June dividend update – ETF dividends

June was a very busy month for me. Not only did I get engaged but we also spent a considerable amount of time looking for houses. In fact, we just made an offer on our potential first home today which is both exciting and stressful.

I’ll write about that process another day and what it might mean for my portfolio. Today, I’m looking at my June dividends and am excited by what I see.

My portfolio is very ETF/mutual fund focused. Mutual fund and ETF dividends are centered on these quarter ending months. These months drive my performance for the quarter and the year. Even though I’m not a dividend focused investor, I do feel like consistent and growing dividend payouts are a helpful tool in long term investing and as such, I set a goal of $8,000 for the year.

I’m not quite sure if I’m on pace to beat that goal. A lot of it will depend on what happens in December but June certainly helped my totals move along. Steve, my trusty dividend employee who has been lazying about the past two months found a lot of seasonal work in June and earned himself a solid wage!

As a reminder, my March dividend totals were $1250.80 and last June’s dividend total was $1161.49 so both serve as a starting point for what was expected this June. With that in mind, let’s take a look at how June 2017 looks.

June dividend income comes in at $1701.73! That’s a 46% increase over last June’s total. It’s even a 36% increase over March! I’m pretty excited to see such big numbers. This is by far the biggest non December month I’ve seen since I’ve started tracking dividends.

On top of that, my tax-advantaged international fund also paid a long-term capital gain this month that amounted to $1187.91. That is not included in the above numbers as it’s not a dividend. My 401k does not split those out and instead shows everything as dividend. That requires some manual calculation but I want to track only dividends here. The idea is to not skew the numbers with any capital gains since those are not regular.

It’s great to see such big growth in dividends. That really shows the power of putting additional money into the market. Combine that with dividend increases from individual stock holdings and baby, you’ve got a stew going. A lot of this growth has come from some of my recent purchases. Those have driven the yield of my portfolio up. REITs and bonds have been underweight recently. Those have been the asset classes getting more of a cash infusion which serves to help the dividend picture.

I also had one of my individual funds(the same one that paid the LTCG) pay out a small dividend in June. That fund normally only pays in December which helped bump the number up as well.

One of my core individual holdings, UnitedHealth Group(UNH) raised their dividend another 20% in June. That bump is first seen here and is going to help the numbers quite a bit going forward. UNH has not only been a strong performer for me but has raised their dividend substantially for the last 7 years. Their 5 five dividend growth has been an amazing 31.6% and they still only have a payout ratio in the low 30% range which leaves them plenty of room to grow.

The beautiful thing with these dividends is they get reinvested right back into the portfolio. That means an additional $36.59 in dividends annually going forward.  It may not seem like much but every little bit helps.

I do a fun little exercise each month where I see how much my portfolio earns me on an hourly basis via my dividend employee Steve. Dude got himself a nice raise this month.

Steve’s hourly wage in March was $7.50/hr and it shoots up to $10.21/hr in June!

The June numbers bring my total dividends for the year up to $3246.79. That’s an annual hourly wage of $3.25 for dear old Steve. I’m still far away from my portfolio supporting any sort of lifestyle I want but the growth is clear from these graphs.

Here’s a look at how the data looks from the time I started tracking this.

I like the look of that graph. The green in the important quarter ending months is trending in the right direction.

Do note that the 2015 December number did include a long term capital gain that I didn’t take out at that time. That’s due to how my 401k provider lists those so that skews the numbers. I might go back and update that if I still have the information so that the data is more comparable.

ETFs and mutual funds make up a good portion of my investments. That keeps the other months quite small but what’s important is growth in the overall quarters. As such, I also like to look at every time the quarter ends.

Q1 saw a pretty big bump y/y but Q2 is even more pronounced. I’m seeing 34.9% between quarters. The driver of that is the additional mutual fund payout in June that doesn’t occur every quarter. Even without that, the growth is nearly 20% which speaks to the power of regular investing and reinvesting.

Let’s take a look at the same data for Steve’s hourly wage.

This is the same data as above presented in a different format. Steve’s hourly wage is a good way to gauge my proximity to financial independence if I wanted to live fully off dividends. My portfolio is not dividend driven as the goal is total return with tax minimization right now.

Still, it would certainly make things easier when I choose to retire if I could live entirely off dividends. My portfolio will likely become more dividend focused later on in life. Right now, the quarterly hourly wage Steve is earning is still a far cry from a livable wage but they’re growing which is all I want to see at this point.

I think June and Q2 look awesome and I don’t expect such growth from the next quarter. It wouldn’t be a surprise if September actually comes in below June due to the unexpected dividend I saw this month from one fund. That dividend also means my December total may be slightly lower than expected as that fund typically pays everything out in December and that dividend, even if small will likely cut into that payout.

That’s it for this month’s update. It’s great to see another great quarter. Steve growing his earnings potential and becoming a better worker is cool to see. It’s too bad he’ll go back to being lazy for the next two months and these updates will get slightly less exciting.

How was your June and/or Q2 2017? Did you see good growth like I did?

Thanks for reading.

June Total : $1701.73
2017 Total : $3246.79
Portfolio monthly hourly wage : $10.21/hr
Portfolio annual hourly wage : $3.25/hr