Two readers sent me a worrying e-mail asking if I had dropped out of dividend growth investing due to the market turmoil of the past weeks. Their logic seemed reasonable since I hadn’t posted my dividend income for August yet and neither had I been particularly active. Their concerns laid to rest – thanks, guys – I decided to quickly write the long-overdue article on August’s dividends.
When you’re publishing your progress and passive income out in the open like I have over the past few months, there’s no chance in the world you’ll give up simply because of the small rollercoaster ride the market’s been on the past few days and weeks. What’s more, I quickly learned that I should take advantage of some opportunites presented to me so I can reap the rewards in the future in the form of even bigger dividend cheques.
Sure enough, that’s exactly what I did just one year after purchasing my first shares of the French integrated oil major Total SA (EPA:FP). I put more capital to work in August than I have in any other month to date with the hopes that the additional purchases continue to grow my dividend income at a rapid pace.
As you can see, there’s no doubt in my mind that the current state of the stock market has very little to no impact on my long-term prospects. From the first and very small dividend income in September of last year to the sizeable chunk of money I now receive each month – it’s a level of passive income I’ll be able to rely on for the rest of my life.
And it’s unlikely to stop there, of course. In a previous post I’ve called this the double effect of dividend growth investing. Both an internal and external compounding effect tirelessly work to build my passive income far into the future.
However, let’s stick to the now for this post and take a look at what August brought me in terms of dividends.
Since receiving my very first dividend payment from American fast-food giant McDonald’s last year, I have now crossed an all-time threshold of €500 in passive and free-of-work income. To me that’s an amazing feat in just one year, even though European stocks paying an annual dividend helped me in that regard.
As such, I also expected to see a rather big slow-down in income towards the end of the year, even with my aggressive investments each month. However, that slow-down has only materialised to a certain extent. August’s income stands tall at a whopping 66 Euros, mostly thanks to my three telecommunications holdings.
All dividends below are listed in Euros, and are after foreign withholding taxes and a 25% income tax levied by the Belgian federal government.
|03/08||DE||Deere & Company||2.38|
|03/08||VZ||Verizon Communications Inc.||6.22|
|05/08||NG||National Grid plc||29.46|
|17/08||PG||Procter & Gamble||3.34|
The table above exemplifies why I like dividend growth investing so much. The incoming monthly capital constitutes short-term success within a long-term strategy and thus reinforces my commitment to said strategy every single month. To me this constitutes a huge mental advantage over other types of investing.
Boom! A brand-new graph for this segment of my dividend report.
I thought it appropriate to give the previous graph an update since we’ll be able to make a year-over-year comparison from next month onwards. Without a shadow of a doubt the income in the upcoming months is going to trump last year’s results, but it’ll still be exciting to see exactly how fast my actual dividend income grew in just twelve months.
At the moment my average monthly income for 2015 remains a tad under €40, which is a €6 increase from last month’s number. A passive income stream that big is enough to cover a two-way trip with low-cost airline Ryanair to any of my friends scattered across Europe every single month from now on. Amazing!
While I love my friends, I’m not about to do just that, of course. Even though spending on fun experiences with good friends isn’t a bad thing, I’d much rather re-invest the majority of my dividends to grow my future passive income flow.
We’re currently sitting on dividend income to the tune of €474 in total for 2015 already, which is 94.5% of my annual goal. I guess you could say I underestimated how much capital I could put to work in a year’s time and how fast dividend growth could materialise. If you’d told me in January that we would be pushing the €500 barrier just nine months into the year, I’d have laughed that comment off as impossible.
Yet here we are.
A couple of weeks ago I wrote a post on the Win for Life lottery in Belgium, which promises its rare and lucky winners a lifetime €2000 monthly payment. Even though I’m nowhere near that number yet with my passive income, I still feel like I’ve already won a Win for Life ticket, but with one major difference: I don’t have to beat odds of one in a million.
Sure enough, dividend growth investing requires a modest amount of luck, but on top of that you’ll also need to develop a habit of saving and investing regularly. Combine those two money habits with perseverance and you’ve got yourself a deadly cocktail screaming long-term success.
I hope your experiences have been the same and that you all have been able to take advantage of the recent downturn in the markets. Let me know in the comments if you managed to snag any high-quality dividend growth stocks!
Thank you for reading and for your continued support.