Dividend Income Summary: Lanny’s January 2023 Summary
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 January 2023 dividend income results! Were records set? Almost to financial freedom? One day and one month at a time!
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), as well as SoFi’s investing application – commission free.
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. A new dividend income record was set in December of 2021. Unfortunately, did not break it in December 2022. However…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 – January 2023
Now, on to the numbers… In January, we (my wife and I) received a dividend income total of $1,264.68. Glad to start the year off with crossing $1,000. To be free, would like to have this number 3x that! What happened during this month?
Always keep this in mind, 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. Over a decade of investing is snowballing on its own, but we keep investing as much as we can.
As I stated in my December 2022 post, 2022 finished off down, ending up below 3,900! The market was down 20% for 2022. Only 1 time since 1980 has the stock market been down back to back years.
I bring this up because the S&P 500 is up a resounding 8% through February 3, 2023. It’s true what they say, it’s hard to beat the odds when they are completely stacked with decades of history. It appears this year could finish up, despite inflation still high and the fed raising interest rates.
In addition, the Fed has raised rates by 425 points in 2022 and 25 basis points just recently in 2023, 450 in total. I am anticipating further 25 basis point hikes, especially as the labor market continues to boom. The Fed needs to cool that down, and prices at the grocery store are simply not good, eggs are $4 for a dozen and gas is still almost $4 per gallon in Ohio. Deflation? You kidding me?
Here is the breakdown of dividend income for the month of January, between taxable and retirement (far right column, under “Retirement”) accounts. In addition, “W” means my wife’s account:
So what happened in dividend income this month?
Philip Morris (PM) continues to a beast in my dividend stock portfolio and I love Canadian banks, as Canadian Imperial is almost eclipsing $200 per quarter in dividends.
Meanwhile, we are starting to see the dividends come in on my wife’s account, especially with the new, large position in BRT Apartment Corp (BRT), almost at $25 per quarter and Medtronic (MDT) coming in over $25 per quarter.
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 H.S.A. 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 $267.06 or 21% of the dividend income total. Almost $1,000 from the taxable dividend account. For January, I’ll take it.
Dividend Income Year-Over-Year Comparison
Our dividend income was up $140.92 or 12.5% last year. What caused the increase in dividend income?
First, Store Capital (STOR) had the acquisition close and they are no longer a publicly traded company. Therefore, I did not have that juicy dividend of over $36+ in 2023.
Second, Medical Properties (MPW) is way higher, due to exiting Healthpeak Properties (PEAK). I used the proceeds to not only increase my income, by shifting into MPW, but used a significant amount in the retirement account on Vanguard’s High Dividend Yield ETF(VYM).
Third, as stated earlier, my big position dividend stocks of Philip Morris (PM) and Canadian Imperial (CM), continued to grow.
Overall, an incredible dividend month. The push to $2,000 for January 2024 is on! Keep on investing.
In January, we rocked in SIX dividend increases, that really added a punch to the dividend stock portfolio.
The increases had many surprising events – Wendy’s (WEN) and United Parcel Services (UPS).
Wendy’s was just massive, plain and simple. My wife owns them in her portfolio and they finally are giving back to the shareholders here.
Then, UPS came in the clutch with a solid 6.6%.
My favorite, though, has to come from the Dividend Aristocrat – Archer Daniels Midland (ADM) with a juicy 12.50% banger, adding over $44 in annual passive income! So fortunate.
In total, the dividend increases created $129.49 in additional passive dividend income. I would need to invest $3,700 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. 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 for the future, no doubt. Further, all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.