Another dividend income post, already! I can’t believe how close we are to the end of the year now; only one more dividend income posts to write after this one and 2019 will be complete. I can’t wait to see what my dividend income total will be! I am now quietly confident that I’ll hit my target of £1,000 of income received in 2019. I have done myself a projection of what I need to do year on year from now on. It is interesting reading! I am so excited to write that final update for 2019 🙂 every time I talk about dividend investing to someone else, I get so enthusiastic about the subject 🙂
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! If you invest £100 a month into a low cost fund, every month for twenty years, it can grow to nearly £170,000! It really is that straightforward.
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 November:
Morrisons – £11.79
Total: £11.79
So, a lot smaller than some months this year. That’s the difference when you only have one company pay out, instead of multiple holdings. I’m a little disappointed that this number is low, as this wouldn’t cover any of our monthly bills. Which is what the aim is, eventually. 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:
Only one more month to add on to this! 🙂 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. Then there were three months where the income was lower than the previous year. I think this looks good! I’m hoping to finish off the year strong, like the previous years 
My dividend income aim for 2019 is £1,000 received. At the end of September, I am up to £817.30 which is not bad. I wonder what the final total will be at the end of December. I cannot wait!!! 🙂
Have you received any dividends this month? Thanks for reading!
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Good job. Keep adding and growing those dividends.
“If you invest £100 a month into a low cost fund, every month for twenty years, it can grow to nearly £170,000!”
Have you worked out the average annual return that would be needed to achieve £170k in 20 years from £100 p/m?
“It really is that straightforward”
What are you investing in that gives this level of return?
I have – that’s how I’ve got to that number. And various low cost funds will do this – it’s the magic of compounding!
£100 p/m for 20 years to get to £170,000.00 assumes and an approx average return of 16.5% p/a .. that’s an amazing return!!
Which low cost funds have achieved this average rate of return over the last 20 years?
Not on the calculation I did – I used the average of 10% return based on the last 50 years or so.
You calculated incorrectly, you’ve worked on the basis the monthly £100 is paid in on day 1 as a lump-sum of £24,000 (£100 X 12 X 20).
If a £24k lump sum is compounded at 10% p/a for 20 years it is indeed £170k
If, as your post, the money is fed in at £100 p/m over the 20 years then compounding at 10% gives a total of £77k
Compounding is indeed magic as you state, but there is a huge difference when a applied to a lump sum compared to drip feeding .. nearly a £100,000.00 difference 😉
Hello Nicola
Really like your blog and have just taken the plunge with a stocks and shares Isa focusing on dividend paying funds to start with. Today is my 59th birthday…never to late eh? It will be interesting to see what happens over the next 12 months. I would like to retire earlier than the fixed time of 67 years and 8 months or at least cut my hours down per week. This little pot, over time may actually enable me to fulfil the dream…..
Ooh, fantastic! Please keep me updated with how you get on 🙂
Hi,
Good luck with your investing.
I was invested in individual stock but now invest in index etfs.
November was a low income month for me HMWO paid out £241 . So far year dividends are at £6900 with ISF to pay out in december.