Dividend Income Update – September 2011

ByDividend Mantra Team

September’s dividend income numbers are fresh off the press and I’m writing today to present them to you. My main reason for investing in dividend growth stocks is to receive an ever-increasing stream of passive income. It’s through this rising stream of dividends that I’ll become financially independent, using them to pay expenses one day. Although that day is still quite far off, it’s extremely fun to see the progress improving every month and I love to document that progress.

The dividends received in September were just over double of what I received in August. I’m very thankful for the way my investments and passive income are adding up every single month. Again, the numbers I’m going to present aren’t extremely impressive compared to a lot of other investors out there, but I’ve come a long way from my humble beginnings. Without further ado:

September 2011 Dividends Received

  • Wal-Mart Stores, Inc. (WMT) – $13.87
  • Intel Corporation (INTC) – $15.12
  • Exxon Mobil Corporation (XOM) – $15.51
  • Chevron Corporation (CVX) – $19.50
  • Johnson & Johnson (JNJ) – $39.90
  • McDonald’s Corporation (MCD) – $8.54
  • Harleysville Group Inc. (HGIC) – $24.32
  • PepsiCo, Inc. (PEP) – $17.00

Total dividends received for the month of September: $153.76

A pretty stellar month for me. I’m very happy with the total amount of dividends received over the month of September. I always try to remind myself that this income is completely passive, and required absolutely no additional hours at the office to receive it.

A quick note: I received dividends from Harleysville Group, Inc. but I recently sold my entire stake in this company, so these will be the last dividends I’ll receive from HGIC. I purposely held on to my shares until receiving my payout. I promptly then sold all my shares the next trading day.

I’m behind my goal of producing $1,200 in total dividend income for the year of 2011. I have produced a total of $772.33 in dividends through September. It’s highly unlikely I’ll reach my goal, but that’s alright. It’s very fun tracking the progress and I’m anxious to see just how close I can get. I started off the year with monthly dividend totals of just over $30, so I’ve come a long way.

I’ll update my dividend income page to reflect September’s dividends.

Edit: I somehow missed including my dividends from my Intel (INTC) holdings. I have edited this post to include those dividends. I apologize. 10/16/11.

Thanks for reading.

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31 Comments

  1. Hey Mantra,

    Always look forward to your monthly updates! Thanks for the post. I was curious as to your thoughts on keeping an emergency fund. How many months (days? years?) cushion do you keep, if you keep one at all?

    Thanks,

    Mike

  2. Mike,

    Thanks for stopping by and I appreciate your readership.

    Great question on the emergency fund. I plan on writing on this more in depth in the future, but I keep a small amount of revolving cash in the bank, usually at just a few grand. I also have $5k in revolving credit that I keep open (and paid off) every month. I have a credit card for two purposes: emergencies and reward points. I’ll write a full article about this in the future, I promise.

    Thanks for stopping by Mike.

  3. Hey Mantra,

    Sounds great, can’t wait to read that post (I ask as I’m trying to model many of my habits after yours. You’re an idol of sorts <– not trying to scare you!)

    Mike

  4. Mike,

    I’m truly honored!

    I hope I can live up to the expectations.

    Thanks so much for the encouragement. It really means a lot to me and keeps me doing what I’m doing. Best wishes to you as well!

    Best regards.

  5. What is your total return for the month of Sept ? also you need to post the YTD returns at the end of each month.

  7. DM,

    Based on your August expense report of $1131 your September dividends cover approximately 12.26% of your expenses. Nicely done my friend. At this rate I predict your monthly dividends will equal your monthly expenses in less than 8 years…

    Cheers!

    Income Pirate

  8. Hey DM!

    I’m very impressed with your progress this year. I’ve been tracking my dividends on an annual basis, too.

    In 2010 I received $200 for the entire year and I’m getting close to my goal of reaching $1,000 for 2011. It’s amazing how quickly the dividend balances can grow with regular contributions, dividend increases and — to a lesser extent in the short term — the power of compounding.

    I’m curious, though. Hopefully I don’t overstep my boundaries by asking this but is this your only retirement vehicle or do you have a 401(k) or Roth IRA? You’re a sharp guy so I’m sure you’ve thought about this but there is definitely some benefit to having tax-sheltered accounts, as well.

    Keep up the good work and I, for one, will definitely be following your progress.

  9. Hey DM,

    As with CSI, I would also like to know about your registered accounts, and how you use them to mitigate paying taxes.

    Being a canuck, I’m not 100% how you guys down south avoid the taxman, but it would be good to know.

    Great progress as always – Best of luck in getting to your $1,200 goal!

    -EJ

  10. “Income is completely passive, and required absolutely no additional hours at the office to receive it.”

    Absolutely the best part of investing in dividend paying companies!

  13. Pirate,

    8 years wouldn’t be bad at all! That would be far ahead of schedule. I hope I can keep it up and make your calculation correct.

    I hope all your investments are doing fantastic.

    Keep in touch.

  14. Pey,

    Thanks so much for keeping in touch.

    It sounds like you and I are on the same lines in terms of progress and dividend income. I’d love to see your portfolio sometime if you wouldn’t mind emailing me some of your picks.

    I have thought about a tax-sheltered account a few times. Ultimately, I’m giving up tax benefits now for access to my money earlier in life. Some people say they’d like to retire early, but I’m serious about it. When my passive income exceeds expenses I’m gone…and so I’d like to have access to that money by 40 years old. I could also fund a ROTH, but I’m giving 100% to the early retirement.

    By the time I’m taking out dividends in the form of distributions to my bank account, I’ll be in a low income bracket and won’t owe much in taxes anyway.

    I’m not necessarily saying this is the strategy for everyone, or even the best strategy for anyone else…but it’s best for me, in my opinion.

    Thanks for stopping by!

  15. Jack,

    Thanks for the encouragement. I appreciate it, I really do.

    I hope I answered some of your questions in the above post. I don’t minimize tax reductions, but I do maximize dividend income through living extremely frugally and investing in the best companies I can every month. The numbers may work out better to contribute to a tax-sheltered account, but I’ll be accessing 100% of my passive income early in life.

    Best wishes!

  16. MoneyCone,

    You’ve got it, buddy. That’s really nice. One day I’ll be managing my investments with minimal time involved and collecting a full-time income on a no-time job. I hope your investments are doing just as well.

    Best regards.

  18. “It sounds like you and I are on the same lines in terms of progress and dividend income. I’d love to see your portfolio sometime if you wouldn’t mind emailing me some of your picks.”

    We’re probably growing our portfolios at about the same rate, but from reading your blog over the past few months, you’re much more diligent about being frugal and watching every purchase and investment very closely. I wish I was more diligent about frugality, but then again my ability to spend a little more socially probably helped me land a higher paying job, too. This topic would definitely make for an interesting blog post.

    I’m an open book, too, so I would be happy to share my whole portfolio with you. You can email me at [email protected] and I’ll send it over.

    Pey

  19. Pey,

    Email is sent!

    I appreciate your candidness.

    I never really thought of spending more socially being able to land better employment opportunities, but it makes total sense. There isn’t much opportunity for that in my line of work, but I can definitely see how that would work out for you.

    There is no need to be as frugal as I am. I’m partially as frugal as I am simply because of my low income base and my lofty goals. Saving 50% of $7k/mo would be a lot easier of course, but I don’t have that luxury.

    Best wishes!

  20. Hey DM, big fan. Was wondering if you have ever looked at RGC. I recently added to the portfolio and seems like a winner. The P/E is a little high but the DVD seems steady with frequent special dividends. Thoughts?

  21. Anonymous,

    Thanks for stopping by!

    I just now took a very quick look at RGC. My first problem would be the business. Movie theaters are, historically and typically (from my understanding), very low margin businesses. This type of business seems to be very cyclical and based on the overall economy.

    The P/E ratio is very high. There is a lack of revenue and EPS growth, and the dividend is very sporadic.

    The positive would be that they appear to be extremely shareholder friendly. Looking through the yield history shows a very high yield because the share price is so low. I can’t see how this would work long-term, as they are paying out over 100% of their earnings in the form of dividends.

    This seems to be a high risk/high reward play to me.

    I’d have to take a more thorough look when I have more time, but it just doesn’t seem sustainable to me.

    Best wishes with this investment for you. I certainly hope it outperforms for you!

  22. Hello, Im new to Dividend Investing, one concern that I have is with tax payment on dividends, do you guys have to pay tax on an anual basis on your gains? sorry for the ingnorance, Im not clear on this yet.

  23. Anonymous,

    You can pay taxes on dividends a number of ways. You can increase your withholding through your employer if you are working full-time. Once you start really making a large amount of dividend income, quarterly tax payments are probably unavoidable and the most efficient way I know of to pay taxes on your dividend income.

    Take care!

  24. What is your opinion on Dividend ETFs like DVY and DLN? have you ever considered investing in this? I was considering at least one like DVY with a yield of 3.49 The list of quality stocks in it looks impresive. Thanks for sharing your opinion.

  25. Anonymous,

    Great questions.

    I’m not a fan of ETF’s and other fund products. In the end, I can own these companies individually and self-direct when I invest and I prefer doing it all myself, anyway. If you prefer a passive investment style then a lot of these products will serve you well. Simply different products for different strategies, all based on your personality and risk profile.

    Best wishes!

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