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 $740. It could have been so much more but I’ve bought $20,000 in I-Bonds this year plus I’ve put $5,000 into Fundrise. The I-Bonds are for my cashflow bridge so that I can delay taking social security until 70. And the crowdfunding real estate investment is the beginning of me diversifying away from just stocks and bonds.
I’ve really drained the cash in the stock brokerage account. I’ve literally got only $115 in available stock cash right now. I’m not real comfortable with that but I can only do so much with the finite money that’s available to me. I’m just working my plan and everything is by design at this point.
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
For Q3, I put another $15,015 to work by adding:
- Unilever (UL) = 140 shares for $7,688
- British American Tobacco (BTI) = 150 shares for $7,327
Unilever is a new position and I suspect I’ll double that position over the next several months. And British American Tobacco has become the 2nd or 3rd largest position in my portfolio. It’s yielding over 8% and I’m finding it has so many positives that I’ve just found it compelling to be prominent in my portfolio.
Just after Q3 ended, I actually sold AT&T and Franklin Resources. AT&T was my first real dividend stock and it was difficult to part ways but it just didn’t fit into my portfolio anymore. So, after 3 years my total return was a whopping 1.5% … WOW!! And Franklin Resources was my smallest position and I just don’t want anymore financials in my portfolio. I’ve already got Aflac and I plan to add Visa or Mastercard someday but financial companies just aren’t my favorite industry due to there volatility. I had a 30% gain in Franklin Resources so that made the decision easier.
Selling AT&T and Franklin removed about $1,000 in annual dividend income, which doesn’t show in the above chart. I’ll had to find a replacement for much of that income in Q4, assuming I can find something of value. After selling these two stocks, I’ve now got 11 stocks representing about $180,000. The only stock I’m not reinvesting dividends is Exxon Mobile since it’s easily my largest position and I don’t need anymore of the stock. Eventually, these stock dividends along with I-Bonds and cash will be part of my cashflow bridge to delay social security until 70. So far, so good and I’ve just got to stay with the plan.
Looking forward, I’m expecting to receive $8,452 (not including the recent sale of AT&T and Franklin Resources) 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 $8,452 leaves me $6,548 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