Dividend Income August 2019

August is over which means another dividend income post 🙂 I can’t believe that we’re only four months away from 2020.I am slightly disappointed as I have realised that August’s income this year is actually less than last year  that’s because I have had a couple of dividend cuts and sold some holdings which has had an impact. It does mean that other months are higher (see May for example) but it is a little disappointing when you look at a year on year comparison.

 

The one thing I have continued to try and do this month – and succeeded – is to not check my ISA every day. The reason behind this is that I am a dividend growth investor, so the amount my shares are worth day to day is not particularly useful information. The only time when it really matters is the day I plan to sell. I know that it’s a good idea to keep an eye on things, but I was becoming a bit obsessive about checking every day. There’s just no need! So I really took a step back from checking this month which I actually felt better about in the end. I aim to keep doing this as I feel like shares are going to have a bit of a rocky time so I need to not check so often.

 

This is my fourth year of dividend investing, already. I can’t believe it! And one of the only things I regret is not starting sooner. If you’re putting off investing, because of the risk or thinking you don’t have enough to start, then please do. You can start with £25 a month into a low risk fund and go from there. It will add up over time and make a difference. You can reinvest as well, so if you’re thinking about starting to invest, please do!

 

See also: Dividend Income

 

Eventually, the aim is to use the dividend income to pay some household bills. Things like council tax, or water rates. That’s when passive income really takes over. 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. I am quietly confident that we will be able to do this, in the long run. If I can average £500 a month (!!) then that would pay for a big chunk of our fixed expenses each month.

 

Dividends received in August:

Brown Group – £21.35

Halfords – £12.39

Legal & General US Index – £11.90

Next – £22.00

Vodafone – £18.63

Total: £86.27

 

So, less than last year but how can I be disappointed at almost £90 worth of dividends?! When I first started this seems almost impossible. But it isn’t.  This would cover our water rates plus a little extra. At the moment, all dividend income received is reinvested, so this will be kept until I add some more savings to buy more shares. Because my holdings are within my stocks and shares ISA with Hargreaves Lansdown, I don’t pay any tax on them either.

 

As I wrote about the effect of the magic snowball, mine is beginning to move slightly. By reinvesting the dividends, it’ll only create more income. 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. If I show you this graph which shows year on year growth, it looks good, even with the dip the past three months:

 

The orange lines are for 2019 – you can see the difference in some months already. January was slightly lower but February was much more, as was May’s dividend income. However, the last three months have been lower than the previous year. This is because I have sold some holdings and a couple have reduced their dividend payment. I am still confident that overall this year will be more than last. We shall see, I suppose!

 

My dividend income aim for 2019 is £1,000 received. At the end of August, I am up to £584.96 which is not bad. However, I am now definitely behind where I should be at this point. So, some catching up to do! In fact, I am wondering whether the £1000 received might be a stretch in the end. We shall see 🙂

 

Have you received any dividends this month? Thanks for reading! 

 

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