Owning stocks from my Master Stock List, I’m generating passive dividend income from my Vanguard taxable account.
Each month, I contribute dollars to my Vanguard money market account and wait for it to build enough cash to purchase a dividend stock(s). Now that Vanguard has free stock trades, I’ve started building smaller positions in quality companies. In Q1 of each year, I also receive annual bonuses that will go to the purchase of dividend stocks too.
Goal
Generate over $15,000 in forward annual stock dividend income by 6/30/25. This means on 6/30/25 that my next 12-months of dividends should be expected to be over $15,000.
Updated Income
In the past 3 months, I increased my forward 12-month dividend income by $895. It could have been so much more (at least twice that amount) but I’ve been building my cash as it’s getting hard to find value in this pricey stock market. In Q1, I only purchased $3,600 of British American Tobacco though I was a little more active in Q2. Even then, I only put about $15,429 to work in Q2:
- Pfizer (PFE) = 100 shares for $3,584
- British American Tobacco (BTI) = 150 shares for $5,804
- Altria (MO) = 40 shares for $1,902
- Johnson and Johnson (JNJ) = 25 shares for $4,139
Even after these Q2 moves, I was still sitting on about $30,000 in cash (and growing) so I put $10,000 in Treasury Direct I-Bonds. I’ll probably continue putting some into I-Bonds for the next few years because I find them an effective way to hold some cash while keeping pace with inflation.
If the market has a correction, I’ll be ready to load up on some stocks. Namely, Pepsi, Procter & Gamble, and more Johnson & Johnson. Since we will be debt free in less than 30 days, all our surplus cashflow will go into our Vanguard money market account and I-Bonds. Come March 2022, it’s very possible that I could be sitting on nearly $100,000 in cash if I don’t find some quality dividend stocks that are fairly priced.
YOY Growth Looks Good
In Q1, our YOY dividend growth was about 37% but it’s now jumped to 46%. Like I said above, if we had put our cash to work we’d likely be about 100% YOY growth. Fortunately, I’m learning to be much more patient until I find that right company at the right price.
Looking forward, I’m expecting to receive $7,486 in forward (next 12-months) dividend income. This is assuming I make no changes to my current stock portfolio and add no more capital (though I will add capital). The $7,486 leaves me $7,514 short of my $15,000 dividend income goal (by June 2025) but I’m happy with my progress and I’ve got to time to close the gap. I know when I put my growing cash to work I’ll be much closer to my dividend goal.
Thanks for reading!
Mr. TLR