Dividend Update - February 2021

dividend growth investing | financial independence | freedom | dividends

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 hard to believe that 2 months of 2021 have already come and gone.  If I didn't know the date and you asked me what part of the year I thought we were at I'd guess late 2020.  Time really does seem to just go faster and faster as you age which is why I've been pushing to reach financial independence.

During February, my FI Portfolio produced $315.06 in dividends with my FolioFirst portfolio chipping in another $5.13. My Roth IRA added $14.28 while my Rollover IRA generated $220.50.  All told I received $320.19 across my taxable accounts and $554.97 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 February the companies I own paid me $19.82 per day or $2.48 per hour assuming 8 hour work days every day of the month.  Year to date those numbers are $22.28 per day and $2.78 per hour.

FI Portfolio

As I mentioned above my FI Portfolio produced $315.06 in dividends during February.  That's a disappointing 9.7% decline from November and a 10.1% decline from February of last year.  The declines were primarily due to closing my position in General Mills (GIS) last year as well as Starbucks (SBUX) moving their typical February payout to March.

Year to date my FI Portfolio has produced $832.20 which is still a decent 1.8% increase compared to the first two months of 2020.

Roth IRA

My Roth IRA generated $14.28 in dividends during February which is a solid 2.1% increase compared to November and a strong 12.4% increase compared to February 2020.  I'm very pleased with those results considering the increases was from organic dividend growth as well as dividend reinvestment alone.

Through February the YTD total for my Roth IRA is showing a solid 10.2% increase compared to 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 $220.50 in dividends during February which was a 3.0% increase from November 2020 and a solid 11.2% increase compared to February of last year.  The increase was largely due to additional purchases made throughout the last year as well organic dividend growth. 

The YTD total for 2021 sits at $399.36 which is a remarkable 37.2% increase compared to the same period of 2020.

Dividend Raises During the Month

This year has been excellent in terms of dividend increase announcements with January starting the year of with 6 raises and February adding on an additional 10 raises.  The 10 raises in February combined to increase my forward 12-month dividends by $74.89.  YTD dividend raises have increased my FI Portfolio forward 12-month dividends by $138.21.  

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.
Dividend | Purchase | Stocks | Dividend Growth | Reinvestment

February was another solid start to the year  in terms of increasing my FI Portfolio forward dividends.  In February my forward dividends surpassed a $100 increase for the month combined across all three sources: (1) purchases (2) reinvestment (3) dividend increases climbing a total of $121.63.  Dividend raises led the way again in February at nearly $75, but purchases added a solid $41 as well. 

Looking Forward

My forward 12-month dividends for my FI Portfolio ended February at $7,892.73 while my FolioFirst forward dividends are at $114.36.  That pushes the total taxable account forward 12-month dividends up to $8,007.09.  My Roth IRA's forward-12 month dividends are at $706.80.  My Rollover IRA's forward 12-month dividends are at $3,578.86.  Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $12,292.75 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 February at $633.36 per month which is $1.23 or 0.2% above 2020's monthly average of $632.13.
dividend growth investing | dividends | financial independence | freedom

Dividends Received Breakdown
Dividends | Financial Independence | Dividend Growth Investing

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

Two months into the year are you on track to meet your dividend goals?

Let me know in the comments below!