Another dividend income report! These come round so fast at the moment; the days all seem to blur together and so before I know it, another day is over. However, this is one of my favourite posts to write here 
My dividend income has been directly impacted during 2020 through the current circumstances and when I first looked at my final figure, I must admit I was disappointed. However, the fact that I have managed to get any dividend income at all during the crisis is a good thing.
I love writing about dividend income; I wish I could inspire everyone to try it out! I promise you it isnāt as scary as it sounds 
Consistency is key when it comes to building dividend income. Slow and steady will win the race five years ago I had yet to receive my first dividend payment, so hopefully this shows just what a little patience and time can achieve.
See also:Ā Dividend Income
Eventually, the aim is to use the dividend income to pay some household bills. Things like council tax, or water rates. Thatās when passive income really takes over. We are such a long way off this! To pay fixed expenses each month from passive income would be amazing.
To be able to pay for things that we have no control over, such as our council tax or the water rates, by using dividend income would take the pressure off other areas of money. One day, I am hoping to say we can do this. Imagine how much freedom weāll have then
In fact, Iām sure we will be able to at some point, if we continue on the same path. It will be so exciting when we get to pay our fixed expenses with passive income. Thatās the dream, right there Ā In fact, I am aiming to have Ā£1,000 a month on average to ensure this. Of course, some months pay out more than others but an average of Ā£1,000 a monthwould be great. However, as youāll see in a second, I am so far from this 
The dividend income received in December is over Ā£80 less than last year š that’s due to dividend cuts. I have invested more into the funds during the year as well so hopefully it’ll bounce back next year. Ā There are always going to be swings in terms of how much income is produced by dividends, just because different holdings pay out at different times. Slow and steady wins the race. I am never going to be able to invest huge amounts, so this is something that will take time. We will get there! I provide up-to-the-minute updates over on my Patreon so make sure you join me over there.
Dividends received in December:
Vanguard FTSE UK All Share Index – Ā£184.17
Vanguard Global Markets – Ā£48.44
Vanguard US Equity Index – Ā£27.84
Total: Ā£260.45
So, it’s still a great number! Yes, I could focus on the fact that it’s such a lot less than last year. Or, I could focus on what fixed expenses this could pay – such as our council tax, water rates and mobile phone bills š Ā Thatās the long term aim! Ā At the moment, all dividend income received is reinvested. Because my holdings are withinĀ my stocks and shares ISAĀ withĀ Hargreaves Lansdown, I donāt pay any tax on them either, as they are inside that tax free wrapper.
As I wrote about theĀ effect of the magic snowball, mine is beginning to move slightly. By reinvesting the dividends, itāll only create more income.Ā I believe that continuing to live a frugal lifestyle and save as we go along will see us right in the end. I hope this is inspiring someone else to begin their frugal journey. If we can do it, anyone can.
We are notĀ depriving ourselves of anything, just making purposeful choices and itās beginning to pay off. Literally! If you are wanting to know about frugal living, then here are 30 easy tips to get you started.
My dividend income aim for 2020 wasĀ Ā£1,600 received. To get that meant receiving an average of Ā£133 a month, which as you can see I have not achieved.
At the end of the twelfth and final Ā month Iām up to Ā£997.29Ā which is SO frustrating short of four figures. However, I will take it! Imagine being handed that as a bonus; that’s exactly what dividend income is.
This is it broken down a bit further into different numbers which I find interesting – the next aim is to get that daily average to Ā£5:
Then, once I’ve broken that barrier, the only way is up (hopefully!) and building that average number so it eventually replaces our fixed expenses.
Hereās a visual look at my dividend income for the past five years:
So, here’s to 2021 and building that passive income stream! My target number for dividend income is Ā£2,000 which seems madness, but if I’m to stay on track then that’s what it is. Here’s hoping things balance out a bit over the next twelve months.
Have you received any dividends this month? Ā Thanks for reading!Ā
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What a great situation to be in where working is a choice and not a necessity. Iāve been wanting to retire early for a year now but maybe Iām not fully appreciating the costs thatāll go into my lifestyle if I decide to retire now. The biggest expense being what you highlighted in your blog, which is healthcare costs. Iām very conflicted but maybe I should be like Mrs. RB40 and wait one more year. I mean, it canāt hurt to be paid and have subsidized healthcare!