See my updated Dividend Portfolio.
One of my financial goals for 2013 is to generate $18,000 from passive income. This isn’t going to be easy because last year we only made $7,742 last year from dividend, rentals, peer to peer lending, and interest. However, the total was pulled down quite a bit by the rentals in 2012. I’m pretty sure 2013 will be better, but it is still a tall order to hit $18,000.
Let’s look at dividend income today. In 2012, we generated $6,791 in dividend from our taxable account. For 2013, I’m hoping to generate around $9,000 from dividend. That’s a big increase, but last year I was still converting my investments in the taxable to dividend stocks. I had some stocks that didn’t pay dividend such as Berkshire Hathaway and Amazon. Now, I’m much further along now and most the investments in our taxable accounts are paying some dividend.
This year I’d like to keep better track of the dividend portfolio and share how well it does. The long term goal is for the % gain + % dividend to at least equal the S&P500 gain for the year. We’ll use VFINX as a benchmark.
The projected dividend income is still a bit under $9,000. However, we can add new money and reinvest the dividend throughout the year to increase the total for the year. Many of these companies have a good track record of increasing their dividend payout every year so we should see some increase in the % yield as well. If we’re lucky, the dividend payout will increase to $9,000 by the end of 2013.
Some Red Flags
- This dividend portfolio is becoming unwieldy. I will need to cut down on the number of stocks because there are too many companies to keep track of.
- Intel – I sold a bunch of Intel stocks and options in 2012, but I still have quite a few shares. I’ll need to sell more shares off at some point.
- Abott Lab – They split into Abott Lab and AbbVie. I’m not sure what to do with both at this time. I’ll keep an eye on them.
- Activision – Probably need to sell this one too. It hasn’t been doing much over the past couple of years.
- Mondelez – This is a spinoff from Kraft. I need to keep an eye on this one.
- Shell – It’s not doing as well as Exxon or Chevron. I probably should sell some shares and buy another energy company.
- AT&T – The price seems high so I might need to take some profit. The dividend is quite nice though.
Passive Income 2013
Here is the plan to meet the $18,000 goal.
- Dividend: $9,000
- Rentals: $7,500
- Peer to Peer lending: $1,000
- Interest: $500
The biggest question mark here is still the rentals. I’m not sure how we’ll do in 2013 on that front. We’ll just have to compartmentalize and take care of one thing at a time. The dividend income is getting close to the target so that’s one less thing to worry about. With a little luck we should hit that $9,000 by the end of the year.
How about you? Do you have a plan to generate passive income? If you see any problem with our dividend portfolio above, don’t hesitate to call me out. I still have a lot to learn about stock picking.
Disclaimer: This is not a recommendation. My stock picking track record isn’t great so you need to do your own research. This post will help us keep track of the gain and dividend to see if they meet my 2013 goal. If you need help with financial planning, consider signing up with Personal Capital. Personal Capital will help you keep track of all your investments in one place and can hook you up with a personal financial adviser as well.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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