2012 Passive Income: Dividends

Here is a summary of our 2012 dividend income. All this income comes from our taxable stock portfolio that is included in our monthly investment review. All retirement investment holdings are excluded from this dividend income summary.

This passive income is an important part of our financial freedom plan. Our current financial plan includes $6k in annual dividend income to support our living expenses so I prefer to be growing our dividend income on a trajectory that will will support this by the time we are targeting to be financially free.

 

Annual Dividends

Investment

2008

2009

2010

2011

2012

Sold off Equity Holdings

$ 590.87

$ 151.53

$ 48.86

$ 24.62

$ -

Pepco

$ 22.67

$ 22.68

$ 22.68

$ 22.68

$ 22.68

Argo International*

$ -

$ -

$ 10.84

$ 14.63

$ 11.01

AT&T

$ 20.80

$ 21.32

$ 21.84

$ 22.36

$ 22.88

Bank of America

$ -

$ 1.00

$ 6.65

$ 20.15

$ 32.20

BP

$ -

$ 11.02

$ 9.40

$ 16.80

$ 19.80

Connoco

$ 44.78

$ 106.56

$ 156.58

$ 211.65

$231.49

Chevron

$ 34.16

$ 37.17

$ 41.19

$ 46.35

$ 54.33

Duke Energy

$ 100.98

$ 111.83

$ 122.30

$ 131.90

$ 141.22

Edison

$ 15.57

$ 16.35

$ 17.28

$ 18.16

$ 19.04

ExxonMobil

$ 80.66

$ 88.24

$ 94.80

$ 103.31

$ 124.80

Fairfax Financial

$ -

$ -

$ 260.00

$ 450.08

$ 512.66

GE

$ 14.97

$ 102.07

$ 199.00

$ 281.29

$ 346.49

Healthcare SPDR

$ -

$ 173.76

$ 175.93

$ 200.42

$ 177.78

IBM*

$ 555.74

$ 520.33

$ 394.42

$ 241.02

$ 234.69

Medtronic

$ 53.74

$ 68.70

$ 76.82

$ 84.97

$ 115.38

Merck

$ 212.83

$ 222.68

$ 229.84

$ 229.84

254.04

P&G

$ 46.94

$ 53.52

$ 60.49

$ 68.03

$ 75.58

Pfizer

$ 972.66

$ 255.60

$ 247.48

$ 114.96

$ 126.48

Phillips 66

 

 

 

 

$ 19.35

Spectra

$ 45.07

$ 49.54

$ 51.97

$ 53.15

$ 64.16

Microsoft

$ 0.75

$ 0.86

$ 0.93

$ 1.17

$ 1.47

Johnson & Johnson

$ 16.13

$ 17.88

$ 20.21

$ 65.09

$ 65.51

Union Bancshares

$ -

$ 6.00

$ 25.21

$ 39.30

$ 56.76

VXF

$ 66.84

$ 55.31

$ 62.46

$ 1.75

$ 184.06

VWO

$ 108.32

$ 52.62

$ 79.73

$ 99.23

$ 109.93

VTI

$ 96.93

$ 337.00

$ 370.01

$ 419.20

$ 555.85

KBE ETF

$ 92.58

$ 208.17

$ 68.17

$ 198.78

$ 146.81

Total

$3,293.99

$ 2,691.74

$2,875.09

$3,180.89

$ 3,726.45

Growth Rate

 

-18.28%

6.81%

10.64%

17.15%

* Indicates we sold some of this investment in 2012.

Our taxable dividend income rose by 17% in 2012. Its not the 40%+ growth rates in dividend income we saw before the last recession, but our portfolio is significantly larger now and we are no longer increasing the portfolio size as rapidly as we were when our net worth was smaller.

If you look at our taxable stock portfolio yield - our portfolio was valued at $191,009 at the end of 2012, so we had an a 1.95% dividend yield on our overall taxable portfolio (including non-dividend paying investments).

If we assume an average 10% growth rate over the next 8 years we can see in the table below we have a reasonable margin of safety that suggests we are on target with our financial freedom plan.

If we want to increase the amount of dividend income we utilize when we become financially free ~2021 to about $10k/yr we are currently about $479/yr short. All in all we are in good shape regarding our dividend income.


Related in Financial Goals:

Financial Freedom Plan (Aug 25, 2013) Almost two years ago I laid out a plan for the net asset allocation I thought we needed for our financial freedom plan. It was a rough guide for asset allocation that I believe could generate enough income to cover...

Can We Coast to Our Financial Goals? (Nov 12, 2012) As I continue to reflect on getting closeer to reaching our millionaire net worth milestone, I am becoming more optimistic and excited about what the future holds. I've pondered whether we could just tread water at this point and still...

Cost of The Wealth Effect (Oct 10, 2012) With Quantitative Easing Round 3, the Federal Reserve has said it will continue to indefinitely buy mortgage securities to drive down interest rates. The intent is to accelerate our economic recovery by making cash cheaper and more readily available for...

Comments (1)


Why do you own so many stocks? I have found that I personally do much better when I stick to the broad-market ETFs. For example, I think that the risk-adjusted returns of the Nasdaq-100 ETF (QQQ) are better, accounting for risk, than those of any individual stocks comprising the index. Also, the dividend yield on the Nasdaq-100 has risen substantially in recent years an is now close to 1.20%, which is decent, considering the more than 200% price increase of the Nasdaq-100 Index since early 2009.

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