Tuesday, July 31, 2018

Expected Dividend Increases for August 2018

Another month has come to pass, which means it is time for the first installment of the expected dividend increases series. Prior to delving into the dividend increases that I anticipate for the DGI portfolio for the month of August, I'll start by recapping the dividend increases from July, and their impact on my dividend income.


July Dividend Increases

#1: JM Smucker (SJM) increased its quarterly dividend per share from $0.78 to $0.85 for a 9% raise. Given that I own 2 shares of SJM, this translates into a $0.56 increase in annual dividend income. The 9% raise came as a bit of a surprise to me as I was expecting a raise of around 5%, but I'll certainly take the raise!

#2: EQT Midstream Partners (EQM) increased its quarterly dividend per share from $1.065 to $1.09 for a 2.3% increase. Although the dividend increase sounds modest at face value, EQM raises their dividend every quarter. The raise from EQM was about what I expected, and I look forward to many more raises from EQM. With the 4 shares that I own, the increase in annual dividend income from EQM was $0.40.

#3: Enterprise Products Partners (EPD) increased its quarterly dividend per share from $0.4275 to $0.43 for an increase of 0.6%. Similar to EQM, EPD has a history of increasing its dividend by a marginal amount every quarter. Overall, the increase in annual divided income from this holding amounts to $.09 due to my 9 shares.

#4: On the date of this post, British Petroleum (BP) increased its quarterly dividend per share from $0.595 to $0.615 for an increase of 3.4%. Given my 4 shares of BP, this increase boosted my annual dividend income by $0.32. This dividend increase came as a bit of a surprise, and it marks the first time in 4 years that BP has raised its dividend. This was certainly a welcomed dividend increase! 

Expected August Dividend Increases

#1 - Altria Group (MO): Given that management tends maintain a target payout ratio of 80% of its earnings, I believe that another raise from MO is likely. Using the most recent earnings guidance of $3.90 to $4.03 that management reaffirmed, I would venture to guess that MO will increase its quarterly dividend from $0.70 to $0.77 for a raise of 10%. The next few months will be rather light in terms of dividend increases for my portfolio as the majority of increases in my portfolio occur during the last couple months of the year, as well as the first couple months of the year.

In totality, I received 4 raises from my holdings in July for an increase in annual dividend income of $1.37. It would take an additional investment of $34.25 at a 4% yield to reproduce the effect that the most recent dividend increases have had on my portfolio. Although this seems rather insignificant at this point in time, one has to remember that this is the impact of a single month of dividend increases with 4 increases out of the 31 companies that I own. This increase also doesn't include any additional investments that I make or reinvestment of dividends.

How many dividend increases did you receive in the month of July? How many are you expecting in August?

Saturday, July 28, 2018

Introducing Dividend Income in Terms of Vacation Pay

In the DGI and FIRE communities, it is very common for us to report our income that originates from dividends in terms of the amount that we are provided in annual income. However, I have taken this concept a few steps further from an annual or monthly income perspective, and shifted to a perspective of what our dividend income equates to in terms of hours/weeks of vacation pay from our day jobs.


For instance, my portfolio of dividend growth stocks and the mutual fund in my retirement account currently generate total annual dividends of $414.35. I view my dividend income with the perspective that I make $12.25 an hour at my current job including benefits. Over the course of a 40 hour workweek, my weekly income net of taxes is roughly $418.50 (without adjusting for an income tax return). This would equate to an hourly take home pay of $10.46. When dividing our $418.50 into $10.46 an hour, we arrive at 40 hours of pay from my day job.

For those wondering why I used my full dividend income in calculating how many hours of wages my dividend income is equivalent to, I did this because I pay no federal taxes on my dividends due to the current income bracket I am in. Also, I didn't deduct FICA taxes from my dividend income because dividends are not subject to FICA taxes. If one wanted to be very precise, they would have to factor in their state income tax liability on the dividends they received, in addition to adding their tax return into their weekly net pay to arrive at their net wage per hour, and accordingly calculate how many hours of labor their dividends equate to after taxes.

For the intent and purpose of this article, I am just trying to illustrate what my dividend income equates to in terms of hours/weeks of vacation per year. In summary, my current dividend income roughly matches what a week of vacation from my day job would amount to after taxes.

What is your current dividend income? How does that equate into terms of vacation pay for you? Did you have this perspective prior to reading?

Tuesday, July 24, 2018

The Financial Impact of Many Side Hustles

I thought I would take a few moments to make note of a few of my side hustles with a brief description of each, and how that translates into the overall theme of FIRE.

My first side hustle is an ad lockscreen app called Smore. For those unfamiliar with what an ad lockscreen app is, it is essentially an app that allows the user to earn points while viewing content and ads that Smore sponsors. What I like most is that Smore has a low minimum cashout at $1 (100 points) in many useful gift cards, such as Amazon and Google Play. Users earn $0.10 (10 points) a day as long as they unlock their phone screen at least once during the day. The payout in this case is almost immediately emailed to you with the gift card code. This app generates $36.50 a year in dividend income with everyday use, which isn't bad considering it takes half a second to swipe it away whenever you use your phone. Assuming a 4% dividend yield, it would take a $912.50 investment to match the income of this side hustle (if it could even be considered a side hustle given the relatively minimal effort). If this side hustle interests you (and why wouldn't it), feel free to use my referral code of R4R4EM so that you can earn an immediate 75 points, and I can earn 100 points after your first 10 days of use.

Another similar app that I use is Adme, which has a more variable point system depending upon how often you use your phone. Users can earn a daily bonus of $0.02 by clicking on the Bonuses tab. In viewing my history tab, we can see I cash in roughly every 3 months. This would equate to roughly $20 a year in added income which would require a $500 investment assuming the same 4% yield. Adme allows users to redeem points for Paypal, Amazon, Google Play, and much more. For those interested, my referral code is Adme.mobi/r/TaMCSOgJzB. You would earn $0.30 upon inputting the referral code.
The last side hustle that I engage in is Microsoft Rewards. The mobile browser, Edge offers the ability for users to earn 120 points a day (5 points each search), while desktop offers 150 points a day to use Bing. There is also generally the ability to earn 50 points a day through a brief daily poll, 3 question quizzes, etc. In total, I generally earn around 300 points per day through this side hustle. It is a relatively quick process that takes about 6-7 minutes a day to earn the full amount of points. For context, it takes 5,250 points to redeem a $5 Amazon gift card that is sent to your email that you provide when you sign up. I have redeemed $120 of Amazon gift cards from this side hustle. In order to earn that same $120 using a 4% yield, you would need to invest a whopping $3,000!

In summary, by implementing these 3 side hustles, I have essentially replicated what a $4,412.50 investment would produce in dividend income at a 4% yield. I consider that to have a tremendously positive impact on my finances as these side hustles have helped provide hundreds of dollars in Amazon gift cards that have partially offset the cost of my textbooks for college.

What side hustles do you engage in? How much of an investment would it take for dividends to replicate your side hustle income?

Sunday, July 22, 2018

June 2018 Dividend Income

Another month has passed, and another month of dividends have hit my brokerage account and retirement account. Overall, I received dividends from 13 companies and 1 mutual fund in the month of June. Below is a summary of the dividends I received from June:




In total, I received $38.64 in dividends in June. $31.51 of this originated from my Robinhood brokerage account, while the other $7.13 was dividends from Capital Income Builder (CAIBX) in my Simple IRA account.

Overall, I'm very pleased with this month as it was the most income I've received in a month since I started investing in September 2017. This was in large part due to newcomers to my portfolio paying dividends, such as SJM, SO, AMGN, JNJ, HD, D, and PEP. 

How was your June? Was your June the best month you've ever had?  Did you have any new dividend payers for the month?