Saturday, May 12, 2012

Portfolio Reaches $3600 Annual Income

I'm excited to announce my investments will now provide an average monthly income that exceeds $300.  May has been a busy month with new purchases, dividend increases, spinoffs, and stock splits.  All together I currently expect to receive $3,680.57 of dividend income the coming year.  Average monthly income: $306.71

To me this is a significant milestone because dividend income is real cash that can be used to pay bills, travel, eat out, or just squander on hookers and blow (haha).  In all seriousness I will continue to use this income to buy more shares of dividend stock till I'm ready to retire.  The best part is that these dividends are sustainable and will rise over time; hopefully faster than inflation. 

Looking forward I will strive to improve my portfolio and take advantage of attractive entry prices to the best of my ability.  I'm obviously not a financial expert (I'm a professional soldier), but I have learned a lot about investing the past few years.  The real test will be the next market crash.  Staying the course during tough times is not easy.  I will need to either have an iron stomach or just not pay attention to account balances.  Back in '08/'09 I remember cringing as I watched my mutual funds sink in an endless sea of red.  As long as income stays steady I'm confident I'll make good decisions.

14 comments:

  1. Congratulations! That's indeed a huge milestone!

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  2. Awesome! Averaging $300 per month in dividend income is a superb accomplishment. Keep up the good work!

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  3. Congratulation. What is your fixed expenses that your are reaching here?

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    1. I don't know yet. I currently do not pay for housing, utilities, and medical since I am active duty military. I hope to retire with a pension and cheap medical care in 16 years, but it's too far in the future to say for sure. Either way I want to have more income than just reaching fixed expenses so I can travel, eat out, etc. Eventually I'd like to get married and possibly have kids. I'm trying to build a base now so I won't need to save as much later on. Married life typically interferes with trying to retire early.

      I posted my budget in February, most months I have money left over. http://compoundingincome.blogspot.com/2012/02/budget.html

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  4. Congratulations! That's fantastic. I hope to reach this milestone within a year or so.

    Being able to receive $300 in monthly passive income that doesn't require you to clock in and do any actual "work" is an amazing feat. The milestones will happen even faster as your compounding income exponentially snowballs. You'll reach $400/mo in no time.

    Best wishes!

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    1. Thanks DM. I hope to reach the $400 level this time next year, but it could be faster if we see sizable dividend increases. Right now 3 stocks (BWP, LTC, T) comprise 28% of my income. I'm going to build up my other positions so I'm not relying as heavily on these yields. In the beginning I intentionally bought high yielders to build a sizable income stream. Now I'm going to use that income to buy lower yielders that are expected to grow their dividends at a faster rate.

      Take it easy,

      CI

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  5. That is a fantastic achievement. That would cover my car loan payment and car insurance for the wife and I each month.

    Great job!

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    1. Thanks IRTF! Wow I didn't even notice it till now, but $306/month exactly covers my car insurance + monthly car savings. o.O weird

      My plan is to drive a car 5 years. I save $225 a month which is put in its own savings account. When the account reaches $1,000 I buy a cd. After 5 years I cash it all in and pay for a different car (used). This way I avoid paying interest on a car note all together plus I gain a small amount of interest. I find that the $225/month I set aside is a lot less than other people's car payment for a vehicle of similar value.

      Take it easy!

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  6. This is a late reply but congratulations. That is indeed a great milestone. Every additional $100/mo in dividend income should come faster than the previous due to the compounding effects. I will average over $100/mo this year and hope to average over $200/mo next year. I have some catching up to do.

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    1. Thank you. One thing working in my favor is that right now there are many stocks on sale. Reaching $400/month will be easier if I can find better yields. Many of the companies I own have already raised dividends this year. I'll have to wait till 2013 to enjoy that half of the compounding affect (for the most part). Reinvesting rising dividends is so elegantly simple.

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  7. Hookers and blows my favorite :D

    Grats man nice achivement !

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