Dividend Income – August 2019

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%.

Month2019
2018
+/-
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%
September€ 125.87
October€ 54.34
November€ 71.56
December€ 116.98

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

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.

Summary

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!

8 Comments

  1. CanadianPassiveIncome September 8, 2019 at 3:06 pm

    nice snug.

    the decline sucks short term but the move to dig stocks is for the better I think
    keep it up
    cheers!

    Reply
    1. Snugfortune September 8, 2019 at 4:24 pm

      That pretty much sums it up:)
      Thank you, CPI!

      Reply
  2. Engineering Dividends September 8, 2019 at 4:21 pm

    Everything is going according to plan, SF. You’ll be eclipsing last year’s dividend total next month, with Q4 left to raise the bar for 2020. That’s progress right there.
    I share half of your dividend payers from August. I also got to share that ITW raise.
    Keep up the outstanding efforts.

    Reply
    1. Snugfortune September 8, 2019 at 8:02 pm

      Thanks, ED!
      I’m more than happy with that progress indeed. Especially when considering that I wasn’t too active on the investing side lately.
      Speaking about the remaining four months, I hope to raise that bar as high as possible. And then in 2020 I’m going to play the same boring game to achieve my income goal. That game goes like this: save, invest, repeat. Boring but very simple and highly effective.

      Reply
  3. Doug September 11, 2019 at 1:24 am

    Small decline huge gains going forward thats the way i look at it.

    Reply
    1. Snugfortune September 11, 2019 at 11:12 am

      You are on point, Doug!
      Thanks for stopping by.

      Reply
  4. BrokeInvestor September 15, 2019 at 6:12 pm

    It sucks a little bit to see a decrease in income but at least it’s what you expected. I would also prefer having bigger income in all other months, even if one month had to suffer. Let’s see if you manage to reach €190 next August. Looking at your growth in other months, it’s definitely possible, so good luck with that!

    Reply
    1. Snugfortune September 16, 2019 at 12:00 am

      Thanks, BI!
      You’re right: decreases suck. But looking at the big picture, my annual income grew due that reallocation.
      Maybe I can reach €190 next August. We’ll see:)

      Reply

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