Almost five years ago I have decided to establish a goal for myself. I want to create an income stream that would allow me to be independent from the conventional form of employment. In order for this goal to be met, I need to invest my savings into companies that provide me with a reliable and growing dividend. For that reason, I’ve started out with dividend growth investing.
I am not suggesting that dividend growth investing is the only way because it isn’t. However, it is a simple way for young people to start while they don’t have a lot of cash to invest. This is it. While starting out is easy, staying the course long-term is not. Personally, I’ve found it very motivating to see progress along the way. And this is what these posts are about. Tracking the progress and drawing motivation to simply keep going. That being said, let’s have a look at the dividend income for August 2019.
Dividend Income: August 2019
In August, eight companies have rewarded me with a dividend payment:
- AT&T (T): €31.34
- General Mills (GIS): €13.55
- Verizon (VZ): €12.96
- General Dynamics (GD): €8.49
- Texas Instruments (TXN): €10.49
- AbbVie (ABBV): €24.39
- Clorox (CLX): €7.30
- Starbucks (SBUX): €11.04
August’s dividend income total came in at €119.56 ($132.10). Compared to August 2018, this is a decrease of 37%.
|Total||€ 1,123.28||€ 1,163.80|
|January||€ 97.98||€ 25.26||+ 288%|
|February||€ 89.69||€ 55.35||+ 62%|
|March||€ 166.57||€ 107.33||+ 55%|
|April||€ 84.59||€ 84.92||+/- 0%|
|May||€ 326.18||€ 177.26||+ 84%|
|June||€ 160.66||€ 103.13||+ 56%|
|July||€ 78.05||€ 50.96||+ 53%|
|August||€ 119.56||€ 190.84||- 37%|
For the first time ever this portfolio is showing an income decline on a monthly basis. Does this mean that my motivation has suffered as a result? Not really. In fact, I have expected August’s dividends to fall back. The reason for that is simple. Towards the end of 2018, I’ve decided to sell all my ETFs and reallocate the capital to dividend growth stocks. The major payout month for the ETFs used to be August. So I knew that the August income would suffer. Overall, however, this reallocation has increased the cash flow when looking at the whole year. This is where the cumulative income is standing compared to the previous year:
In 2019, I have collected €1,123 in dividends so far. This is 41% more than in the same period last year. Although I’ve received fewer dividends this August, the year-to-date income growth is solid. This portfolio has almost reached the sum of last year’s dividends already within eight months. With four months left to go, I expect to move closer towards the yearly income goal.
For 2019 that goal is to collect €1,650 ($1,848) in dividend payments. Today, the projected annual income is sitting at €1,629 ($1,800). I hope to close this small gap and finally reach the income target at the end of the year.
Dividend increases play a major role when it comes to achieving my income goals. In this matter, I’m happy that one of my holdings is increasing its dividend for another year. This company is Illinois Tool Works (ITW). In August, ITW has announced to raise its annual dividend by 7% from $1,00 to $1,07 going forward. Although this increase is below ITW’s 5-yr DGR of 16%, I’m still quite happy with this announcement. You have to consider that ITW’s business is cyclical. However, this company has still managed to raise its dividend for 45 consecutive years. Knowing this, I take the 7% raise without complaining.
For the first time ever I’ve recorded a declining monthly income. At first glance, not very good news. On a second glance, however, things are starting to look much brighter. The monthly decline occurred due to the reallocation from ETFs to dividend growth stocks. As a result, this shifting has reduced the income in August. However, by reallocating the funds, I was able to grow the annual cash flow simultaneously. Now I have less income in August but more income in all other months. I like that. Last but not least, being 100% invested in dividend growth stocks helps me to focus more on my long-term goal. That is building a reliable and growing income stream. Happy investing to you all!