It’s 2022 and it’s time to get more dividends!
Last year was a solid year for growth despite it being a slow savings year for me. After all, we bought a house at the end of 2020 which pushed a lot of new expenses into 2021 and then we both had a bunch of health problems that sent our health expenses through the roof.
Apparently, I have an autoimmune disease, what a bummer, but I’m feeling better now which is pretty nice.
Despite all that, through a combination of some savings, dividend re-investment and dividend growth on my current holdings, I grew dividends by 13.9% which is pretty cool.
Again, that was despite by expenses being almost double what they are in an average year and my savings rate being way way below a normal year. I’m really lucky to be in a spot now where my portfolio generates almost $16,000 in dividends per year because all that re-investment really helps my dividend employee do his job.
This year, we have better insurance, which while costing more, will still be a better deal given our medical conditions and we’ll likely have less expenses on our house(knock on wood) now that it’s mostly set up and furnished. That hopefully means more savings and through that even more dividends.
I just set my goals for this year and hope to have a better success on those than last year and January is the start of that.
On the dividend side, January is never an impressive month. I don’t own many stocks that pay out in January and even my M1 Finance portfolios fail to lift this month too high as there aren’t many stocks in there that pay in January. In fact, most of the dollars rolling in here come from my small bond allocation which hasn’t gotten a ton of money recently due to it being overweight as stocks fell and fell. Plus, yields have remained fairly static or even fell in the last two years, something that may change in the coming months.
That means two things, January’s a small month and growth here will likely be stalled. However, with rising rates and more money flowing into the market, that may start to change going forward but 2022 won’t really benefit from that.
Last year’s dividends in January came in at $258.42 so let’s see where they are now.
January 2022 comes in at $268.06, a small 3.7% bump over 2021.
It’s not big growth but any growth is nice so I’ll take it. January has always been my smallest month and that doesn’t change this year. It’s also generally a slow growing month due to the dependence on bond payouts which have been flat lately.
Due to that, even my small contributions to my M1 Finance accounts which do pay monthly don’t spur major growth.
Steve, my dividend employee, has a slow start to the year with a $1.61 per hour rate. That’s not quite enough to pay his bills so he’ll have to work harder in the next few months.
If the guy doesn’t bring in more dividends then he won’t be able to make it!
Still, despite the low number, all that re-invested boosts my forward income by $7.77 annually which isn’t too bad. That’s the beauty of compound growth and continued investing and why my dividend growth in 2021 was still pretty solid despite low savings.
If this is your first time reading one of these updates, I know what you’re thinking, if my January is so low, how am I getting $16,000+ per year. Well, that’s because most of my investments flow into ETFs or mutual funds that pay quarterly.
You can see that in the graph below which shows the growth opportunities ahead.
While growth in January may be small, I’m sure to get more dividends in the months ahead and the growth there will be a lot more impactful that whatever happens in these small months.
That’s especially true in months like March, June, September and December.
However, if I’m able to save more money this year, I’ll also likely start to buy more individual stocks that pay in these off months as well which can lead to more dividends in months like February and April.
Hopefully the 3% growth rate I saw this month isn’t the norm and growth ahead becomes more pronounced. It’ll certainly have to be if I want to hit my goals for the year.
Overall, not a great month but nothing terrible. I’ve already sent some money into my dividend growth pie on M1 so hopefully that will spur the forward months on a bit. We’ll see how things are in February but it’ll be March that’s will start to show whether my growth goals are realistic here or not.
Here’s to a good February and a good year for everyone.