July dividend update

The awesome record breaking(outside of December) total I saw in June is behind me and now I’m back to an off month in July.

All of us ETF holders are used to big payouts quarterly and lack of payouts outside of those months. I’ve been adding a bit of cash to my bond funds in the last few weeks. Adding bonds is key since that area of my asset allocation has fallen behind. That’ll happen when stocks perform great. Adding bonds has led to slight increases in my monthly payouts in these off months. It hasn’t been a lot of cash since my expenses shot up the past two months. That’s due to my engagement and wedding planning but anything above 0 is great as it will help with the compounding going forward.

My bond mutual funds are the only ones that pay monthly so they’re my primary income in slower months like July. These might be small months when compared to June or any other quarter but anything I get here will be reinvested and help this number grow year over year.

Last year’s July income was $52.76 so that serves as a starting point for my expectations here. Let’s take a look at how I did this month.

adding bonds

The graph clearly illustrates my above point as the none quarter ending months are tiny in comparison to the rest of these months like July.

July’s dividend income comes in at $64.34. That’s not a huge month but it is a 22% bump over last July. That shows the power of compounding and additional contributions. I think I’ll see slight increases in these off months going forward. That’s because my bond allocation is likely to lag behind and be a target for contributions if the stock market keeps performing like it has been. It won’t be a ton. Still, I’ve seen $2-$4 increases in payouts each month as yields and dollars invested in bond funds go up.

The beauty of this is that these dollars get reinvested right back into the market. That will help my future dividend income keep growing. It may seem like only $64 but if I reinvest it at my portfolio’s average yield, that brings an additional $1.42 in income per year or 12 cents per month.

It’s not huge but all these small steps will add up to something much greater in the long run.

Steve, my dividend employee saw his hourly wage drop quite a bit this month. It was down to 38 cents per hour which is a far cry from the $10.21 in June. Still, Steve’s certainly not complaining. The guy’s just taking it easy while he waits for September, the next big “work” month for him.

That’s the beauty of dividends. It’s money you earn while doing nothing. Combined with capital gains will eventually lead investors to a sustainable and sizable hourly wage.

The July numbers bring my annual dividends to $3311.13 and that’s the number that really matters. July may be lean but it’s just one part of the whole that makes up my annual dividend income. I’m still a good deal away from my goal of 8k+ for the year but September will give this number a big boost and December is always my biggest month so it’s still certainly possible. I’ve also got a bit more time this year for additional contributions as well that will help grow those months in relation to their historical performance.

Steve’s hourly wage this month may look lean but the annual hourly wage so far this year $2.84 and that number is sure to jump once we get the large December payouts. It’s not enough to live on for sure but it’s a great start that I plan to grow through the years.

Here’s another look at the data since I started tracking this.

dividends

The months may look concentrated but it’s the annual income that matters in the long term.

That’s it for July. It’s a small month but I won’t scoff at 20%+ growth even if the dollar amounts are small. How was your month?

July Total : $64.34
2017 Total : $3311.13
Portfolio monthly hourly wage : $0.38/hr
Portfolio annual hourly wage : $2.84/hr

13 thoughts on “July dividend update

  1. Hi titm,
    The 1st and 2nd months are definitely not much to write home about for us fund holders. 20% is a pretty good increase I think. But it all just makes the 3rd month even more fun 🙂 My results are helped by bond funds which pay monthly dividends although I’m reconsidering that allocation in taxable.
    Congrats on solid performance and staying on track!
    Best wishes,
    -DL

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