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.
Great numbers. Covering €34 in expenses per month sounds good to me!
It’s always instructive to look back in time and see where you’ve come from. It can be motivating, too, especially in your case, considering how far you’ve come in just a year. I know it is motivating for me, just starting out, to see you make such awesome progress. 🙂
Even more exciting: consider how much further you’re going to be in a year from now!
€34 is better than nothing at all and even miles ahead of where I thought I’d be this far into my dividend growth investing journey, so consider me a happy camper. 🙂
What I’m really looking forward to is to be able to glance back at the past and see how far I’ve come by then. Glad to hear the same thing motivates you too!
Nice progress NMW, let’s see how the coming years are working out for you! Keep up the good work
Thanks, man! Not quite as fast as you’re making progress, but it’s hard to keep up with the speed at which you’re investing in high quality companies, ha.
Keep it up on your end too,
Excellent progress, NMW considering this is a slow month. Mine will be much the same for this month and (in particular) next month. But September and October should be strong ones again!
Are you going to revise up your goal for the year as you have already racked up over 80% or are you going to keep it until it is broken?
It’s funny to see that we have similar months in term of fluctuating income. I guess that says a lot about the dividend payment dates of most European companies.
August will be pretty good for me too, but September is likely to be much higher again. Keep on trucking over there too!
I probably won’t change my goal for this year, but obviously upgrade next year’s goal. I obviously underestimated the yield I’d be getting on most stocks and their growth.
Top notch work NMW! Those numbers are looking very sexy right now. The best part for me is that my dividend payments kinda mirror yours in their size…which hopefully means that in a few months time I’ll be raking in similar amounts.
I love the concept that, as one’s dividend income grows, so does his/her savings rate (assuming expenses are kept similar!). I’m sure that your savings rate will be close to 80 or 90% in a few years. Calling it now.
Keep up the great work, man!
I’m sure you’ll be taking in a lot of dividends in just a couple of months time! I really underestimated how fast you can get a well diversified portfolio off the ground and up and running. It’ll be really interesting to see where we both are in just a couple of months and years.
To me that’s one of the main reason why I prefer dividend growth investing over index funds; the additional income. Not only does every dividend payment provide me with a huge motivation boost, it simply increases my monthly cash flow.
Congrats on the progress, NMW. Good to hear you are continuing to work your way towards you goal.
Thanks, pal! Glad to see you checking up on me because that’s what motivates me most to keep on going down this path.
Keep crushin’ your first year man. Wait until you are 5 years in, it will the difference will be stark and you will be loving that cash earned by your cash.
Will do! Growth has already been amazing, can’t imagine what happens if I keep this up for five years… Well I can, but I’ll probably underestimate the growth component of our investing strategy again.
Hope you’re well over there!
Great progress , The dividend income will soon pay all your bills, keep the snowball rolling.
Can’t wait until these dividends cover all my living expenses… Probably the best of days for a dividend growth investor, right? Let’s hope we both get there before long!
Thanks for the update, and extra 40 Euros is pretty sweet for doing damn near nothing. The DG strategy seems like one of the easiest and most fulfilling investing strategies to implement.
Keep up the great work!
Dividend growth investing is a very satisfying strategy in my opinion. Every dividend payment boosts my morale and keeps me going. And the best part is that once you’ve put your money to work all you have to do is check up on it regularly.
Keep it up NMW. You’ll crush all your goals easily bud. Keep logging your progress and pretty soon, Your focus is your Reality! No doubt. Thanks for sharing with us and I wish us the best! Cheers bud.
Thanks, man! Appreciate your positive comments and constant support – really keeps me going and pushes me to do even better in the future.
I hope you’re great over there too. Keep showing everyone how it’s done!
You’ll have to adjust your annual goal as it looks like you’ll be able to reach that number no problem. Excellent progress since receiving your first dividend not so long ago.
Indeed, I underestimated my initial dividend income for this year by quite a lot it seems. I believe September will be the month to crack through the €500 ceiling.
Love the honey badger and how he doesn´t give a shit 😉
Nice progress NMW. Curious about your next purchase!
Have a good one over there!
Ha, glad you like it! I really enjoy weird humour like that.
Since writing this post I’ve decided to grow my position in JNJ. Even though the Euro is down a lot compared to the USD, I believe JNJ’s current price level provides an attractive entry yield.
Seems you are on a roll.The only thing you have to do to receive these dividends is waking up every morning.
They see me rollin’, they hatin’? 😉
Waking up in the morning only to find an e-mail from my broker that they’ve added another dividend payment to my account is one of the best feelings ever, as I’m sure you can attest to. Up, up and away!
Love to read these reports. I’m a shareholder of three of the five companies you listed above.
Glad to hear another Belgian owns some of the companies I hold a stake in – it turns out we share quite a lot of stocks, actually. I’d love to ramp up my Belgian investments over the coming months, especially WDP which you already own.
WDP is showing some nice dividend growth, this year’s dividend is now looking like it will be 3.75EUR per share versus 3.4EUR for the previous year, a 10% growth 🙂
The company has promised a dividend of 4EUR per share for book year 2017 and so far they’re on track to overdeliver as the previous expectation was a dividend of 3.6EUR for 2015.
Also worth mentioning is that the company encourages investors to choose for the share dividend by providing a discount of roughly 5% on the new shares in relation to the average price of the WDP share in the last five trading days before the dividend announcement date.
Thanks for quick round-up. Seems like a solid company indeed! And the fact that they specifically focus on dividend growth and return to investors is something that we all lust after.
I’m sure you’ll see me pick up some shares in the immediate future!
Great progress and looking forward to your first year review.
Stay tuned then! It’ll be glorious, I tell you. 😉
Hope you and the family are great over there,
Great progress and well on track for a win for life. You did not even need to scratch for that 😉
I wish I just had to scratch for a Win for Life dividend portfolio, but dividend growth investing is the second bet option, so I’ll gladly take it. In a couple of years we’ll be able to look back on these humble beginnings and see how far we’ve come – really looking forward to that.
I recently started looking at my monthly dividend income not in dollars and cents terms, but, as you said, in real purchasing power. Last month it covered all of our home/other, cash withdrawals, utilities, phone/internet, baby costs, schooling, and entertainment. It even started working at our travel costs. Each month that passive income eats up a bit more of the next larger category until, one day, it’ll cover food, insurance, housing and transportation.
This also is an effective way of looking at it, because it’s plain to see that decreasing expenses is equally as important (if not more so, than increase passive income.
Good numbers again from you. The trend is what’s more important. Soon enough that hockey stick compounding chart will start to take form.
Thanks for sharing,
That’s a huge list already, pal! It won’t take long until your dividend income covers nearly all your basic expenses. And the best part is that as time goes on the speed at which you can cross of more and more expenses keeps on increasing.
My numbers are great again. With irregular dividend payments my charts look a bit all over the place, but it’s the general trend that counts, like you said.