Every month I publish the passive income that I’ve received through dividend growth investing. As most of you guys know I do this to for two main reasons. On the one hand I hope that disclosing my progress to a wider audience keeps me both accountable and motivated, while on the other hand I also wish to inspire others to follow a similar journey.
Indeed, embarking on a financial independence endeavour isn’t something that comes naturally to most people – I needed a little nudge too. If I can be just a fraction of that nudge to other folks, this blog will have met its purpose.
It’s now been almost one year since I bought my first individual stock in the form of French Oil giant Total SA (EPA:FP) and I haven’t looked back since. When people tell you that small beginnings in dividend growth investing lead to an ever growing income stream, they’re not lying. Even with the tons of simulations I performed last year I still seem to have underestimated the power of dividends.
And the best part about all of this? I could be slaving away at the office, I could be on a well-deserved vacation on a tropical island, or I could be fast asleep, but just like honey badger, money doesn’t care about all of that. Your hard-earned cash will work tirelessly for you even when you’re not. Through dividend growth investing fresh capital will automagically hit your account on a regular basis.
Just take a quick look at the numbers below! 2015 was off to a furious start, no doubt about that. With the fiscal and bookkeeping year ending in large parts of Europe, many annual dividends were distributed to shareholders during the months of March, April and May. As a result, my account saw a massive influx of brand-new income already.
The downside, of course, is that the next couple of months are likely to slow down quite a bit. Still, it’s not important when your dividends are being payed as long as you continue receiving them far into the future. That’s why I’m happy to see five companies once again pitch in towards this month’s income.
All dividends below are listed in Euros, and are after foreign withholding taxes and a 25% income tax levied by the Belgian federal government.
|01/07||KO||The Coca-Cola Company||3.14|
The table above consist of some impressive numbers when you take into consideration that I received my first ever dividend payment only last september from McDonald’s (NYSE:MCD). Even more crazy is the fact that each and every single one of these companies will continue to build my passive income over time.
It’s what makes dividend growth investing such a potent strategy.
Next to the growth component of dividend investing, I obviously also love the dividends themselves. What’s not to love about July’s free-of-work income? I certainly won’t argue with €42.90 in brand-new and real purchasing power. Or, in my case, more capital to invest and take advantage of the power of compound interest through re-invested dividends.
Because of the aforementioned annual payments from many European dividend champions and aristocrats, the graph below is heavily skewed towards the first half of the year. As a result, it should come as no surprise that the trend line slowly declined the past few months.
However, I’m still delighted to see it hover around €70 since that’s way higher than I could have imagined a couple of months ago. Awesome!
At the moment I’m furthermore averaging about €34 in dividend income on a monthly basis. Remember when I said dividends equated to real purchasing power? According to my latest income and expenses report, the current level of dividend payments are likely to pay for my internet bill and Google Play Music subscription ad infinitum.
When tallying up all dividend income for 2015, we’re at a surprising €407.51 already! That’s 81.5% of my goal of €500 worth of dividends for 2015. It seems I really did underestimate both the growth component of dividend growth investing and my own savings potential because we’re set to crack through the ceiling in September already! The mind, it boggles.
Indeed, during my first year as a dividend growth investor I’ve noticed these two factors work in tandem with one another. Because additional dividend income bumps up your savings rate, it inadvertently also aids you in building future passive cashflow. That’s why this months dividends are going straight towards more high-quality stocks and companies.
Because we’re coming up on my first full year of investing in dividend growing businesses, I’m looking forward to start making year-over-year comparisons and growth calculations. How much will my dividend income have grown by September when compared to last year? How much of that growth stems from increased dividend payments and how much comes from additional investments?
These are all very exciting questions. I feel like the answers to them are going to provide major confidence and motivational boost. Onwards and upwards, let’s make sure we Win for Life!
Thank you for reading and for your continued support. Without you readers this journey wouldn’t be nearly as fun as it is now.