Time is flying by and we are already into July, which means it is already time for another dividend income report–the second such report since establishing my new DGI portfolio.
Unfortunately, due to having just established my portfolio at the end of May, there are a number of June payouts that I missed due to buying after the ex-dividend date.
Those include the following: 3M ($MMM), AFLAC ($AFL), Cummins ($CMI), Exxon Mobile ($XOM), Microsoft ($MSFT), Prudential Financial ($PRU), Snap-on ($SNA), Southside Bancshares ($SBSI), and Target ($TGT).
June 2018 Dividend Income Summary
The Divvy Dad Portfolio (DDP) received $202.66 in dividends in June, with an additional $104.38 that I missed out in June due to my purchase date. On the bright side, come September I will receive payouts on all of those positions.
Unlike the May dividend income report, I did not hold any positions in my taxable account that paid dividends in June 2017. Therefore I am unfortunately unable to calculate my YoY % increase because last year was a big fat $0.
The June dividend income is as follows:
| Ticker | June 2018 | June 2017 |
|---|---|---|
| EAT | 17.10 | 0.00 |
| HD | 10.30 | 0.00 |
| JNJ | 7.20 | 0.00 |
| K | 8.10 | 0.00 |
| MDP | 21.80 | 0.00 |
| NEE | 5.55 | 0.00 |
| PEP | 18.55 | 0.00 |
| VTSAX | 51.04 | 0.00 |
| VYM | 63.02 | 0.00 |
| Total | 202.66 | 0.00 |
| YoY Growth | HUGE =) | |
June 2018 Purchases and Forward Dividends
There was $1,562.00 in new capital invested during the month of June, which was split over the following two investments:
In hindsight, I made my Starbucks ($SBUX) purchase a little too early as it continued to drop another few percent after I made my purchase.
However, my buy of 20 shares @ $51.85 will add $28.80 in forward dividend income. If you’d like to read more about why I felt this was a good buy, take a look at my analysis of purchasing Starbucks.
The purchase of Vanguard Total Stock Market Index is not truly aligned with the DGI strategy, however being a long-time index fund investor it was just too hard for me to not have some coverage with index funds despite the low yield.
My buy of 7.57 shares in VTSAX will add $8.71 in forward dividend income.
Currently I have this setup as an automated transaction, where I contribute $525.00 to my Vanguard account every month to purchase VTSAX. I’m contemplating a change to that where I would buy VYM in place of VTSAX, however being a fan of hands-free automation means that will be a bit more manual.
Unfortunately you cannot setup an automatic investment into an ETF at Vanguard, so I would have to change to a deposit into their money market fund and then manually make my VYM purchase. Despite the more manual effort required, the dividend yield on VYM is much nicer than VTSAX–and I already have sufficient coverage on index funds via my 401(k) and IRA accounts.
I may make this change in the near future to put more focus on those divvys.
Additional Dividends
While I don’t track the dividends paid out in my retirement accounts as part of this blog, I thought it would be helpful to mention those on a quarterly basis to demonstrate the overall picture of my passive income stream from dividends.
For the 2nd quarter, I received $870.67 in dividends in my tax-advantaged accounts.
That represents a 12.2% YoY increase compared to 2017. As nice as it is to see the double-digit YoY increase, it was a drop from the 20.7% YoY increase achieved in 2017.
Looking at my overall dividend picture, I received $1073.33 in total dividends for June!
Summary
While the combined picture is certainly motivating, I am driven to get my taxable accounts up to the 4-digit level independent of the tax-advantaged accounts.
As the June dividend income reports begin to come in across the DGI community, I know people are excited because June represents a quarter end–and for many people those are their highest paying months.
Oddly enough, as I look at my forward dividends, my quarter ending months are not my highest paying months. My portfolio currently has the best payouts in February, May, August and November. Part of that is because I have held Apple, Abbott, and AbbVie for quite a few years and therefore have a larger position than I do for anything else in my DGI portfolio.
Over time I expect that to change as new capital balances out the portfolio weightings, and I am sure the quarter ending months will become my top paying months as they don’t lag behind by too much now.
How was your month of June?
Hey DD. You and I are of the few in the DGI community that share MDP as a holding. I like it for mid cap exposure, long history of dividend growth and it residing in a non traditional dividend paying sector for diversification. Aside from that, I could go on and on about how I like many of your holdings. Tom
Thanks Tom, MDP has been good to me thus far with a 5.88% return from capital appreciation and this first divvy payout of $21.80. You’re right that it doesn’t seem to get a lot of love across the DGI community, but I guess that just shows how many different ways there are to go about building a portfolio.
Appreciate the feedback, particularly since I am still so new to this space. I’m extremely excited about what the future holds with the dividend machines we are building.
DD, welcome to the DGI Community. I read through your about page, and I look forward to following your progress as you continue to build your portfolio towards retirement. Before you know it, you’ll begin to record YoY growth, but $202.66 in dividends is nothing to snooze at.
It’s interesting that you’re considering substituting VTSAX with VYM. I tend to ignore my retirement account to the point where I sometimes forget that I have one. I’m with Vanguard, currently in my late 30s and I am only invested into ONE index fund which is VTSAX. I have no idea if that’s a good thing. I didn’t want to invest in bonds because I’m young enough to tolerate an all-stock portfolio. One thought was to have a 3-way funds portfolio of total stocks (US), total stocks (international) and total bond fund. But, for some reason, I went with just VTSAX. After reading your post, I might take a look as to whether I’m properly invested in my retirement account.
Happy 4th of July.
Thanks for stopping by DP and for the welcome to the DGI community! It has been a great experience all around and I love how gracious the community is in being transparent and supporting one another.
The VTSAX / VYM comments here are in my taxable account, not my retirement accounts. I don’t mention the retirement accounts here outside of including the dividend payment as a side note to represent my overall picture. My retirement accounts are largely VTSAX as well, with some VFINX and then Fidelity funds mixed in from my 401k account. My core retirement is all in index funds, with very little bond coverage–I’ve been more aggressive like yourself, although as I get older now I am looking at how I may need to adjust (and the DGI is part of that to begin generating more passive income).
It is good to evaluate your holistic picture between taxable and tax-advantaged accounts to ensure everything is properly aligned with your strategy.
All the best, and I look forward to following along with your journey as well!
Just stumbled across your site. I look forward to exploring and learning more about you. Dividend investing is fun ad sort of addictive. Cannot wait to see your portfolio in 6-months.
Thanks for stopping by Nathan, and I’m excited about what the future holds as well!
Well you ate making huge steps in your journey. I mean your monthly is my yearly so that puts things in perspective.
Awesome to see you contributing at different blogs in the DGI community including mine. Looking forward to seeing yoy comparisons next year 🙂
Thanks Mr. Robot, I’ve been very fortunate this year to receive some unexpected bonuses that have helped me jump start my foray into DGI. I will say that looking at my retirement accounts that are primarily index funds (VTSAX / VFIAX) has given me pause because as nice as the payouts were in June, those have very low yields because they are not focused on dividends.
I too am eagerly awaiting the YoY comparisons next year, and this year I am anxious to get into the months where I will finally be getting the full compliment of divvy payouts. With starting this portfolio in May, I have missed a handful of payouts due to buying in after the most recent ex-dividend date.
Keep up your great work too, and it has been fun getting involved with the DGI community and finding so many people that are crushing their goals!
Nice month DivvyDad! Can’t complain about earning over $200 without breaking a sweat. And Welcome to the DGI Community! 😀 Looking forward to following your journey. 🙂
Thanks MDD for the feedback and welcome! It is definitely a beautiful thing to see those divvy payments come in on auto-pilot.
I am looking forward to your journey as well. Here’s to reaching goals, setting new records, and enjoying the community!
I love your HUGE YoY growth! Also love your Starbucks purchase (we purchased some as well). Keep up the good work and welcome to the DGI community.
Haha, thanks! Going to have a few more of those this year given my portfolio is new and only held three dividend paying stocks previously. Speaking of Starbucks, I am thinking of adding a little more to my position to bring it up to equal weighting in my portfolio.
Appreciate the welcome and you stopping by!
Divvy, Welcome to the DGI club! Congrats on a great month! I like seeing a fellow shareholder in VTSAX. I owned a few mutual funds before I started branching out into individual stocks and VTSAX is my favorite. Keep up the great work!!
Thanks for stopping and for the welcome to the DGI community MH!
I own quite a bit more VTSAX in my tax-advantaged accounts as well, as index fund investing has been the core of my strategy for quite a few years. Now I am starting to focus on DGI to build up that passive income to supplement our retirement and thus allow for a more conservative withdrawal rate.
DivvyDad,
This dividend growth rate is just impressive 🙂 Welcome to the dividend growth community and that is a fine list of companies paying you a dividend this month. I saw you mentioned that you may have purchased SBUX too early. I purchased it at $50 and watching it fall to $48.50. In the long run, the $1-2 per share difference in our prices isn’t going to make a big difference. We both purchased shares in a great company at a discount. That’s all that matters in my opinion.
Take care and congrats again!
Bert
Thanks Bert!
You’re right that the minor difference in prices won’t make a big difference over the long term, which is the way to think about these holdings. I added another 20 shares on Friday to bring my average cost down a little more, and see that Lanny added some as well. Looking forward to that dividend!
Hello DivvyDad. Welcome to the DGI community! Looks like you are off to a great start in the DDP. You made some purchases recently (MMM, CMI, MSFT) that I’d like to add to my portfolio. You should have even more outstanding dividend income reports in the next quarter as some of those new purchases make their first dividend payment to you.
Since your 3 legacy holdings are so large relative to the rest of your DDP holdings, do you have any plans to pare them down and balance out the portfolio weightings? Of course, the downside of this is the tax implications, but it would help diversify the portfolio. Perhaps you’ll just add to the other holdings for now and have them grow to become equivalent in size. What are your thoughts on this?
Hi ED, thanks for stopping by and for the welcome to the DGI community!
You bring up a great point, and my approach as of right now is to leave those three legacy holdings alone and build up my other positions. I’m also a little overweight on the VTSAX and VYM, and given that I am so heavy in VTSAX in my primary retirement accounts I may move all over that over to VYM (or individual positions) once I’m at long-term capital gains. I’ve already adjusted my auto debit to go into the money market fund at Vanguard so I can buy VYM instead. I’m okay with that being more overweighted due to the diversity it brings on dividend stocks.
Thanks for asking the question. Have you ever been in that situation yourself? If so, how did you manage it?
I have been in that position, but the $$$ deltas between my 5 legacy holdings and new holdings were not as significant in my case as they are for you. Thus, I found it fairly easy to just increase the new holdings over time to a more equal weighting. It did take more time than I thought though (years), which is partly why I asked the question. I was thinking that weighting discrepancy might exist for you for a while and was curious is that would be of any concern for you.
Looking forward to following along on your journey, DivvyDad.
I was just looking at your portfolio after asking the question and had to assume you were in a similar spot with those 5 holdings, but right now you’re pretty balanced.
The thought has crossed my mind to sell a little off to reinvest elsewhere, but I am also sitting on pretty big chunk of cash right now that I had contemplated using to pay off my mortgage. I’m now planning to start investing that money as I find attractive buys, plus my goal is to try and add $1500-2500 in capital on a monthly basis. I’ll be challenging myself to see how quickly I can level off the weightings across the board.
Appreciate you sharing the approach that you took in a similar situation!
Nice work. From nothing last year to doubling my June results in one year. That is for sure huge growth. Wish i had that kind of capital to invest. Keep it up. Looking forward to seeing your new purchases pay out later this year.
Thanks DD, and I was definitely fortunate to be in a situation where I received a rather healthy lump sum from my employer that I was able to utilize for building this DGI portfolio. Now I am focusing on funneling as much new capital in on a monthly basis to keep this rolling.