Another month is over 🙂 and that means it is time again for me to talk about one of my all-time favourite topics; dividend income. I’ll be honest, I sometimes wish that the process was going slightly quicker, that the income we’re receiving was slightly higher. But, when I feel frustrated by our progress, or lack of, I have a look back at where we started. The first dividend income report I posted was way back in February 2016 and I was so excited to publish that! And the amount received? £9.80. A tiny amount, by all accounts, but it was the start. After all, everyone has to start somewhere 🙂
And, twenty nine months later, the amounts are bigger. I love logging into my account and checking out if I’ve received any dividends. I keep meaning to write down when I’m due dividends, but never seem to get round to it! So, I log in fairly regularly to see if I’ve received any income. I do have written down which holdings should pay out during each month, but not the actual amount. In terms of my holdings, it’s been a bit of a ride in terms of numbers going up and down as valuations are somewhat rocky at the moment. 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.
The aim eventually 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. One day, this will be our reality. I can’t wait until this point 
 when the numbers start to tip in that balance, our financial freedom point will be ever closer. I should work out what our fixed expenses are each month and that should be what we aim for.
The dividend income received in July is a combination of dividends from shares and funds. 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. In July 2017 I received £53.56 which I thought was great at the time! This year is better 🙂
Dividends received in July:
Glaxosmithkline – £25.65
Marks and Spencer – £29.75
Pets at Home – £15.00
Premier Monthly Income – £0.51
Whitbread – £41.85
Total: £112.76
Look at that! This is the second time that I have hit three figures in dividend income during one month. The only other time I have done this (so far!) was in December 2017, which was my highest received income to date. But, how exciting! This would pay for our broadband/telephone/tv plus our water rates for the month. Although I do this every month, I actually get the dividends kept within my ISA and reinvest them when they reach a good amount.
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. Literally!
My dividend income aim for 2018 is £800 received. At the end of July and seven months through the year (!) I’m up to £393.61 so I’m definitely waaay behind where I should be by now! I’m just about at 50% of my aim, with only five monthly updates to go. Although there are some months throughout the year where there is little paid, I’m sure this will be an upwards trend overall  because I will continuously add to my investments throughout the year, hopefully I can reach my target! It does seem a long way off at the moment though, not going to lie. It actually feels a bit uncertain now, Brexit doesn’t help matters!
Have you received any dividends this month? Thanks for reading!Â
Follow me on:
Facebook | Twitter | Instagram | Pinterest
OK so you’re not quite on track with your goal but July’s dividend income has certainly helped massively hasn’t it! If you have a few relatively good months and then December is as good as last year you might still hit £800! I’m rooting for you 🙂
Very true! And thank you 🙂
I’m very interested in this. I’m just about to set off on my stocks and shares journey so im reading everything I can. May I ask if you have a particular reason for investing in the shares you have or is it just because of their past history and are established brands?
I do research holdings and watch them for a while – I tend to look at companies I use, or are well known and have a good track record 🙂
What research do you do and if you’re picking companies you know / use how do you avoid a domestic bias (or don’t you worry about that) ??
I’ve got funds which are not entirely UK based, plus I don’t claim to be an expert at investing!
It’s not just about dividends though, what has happened to the underlying capital values – are you seeing an overall upward trend in them too?
For example it looks like you’ve receive a nice little dividend on the Pets at Home holding, but the share price has just about halved from it’s 12 month peak, and is currently lower than the 12 month, 24 month, 5 year, and 10 year price.
Potentially that share has been a disaster depending on what book cost you have on it. So did you buy at the bottom, have you spotted a little goldmine, what research did you do and what led you to buy this?
My strategy is buy and hold, so until I sell my holdings I’m not particularly worried about the ups and downs.
It doesn’t matter about not quite being on track, you’re making these changes and re-investing this money! Hope you have 5 more 3 figure months – then you’ll smash your goal!
Thanks lovely – I hope so!
Congrats! That is awesome to see you hitting the triple digit mark and it isn’t even a quarter ending month. I am close to the same stage in my portfolio. Trying to achieve consistent triple digit months. Just takes time to build up those positions. Seems you are well on your way. Keep it up!
… or an expert at answering a question 😂
You state you research funds, but how, what are you looking for, how do you decide what to go for?
What made you build your portfolio the way you did, how do you evaluate if it’s working or not etc.
It’s an interesting thing to look at, what you’re doing is perhaps a little different to the easier route of buying a fund in an ISA wrapper .. does that deserve a post in its own right?
You say, “I can’t wait until this point 🙂 when the numbers start to tip in that balance, our financial freedom point will be ever closer. I should work out what our fixed expenses are each month and that should be what we aim for.”
I don’t mean to be unkind, but, if you are aiming to be retiring early, I’d suggest that you need to be rather more on top of that kind of figure now! (AMHIK – we both retired before 50)
Also – does ethical investing not feature in your thinking? Pharmaceutical companies are hugely damaging to the planet in many ways… just look at Monsanto today!
I would suggest that you look at tracker funds rather than individual shares – for one thing, it will save you a lot of time and effort and keep costs down (less buying/selling, less stamp duty).
Good luck!
Thanks! I am in the process of rebalancing my portfolio in favour for more funds rather than individual shares 🙂 definitely less effort involved!
Nicola, what are taxes like on dividends in the UK? I’m in the US, and have held off on investing, first, as we are barely making paycheck to paycheck, and school fees and veterinarian bills have run up our credit cards sky-high. I’d love a bit of passive income, to be sure.
Hi Sara!
As my holdings are all within an ISA wrapper, I don’t pay any taxes on them 🙂
A few buys and a good december and you will hit your goal. Some good payers on your list keep it up.
Here’s hoping!