Wednesday, August 16, 2017

Recent buy: HD, ITW, MA ...

Today I shares in the following companies:

HD - Home Depot - $2436
ITW - Illinois Tool Works - $559
MA - Mastercard - $397
GIS - General Mills - $230
HRL - Hormel - $206
CL - Colgate Palmolive - $143

More shares in my portfolio equals more dividends! What I try to do is continue to add every month no matter if the amounts are small or big. At the least each contribution I do will increase the future passive income I will receive.

Tuesday, August 15, 2017

July 2017 Portfolio Summary

In this post, I will summarize how my portfolio has been doing in the last month. Today is August 15th and my portfolio sits at $383,000. The portfolio is generating $9713 in dividends every year. For me, 15% of this dividend will be taxed. My dividends are always immediately reinvested back into the company that paid them. This increases the level of compounding for each of my positions. All of my positions pay dividends, and all of them have increased them every year for many years which establishes a solid track record. I don't expect all of my holdings to continue increasing dividends forever. Some companies may fall and die but from the homework I have done, I believe that will be a rare occurrence. It is impossible to avoid any failures; however, I am confident the winners in my portfolio will more than cover for any losses from companies that go out of business.

Nearly all of my positions are defensive. This means that the companies offer products and services we use everyday no matter the economic situation. I want to be part of a business that receives money from the regular consumer that will use the product on every occasion. My favorite companies are in the consumer staples business offering food, beverage, personal care, cleaning, and daily household item goods. I also favor utilities and healthcare as they offer products people will use even if the economy is bad. Defensive companies are more predictable, they offer more consistency in the dividend. I hold less industrials, no energy, and little materials stocks because they are volatile due to the nature of the economy or commodity prices. I hold quite a few consumer discretionary companies to diversify. However they are not my core holdings.

Sunday, August 13, 2017

July 2017 Dividends Received

In July I collected a total of $967 in dividends. All of the cash received was reinvested back into the companies that paid them.

Ticker      Total    Taxable         401k
MO $414.79 $369.66 $45.13
PM $216.37 $170.56 $45.81
KMB $60.63 $38.80 $21.83
MKC $55.27 $35.72 $19.55
KO $52.91 $52.91
O $52.86 $52.86
ADP $39.90 $39.90
XEL $32.76 $32.76
ITW $15.60 $15.60
MDT $13.09 $13.09
SYK $12.33 $8.50 $3.83
Interest $1.25 $0.90 $0.35
$967.76 $765.31 $202.45

The 1, 4, 7, 10 months are high paying months for me since I hold a lot of MO and PM in my portfolio.

Below is the plot showing my the monthly dividends I receive. The 3 month average trend is a nice growth upward. Nearly all of this growth is due to my continuous contribution. By itself the portfolio is growing income around 10% annually.

I zoomed out the chart for this month going forward since some of my plots were approaching the maximum dollar amount I previously set ($1000). I can feel that the snowball is starting to roll. Nearly $1000 in dividends in a month is an appreciable sum for me. My goal now is to my monthly moving average to cross $1000/mo.

I hope in the future my dividends alone can pay for all of my rent or mortgage if I choose to purchase a property. That would make life much easier.

Friday, July 28, 2017

Recent buy: MO

I missed the large dip in PM today. It largely is now flat.
MO dropped a lot and I bought it after a 10% drop. It was lower intraday but I did not wake up early enough.

The announcement that the FDA will look at reducing nicotine concentrations in cigarettes caused all tobacco vendors to drop today. I took the opportunity to add.

I added $1663 in MO today. Will add more if the yield hits 4% territory. Any drop in PM below 5% I will start adding. PM is largely international so I don't think there's much effect on PM.

Happy investing

Tuesday, July 25, 2017

Recent buy: MMM

I purchased around $1000 in 3M (MMM) after they announced earnings. The stock fell 5% so I decided to add more to my position.


Friday, July 21, 2017

My annual dividend is now almost reaching 5 figures

My investing started back in October 2013. I have been diligently investing my income into dividend paying stocks so that one day I can live off the dividends. The companies I invest in are largely dividend aristocrats with large margins of payout safety and track record of dividend increases over many decades. My primary focus is dividend safety and the growth of that dividend on its own.

Back then I had $0 in passive income every year. The contributions initially felt like a complete waste of time. I had people tell me 3% yield (what I'm shooting for as my average portfolio yield) is nothing and that it would take forever to accumulate enough assets to live off of that. The income I was receiving from my dividends in 2014 every month would barely pay for a happy meal. But now the dividends are rolling in. I'm making more from my dividends now doing absolutely nothing than when I was a college student laboring away at minimum wage part time to pay my rent. The dividend payments are quite sizable now with my largest month January paying over $1000. I'm certainly glad that I kept with my original plan instead of spending the money as the dividend payment effects are starting to snowball. 

I estimate that by the end of August or September I will be able to cross the $10,000 a year mark in dividends. This means that every year I will be able to receive $10,000 for doing absolutely nothing. I can be sipping martinis and those dividend checks will still be mailed to my door. What a great feeling to not have to be tied to an employer. Eventually I hope this number grows even more so I can sustain my entire lifestyle with passive income.

I expect that with dividends reinvested, this $10,000 will be able to grow by 10% (3% yield reinvested with 7% dividend growth on its own), which means that $10,000 in one year will become $11,000 the next year and $12,100 the next. I find that this is a great way to snowball my passive income without having to work at all.

I invested heavily in the Q2 of 2017. A lot of my position was in cash starting in 2017 so I deployed a lot of that to work. I will post when I finally cross the 5 figure mark in a few weeks.

Happy investing -YD

Thursday, July 20, 2017

Recent buy: HD

Shares of HD dropped 4.1% today after Sears said it is now selling its Kenmore appliances on Amazon. I took this opportunity to add $2000 to my existing position in HD.