December of last year marked the first month in which I reported my passive income through dividend growth investing. This month I’d like to continue that practice even though January traditionally is a slow dividend income month compared to big hitters like March and December. In doing so I hope to keep myself motivated and to inspire others.
It’s true that my dividend income currently is quite small, which you’ll see in a second for yourself, but that’s no reason not to track it. Forcing yourself to look at a monthly overview of fresh cash that magically appeared while you were enjoying a good night’s sleep isn’t just fun, it’s an excellent motivator. That’s why I love putting these posts together.
When you slowly but surely see your dividend income rise from month to month, quarter to quarter, and year to year, it’s hard not to believe in dividend growth investing as a plausible strategy and in the power of compounding as an unrelenting uplifting force for your net worth. Even though January was a lot slower for me than December, there are still a lot of positive things to take away from this month’s passive income stream.
Without further ado, you can find a list of the two dividend payments I received in January below. Sometimes I still can’t believe that companies willingly pay me a piece of their profits simply because I believe in their business, but you obviously can’t argue with these numbers. Please note that all listed dividends are in Euros, and are after foreign withholding taxes and a 25% Belgian income tax.
|26/01||GE||General Electric Company||2.81|
Great! I’ll take an extra €8.66 towards my monthly cashflow any day of the week. Even though both GlaxoSmithKline and General Electric are rather small positions in my portfolio, they still managed to pay for my Google Play Music subscription this month, which is absolutely incredible.
Simply by keeping my expenses low and investing the difference with my job’s paycheck, I’m now able to cover a subscription for unlimited access to music in January for as long as these two companies continue to do great and maintain their dividends. That sounds like a pretty sweet deal to me!
However, the real fun starts when I decide to reinvest the dividends and let them compound, which I did of course. GlaxoSmithKline won’t be happy to know that their generous dividend covered 0.5% of a stock purchase of Novartis (VTX:NOVN), one of their competitors, but to me betting on two of the best horses in the race instead of only one seems like a pretty smart thing to do.
Just like last month this paragraph remains relatively useless for the time being. Only having started with dividend growth investing in August of last year, it’s impossible to compare year-over-year growth at this point in time. However, the graph below shows a noticeable increase in income compared to one quarter ago.
January’s income shot up by over 330% compared to one quarter ago, just like when we compared December to September of last year. If my quarterly increases maintain the same pace for the next couple of months, I’ll be in a great place one year from now. I’m really glad to be able to continue my progress and enjoy the fruits of my coordinated efforts.
Looking forward, February and March are going to be pretty big months. With the recent avalanche of earning reports both in the US and in Europe, many companies are preparing themselves for the next dividend increase. On top of that, most companies this side of the atlantic have a 40%/60% payment scheme or only a single payment, which makes late winter and early spring the dividend seasons par excellence for European investors.
Even though I’m a long way off my goal of €500 in dividends for 2015, I’m still convinced that without any hickups along the way that target is achieveable. On top of some of my holdings already announcing a dividend increase, I’ll continue to aggressively save and invest to make sure I get where I want to be at the end of this year. We’ll see how I do!
Thank you for reading and be sure to let everyone know in the comments how your dividend income, if any, turned out this month.