We are already mid-way through the year. Where has all the time gone? It feels like just yesterday that I was bringing in the new year in style. Yet six month have flown by. The year so far has brought a lot of change. But the one constant is my dividend income – it just keeps pouring in.
The amounts of dividends that hit my account in the months of April, May and June was £538. This averages out to £179 a month in pure passive income. Comparing this figure to the amount I received in the same period last year – £423 – shows an increase of 27%! This growth came from a combination of organic growth (companies increasing their dividends), throwing new money into the market to buy additional shares and dividend reinvestment.
The companies that paid me the highest amount of dividends over the past three month were Royal Dutch Shell, Imperial Brands and BP with amounts of £90, £62 and £38.
At the other end of the scale, the lowest amounts came from Visa, Nike and Intel with £0.45, £0.70 and £0.92. Whilst the dividends paid from these companies are minimal at present, I expect them to increase their payments at a double digit rate over the next few years. Additionally, these companies have proved to be brilliant investments for me as their share prices have rocketed upwards and provided me with a handsome total return. It pays to have low yielding fast growth companies in your portfolio.
Looking ahead, I expect to receive over £2000 in annual dividend income this year. Personally, I feel this is a great achievement considering I started my financial freedom journey not too long ago. From my perspective, I am still on course for the target I set which was to cover all my expenses via passive income within a 13 year time frame . Living off dividend Income. Is that not the dream?
The Dream Is To Live Off Dividend Income
Anyone who has been reading this blog knows that the reason I’m saving a high portion of my income is to invest it in dividend growth stocks. The idea is to accumulate a portfolio of high-quality dividend stocks that can, in aggregate, generate enough passive income to live off of. At this point, I will be financially free.
The whole point of financial freedom it to obtain a choice in how to spend the majority of my time. I currently spend most of my time (40 hours a week) working in a job that whilst satisfying for now, I cannot see myself doing forever. And truth be told, like many other people, I only go to work for the money.
In order to take control back of my time, I am accumulating a portfolio of dividend paying stocks. The dividends produced by this portfolio will provide me with a choice – a choice in how I spend my time. And I value my time a lot. I don’t want to look back at life and have the regret of spending too much time in an office.
So the passive income I receive from my dividends will give me an option of what I want to do. No more will I have to do something just for the money. When you have a constant income stream that is above your expenses, the world is your oyster.
Just look at the man with a six figure Unilever portfolio. He probably never needs to go to work again in his entire life. He has used the dividends from him portfolio to pay off his mortgage. Whilst he still enjoys his work, he has drastically cut back on his hours in order to have more free time and pursue his hobbies. And whilst his salary has gone down, the dividend income has more than made up for it. He told me investing is the best thing he has ever done. And that is why I am doing it.