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The GOAL of my dividend growth portfolio is to balance increasing share value (Growth) while simultaneously building and producing passive income (Dividends) that can be used during retirement. Currently my portfolio is concentrated more on growth with a dividend yield of 3.15%. As I near retirement I will look to produce more income and less growth. Typically, I deposit $2,000-$4,000 monthly into this portfolio, with $24,500 deposited YTD. This portfolio is in addition to my tax deferred ROTH TSP. Currently, I reinvest all dividends utilizing DRIP. As I gain more dividends, I will hand select targeted reinvestment and withdraw the correct percentage to cover anticipated taxes. Looking to start your own portfolio? Check out my Ultimate Dividend Investing Guide, Start Here!
Its been a few months since I've posted an update for my portfolio so this will be a mix of the last few months. Overall I will focus on October. I did hit the milestone of $70,000 invested in this portfolio! I've been adding $3,000 a month for the last several months. October was the same. I used to the $3,000 to purchase shares in the following positions:
Realty Income Stock ($O) x 6
SCHD ETF ($SCHD) x 22
Exxon Mobile Stock ($XOM) x 5
Starbucks Stock ($SBUX) x 7
The last two months I've opened new positions in Starbucks and Exxon Mobile in my portfolio. I also reconsidered my target allocations, resetting most individual companies to 2% and increasing SCHD to 30%. I've stopped contributing to DGRO and plan to sell that position VIA a covered call to concentrate that profit into SCHD. Ultimately, SCHD will make up 50% or more of my portfolio long term. These new positions added $105.64 to my portfolio's passive income or just shy of $9 a month.
October wasn't a bad a month for my portfolio overall. It returned 10.31% during October compared to the 8.8% of the SP500. I'm still down around -12% (-9% including dividends) which is decently better than the SP500 return of -18.59%.
My portfolio remains down for Year to Date (YTD). My allocation has returned -9.64% YTD which is less than the overall SP500 return of -14.17%! Got to love less volatility! We all hope the market continues regain ground through the end of the year to end positive. I will continue to make monthly contributions and buy stocks that are undervalued first.
Dividend Income Growth (YoY)
My dividend income continues to surpass expectations with a 100% increase in dividend income (October 2021 Vs. October 2022). I won't even calculate the comparison for 2020 since that's the year I began tracking my dividends. Yearly passive income received also surpassed 2021 totals and we still have five more months of dividend payments. My 2022 total passive income is $1,310.86 compared to $757.19 for 2021. That's a 73.12% increase!
One thing I have considered is modifying my portfolio to bring in consistent dividend income month to month. Currently the quarters have my largest dividend payments. This would require me to close some positions and start new positions in dividends in the months I'd like to raise. This is really a quality-of-life issue since it would require me to budget quarterly income over several months instead of a more balanced payment schedule. Below is the last two years of dividend payments.
Quarterly income continues to grow as expected. One month into Quarter 4 and I've received more dividends that all of 2020 combined and close to the entirety of of Quarter 1 2021. I'm hoping to push above $500 total for this quarter.
Projected Annual Dividend Income (PADI)
Lastly, my projected annual dividend income is now $2,125.41 or $177.12 a month!
16 of my 17 positions pay dividends (Disney being the non-payer).
I hope this update hope this update helps break down the power of dividends and inspires some of the new dividend investors. Stay the course and be patient!