding Nike from the quarterly comparison bumps it up to a solid 7.6% increase.  Compared to January 2020 it's an even better 92.6% increase that was primarily due to additional capital being invested.

Dividend Raises During the Month

January was a solid start to the year with 6 dividend increases being announced among my FI Portfolio holdings.  Those 6 raises combined to boost my forward 12-month dividends by $63.32.  

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.

January saw a relatively large increase in my forward 12-month dividends rising $97.58 across all three sources: (1) purchases (2) reinvestment (3) dividend increases.  Both purchases and reinvestment were adequate providing boosts of $18 and $15, respectively.  Dividend raises were by far the leader rising $63 from increases announce in January.  

Looking Forward

My forward 12-month dividends for my FI Portfolio ended December at $7,770.21 while my FolioFirst forward dividends are at $107.76.  That pushes the total taxable account forward 12-month dividends up to $7,877.97.  My Roth IRA's forward-12 month dividends are at $688.02.  My Rollover IRA's forward 12-month dividends are at $3,389.39.  Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $11,955.38 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 January at $636.31 per month which is $4.18 or 0.7% above 2020's monthly average of $632.13.

Dividends Received Breakdown

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

With one month in the books for 2021 how did your dividends perform?

Let me know in the comments below!