Last month my wife and I crossed $1,100/month in dividend income. It feels incredible to hit this point in our journey, and we plan to keep the party going.
I am 41 years old, and I cannot fathom how much we will earn in dividends by age 70. It truly is an experience worth sharing with the few people who care about dividends.
I want to recap our journey and take a look at our portfolio. If that sounds interesting to you, please keep reading.
Small City. Passive Income. Great Retirement.
The start of the journey. In June 2019, I will begin reading about passive income. I was earning a good salary from the military but didn’t have much free cash flow.
I read an article about dividend growth investing and dividends. I couldn’t believe that people create their own streams of passive income.
From that moment on, I jumped head-first into the world of passive income and dividends—the first months of investing started with small amounts.
However, three years and four months later, in October 2022, we achieved $1,100 in dividends. It has been a fantastic ride.
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The dividend journey. As we forged our path, the dividends were too small to be of any use. However, once they reached over $10, they became special moments in our daily lives.
We could use dividends to pay for our lunch or coffee. Then, they reached $30 and $40, and things became real.
Today, my wife and I each have dividend debit cards that pay us right to our pockets. Spending a few dollars and having dividends replace that income the following day is terrific.
The allure of dividends is that they keep coming whether you are working or not. They can assist you in daily life, with retirement, or saving for a goal—you can use them as you wish.
A look into our portfolio. The picture above is one of our nine total brokerage accounts. This is Wells Fargo, which paid me $254.
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I divide my dividend investing into index funds, dividend growth, and income investing.
My article “The Best Way to F.I.R.E.” compares all of these methods against one another. I use them all in tandem but heavily focus on income investing.
Can you pick out the different types of investment securities from the above picture? Understanding which path is right for you is part of starting your dividend journey.
How does it feel to be a dividend investor? When you wake up to new money in your pocket, there is no feeling quite like it.
Sometimes, I get wrapped up in daily life and forget about dividend payments. I am stunned to wake up to an $81 dividend.
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We reinvest most of our dividends but use the cash from our Dividend debit cards as spending money. It’s hard to keep investing if you don’t reward yourself a little.
I would love to say that it’s easy to reach $1,100 in dividends a month, but it takes hard work and sacrifice. We took on roommates, and the additional cash flow helped us pay down debt.
The screenshot above is from my Dividend Debit Card (Cash App). You can see all the various dividends I received over a week.
If you want your bank statement to look like this, it’ll require you to budget, eliminate debt, save, invest, and increase your income. Are you up for the challenge?
The Magic of Leverage
Dividends vs. Passive income. There are a few more types of passive income outside of dividends. Some other types include royalties from your creative works, rents from real estate, and business income from an automated business.
I recently had a great day in book sales, where I made $53. Each type of passive income takes an extreme level of work to achieve. However, you should funnel the proceeds toward your dividends portfolio.
Dividends are the most passive of the passive income streams. Let’s take dividend growth investing, for example. Here you invest in blue-chip dividend-paying stocks like McDonald’s (MCD) and Ares Capital (ARCC).
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Both of these companies recently announced dividend increases of over 10%. Therefore, I recently received massive pay raises without having to do anything on my end.
That is what makes dividends more passive than other income streams. You do the initial work to find good companies and funds; all you have to do is check up on them.
How to get started with Dividends. There are many ways to launch your dividend journey. However, I recommend Cash APP and STASH as places to begin.
Other brokerages like Charles Schwab, M1 Finance, and Wells Fargo can be a little complex for new investors. Once you earn your stripes on STASH and Cash App, you can move to the more feature-packed platforms.
I recommend two of my books that can get you started: “Dividend Investing: Back to the Basics (free pdf)” and “Your First Five Dividend Stocks (free pdf).”
The journey starts with your mindset first. Therefore, building up your mental toughness and finding direction in a directionless world are top priorities. My Become CEO of Yourself series (part 1, part 2, part 3) can give you a head start.
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Conclusion. Dividend investing is not for everyone; however, everyone would love to have dividends. Only one thing separates the haves and haves not: determination.
In my first three months, I earned $1.50 on dividends—one dollar and fifty cents. Most people would have quit then, but I kept going. Then, in December 2019, I received $65.
That was a massive amount of cash flow, but now I receive 16 times the income. Plus, I am just getting started with dividends. That is the power of compounding; not only does your income compound, but also your mindset.
To become a long-term dividend investor, you must see your dream future. Who is with you, what are you doing, and how much will it cost?
If you can answer these questions, you will have an excellent place to start. The path to wealth is worth the sacrifice, but most will not take it. Will you be one of the few that will retire from dividends? Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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