2012 has been a great year for the stock market so far. The SP500 is up about 11% and the Dow Jones is up about 8%. I’ve been trying to slowly move our investments toward dividend stocks to increase dividend income for a while now, so I took this opportunity to sell some equity and beef up our dividend portfolio.
This is actually very timely because side income will be harder to come by in the future due to some recent changes at Google. I can probably count on $200/month from online income instead of the previously $1,000/month average. This mean I’ll have to increase my income from the dividend portfolio and diversify the online income model. Keep an eye on the monthly cash flow posts for the latest updates.
Here is our dividend portfolio after the update.
This update finally met my goal of $500/month dividend income. Some of these are not quite dividend stocks, but I plan to hold them for long time. VPL and DODFX are part of my international diversification plan and they happen to pay dividends. I picked up BAC when it was cheaper and will hold on for now to see if they will increase their dividend payout.
What do you think about my diversification here? I probably need to pick up some utilities to diversify a bit more. I would like more healthcare and insurance too. I don’t have any REIT here because I’m already investing in rental properties.
At this point, we have a few more holdings in non dividend paying investments like Amazon and Berkshire Hathaway. The plan is to slowly move them to the dividend portfolio. When the price is right, I’ll sell these other holdings.
Alternatively, I can add to my P2P lending account at Prosper.com instead of the dividend portfolio. The rate at Prosper.com is much better than 3.55% and it might be a better way to generate income. If I add $10,000 to my $2,000 at Prosper.com then I can generate about $100/month. This is much easier than trying to do it in the dividend portfolio. At 3.55%, I would need to add $34,000 worth of dividend stocks to generate $100/month.
All in all, I’m quite happy with the recent market run up because it gave me the opportunity to move from growth stocks to dividend stocks. I don’t mind holding these for the long term because they are solid companies and even if the market goes down, we’ll still see the dividend checks. What about you? Have you made any major changes to your stock portfolio due to the recent gains? Did you see Financial Samurai’s move? He sold all his stocks to lock in the gain for 2012.
You can see our updated Dividend Portfolio in the 2017 Passive Income post. This post is updated monthly.
Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also 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 DIY investors analyze their portfolio and plan for retirement.