By the time you reach September, your annual dividend income is probably locked in. It just happens that dividends are mostly-pre-determined. If you have monthly dividend income, they don’t tend to increase regularly. The nature of business from the companies that pay monthly dividend is different than the companies paying quarterly dividends. When it comes to quarterly dividends, you really just have another quarter and dividend increases are usually announced after the previous earnings. That means, your dividend income for the rest of the year is pretty much locked in.
Big dividend income month. My biggest month ever! I am proud to announce I have earned $830.49.
For those interested in some yield numbers, here is what I have:
- Portfolio Market Value Yield: 3.44%. This represent the yield of my overall dividend portfolio value based on the current market prices.
- Investment Cost Yield: 4.27%. This represent the yield of my current holdings purchased price. I made money on one stock, sell it and buy another with all the proceeds, my invested amount is higher as I need to track the cost of my new investment.
- Capital Invested Yield: 5.04%. This represent the amount of money I add to the accounts. It has nothing to do with what I buy. This value really tell me how hard my money is at work for me.
Take those numbers with a grain of salt though … What the 5.04% tells me is how well I can invest my money compared with interest rates on loan – say mortgage interest or line of credit investment loans. Why share those numbers? I want investors to have proper expectations of their investment capabilities. You can have higher yield but you may have challenges growing your capital and the yield numbers don’t show that either so it’s important you track your ROR.
The portfolio market value yield is a good metric to assess how much you could safely withdraw without touching the capital. That’s my intention to grow this to the income I need to retire. If you do reverse math, you can find that for $50K in income, you need almost 1.5M$ in investment assets. This is where high yield stocks my be more attractive as you don’t need the growth as much but you don’t want to forfeit it either. If you were to push your yield to 4%, you could have a 1.25M$ portfolio. As you can see though, you need growth in your portfolio to reach those numbers. Time, market appreciation and compound growth will work their magic.
Related: How To Track Your ROR
DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.