Time for another one of my favourite updates of the month; my dividend income update. I still get a little thrill of excitement when I log into my ISA and see that I have received another dividend payment, no matter how small it is. Just for owning a tiny part of a company and investing in them, believing in their ideals and just being patient means we get paid dividends, and hopefully for many years to come! There are many personal finance bloggers that post about dividend investing and how it is a part of their varying income streams, and I am definitely in that mindset when it comes to investing and creating another income stream. Mine is very small compared to some of them, but we all have to start somewhere.
The dividend income received in August is a combination of dividends from shares and dividend payments or interest from funds. As I share in a moment, August’s dividend income was great and clearly shows that investing in dividend growth shares is a good choice in terms of receiving payments. 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. My stocks and shares ISA is with Hargreaves Lansdown, which is very easy to use and I’d definitely recommend them. You can get information about that here or even open an ISA in about 5 minutes.
As part of our long term plans for early retirement, we need enough money in savings and/or income to make sure we can live on a budget long term. I am now hoping that a small income stream will come from dividend payments as part of our investment portfolio. The sooner we can get different income streams up and running, the sooner we’ll hit our aims! If you are thinking about investing, remember that there are many things to learn about investing in shares.
Dividends received in August:
CF Woodford Equity Income – £1.33
Halfords – £11.34
HL Multi-Manager High Income – £0.38
Next – £21.00
Premier Monthly Income – £0.58
Standard Life Inv UK Real Estate – £0.12
Vodafone – £1.32
Total: £36.07
My highest month ever, beating my previous high month of May. Best of all, it’s money I have received for doing absolutely nothing apart from holding a tiny part of a big company. A tiny pay check that I have received; truly passive income. And, as I continue to invest in different stocks and funds, the amount received over time should increase and increase. Finally, as I’m reinvesting all dividends received, this will buy me some more as well, so my payments will (hopefully) grow and grow. If I look at this in relation to our spending, this amount would cover one weeks’ worth of groceries for the Frugal Cottage household, just about. Or, it also would cover our tv/phone/internet package for the month. How great is that?
As I wrote about the effect of the magic snowball, mine is beginning to gain a tiny spec of momentum.. It all starts somewhere and 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 not depriving ourselves of anything, just making purposeful choices and it’s beginning to pay off.
At the start of the year, I stated that one of my aims for this year is to receive £100 in dividend income. Well, if I add August’s total to the previous received, that total now stands at £112.83 so I have smashed my goal, with four months still to go! As this is my first year of receiving dividends, I thought that this would be quite a target to reach! I think having a combination of stocks with tend to pay out twice a year, plus funds which seem to pay out monthly or quarterly, means that I underestimated how much I receive throughout the year. In fact, I am now wondering whether, without working it out, whether or not I might reach the £150 mark by the end of 2016? That would be an amazing start to this journey. I still haven’t invested in enough companies/funds to receive payments every month though, so I’m still researching various options.
Have you received any dividends this month? Thanks for reading!
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Isn’t it awesome earning income without lifting a finger. Nothing makes me fee better about dividend investing and more encouraging/motivating like signing into my brokerage account in the morning and seeing a dividend check post. Keep up the great work and congrats on the new record!
Bert
I love it; I wish I’d started dividend investing sooner! And thanks, it’s only up from here, right? 🙂