STICKY: Dividend Income (Q4 2020)

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’ll likely start 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

Here’s the good news … my dividend income went from $2,251 (2019) to $4,760 in 2020. And if I do nothing else (meaning, I don’t put any more money into dividend stocks), I should received $6,357 in 2021. The dividends are really stacking up and I can only imagine where I’d be if I started this 20 years ago.

This year, I battled a couple of dividend cuts. The one that really hurt was Royal Dutch Shell. COVID-19 actually helped me refocus on businesses that are strong in both good and bad times so I made some changes in May to the master stock list.

Because my portfolio was young, I was overweight energy and that was a bad place to be in 2020. So, I added some new positions last year:

  • Johnson & Johnson (JNJ)
  • Altria (MO)
  • British American Tobacco (BTI)
  • Franklin Resources (BEN)
  • Aflac (AFL)
  • Pfizer (PFE)
  • Wells Fargo (WFC) – Wasn’t happy with this purchase but it was small

What I like about my current portfolio is that I “feel” that patience can truly be my friend. Getting to a taxable portfolio of over $100,000 was a goal but now I’m focused on only adding the right pieces to my portfolio puzzle.

Looking to 2021, I’m expecting to receive $6,357 in annual 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 $6,357 leaves me $8,643 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.

Thanks for reading!

Mr. TLR