Dividend Update - May 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.

My writing will continue to be on the backburner at least for another week as I soak up every bit of time with my family that I can before returning to work after being on leave for the birth of our 3rd daughter.  This time off has been great and something that I wish every company would offer their employees.

During May my FI Portfolio produced $370.10 in dividends with my FolioFirst portfolio chipping in another $5.67.  My Roth IRA added $44.92 with my Rollover IRA generating $224.85.  For the month I received $375.77 across my taxable accounts an $645.54 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 May the companies I own paid me $20.82 per day or $2.60 per hour assuming 8 hour work days every day of the month.  Year to date those numbers are $29.76 per day and $3.72 per hour.

FI Portfolio

As I mentioned above my FI Portfolio produced $370.10 in dividends during May.  Compared to February that's a huge 17.5% increase although the year over year change is just a 3.2% increase versus May 2020. 

The large quarterly increase was due to Starbucks that's been floating their dividend pay date around some and as such didn't pay in February, but did in May.  I focus more on the year over year comparison which doesn't look all that strong at just 3.2% but that's after accounting for my closing of my General Mills position last year.  Considering I was able to overcome that and still show an increase I'm pretty happy.

Year to date my FI Portfolio has produced $2,856.86 which is a miniscule 0.9% increase compared to the YTD numbers for 2020.  That's primarily due to my closing of some positions during 2020 as well as the handful of dividend cuts that were received last year as well.  Moving forward I expect 2021 to start distancing itself from 2020.

Roth IRA

My Roth IRA generated $44.92 in dividends during May which is ridiculous 215% increase compared to February and an even more ridiculous 233% increase compared to May 2020.  I wish that was due to huge dividend raises or lots of capital being put to work, but in reality it was just Norfolk Southern (NSC) moving their payout from June to May.  The explanation for the move wasn't all that noteworthy and to me doesn't make much of a difference, but it will introduce some noise in the period comparisons for a while.  

Through May the YTD total for my Roth IRA is showing an excellent 24.0% increase compared to 2020.  I still have a decent amount of cash ready to deploy in that account which should help to boost those numbers up even more as the capital gets put to work.

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 $224.85 in dividends during May which was just a 2.0% increase from February but a solid 10.1% increase compared to May 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 $1,297.80 which is a remarkable 40.9% increase compared to the same period of 2020.

Dividend Raises During the Month

After April's slew of dividend increases, May saw the pace slow down dramatically with just 1 raise among my FI Portfolio holdings.  The one raise did boost up my forward 12-month dividends by $18.83.  Year to date I've received 26 dividend raises increasing my forward 12-month dividends by a combined $287.98.

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

May was by far the "worst" month for increasing my forward 12-month dividends for my FI Portfolio.  Purchases were down, dividend reinvestments were down, dividend increases were down.  However, I'm not discouraged because I still increased my forward dividends by over $40 in a slow month.  

Through the end of May new purchases an dividend increases are neck and neck for the top stop with reinvestment well behind.  With no commissions across most brokerages now I take more of my dividends in cash an re-deploy it throughout the month.  Between the 3 sources of dividend growth my forward 12-month dividends have combined to rise by nearly $620 through the first 5 months of 2021.

Looking Forward

My forward 12-month dividends for my FI Portfolio ended May at $8,198.95 while my FolioFirst forward dividends are at $175.14.  That pushes the total taxable account forward 12-month dividends up to $8,374.09.  My Roth IRA's forward-12 month dividends are at $790.07.  My Rollover IRA's forward 12-month dividends are at $3,750.89.  Across all 4 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $12,915.05 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 May at $634.37 per month which is $2.24 higher or a 0.4% increase compared to 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 May's changes.

Are you on track to meet your dividend goals for the year?  

Let me know in the comments below!


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