Q1 2015 is over and it’s time for a dividend income update. One of my goals for 2015 is to generate $10,000 in dividend income. Let’s see how we did so far this year and go over a few highlights and lowlights.
Dividend Income Q1
For the first quarter of 2015, our dividend income was $2,715. That’s great! We are on track to beat the $10,000 per year goal. In fact, we might even hit $11,000 in 2015. The great thing about the dividend portfolio is that our dividend income should increase every quarter. This is due to three factors.
- Reinvest dividend – I reinvest our dividend income in new stocks. I don’t DRIP because it complicates the tax when you sell. Although, now that the broker keeps track of everything, it might not be that difficult.
- Dividend growth – Most of the companies in our portfolio should increase their dividend payout every year.
- New money – We try to add new money to our dividend portfolio when we have extra saving.
Here are the companies that increased their dividend in 2015 so far. Most of them are just one or two cents increase, but that’s still better than nothing. A few companies increased their dividend quite a bit, though. I haven’t been paying close attention to stocks lately so I probably should see why Abbvie, Western Union, and Ford increased their dividend so much.
|Stock||Dividend Increase 2015|
|Kinder Morgan Inc||2.3%|
Dividend Portfolio Performance
Our dividend portfolio’s performance is not that great so far. We gained about 0.8% year to date, including dividend. A few stocks really dragged down the whole portfolio.
- Intel dropped around 15% since the beginning of the year. I followed the stock closely for over 15 years so the drop was somewhat expected. That’s why I sold off over half of my position last year. Perhaps I should have just sold off the whole thing…
- Abbvie dropped about 10% so far in 2015. I’m not sure what the problem here is.
- Mattel dropped about 18%. I should have sold MAT last year and taken the deduction. They have a new CEO so let’s keep an eye on them and see if they can turn things around.
The performance is not very good compare to the benchmark – VIG, Vanguard Dividend Appreciation ETF. VIG’s yield is about 2% so far this year. We still have 9 months left so we’ll see if our portfolio will be able to come back from behind.
2020 Passive Income Challenge
I thought this quarterly update would be a good place to keep track of my 2020 Passive Income Challenge as well. The goal is to have enough passive income to cover all our expenses by the end of 2020. Let’s see how we did in Q1 2015.
- Dividend Portfolio: $2,360
- Rental property: $1,026
- Interest: $57
- P2P Lending: $103
- Joe’s retirement accounts: $2,854
- RB40’s retirement accounts: $1,325
Total passive income*: $7,725
Q1 expenses: $11,425
% covered (FI ratio = passive income / expense): 67.61%
*This is pre-tax income so I will have to account for tax later. I’ll just shoot for pre-tax income to surpass expenses for now. We’ll deal with tax when we actually reached that point.
Anyway, it looks like we are doing pretty well. We didn’t have a lot of big expenses in Q1 so things look quite good. I projected 66% for 2015 so we’re ahead of the pace. We’re planning a big trip later this year so I’m sure it will come down a bit when that bill hits.
Dividend stocks are great for retirees
I love our dividend portfolio. It doesn’t require much work and the dividend increases every quarter. That’s a great fit for retirees. If you’re in the 15% tax bracket or below, you don’t even have to pay tax on your dividend income. Of course, dividend can drop during big recessions, but generally the companies raise the dividend back when the economy recovers.
Are you investing in dividend stocks? How did you do in Q1?
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 gains and dividends to see if they meet my passive income 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.
Disclosure: If you sign up with Personal Capital, we may receive a referral fee depending on the size of your portfolio.
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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