Dividend Income Summary: Lanny’s December 2020 Summary

Community, we did it! We finished this INSANE year of 2020. The year marked by the global pandemic of COVID-19 – but WE DID IT! We persevered, fought, bought dividend stocks, saved money and we are doing everything we can to keep up with our GOALS! We are defeating COVID-19, vaccines are rolling out, economic stimulus is hitting the stock market and record highs are being hit on the daily within the S&P 500!

December is always the BIG dividend income month for dividend investors. Did we set a record for dividend income to cap off 2020? Did the pandemic strike the portfolio and cause us to take a step back? Time to read more to find out!

Dividend Income

Dividend Income is the fruit from the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio.

How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products) – commission free.

Relates: Financial Freedom Products

I also automatically invest and max out, pre-tax, my 401k through work and my Health Savings Account. This allows me to save a TON of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend. This takes the emotion out of timing the market.

Growing your dividend income takes time and consistency. Investing as often, and early, as you can allows compound interest (aka dividends) to work it’s magic. I have gone from making $2.70 in a single month in dividend income to well over $3,500+ in a single month. That dividend income record was set in 2019. The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?

*Not pictured is my wife’s dividend income above*

I want to show YOU that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, YOU can too.

dividend income – December 2020

Now, on to the numbers… In December, we (my wife and I) received a total of $5,483.32 of dividend income. WOW! $5K+ again. We’ll go over this below, but very lucky to showcase these results. You will see though, we’ve been investing like crazy but also, so much of this comes from the (currently) untouchable, retirement accounts. The road to financial freedom from dividend investing is becoming clearer. The passive income stream just continues to grow.

Despite the pandemic from COVID-19, dividend income continues to grow, due primarily to additional investment and reinvestment. In the dividend stock purchases article released earlier in December (for November), my wife and I invested almost $4,000+ in dividend stock investments!

Further, though the dividend cuts hurt very bad, I know we did not take the worst of it. Dividend increases have also helped fuel the income growth. Dividend increases are discussed below and that’s one of the best feelings of being a dividend investor.

Here is the breakdown of dividend income for the month of December, between taxable and retirement (far right column, under “Retirement”) accounts:

That dividend stock list is long, it’s great. Very fortunate here. Big highlights, and I have to point out, is the Vanguard (VYM) quarterly dividend coming through. In fact, we talked about the dividend from Vanguard in the video shown below, as VYM had an increase to their dividend in Q4 2020 vs. Q4 2019.

In fact, Vanguard’s VYM brought in a total $225.79 across all accounts, wild! I also have many dividend stocks knocking on the $100 dividend door with Aflac (AFL) at $72.67, Target (TGT) at $81.56 and my wife has KeyCorp (KEY) at $83. However, it was very cool to see Lockheed (LMT) officially make the jump, as I received a nice $102.06 dividend from them. Thank you Lockheed!

Obviously, the far right column continues to grow. The retirement income is definitely in full force on quarter-ends, let alone, year-end months.

Related: Top 5 Foundation Dividend Stocks and watch our video: Top 5 Foundation Stocks VIDEO

Therefore, as for our retirement accounts, we received a total of $3,761.07 or 69%. The other 31% was from the individual taxable portfolio that can be used for everyday expenses. I need to keep bolstering the taxable account, as that passive income stream can be accessed today/right now. However, I continue and will always maximize the 401k and IRA, as that continues to pay-off in dividends, literally.

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2019:

2020:

Dividend income, year over year is higher by only $23.52. This is a 0.40% growth rate from prior year. Well, not the blistering growth rate I was anticipating. What happened?

First, you can see in 2019 – My wife had a dividend from Vanguard’s VIIIX mutual fund of $1,003! This was not received this year, due to her employer dropping the Vanguard fund from the lineup and is now in a BlackRock (BLK) fund that doesn’t distribute regularly. That’s the PRIMARY loss/setback for dividend income in December.

Second, as stated earlier, the addition of Vanguard’s High Dividend Yield ETF (VYM) in the taxable accounts is really bolstering that segment. Shell’s (RDS) dividend was cut by more than half for me, despite an increase from their massive dividend cut in earlier 2020. We also started a position of Discover Financial Services (DFS) during 2020 and those dividends are paying off very well.

Lastly, you’ll see strong, foundational positions really grew due to new investments/contributions to the positions. Equities such as Aflac (AFL), Pfizer (PFE) and Key (KEY), really showed significant growth. Time to see more triple digit dividend payers in 2021, most definitely.

I also want to note, dividend investors are really enjoying the roaring come back from dividend growth. November and December proved to be pivotal moments for dividend investors, due to massive dividend increases. Here is the article below and a recent, related video.

The plan is to continue to invest where it makes sense and beef up current positions, increase the # of shares I own and set records again in 2021.

Dividend Increases

I received only 3 dividend increases in December. No BIG surprises here, but very solid increases.

Pfizer (PFE) increasing their dividend was surprising. Why? Due to massive COVID-19 vaccine release and the spinoff of UpJohn and Mylan to form Viatris (VTRS), I wasn’t sure if an increase was coming. Thank you Pfizer, for not forgetting about us dividend investors!

Then, Realty Income (O) continued their dividend growth streak, of increasing every quarter. Norwood (NWFL) a bank in PA, came in with an increase, supporting us community bank shareholders!

I cannot wait for January. Why? There are 7 HUGE dividend increase announcements coming, with potentially AT&T (T). Check the related link below!

In total, dividend increases created a total of $14.24 in additional passive dividend income. I would need to invest $407 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn’t have to come up with the capital to create that form of income!

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The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live life on your own terms. My plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!

Excited for the future, no doubt. Further, all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.

If you are just starting out on your investment journey and you aren’t sure to start – please see the articles mentioned throughout this post. We are trying to bring you financial education and help you reach your financial goals.

Further, if you are starting out and/or want to know the Top 5 Stocks we always recommend, please see our YouTube video, subscribe to our channel and check us out! We’ll help break down further investing topics not only on this blog, but by showing you through video!

As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing everyone!

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