2021 is flying by at light speed, or at least it sure feels that way.  That is why we are pursuing financial freedom. To slow time down! Winter is kicking our butts and there have been some HEAVY snow days.  Sometimes, I ask myself why I choose to live in the cold. Every month, we summarize the dividend income we received from our investments.  This article summarizes the dividend income I received in January 2021!

Why I Invest in Dividend Stocks

I invest in dividend stocks to grow a my passive income. Eventually, one day, my dividend income will be large enough to cover my monthly expenses. That is why we are relentlessly searching for dividend stocks to buy. It is about putting our hard earned cash to work. Most importantly, as I said earlier, this will ultimately buy us time!

To find dividend stocks to buy, we use  our dividend stock screener. Our stock screener has helped us find some awesome undervalued dividend stocks over the years. This simple, 3 step stock screener is designed to identify undervalued stocks with a strong payout ratio that have a history of increasing their dividend.

Watch: Dividend Diplomats’ Dividend Stock Screener

Building a large dividend income stream takes time, consistency, hard work, saving, and most importantly, investing. I have been investing in dividend growth stocks since 2012. Slowly, but steadily, my income has grown. Brick by brick. DRIP by DRIP. It is really exciting to see the growth and larger dividend checks trickle into my brokerage account.

Each month, we share our dividend income summaries to highlight our growth and progress. It is  a fun and helpful excercise that holds us accountable. Further, it helps you, our followers, see the stocks we are purchasing.

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In January, we received $595.72 in dividend income. This represents a 37% year over year increase compared to last year. We are off to a strong start in 2021. Hopefully, this will set the tone for a killer 2021. The chart below shows each individual dividend check we received.

In every monthly dividend income summary article, I provide a few observations and highlights. My notes for the month of January are as follows.

Observation 1: The Power of Dividend Reinvestment & Dividend Increases

We talk all the time about how big of an impact dividend reinvestment and dividend increases have on your passive income. We don’t just invest in dividend growth stocks. No. We invest in dividend GROWTH stocks. Companies that have a long term history of increasing their dividend. Currently, I reinvest all my dividends.

Read: The Power of Dividend Investing

Every month when I prepare this article, I am shocked about the impact this has on our dividend income. Look at my largest dividend payer, for example. My Canadian Imperial dividend increase was bolster by DRIP and increases this year. Adding almost $8.

That was just one exampel of many. Look at the chart above. The same story can be told for LEG, NGG, PEP, CAH, IRM, and ITW. The dividends grew without having to lift a find. How do you not loving dividend investing after seeing the results?

Observation 2: Strong Growth in my Wife’s Portfolio

One of our goals has been to aggresively start growing my wife’s portfolio. In 2020, we made a strong push and purchased a lot of great dividend growth stocks to add to her portfolio. In fact, many of the companies purchased were Dividend Aristocrats or Dividend Kings.

Don’t Miss: Our Dividend Stock Portfolios

Many of the dividends received by my wife were from new holdings in 2021 that were not in her portfolio at the same time last year. Total, Genuine Parts Comapny Cincinnati Financial, and ViacomCBS were some of the new dividend payers this month.

Watch: Recent Dividend Increase – Including Genuine Parts Company! 

Look at the impact it had on her income. It was a huge catalysit for our strong 37% growth rate this month. Without working hard to build her portfolio, our income would have remained stagnent. It has truly been a treat watching her dividend income grow over the years and being on this journey with her.

Observation 3: Dividend Cuts Still Sting

All can’t be good news, unfortunately. Last year, the oil sector was hammered. The price of crude oil collapsed and oil companies were suddenly facing an unexpected cash flow crunch. Many, except for a few, were forced to cut their dividend in order to preserve cash and cover their debt.

Two of my holdings suffered dividend beat downs compared to last year. Occidental Petroleum and Schlumber both slashed their dividend in 2020. That had a negative $47 impact on our dividend income alone. Man, I am sick of having so much oil exposure in my portfolio.

Luckily, now, the price of oil is starting to recover. Exxon and Chevron shareholders may be able to take a breath. If oil recovers, so will revenue and income. This may provide the relief needed to save their dividends!

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All in all, couldn’t be happier to start 2021 off on a positive note.  How can you complain with a 37% growth rate??  In all seriousness. Results like these make me hungrier. It makes we want to save even more and side hustle like crazy. Save every dollar possible. Earn every dollar I can. All so I can continue growing my dividend income and reaching financial freedom. That’s what it is all about!

How did you perform in January? Did you have a strong growth rate? What new dividend stocks paid you a dividend in 2021 compared to 2020?

Bert

The post Dividend Income Summary: Bert’s January 2021 Summary appeared first on Dividend Diplomats.