I consider Dividend Income Investing a truly passive pursuit. The money earned from holding dividend yielding stocks is part of the foundation of my plan for Financial Independence. Although, in the past, I normally monitored my dividend income total based on an annual basis, I have recently started to monitor the income total and growth quarter to quarter.
My original goal for my dividend income this year was in the $35,000 range. However, since I had to liquidate some shares to pay for unforeseen repairs on a rental property, I had to modify my goals for the rest of the year 2015. The current goal stands at $30,000. I am not taking into account the dividends paid by mutual funds because they vary wildly. If the mutual funds pay at the end of the year, the numbers will be added to the total, but not used to determine if I reached my income goal. The goal applies only to individual stocks.
With that being said, let’s get to the numbers.
- 17,500 shares General Electric (GE) @$0.23/share= $4025.00
- 4,524 shares AT&T (T) @$0.47/share========== $2126.28
- 1,900 shares First Energy (FE) @$0.36/share==== $ 684.00
- Total quarter act. dividends================= $6835.28
- Total annual est. dividends= ===============$27,340.00
The total is not too far from my goal for the year, however I am still very far from my ultimate goal for FI. We will see how things turn out going forward. I am looking for stagnant dividend growth in the next few quarters for GE, but I am also EXPECTING growth to return once the restructuring is completed. I seem to recall a song…..”You can’t always get what you want…..You might just get what you need.” That seems fitting for the current situation, so I am going to run with it.
- GE—- 3.37%
- T ——5.44%
- FE —-3.93%
The annual dividend total does not take into account the potential for compounding through reinvestment. The total dividend income will be adjusted after stocks are purchased and the dividends are added to the account.
The rate of growth for the dividends of FE and GE has been halted to zero in the near term, and although AT&T has been steadily growing, the rate is at an anemic 2%. The low rate of growth of the dividends will be cushioned in the near term because the stocks held are currently yielding more than the average S&P 500 stock which currently sits at 1.93%.
Going forward, decisions must be made whether to continue adding to established positions through dividend reinvestment or to replace those positions with suitable stocks with growing dividends.