July’s dividends received from my ownership shares in my taxable and retirement accounts have been recorded, and I’m sharing another monthly update for tracking the progress of my dividend income.  My taxable accounts include Merrill Edge, fractional shares that remain in Computershare, and a couple of stocks I own in Loyal3.  Cumulatively, there were 9 companies in which I own a small percentage stake in that sent me my portion of profits distributed as dividends for $39.90.  Please don’t laugh, lol!  The shares I’ve gifted this year has really set me back a couple of steps, but I intend to keep plowing ahead, paycheck by paycheck, month after month to continue to acquire ownership shares in the best businesses on the planet.

My two largest holdings for the July payout were The Coca Cola Company and Realty Income, aka The Monthly Dividend Company.  As I mentioned in last month’s update, I gifted 25 shares of Realty Income a couple of months ago, and 24 shares of Coca-Cola last month.  I made sure I waited until the ex-dividend date so that I could receive the dividends based on the shares I owned prior to gifting.  Waiting until after the ex-dividend date allowed me to receive an extra $8.40 from Coca-Cola.  Not a whole lot, but a little something extra.  This means, I’ll  be receiving less the next time around until I can add more to my position.

In my retirement accounts, I received $656.44 of which the bulk of this coming from a dividend I received in a mutual fund Davis New York Venture (NYVTX).  In total, I received $696.34 which was reinvested automatically.

Below is a list of every dividend I collected for the prior month.   

 

NOTE: I utilize google docs feature so you may have to click on the tab for “07_2016” to see July’s Dividends.

 

I’ve updated my Dividend Income page to reflect July 2016 dividends.

First I would like to apologize for not issuing these posts out as timely as I’d like to be issuing them. Definitely something I acknowledge as “needs improvement” and will make a point to prioritize accordingly. As mentioned in my recent post on my dividend income update for myself, I’ve been very busy on a side project to substantially reduce my monthly expenditures that I will hopefully be able to share very soon. It has taken most of my time here lately.

 

So it’s past due to once again provide an update of the dividends generated from my parents million dollar portfolio. I’m hopeful that by providing a monthly update of the dividend income that this idle portfolio produces, a light may turn on for someone that will realize how simple it is to manage your own money if it’s invested in high quality companies that share their surplus cash to owners. Dividends are issued to owners based on your pro-rata shares. The more shares that you own, the more profits you’re entitled to as a part owner. The beauty is that each dividend that get’s reinvested, almost guarantees you that you’ll receive a higher amount the next time around because your fractional shares will pay out too.

 

I hope this transparency will help expose and educate on the true nature of the compounding effect. As time goes by, I urge you to pay close attention to the two components at work 1) dividend reinvestment, and 2) growing dividend income. The dividend reinvestment provides more shares, such that the new shares payout their own dividends, and the growth of the dividend accelerates the compounding effect. What is more apparent with a larger portfolio, that is sometimes missed with a small portfolio, is the remarkable nature of the reinvestment. I’m currently forecasting this portfolio to pay out over $36,000 in dividends this year and every single dividend will be reinvested to earn even more dividends the following year. The companies I’ve invested in for my parents typically increase their dividends annually as well.
By focusing on the dividends received, rather than the portfolio value, I hope to help my readers become aware that being a long term owner of some of the most profitable businesses in the world is really my preferred way to reduce risk in portfolio management. All it takes is awareness, and a disciplined approach to accumulating these assets month after month, so that one day this money will fully fund your recurring and nonrecurring expenses in retirement.

 
June 2016, turned out to be a personal best and monthly all time peak for this portfolio at $5,298.81!!! This amount marks a 56.21% increase from the $3,392.16 received in June of 2015. See table below:

NOTE:I call this an idle portfolio, but approximately $225k was added in December of 2015 from a cash in-lieu of pension from a former employer.

 
Leading the pack is big oil! My parent’s portion of their ownership in Shell paid them $941.44 and BP paid out $613.50. In total for Shell, BP, CVX, and XOM, my parents portfolio (IRA + Roth IRA) received $2,383.42 from big oil profits. Since gas prices have been staying between $2 and $2.25, it’s been costing me approximately $28 – $30 to fill up a 14 gallon nissan rogue tank each week. Using a very rough estimate 1 fill up each week for 52 weeks out of the year costs in the neighborhood of $1,600 for the year. In theory, if I owned the amount of shares my parents owned, this could essentially pay for my gas for life. There’s a certain sweetness in my mind to think of how nice it would be to win free gas for life, and my parents portfolio could actually do that for them. And since there is a very small chance I could win free gas for life, I’m placing my money in these very assets to accumulate which will essentially guarantee my future self free gas for life one day.

 
If you’d like to see the impact of these dividends being reinvested, I’ve structured the portfolio views of my parents million dollar ownership portfolio in a manner to highlight the 1) new shares acquired through reinvested dividends, and 2) increases in the dividends over time. I’m using 5/22/2016 as my baseline date to track the progress from this point forward. The bottom three rows sums up the totals and indicates the % change and absolute change. Over time, you will be able to see the change in 1) shares, 2) the market value of their IRA, 3) declared dividends, 4) annual dividends received, and 5) even the yield on cost will increase over time.

 
If you take a look, this million dollar ownership portfolio already contains an additional 103.20 shares from dividend reinvestment since the baseline date of 5/22/16 when I started recording this information here at InvestorPeek.com

 

I’d love to hear your thoughts about this portfolio and the dividends this portfolio produces. Do you think it will last for the next 20 to 50 years? Your comments are highly encouraged and welcomed.

Six months are in the books for 2016, and I’m making my second monthly update for tracking the progress of my dividend income.  My goal is to purchase shares of dividend paying stocks every single month and to re-invest the monthly dividends I receive from the shares I already own so that the new reinvested shares will also pay me more dividends next time around.  Ideally, my dividends should trend upwards similar to my dividend forecaster.  To be honest, I’m a little upset with my savings rate this month because of a major side project that I’ve been working on that I plan to share very soon.  If all goes as planned, I should be able to substantially reduce my monthly liabilities and allocate a much larger surplus towards buying more dividend income every month.          

Because I primarily max out my 401k and roth IRA before I add any significant money to my taxable accounts, you’ll see most of my progress being made in these two categories for the first part of the year and my taxable account will receive my attention towards the later half of the year.  For this reason, I’ve decided to separate my monthly dividends in these two buckets (taxable accounts and retirement accounts) sub-totaled and then totaled in the same table.   

This means my dividend income for June 2016 will look out of whack, simply because I’ve captured dividends received from my 401k.  I actually think this will be appropriate since I’ve reconfigured my 401k towards dividend paying funds, so if you’re interested in the funds I use for dividend growth investing in my 401k, please check out my portfolio page.  This new structure has also made me realize that I need to allocate more dollars to my taxable accounts so that I can utilize these dividends for my monthly expenses well before the average retirement age.  I really, need to kick it up a notch!  Hopefully, I’ll complete my side project very soon, and I’m already licking my chops to be able to invest more.

Below is a list of every dividend I collected for the prior month.   

NOTE: I’ve been playing with the google docs feature so you may have to click on the tab for “06_2016” to see June’s Dividends.

I’m definitely satisfied for the monthly total, but I’m very upset about the small amount for my taxable account.  In the past, I combined my Merrill Edge accounts (taxable/roth) and by doing so I wasn’t noticing how idle my taxable account seems.  I may be being too hard on myself, because I’ve also gifted a sizable amount of shares this year and satisfied the last little bit this month when I parted ways with 25 shares of  Realty Income and 24 share of Coca-Cola.  I desperately want to replace these gifted shares, but will have to be patient for a pull back in their stock price.

I’d love to hear feedback from you regarding the change I’ve made in reporting my dividends.  Do other’s track 401k dividends?

 

I’ll update my Dividend Income page to reflect June 2016 dividends.

 

Hello Again!  This post marks my first post of my parents monthly dividends received at InvestorPeek.  My parents have graciously agreed to let me share the progress of their portfolio alongside mine as a real life academic case study for the investment community to benefit from.  My intentions are to educate folks on the power of Charlie Mungers “sit on your ass” investing technique, once you’ve accumulated a nice nest egg that’s filled with literally some of the best assets in the world.  Gut check time will occur during the next bear market sell off if market values decline 10 – 40%, and I’m patiently optimistic my parents will agree to sit still and let compounding work its magic.  Jeremy Siegel from his book The Future for Investors is famous for coining the phrase, “bear market protector and return accelerator” when referring to dividends.  The important lesson being, according to Siegel: “Market cycles, although difficult on investors’ psyches, generate wealth for long-term stockholders. These gains come not through timing the market but through reinvestment of dividends.”     The extra shares purchased while deeply discounted, will cause this portfolio to rocket ahead once prices begin to stabilize; so bear markets can be leveraged to accelerate your wealth.

I’m hopeful that my monthly updates of this portfolio will become a wonderful insight to the investment and DGI community.  This portfolio is large enough to accelerate at a nice pace all on its own, and is truly a rapidly growing dividend income machine!  

I hope this transparency will help expose and educate on the true nature of the compounding effect.  As time goes by, I urge you to pay close attention to the two components at work 1) dividend reinvestment, and 2) growing dividend income.  The dividend reinvestment provides more shares, such that the new shares payout their own dividends, and the growth of the dividend accelerates the compounding effect.  What is more apparent with a larger portfolio, that is sometimes missed with a small portfolio, is the remarkable nature of the reinvestment.  I’m currently forecasting this portfolio to pay out over $36,000 in dividends this year and every single dividend will be reinvested to earn even more dividends the following year.  The companies I’ve invested in for my parents typically increase their dividends annually as well.  

By focusing on the dividends rather than the portfolio value, I hope to help my readers become aware that being a long term owner of some of the most profitable businesses in the world really pays dividends in the long term.  All it takes is awareness, and a disciplined approach to accumulating these assets month after month, so that one day this money will fully fund your recurring and nonrecurring expenses in retirement.

Note: My Parents received free shares and $2.78 cash in lieu of fractional shares of Ingevity Corporation which was due from WestRock successfully completing the separation of its specialty chemicals business, Ingevity Corporation, as an independent public company whose shares are listed on the New York Stock Exchange (NYSE) under the symbol “NGVT”.  Under the terms of the separation, WestRock stockholders received one share of Ingevity common stock for every six common shares of WestRock stock held as of the close of business on May 4, 2016.  NGVT shares began trading on the NYSE as of May 16, 2016.

 

$1,466.36 represents a 44% increase from the dividends they received this time in 2015.  If you’d like to see the impact of these dividends being reinvested, I’ve structured the portfolio views of my parents IRA in a manner to highlight the 1) new shares acquired through reinvested dividends, and 2) increases in the dividends over time.  I’m using 5/22/2016 as my baseline date to track the progress from this point forward.  The bottom three rows sums up the totals and indicates the % change and absolute change.  Over time, you will be able to see the change in 1) shares, 2) the market value of their IRA, 3) declared dividends, 4) annual dividends received, and 5) even the yield on cost will increase over time.

 

I’d love to hear your thoughts about this portfolio and the dividends this portfolio produces.  Do you think it will last for the next 20 to 50 years?  Your comments are highly encouraged and welcomed.

 

I’ll update my parents Dividend Income page to reflect May’s dividends.

 

 

Happy Saturday.  This post marks my first post of monthly dividends received at InvestorPeek.  What better way to start it off by posting about a primary key focus of my investment objectives:  cash flowing dividend income.  I’ve been following the early retirement and dividend growth investing community for years, and I’ve decided to get off the sidelines and share my progress to the world.  I’m compounding my wealth one month at a time.  After years of failures, studies, forecasts, and assessments, I’m 100% convinced this is the correct approach for me and is the path to achieve my wealth creating goals.  It’s definitely not a get rich quick scheme, but once momentum sets in, compounding will accelerate beyond your wildest forecasts for sure.

The dividend income from May was more than double than the income I received in May of 2015. This was primarily due to my American Express position I began accumulating aggressively this past February when I noticed how obscenely mispriced AXP was in the low $50’s relative to the huge cash flow this company produces. Just to give a perspective of where I’m coming from, AXP earned over $9 Billion in cash flow for 2014 and 2015 and has a market value as of today of just over $62 Billion.  Back in February the market cap was in the mid $50 Billion range.  

It’s no secret that AXP has been in the news for losing the Sam’s Club contract and such, but that’s what gives me the opportunity to accumulate at grossly mispriced valuations.  If it’s not really apparent how grossly mispriced this really is, let me help by highlighting that Coca-Cola’s annual cash flow is less than this, at just shy of $8 billion, and has a market capitalization of a whopping $194 Billion.  Heck BHP Billiton that is in the beaten down oil and commodities industry earned $7.3 billion and has a market cap of over $70 Billion and I believe they’re grossly mispriced too.  If we compare to one of AXPs peers; well Visa earned over $6 Billion for their fiscal 2015 and currently has a market value of over $192 Billion.  For those of you that are billionaires out there, what would you choose if someone offered the following choice: spend over $192B for the rights to receive $6B each year, or spend $62B for the rights to receive $9B each year.  The AXP investor receives their money back in a little over six years and all gravy there after.  The Visa investor receives their money back in 32 years assuming no growth. Obviously, the no growth scenario isn’t exactly how the real world works, but if the mystery Billionaire investor was considering the choice between the two then Visa would need to grow cash flow at 69% per annum to achieve the same result of the 6 year payback that AXP would provide with ease.  I agree that Visa has a higher growth opportunity, but I’m not willing to bet on them at this price.  In my view, there is plenty of margin of safety built into the price of AXP the market place is currently offering and that’s why I began accumulating them back in February.

My average cost basis for AXP is $53.04 and based on the current dividend of $1.16, my dividend yield on cost is currently 2.189%.  This doesn’t exactly translate into high yield territory but I lean towards the value investor side of the spectrum more than the dividend growth side.  Besides, AXP is still one of Warren Buffett’s largest positions comprising of 151,610,700 shares or 14.82% of the Berkshire portfolio, and I tend to think it’s because AXP produces significant amount of cash for its investors.  In Warren’s case, that translates to 151,610,700 shares x’s $1.16 = $175,868,412 every year and growing!!

This was supposed to be a post about the progress of my dividends received for May and not necessarily a post about the current valuation of American Express.  What you’ll see below is a list of every dividend I collected for the prior month.  

 

 

I’ll update my Dividend Income page to reflect May’s dividends.

Full Disclosure: Long all stocks owned above, especially American Express.