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This is what dividend investing is all about! Investing in dividend stocks allows you to earn dividend income, the best passive income stream! Bias, you better believe it.
Time to dive into Lanny’s February 2024 dividend income results! Were records set? Love the end of the year Dividend Tally, as the retirement account is pumped up. Almost to financial freedom? One day and one month at a time!
Dividend Income
Dividend Income is the fruit from the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio.
How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products) and on SoFi (SOFI).
I also automatically invest and max out, pre-tax, my 401(k) through work and my Health Savings Account. This allows me to save a ton of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend, aka Dividend Reinvestment Plan or DRIP for short. This takes the emotion out of timing the market and builds onto my passive income stream!
Growing your dividend income takes time and consistency. Investing as often, and early, as you can allow compound interest (aka dividends) to work its magic. I have gone from making $2.70 in a single month in dividend income to well over… $10,000+ in a single month. My dividend income record was set in December of 2021. Was it broken this month? The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?
*Not pictured is my wife’s dividend income above*
I want to show you that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, you can too.
Dividend Income – February 2024
Now, on to the numbers… In February, we (my wife and I) received a dividend income total of $1,510.12. The first month going over $1,500 for the year and it only took February, happy about that.
The amount and number of stocks listed below show you what it means to buy and hold for the long term. Most of the positions I have owned for years, letting dividend growth and reinvestment do its thing. This is what dividend investing for financial freedom is all about. The passive income stream is growing at a rapid pace.
2023 was up 24%. Two months down in 2024 and the S&P 500 is already up 8%, setting all-time highs almost daily now.
The Fed has now paused for 5 months, as they let data and the interest rate hikes they’ve done over the last 2 years really sink in. Expectations are rate cuts next year. Will it be 2? Will it be 3? Who knows, I turn off the noise and keep investing.
Here is the breakdown of dividend income for the month, between taxable and retirement (far right column, under “Retirement”) accounts. In addition, “W” means my wife’s account:
Big telecom carried quite a bit of weight here. Those two dividend stocks of AT&T (T) and Verizon (VZ) brought in $180 in passive income in February. Those funds were also reinvested, picking up more shares in the 6.5-7.50% dividend yield range, adding more income. Will we be at $200 before the year is over?
It’s also worth noting the huge dividend payment from Archer-Daniels-Midland (ADM). ADM is a dividend king, with now over 50 years of growing dividends. They currently are going through an accounting scandal and are in a rough patch because of it. However, they announced a massive dividend increase even after self-reporting the event. Hoping this plays out well for us shareholders.
I also split out my retirement accounts in the far right column, and the taxable account dividends are in the left two columns. The retirement accounts are composed of HSA investments, ROTH and Traditional IRAs, as well as our work 401(k) accounts. In total, the retirement accounts brought in a total dividend income amount of $395.10 or 26% of the dividend income total. This still left over $1,100+ in the taxable account. Hard to get these non-quarter-end months to $2,000, I tell you. Next year, maybe?
Dividend Income Year-Over-Year Comparison
2023:
2024:
Our dividend income is up… $322.82, a 27% increase from last year. That beat inflation, right? I believe so, I think inflation was 3.4% for the year.
My CVS dividend is up almost $20 since last year, since grabbing more shares in 2023, as well as a nice dividend increase of 10% last year. Love it.
Archer-Daniels is in this month versus being in March, which is skewing the results slightly. Therefore, March won’t be including ADM.
John Deere’s (DE) dividend payment increased by 24% for two reasons. One, dividend reinvestment, of course. But the biggest reason is the not 1, not 2, but 3 dividend increases in 2023 alone. A rare time to be a John Deere investor, indeed.
In total, if we keep this growth rate up – we are talking over $1,900 in forward income in 2025 for February, which may still put me 2 years away from $2,000, dang it!
Dividend Increases
I received 7 dividend increases in February 2024, 2 more than the previous month of January. Dividend investing is here to stay, baby!
The best dividend increase below? Jackson Financial (JXN) for sure. Given the state of asset management and money management, such as T. Rowe Price (TROW), Franklin Investments, etc. I did not have high expectations. However, JXN came through with a 13% banger!
Another one to mention is in my wife’s taxable stock account. TJ Maxx (TJX) had a surprise increase of 13% as well. Given the state of retail, an increase above the rate of inflation is a huge win, let alone a 13% raise.
In total, dividend increases created $73.86 in additional passive dividend income. I would need to invest $2,110 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn’t have to come up with the capital to create that form of income!
Dividend Income Conclusion & Summary
The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live life on your own terms. Therefore, my plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!
Excited about the future, no doubt. Furthermore, all of the investing from last year and moves this year show that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.
As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing, everyone!
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
