April dividend update

March was an exciting dividend month for me. It was after all the end of a quarter and those of us heavily invested in mutual funds and ETFs certainly enjoy those but we’re back to reality in April. I don’t own a lot of securities that pay outside of the end of the quarter time frame so these off months are always going to be much lower. At least until my portfolio grows in size substantially or I acquire some individual securities that pay in these off months. I don’t make income the sole goal of my portfolio nor do I really track when dividends are paid until after I buy a security so the only way that will happen is through pure chance.

With that in mind, let’s take a look at what my portfolio generated in April.

As a reminder the March total was $986.94 which brought the yearly total to $1176.35 or an hourly wage of $2.35/hr.

I saw income of $106.58 this month, much lower than March but a bit higher than February. The split between taxable and tax-advantaged dividends was right down the middle which is a bit different from the prior months where tax-advantaged dividends were much higher than their taxable friends. It’s a very small dividend month so that difference isn’t an obvious here as it was in March and December.

I naturally prefer tax-advantaged dividends since they can be reinvested and grown without any tax impact which is better for the overall growth of my portfolio in the early stages. Tax-advantaged accounts make up a bigger % of my overall portfolio which is the reason they have more dividends. This is common for most people early in their career as not everyone can max out their 401k and IRAs right off the bat on a starting salary and therefore avoids heavy taxable investing which was the case with me. However, I’ve gotten to a point now with my salary where I’m able to max those out and put money into taxable accounts at a decent level which will close that gap in the future.

More money in either account is good for the overall health of the portfolio and certainly good for Steve’s earning power.

Steve, my hard working portfolio employee must have gotten tired after his performance in March and his earnings showed it. After earning a respectable 5.92/hr in March, his hourly salary this month drops to an anemic .64/hr.

Adding that to our total in 2016 brings his overall hourly wage down from $2.35/hr to $1.92/hr.

It’s certainly better than nothing but shows that I’m still quite a ways from being able to live on just my income. This number will fluctuate widely month to month and won’t truly show a complete picture of my potential dividend income for the year until we’re done with December which is a heavy dividend month.

I don’t invest with dividends in mind but it is nice to keep an eye out on it and can certainly be a boost to overall returns. It’d also be nice to see Steve start earning a reasonable wage that can grow each year.

I think for 2016 I’d like to set a goal for Steve of $4.50/hr. This will be just for fun and I’ll by no means change my strategy to chase it. If I stopped investing now, I think I’d be a little short so it’s just another incentive to keep pumping money into the market.

Beyond the standard contributions I make each month, the reinvestment of dividends accrued each month also helps with dividend growth. For April, the $106.58 Steve earned will generate about $2.66 in additional income per year or 22 cents per month. Certainly not a ton but every little bit helps!

I didn’t make a ton of moves this month – still no individual purchases as work has kept me busy(meaning less time for due diligence) and the market hasn’t shown a ton of obvious values.

I have keeping an eye on Apple as the price fell the low 90s again after a poor earnings announcement. The poor earnings and 3rd quarter guidance has had a negative impact on my valuation of the company but I still think it’s a good value in the sub $90 range and I remain a long term holder. The one good piece of information from the call for those invested in Apple is that the dividend rose yet again by about 10% showing that the company is committed in its quest to return cash to shareholders(in the form of dividends and buybacks) now that growth has seemingly plateaued. I may buy some additional shares if the price continues to fall into the 80s which is certainly possible in the near term.

That’s it for April – see you in a bit for my portfolio and budget updates. I have had some free time lately that allowed me to work on my discounted cash flow(DCF) valuation spreadsheet and I hope to start doing some in depth stock analysis and write-ups soon after work gets less crazy.

April Total : $106.58
2016 Total : $1282.93
Portfolio monthly hourly wage : .64/hr
Portfolio yearly hourly wage: 1.92/hr

8 thoughts on “April dividend update

  1. Hi JGG,

    Oh I love the Steve employee concept – that's awesome! Here's to Steve working harder for you in May!

    It looks like you have a good allocation between taxable and tax-advantaged accounts and it's sensible to manage it as one portfolio. I keep mine separate as I'd like to see if I can reach independence without the tax-advantaged accounts.

    Best wishes,
    -DL

  2. Thanks DL.

    It'd be awesome to reach financial independence with only taxable accounts but I think I'll have a hard time doing that with my earnings and savings rate so I'm being realistic and tracking it as both. The idea will be to try to live off the taxable accounts and any additional passive income I get post retirement and then tap into the tax-advantaged account later as needed.

  3. An hourly wage for Steve sure is a different way to track passive income progress… Nice.
    Good that you mention Apple. Could be good to start watching this company

    Amber Tree

  4. It makes sense to compare your income on a year over year basis rather than month to month as you already know end of quarter months are almost always the biggest payers for dividend investors. Nice to show what your income equates to in a wage format. Kind of makes you appreciated what your time is really worth and what a wage is really worth. Of course, earning that wage passively is the best. Thanks for sharing.

  5. It's hard to get super super excited about Apple as it's already the biggest company in the world and growth prospects will be limited but I think they're transitioning from a growth company to a dividend growth company which will be interesting the long run. If they keep raising their dividend and it's certainly likely with their financial situation then it could be a good cash cow in a decade.

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