Another month is over which means I get to write my favourite post of the month – my dividend income report!
I love logging into my account and checking out if I’ve received any dividends. May seems to be a fairly consistent month in terms of income; it has been slowly rising since I started dividend investing two years ago. Again, it’s been a bit of a ride in terms of numbers going up and down. Thankfully, by the end of the month it’s a bit more positive 🙂 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. 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, 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.
The dividend income received in May 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.
Dividends received in May:
CF Woodford Equity Income – £0.78
ITV – £10.56
Lloyds – £8.20
Premier Monthly Income – £2.36
Standard Life – £21.45
Vanguard LifeStrategy – £31.16
Total: £74.51
Not too bad! In fact, this would pay our water rates bill for the month, so that’s good 🙂 if we could consistently pay this every month through dividend income, that would be amazing. In fact, that’s the dream right there! Though, in time, that hopefully will be the reality.
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 May, I’m up to £241.12 so I’m definitely behind where I should be by now! Still a long way 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.
Have you received any dividends this month? Thanks for reading!
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£74 is a great little bit of passive income, especially as you are not socking away thousands every month!
If you achieve your dividend income aim that’s £800 you don’t need to earn or £800 extra you can save/re-invest.
All our investments are in Vanguard accumulation funds so I don’t know what ‘dividends’ we are receiving, our funds just grow in value instead. Not as clear or as exciting as receiving dividends.
Thank you! Some months are nowhere near that but we are plodding along 🙂
I’m interested to know why you went down a predominately dividend investing route, and in quite a few individual shares, and taking dividend income from funds rather than accumulation units.
It’s perhaps not the most obvious route to go especially given where you are on the road to retirement and from a risk dilution point of view.
Care to elaborate or maybe even a post to cover your strategy?
I should do a post on this at some point. The most obvious reply is to create a passive income stream; if we get to a bit where the majority of our fixed expenses could be covered by dividend income then it’s a step closer to early retirement.
Why are you puzzled as to that choice? There are many investment strategies and I don’t claim to be an expert – far from it!
Not puzzled, more intrigued as to your investment strategy because the more obvious choice would be one aimed at capital growth rather than income. The traditional way being the rebasing of a portfolio once in retirement to one that concentrates on income generation following a long period of growth … you’ve kind of jumped straight to the end of the traditional game! Also individual shares are a potential greater risk to hold in a wider portfolio when those shares form a significant percentage of your overall wealth – in effect you lose diversification.
You are correct to say they’re many different strategies and in some respects no right or wrong answers, therefore I was interested to know your thoughts as it may challenge my own approach and help me to refine my strategy. On the FIRE journey we’re all learning, dealing with a lot of unknowns, refining approaches, and seeing what works best – part of that for me is seeing what others do in case I’ve missed a trick somewhere 😉
That is a great amount this month in terms of your annual goal! x
I think this is a fab amount of passive income and it sounds like you are doing really well. It all adds up and at the end of the year this will be a huge achievement. Thanks for joining #MondayMoney. Hope to see you next week.
This is great income just from dividends!! I love the comparison to your water bill! #mondaymoney