This is what dividend investing is all about! Investing in dividend stocks allows you to earn dividend income, the best passive income stream! Bias, you better believe it.
Time to dive into Lanny’s June 2023 dividend income results! Were records set? Almost to financial freedom? One day and one month at a time!
Dividend Income
Dividend Income is the fruit of the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio.
How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products) and on SoFi.
I also automatically invest and max out, pre-tax, my 401k through work and my Health Savings Account. This allows me to save a TON of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend, aka Dividend Reinvestment Plan or DRIP for short. This takes the emotion out of timing the market and builds onto my passive income stream!
Growing your dividend income takes time and consistency. Investing as often, and early, as you can allows compound interest (aka dividends) to work its magic. I have gone from making $2.70 in a single month in dividend income to well over … $10,000+ in a single month. A new dividend income record was set in December of 2021. Was it broken this month?! The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?
*Not pictured is my wife’s dividend income above*
I want to show you that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, you can too.
Dividend income – June 2023
Now, on to the numbers… In June, we (my wife and I) received a dividend income total of $5,361.99. Speechless. Here we go again. The Notorious Investor here, bringing in Over $5K. Let’s Go! This is even with a change up in timing of huge dividends that are coming in July, when they used to come in June.
The amount and number of stocks listed below show you what it means to buy and hold for the long term. Most of the positions I have owned for years, letting dividend growth and reinvestment do its thing. This is what dividend investing for financial freedom is all about. The passive income stream is growing at a rapid pace.
2023 has been one heck of a year. The S&P 500 is pretty much at all time highs. The Fed is still going to be increasing interest rates in July, as the economy is still on fire. Borrowing rates are through the roof, inflation is slightly cooling/less of a surge. However, Americans continue to spend like there is no tomorrow. What am I doing? Investing, not-stopping and consistently adding dividend income.
Here is the breakdown of dividend income for the month of June, between taxable and retirement (far right column, under “Retirement”) accounts. In addition, “W” means my wife’s account:
So what happened in dividend income this month? Just an onslaught of dividend kings and dividend aristocrats cranking dividends my way. We are talking McDonalds (MCD) at over $80, Target (TGT) over $137+, Archer-Daniels-Midland (ADM) is coming close to $100, next quarter, next quarter!
What is the largest dividend stock that paid during June? We are going to have to tip the cap to LyondellBasell (LYB). This chemical beast also increased their dividend 5% this year and they yield well over 5%. Bring on the income.
Lastly, as you know – we’ve been loving our Vanguard High Dividend Yield ETF (VYM). The ETF grew their dividend in June and the June dividend was almost $900 when combined. Freedom baby, getting so close.
I also split out my retirement accounts in the far right column and the taxable account dividends are in the left two columns. The retirement accounts are composed of H.S.A. investments, ROTH and Traditional IRAs, as well as our work 401(k) accounts. In total, the retirement accounts brought in a total dividend income amount of $1,948.91 or 36% of the dividend income total. This still left over $3,300+ in the taxable account! That’s a freedom number, for sure. If only the passive income stream by way of dividends was this sweet each month!
Dividend Income Year over Year Comparison
2022:
2023:
Our dividend income is up… $6.61, say what?! That’s it? There has to be a reason why… and there are two huge reasons why it’s only that much higher.
First, LyondellBasell had a $5.20 special dividend paid out during last June of 2022. As you can see above, I received a dividend payday of $686 from LYB and only $158. That alone is a $500+ difference right there.
But wait… there is another large factor for the difference.
My 401k previously was a Vanguard S&P 500 fund and that paid $377. Now, they switched to Fidelity funds and it does not pay until July. Boom, another $377 difference.
Those two elements, combined, represent almost $900 of a dividend difference.
Overall, a solid dividend month. Would be wild to cross $7,500 this time next year. Keep on investing.
Dividend Increases
June really surprised me with the size of dividend increases. We had 9 dividend increases, when you include the exchange traded funds (ETFs) in the mix, such as VYM, VOO and VIG.
The best dividend increase? I have to tip my cap to Kroger (KR). Why? They are acquiring Albertson’s but despite the heavy capital it will take for that acquisition, they still managed an 11.54% dividend increase. Simply huge.
Shell (SHEL) I also like, simply because they are pounding the pavement to get back to the pre-pandemic dividend.
Notable one’s are also General Mills (GIS) at 9.25% and Caterpillar (CAT) with an unexpected 8.34%. Thank you!!
In total, dividend increases created $147.43 in additional passive dividend income. I would need to invest $4,212 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn’t have to come up with the capital to create that form of income!
Dividend Income Conclusion & Summary
The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live life on your own terms. My plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!
Excited for the future, no doubt. Further, all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.
If you are just starting out on your investment journey and you aren’t sure to start – please see the articles mentioned throughout this post. We are trying to bring you financial education and help you reach your financial goals.
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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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