How to Narrow Down Candidates for Your Dividend Growth Portfolio

This is a guest post from Ben Reynolds, founder of Sure Dividend.  Sure Dividend is dedicated to high quality dividend growth stocks suitable for long-term investing using quantitative analysis.

There are 2,315 publicly listed stocks that pay a dividend on the stock screener Finviz.  That is a lot of stocks to choose from!  Obviously, you don’t have the time to analyze each business individually and determine its long-term investing merits.  So what is a dividend growth investor to do?  This article shows how to narrow down the investible universe of dividend growth stocks to find stocks suitable for long-term holdings.

What is a Dividend Growth Stock, Anyway?

I suppose technically any stock that has increased its dividend from the previous year is a dividend growth stock.  When I think of a dividend growth stock, I think of businesses that have a history of raising their dividend payments year after year.  I think the minimum amount of annual dividend increases to really be certain a company is committed to raising the dividend payment year after year is 5 years.

Looking only at businesses with 5 years or more of historical dividend increases greatly reduces the number of businesses to analyze, and gives you a view of only businesses that are committed to raising their dividends year after year.  David Fish has an excellent (and free) spreadsheet that details many businesses with 5 or more years of dividend increases.  All in all, there are 553 businesses with 5 or more years of consecutive dividend increases.

Demand Proof of a Strong Competitive Advantage

A company that has 5 years of consecutive dividend increases may not have a lasting competitive advantage.  Five years is a relatively short period of time in the business world.  The forces of creative destruction will eat up the margins of businesses that do not have lasting competitive advantages.  It can be very difficult to identify companies with lasting competitive advantages beforehand.

One way to find businesses with lasting competitive advantages is to look for businesses that have proven they can thrive through a variety of economic, political, and competitive environments.  The Dividend Aristocrats are a group of businesses that have increased their dividend payments for 25 or more consecutive years in a row.  There are currently only 54 Dividend Aristocrats stocks due to the exacting standards for inclusion.

Many Dividend Aristocrats are household name stocks; companies like Coca-Cola, Wal-Mart, and McDonald’s (if you haven’t heard of these, you must live on mars).  Not surprisingly considering the durable competitive advantages these businesses possess, Dividend Aristocrats have outperformed the market by 2.29 percentage points per year over the last decade.  Dividend Aristocrats make excellent DRIP candidates as well.

Invest for Quality and Value

The Dividend Aristocrats index has performed very well over the last decade.  Each individual Dividend Aristocrat should be analyzed based on its own merits.  Of the 54 Dividend Aristocrat stocks, only 2 have dividend yields above 5% (AT&T and HCP,Inc.).  There are several Dividend Aristocrats with dividend yields above 3%; companies like McDonald’s, Target, Clorox, and Chevron.

Instead of looking solely at yield, one can also look for undervalued Dividend Aristocrats based on their P/E ratios.  In this analysis AFLAC is the cheapest Dividend Aristocrat, with a P/E ratio of just 9.45.  AT&T, Chubb, ExxonMobil, and Chevron all have P/E ratios under 13, which is especially cheap in today’s market where the S&P500 has a P/E ratio over 19.

Pulling It All Together

Hopefully, some of the information in this article gives you a good starting point for finding high quality dividend growth stocks.  Sure Dividend uses the 8 Rules of Dividend Investing to systematically rank 132 businesses with 25 or more years of dividend payments without a reduction over several quantitative metrics including yield, volatility, and growth.  Investing in high quality dividend growth stocks is an excellent way to build your passive income over time, as these businesses tend to raise their dividend payments year after year because they have strong competitive advantages.

 

Note from SFZ:  Thanks Ben for writing an excellent post here on Starting From Zero!  For more information, be sure to check out Ben’s site and his Seeking Alpha articles.

Switching to Drips

For the last two years I’ve been dripping only stocks in my Roth IRA. In the taxable brokerage account I’ve been taking them as cash and combining them with fresh capital every few months to make a separate stock purchase or use it towards paying off my credit card bill by buying stock through Loyal3.

Well that changed a few days ago as I’ve decided to start dripping all my dividends in both my Roth and taxable brokerage accounts. Due to the service being unavailable, dividends received from Loyal3 will continue to be selectively reinvested.

So why the change?

First off, I haven’t been making as many regular large purchases as I originally planned on doing so, meaning it sometimes goes several months between even touching my taxable account. Since I prefer to keep my commission costs less than .5%, I like to save up around $1400 before I buy more stock. By automating how I handle dividends and choosing to drip all of them, this puts the capital to work instantly, buying more shares which in turn will produce more dividends. Nice way to keep growing the account even when fresh capital for purchases is limited.

Second, I’ve been reading a lot of articles and blog posts recently that show just how much of a stark difference there is in total returns when you take dividends as cash vs. reinvesting them in the stock. Dividend growth is also accelerated a lot as well. Granted, I’ve always reinvested dividends by doing so selectively but it usually took a long time to do so. Looking through my Roth IRA transactions I can see that when I initially bought 15 shares of Realty Income I was earning $2.73 a month in dividends. Now, fast forward to today, I am earning $2.86 per month. There has been a few small dividend increases (less than 1 cent) from Realty since then. Everything else has been the result of dripping. Now that’s a small increase on a pretty small position in that account. Not a big deal, right?

Now imagine if I had done this with the 109 shares of O I have in my taxable account. The $19.92 I am currently earning each month in that account could buy almost another 1/2 share per month. Over the course of the year, that is almost 6 additional shares that I didn’t have before.

But what about valuation?

Looking through the stocks in my portfolio there isn’t a single one that is so overvalued that I wouldn’t consider buying more shares out right, if those were my only investing choices. With a long-term investing timeline, I’m comfortable overpaying a bit for shares in quality companies like those in my portfolio since there is plenty of time for earnings to increase and “grow into the valuation.” Besides paying up for at most, half a share in a company per month isn’t that big of a deal. It just allows the compounding snowball to grow that much quicker.

Simplifying Things

Dripping dividends and automating that part of your investing activity also makes it much simpler. No more transferring money around to take dividends from one account to use in another account toward a purchase. Just let everything run on autopilot and add more stock through fresh capital when it’s available. It also takes away the temptation to spend those dividends as you can’t spend money you don’t have.

Going Forward

Like most things, I imagine my thoughts on this topic will change as the years go by. That’s all right and what makes this fun. Can’t just do the same thing all the time, right? Gotta mix it up every once in a while and try new ways of doing things. I could see myself switching back to selectively reinvesting dividends, combining them with fresh capital each month to make a purchase once (1) I have the income necessary to make a normal sized purchase each month and (2) once my account is producing a significant amount of dividends. An extra 50 bucks or so doesn’t really help me out getting the required amount to invest each month. Once that figure climbs to be several hundred, maybe I’ll rethink this strategy.

 

Disclosure: I am long O. Please see my portfolio page for a complete list of my holdings.

So what are your opinions on the subject of dripping vs. selectively reinvesting? Or do you not reinvest dividends and simply use them to supplement your current income? Sound off in the comments and let me know what you think! :)

July 2014 Balance Sheet

Today I’ll be sharing my personal balance sheet, listing all of my assets and liabilities to figure out what my current net worth is. Tracking your net worth is a good exercise in my opinion since it provides you a quick snapshot of your financial life.

Overall July was an all right month, considering the high level of expenses that I had. Used up a lot of my cash reserves with apartment related expenses plus added to my position in Philip Morris (PM) toward the end of the month. Note: the +/- after each category total represents the change only from the prior month.

Assets

Emergency Fund: $4501.76 (+.38). Yay for interest! ;)

Cash Savings: $3903.13 (-976.40). Combining this amount with the increase in credit card debt accounted for all of my initial apartment costs-security deposit, first month’s rent, renter’s insurance, furniture, etc.

Roth IRA: $12867.82 (-301.82). Just following the ups and downs of the market for now as I maxed out the account with my purchase of Deere (DE) in June.

Brokerage: $12024.55 (+1172.71). Added to my position in Phillip Morris (PM).

Loyal3: $2414.25 (-65.43). No activity this month except for a small dividend check from Coca-Cola. Investing some cash here is one of my goals for August with both Coca-Cola and McDonald’s recently dipping into my price range.

Thrift Savings Plan: $1347.55 (+42.17). I started contributing a small portion of my paycheck to the TSP in March, splitting my contributions between a S&P 500 and a small-cap stock index fund. This is the one portfolio where I’m investing primarily for total return as these funds do not pay dividends. However, they do have some of the lowest expense ratios you can fund in a retirement plan.

Auto Worth: $4985.00 (-313.00). The value of my ‘ole Chevy sedan continues to slowly decline as to be expected. The only reason I include it here is that is is the one non-financial “asset” that if I ever needed to sell, could probably get close to its market value. Also a nice reminder each month to not think of cars as an investment.

Assets Total: $42,044.06 (-441.39).

Liabilities

Credit Cards: $987.61 (+894.48). As I never carry a balance on my cards and the billing cycles ends in the middle of each month, this is simply my current balance at the end of the month. Like a lot of personal finance bloggers, I’m only in it for the rewards! ;)

Net Worth: $41,056.45 (-1335.87). First month over month loss since I started tracking this back in January which was to be expected considering all of the expenses I had planned for July. Depending on the markets, I plan on getting back to positive increases here in August.

 

Disclosure: I am long DE, PM, MCD, and KO.

How was your July for finances? Do you track your net worth and if so, are there any other items you track? Share below with a comment and thanks for reading!

 

Monthly Dividend Income: July 2014

My favorite post to write each month. :) This is when I get to share all my dividend income for the previous month. These dividends are what I’ll eventually use to live off of when I become financially independent.

I share these figures along with monthly income/expenses to not only track my progress towards financial independence but also to hopefully show others that it is possible to get started with dividend growth investing with a low income. The hardest part is weathering the first few years of small dividend payments and allow the compounding snowball to get rolling.

Here is July’s dividend income from my 3 stock investment accounts: Roth IRA, Loyal3, and Taxable Brokerage. I automatically reinvest all dividends in my Roth and selectively reinvest dividends, combining them with fresh capital every month or two, in my other accounts.

Roth IRA

Coca-Cola (KO): $4.37-reinvested into .103 shares @ $42.25 per share.

Realty Income (O): $2.85-reinvested into .062 shares @ $45.49 per share.

General Electric (GE): $5.86-reinvested into .226 shares @ $25.88 per share.

Loyal3

Coca-Cola (KO): $7.31

Taxable Brokerage

Altria (MO): $3.36

Phillip Morris (PM): $5.64

Realty Income (O): $19.92

General Electric (GE): $1.76

July Total: $51.07. As expected July came in a little light compared to previous months. With seven months down I’ve now earned $439.00 so far this year.

 

Full Disclosure: I am long KO, O, GE, MO, and PM. This post is not intended to be a buy or sell recommendation for any stock mentioned and is for entertainment/educational uses only.

How was your July for dividend income (or portfolio gains for any growth investors)? Share below with a comment and thanks for reading!

liebster

Liebster Award Nomination

Thank you to Dear Dividend for nominating me for a Liebster Award. For those of you unaware what a Liebster Award is, it’s basically a way to discover and highlight newer blogs. You nominate a few other newer blogs and ask 5 questions to your nominees. Then your nominees can pass it on and nominate some other blogs. Great way to learn about and find some new blogs to follow.

So here are my answers to the questions DD asked.

1. Why did you start a blog?

-I think mainly it was to be able to interact with like minded individuals about investing and ideas about retiring early, something I don’t have a chance to do with people in my everyday life. I’ve met a ton of great people since starting this blog and its really helped me a learn a lot about investing.

2. What is your favorite quote?

-“Yes, there are two paths you can go by, but in the long run
There’s still time to change the road you’re on.”

3. What is your favorite book?

-Wow, this is a tough one. I’ve been an avid reader since probably around 3rd grade so it’s tough narrowing it down to just one. I think I’ll cheat a little and list a few-Lord of the Rings, anything by John Grisham, Harry Potter series (showing my age with this one), and for the financial genre-Rich Dad, Poor Dad.

4. What is your favorite food?

-Pizza!!!

5. What is your favorite hobby?

-Another tough one, as I tend to bounce around quite a bit as far as what I like to do in my free time-guitar, bike riding, hiking, basketball, weight lifting etc. Probably writing would be number one though. Been into writing fiction ever since jr. high and now have really gotten into blogging about finances and investing.

 

Okay now for my nominations. Since I’m a little late getting into this and most of my ideas for nominations have already been nominated, I’ve chosen to highlight 4 here.

My nominations (in no particular order):

1. Dividendasaur-Neil started his blog around the same time as I did so it’s been cool following his journey from the beginning. In addition to investing in some of the common dividend growth stocks, Neil also highlights a lot of lesser known names that are always interesting to read about.

2. Long Term Mindset-Brian blogs about dividend investing with a focus on companies with strong growth potential like Starbucks, Mastercard, Visa, etc. which is a nice change from all the blogs talking about buying Coca-Cola every month (wait, that sounds like me ;) ).

3. The Dividend Way-TDW is fellow 21 year old blogger and business student from Finland and one of the first bloggers I interacted with when setting up Starting From Zero. Recently opened a new brokerage account and has been investing in American dividend champions.

4. Dividend Digger-Brand new blog (with only 2 posts so far) that I recently stumbled upon after he commented here. Ace is off to a great start with his blog and I encourage you to check him out and support him as he gets started.

Questions for my nominees to answer on their blog.

1. How long have you been investing?

2. What is your favorite movie?

3. What is your favorite personal finance related book?

4. What is your favorite quote?

5. What is your favorite stock?

 

Thanks again for nominating me Dear Dividend!

Income/Expense Report: July 2014

As I do every month, I’m sharing all of my income and expenses this month in hopes of being as open as I can about my finances here to chronicle my journey to financial independence. Keeping my expenses low each month will allow me to have more money to set aside and invest in high quality, dividend growth stocks that I will use to reach financial independence. I hope that by sharing these monthly updates I can also prove that it is possible to take control of your financial life and invest a high percentage of your income, even on a small salary.

So how’d I do in July? Well, it was by far my most expensive month ever, but I’ve been planning for it since January, slowly building up a cash supply for all the expected expenses. After much shopping around and looking at various places I found an apartment toward the beginning of the month and then went through the application process, moved in once I bought some essential items like a bed/mattress, and then cleaned/out-processed my old dorm room before getting everything else set up. Needless to say, it’s been a busy month.

So here’s how it all broke down:

Income

Regular Job Income: $2569.78. Nice little increase this month after I started receiving my monthly housing allowance toward the end of the month after finishing out-processing the dorms on base. Also received my annual uniform allowance which will be going toward some items for my dress uniform and a new pair of boots here soon.

Expenses

Rent: $942.00. New category here as I (finally!!!) moved out of the dorms/barracks on base and into an apartment downtown. This amount included an application fee of $25, security deposit of $500, and the prorated rent amount for July of $417. Going forward I’ll be paying $500 a month plus an electric bill. Combining with the increased gas costs of driving to work, I figure I should break even and maintain my 50% plus savings rate going forward once I factor in my new housing allowance of $618 a month.

Renter’s Insurance: $108.00. I decided to pay this all up front just to take care of it for the next 6 months.

Food/Drinks: $257.60. 4th of July weekend + several weekends of going floating on the river enjoying the always short Montana summer=way too much spent in cheap beer this month. Oh, well, gotta have fun sometimes right? ;) With most of my time coming up dedicated to attending Airman Leadership School and then with colder weather coming in September I should be getting back on track in this category soon.

Dining Out/Fast-Food: $24.24.

Household/Personal Expenses: $225.85. Having lived in the dorms the last 3 years and before that with my parents while I was in high school I didn’t have much to get started with having my own place with regards to various household items-dishes, vacuum, microwave, etc. Amazing how much crap you need to be able to live on your own. Wal-Mart quickly became my favorite and most frequented store this month. I’ve got pretty much everything I need here now so this category should go back to the $15-20 per so that I’ve been averaging next month.

Clothing/Shoes: $65.53.

Gas: $95.30. Sadly the days of $20 or under gas months is over with me living further away from work now. I figure my gas budget should be around $40 a month. As much as I’d like to be able to ride my bike to work, at least for the rest of summer, the amount of gear that I have to carry with me on a daily basis makes that idea very hard to do. Spent a little extra this month as well with multiple trips to move items and a couple weekend trips to go hiking and rafting.

Auto Insurance: $100.52. Switched to liability only for this month which dropped my monthly payment down to less than $50 a month. This last payment was processed right before the switch was made so I’m a little ahead for the next month or so.

Car Maintenance: $4.44. Turn signal bulb from Napa.

Phone: $43.86. Been looking at various other options, but with the limited service choices in my area and having gotten used to having a smart phone, I’ll be sticking with Net10 for the forseeable future. Still not a bad deal, compared to the monthly rates companies like Verizon charge for their contacts.

Internet: $84.63. Normal rate here is 54.99 but lovely Charter tacked on an installation fee to move my service across town since I am an internet only customer with no cable or landline hook-up.

Entertainment: $7.99. Good ole Netflix.

Donation: $25.00. This will be a new monthly category here as I’ve decided to donate $25 a month to start off to Child Fund International, a great charity that my family has been donating to for quite a while and I’ve donated randomly to over the last few years. This month I choose to donate to their Dream Bike Program which raises money to buy bicycles for female students in India so they can travel to go to school.

Furniture: $449.82. Bed, mattress, kitchen table with chairs, small bookshelf, and a coffee table/end table set. I bought a couple other things that will be included in August’s Income/Expense Report.

Other: $622.67. Another result of my 4th of July and river exploits mentioned above. Also picked up a new pistol (Glock 17) that I’ve been eyeing (and saving up for) for quite some time. (Edit: After A-G’s comment below, just wanted to clarify this will mainly be for target practice, a hobby I used to do quite a bit back home. Due to my job, I carry a firearm daily and am well trained, so everything’s good. :) )

Total Expenses: $3057.45. And this is why I’ve been building up my cash supply the last 6 plus months. :) I’m definitely looking forward to getting back to my frugal ways here in August and being able to put more capital to work in the stock market.

Expense Rate: 119%

Savings Rate: -19% :(

How did you do in July, did you meet all of your budgeting goals?

Monthly Investing Recaps: July 2014

At the start of each month I detail all the buy/sell activity here for each of my 3 individual stock portfolios: Loyal3, Roth IRA, and Taxable Brokerage accounts. It’s just one way I am chronicling my journey to financial independence here at Starting From Zero.

In addition to these 3 accounts, I also continued investing in my Thrift Savings Plan (TSP) again this month. Right now I’m contributing 4% of my base pay but may adjust this in the future. The majority of my investing will still be in my taxable and Roth accounts. The TSP is basically a 401k plan for federal employees including the military. It only offers index funds but does have probably the lowest expense ratios around, even lower than Vanguard. Right now I’m putting my contributions in the C Fund which mirrors the S&P 500 and the S Fund which is a small cap index fund. Since these deposits typically take a while to reach my account, I won’t be detailing those transactions here.

Loyal3 Account

No activity this month.

 

Roth IRA

No activity this month as I maxed out my annual contribution limit for the year with last month’s purchase of Deere.

 

Taxable Brokerage

Buys

16 shares of Philip Morris International (PM) @ $82.96 per share.

Sells

None.

Quick Hits: With shares dipping recently after their latest earnings report, it gave me the chance to average down and increase my position in the global tobacco company. I originally initiated a small position (6 shares) last October. With shares trading at 16.1 times trailing 12 month earnings and 14.6 times forward earnings, I think PM presents good value at current levels. For comparison the stock’s 5 year average P/E stands at 15.7. With a 4.6% dividend yield and steady buyback program that has reduced shares outstanding from 2116 million in 2007 to 1591 million in 2014, there are a lot of things to like about this dividend challenger with 6 consecutive years of dividend increases.

Although the company has increased their debt load quite a bit in recent years, taking advantage of low interest rates to finance their large buyback program, I’m not too concerned right now. However this is a situation that I will monitor closely going forward. Even with the increased debt, PM still has a solid interest coverage ratio of 12.36 and carries an A- credit rating by Morningstar.

 

Full Disclosure: I am long DE and PM. This post is not intended to be a buy or sell recommendation for any stock mentioned and is intended for educational/entertainment purposes only.

How was your July for investing? What do you think of my stock picks this month? Share with a comment below and thank you for reading!

Sunday Morning Reading: July 13, 2014

Good morning! I hope all of you had a good week and are enjoying your weekend.

Is it just me or has this week flown by? ;) I moved out of the dorms/barracks this week (finally) and have been working on getting everything set up. I’ve spent way more than I normally do so far this month but it’s all been large one-time expenses related to moving that I’ve been stockpiling cash for these last few months. Looking forward to August and getting back to higher savings rates.

I also found out I made Staff Sergeant (E-5) this week which is pretty cool. I’ll have a lot more responsibility here at work once I put the rank on probably spring time of next year but will also get an increase in pay which is good. I imagine my blogging/twitter time will be cut back here a little over the next month or so as I’ll probably be attending Airman Leadership School to prepare. It seems like I’ve been really busy with things all year long but I would much rather be busy all the time than be bored.

Here is a quick recap of my blog posts here since last Sunday if you want to check them out.

Monthly Investing Recaps: June 2014

Income/Expense Report: June 2014

Monthly Dividend Income: June 2014

June 2014 Balance Sheet

And now on to some of my favorite posts from around the web that I’ve read recently.

Tom Lewis Once Had A Great Quote About The American Stock Market by The Conservative Income Investor. I won’t spoil it for you by sharing the quote here but it fits right in with the long-term mentality that dividend growth investors have. With so much media attention and instant access to the stock market via the internet, it can be easy to get caught up in the short-term ups and downs of stocks and forget about focusing on businesses that will be growing earnings consistently over the long-term.

Anyone Can Buy That by Budgets are Sexy. J. Money talks about the choice we all make about whether to use our money to buy luxury items or save it with the goal of becoming financially independent. It’s very easy to just go with the crowd and buy a new car every few years, take expensive vacations, and rock the big screen in your living room. Not saying any of these things is wrong to do, just saying you also have the choice, as J point out, to save your money and help yourself out in the future. Spending big pays immediate dividends so to speak with showing others how well you are doing. It takes a long time of packing away money into your investment accounts every month to produce results that others can see.

Look abroad for higher dividend yields by Dividend Growth Investor. DGI runs through a list of some foreign based companies with long dividend growth histories and also explains some of the differences between investing in U.S. companies vs. foreign based ones. Good read for anyone looking to diversify their portfolio with some international holdings.

So I Won The Lottery by Frankly Frugal. Kipp puts it all into perspective for us, explaining just how lucky we all are to have been born in places that allow us to even think about pursing financial independence dreams. Kipp’s a relatively new blogger on the scene so be sure to stop by his site and welcome him to the community.

Necessity Is The Mother of Badassity by Mr. Money Mustache with the winner of this week’s best blog post title. ;) Mr. MM shares the story of replacing the roof at his mother’s house this summer and uses it to explain how sometimes you just need to jump into something new in order to learn about it and make a change to your lifestyle.

Why Dividend Growth Investing Is Such A Robust Investment Strategy For Those Seeking Early Financial Independence by Dividend Mantra. If you’re looking to get started with dividend growth investing, I highly recommend you check out this post. Jason lays out all the details of why this is such a great strategy for individuals such as myself that are looking to retire early. I think my favorite part that he mentions is how this strategy eliminates “Mr. Market.” While you still somewhat need to pay attention to the overall market as an investor (to know if any short-term events could present you with a buying opportunity for example), using this strategy allows you to ignore the daily ups and downs and instead focus on finding and buying companies that will be able to grow earnings and dividends over the long-term.

Hope you enjoyed theses posts from around the web. Have a great week!

June 2014 Balance Sheet

Today I’ll be sharing my personal balance sheet, listing all of my assets and liabilities to figure out what my current net worth is. Tracking your net worth is a good exercise in my opinion since it provides you a quick snapshot of your financial life.

Overall June was a solid month, continuing to increase my net worth by more than the amount I’m saving each month. Just shows you what happens when you use your money to buy cash producing assets. Note: the +/- after each category total represents the change only from the prior month.

Assets

Emergency Fund: $4501.38 (.37). Yay for interest! ;)

Cash Savings: $4854.53 (-1277.72). One large order of Deere stock will do that for ya. The majority of the rest is set aside for all the up-front expenses moving off-base will incur: security deposit, furniture, etc.

Roth IRA: $13,169.64 (+2476.72). Added 23 shares of Deere (DE).

Brokerage: $10,851.84 (+243.49). Just following the ups and downs of the market at this point. With my Roth now maxed out for the year, I’ll start adding to this account once again.

Loyal3: $2479.68 (+451.12). Added to my position in Target (TGT) and opened a new one in Dr. Pepper Snapple (DPS).

Thrift Savings Plan: $1305.38 (+128.53). I started contributing a small portion of my paycheck to the TSP in March, splitting my contributions between a S&P 500 and a small-cap stock index fund. This is the one portfolio where I’m investing primarily for total return as these funds do not pay dividends. However, they do have some of the lowest expense ratios you can fund in a retirement plan.

Auto Worth: $5298.00 (-418). I guess the market or Kelly Blue Book anyways doesn’t like 10 year old Chevy’s. The only reason I include it here is that is is the one non-financial “asset” that if I ever needed to sell, could probably get close to its market value. Also a nice reminder each month to not think of cars as an investment.

Assets Total: $42,485.45 (+1604.51).

Liabilities

Credit Cards: $93.13 (-131.08). As I never carry a balance on my cards and the billing cycles ends in the middle of each month, this is simply my current balance at the end of the month. Like a lot of personal finance bloggers, I’m only in it for the rewards! ;)

Net Worth: $42,392.32 (+1735.59). Back on track after an expense heavy May ate into my returns.

 

Disclosure: I am long DE, TGT, and DPS.

How was your June for finances? Do you track your net worth and if so, are there any other items you track? Share below with a comment and thanks for reading!

 

 

Monthly Dividend Income: June 2014

My favorite post to write each month. :) This is when I get to share all my dividend income for the previous month. These dividends are what I’ll eventually use to live off of when I become financially independent.

I share these figures along with monthly income/expenses to not only track my progress towards financial independence but also to hopefully show others that it is possible to get started with dividend growth investing with a low income. The hardest part is weathering the first few years of small dividend payments and allow the compounding snowball to get rolling.

Here is June’s dividend income from my 3 stock investment accounts: Roth IRA, Loyal3, and Taxable Brokerage. I automatically reinvest all dividends in my Roth and selectively reinvest dividends, combining them with fresh capital every month or two, in my other accounts.

Roth IRA

Aflac (AFL): $8.14-reinvested into .132 shares @ $61.33 per share.

Visa (V): $2.80-reinvested into .013 shares @ $211.80 per share.

Chevron (CVX): $10.97-reinvested into .087 shares @ $124.77 per share.

Realty Income (O): $2.84-reinvested into .065 shares @ $43.67 per share.

Royal Dutch Shell Class B and Class A (RDSB and RDSA): $13.51-reinvested into .171 shares of RDSA @ $78.90 per share.

Loyal3

Target (TGT): $5.55

McDonald’s (MCD): $2.51

Taxable Brokerage

Wal-Mart (WMT): $0.96

Chevron (CVX): $5.35

IBM (IBM): $9.90

Target (TGT): $0.86

Realty Income (O): $19.89

BP (BP): $9.95

June Total: $93.23. Getting so close to that $100 mark! Maybe in September when all these companies pay out again. ;) At the half-way mark of the year I’ve now earned $387.93 for the year.

 

Full Disclosure: I am long WMT, CVX, IBM, TGT, O, BP, AFL, V, RDSB, RDSA, and MCD. This post is not intended to be a buy or sell recommendation for any stock mentioned and is for entertainment/educational uses only.

How was your June for dividend income (or portfolio gains for any growth investors)? Share below with a comment and thanks for reading!