It’s that time again! Time for me to talk about our dividend income. 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 means we get paid dividends. That’s actual money back in our pocket 🙂
With the individual holdings I currently own in my stocks and shares ISA, I will get 62 mini pay checks a year. For doing nothing! Instead of the one monthly payment I receive for my day job, I’m getting over sixty instead. Sixty two! That’s more than one a week ? Adding a slow but steady income stream by investing in dividend payments has been one of the best decisions I have made so far. One day, these little payments might be enough to pay our council tax, or our water rates. Perhaps they’ll even be high enough to be a mortgage payment! Who knows. I have sold a holding recently which paid out a small amount each month, hence why the number of payments a year has decreased. However, I definitely have made the right decision about this.
The dividend income received in May is a combination of dividends from shares and payments or from 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. The majority of mine seem to pay out within the first six months of the year. In May 2016 I received £30.78 which I was really pleased with. At the time, that was my highest monthly income to date. What a difference a year makes!
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 counting on the small income stream that will come from dividend payments. The sooner we can get different income streams up and running, the sooner we’ll hit our aims! Eventually, this whole investing malarky will start to pick up momentum.
Dividends received in May:
CF Woodford Equity Income – £1.20
ITV Plc – £19.60
Lloyds Bank – £8.80
Next – £9.00
Premier Monthly Income – £2.79
Standard Life – £20.03
Standard Life Inv UK Real Estate – £0.48
Vanguard LifeStrategy 60% – £12.76
Total: £74.66
Look at that! My highest monthly income to date 🙂  Like I said, in May last year, I received £30.78. In percentage terms, that’s an 142% increase. Look at the difference one year makes; if only every month increased by that much. In terms of paying bills, this amount would cover our water rates, plus one of our phone bills. How cool is that? 🙂
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.
My dividend income aim for 2017 is £300 received. At the end of May, I am over target by quite a lot! I am up to £182.91. Although there are some months throughout the year where there is little paid, the overall trend will still be upwards. I can’t wait ?
Have you received any dividends this month? Thanks for reading!Â
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I, too, find those little drops of money so satisfying. Sorta like when eBay cha-chings on my phone telling me I sold something. 😀
What a great increase, if only you could achieve that same rate every year!
What an impressive increase, just imagine if that were based on a higher absolute value. I love how you describe it as 62 little pay cheques a year, what a good way to think about it. I haven’t invested in any individual stocks yet (just funds) but I am seriously considering it once my personal debts are cleared. Thanks for the update 🙂
Even starting small will eventually pay you dividends in the end 🙂