$5,000 Dividend Shopping Spree!

Isn’t it fun to go shopping with money someone else gives you? I remember my parents giving us $100 in 1991 to shop for the school year.

We had to purchase our jeans (Wranglers), T-shirts, socks, and underwear (whitie-tighties). We had so much fun during those times.

Those days were over once I turned 16 and got a job at McDonald’s. I have been on my own for the rest of my life—until now.

Time is Money #2: Save

Dividends to the Rescue. Today, I use profits from corporations and fixed income to purchase things I want. They pay me in the form of dividends.

Dividends are the most passive form of passive income. Once you create a decent-sized dividend portfolio, you can use it to assist in your daily life.

I started dividend investing in June 2019 and just celebrated my five-year anniversary as a dividend and income investor.

I learned a lot over the years, but nothing is more important than using your dividends in real life. The sooner you believe in dividend investing, the faster you will want to convert your earned income into passive income.

The first years of dividend investing were quite humble. I remember being very excited to receive $50 in a month.

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However, if you stick with it, things can compound quickly. Last month, we made $1,965 in dividend income. That’s a lot of (passive) money.

Going shopping. Most people preach to reinvest all dividends, and I can understand why. But the best way to trust them is to use them.

Ultimately, living on dividends and passive income is a game of trust. Those who believe in the process retire earlier. Those who have more faith in banks will continue to work hard for interest income (pennies on the dollar).

I have always preached using a tiny bit of your dividends to go shopping frivolously. This actually motivates you to purchase more stocks and funds.

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I remember receiving a $5.34 dividend in 2021 while serving on Okinawa. I went to the PX (post exchange) and bought a sandwich and Reese’s cup. I was excited to use someone else’s money to purchase my snack.

Now, my dividends can pay for my entire mortgage. In July 2021, I wrote an article titled “$1,000 Dividend Shopping Spree.”

At the time, it would take me five to six months to set aside $1,000 to go shopping safely. I thought updating that article with new, higher numbers would be cool.

What to purchase with $5,000? The first goal is to decide what to buy with $5,000. I don’t really have anything on my shopping list.

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If I had to nitpick, I would start with a Samsung Galaxy Book 4 Edge. This new laptop uses a mobile CPU to get massive battery life.

I love my Samsung Galaxy Book3 Pro 360, but its battery life is atrocious. I love my M1 MacBook Air because of its battery life, but I am a Samsung Fanboy (through and through).

The Galaxy Book 4 Edge can solve my dilemma by allowing me to stay in the Samsung ecosystem with a computer that lasts over 20 hours. That’s amazing. The laptop costs $1,300 with my military discount.

I also want to purchase two Samsung Galaxy Rings. We don’t have wedding rings (after 18 years of marriage), so I think these would be nice. The rings should cost about $400 apiece for a total of $800.

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Finally, with the remaining $2,900, I would purchase a riding lawn mower. My current lawn mower—my 17-year-old son—has a full-time job. 

It’ll be much faster for him to cut the grass on a riding mower, and it will be a more enjoyable experience. I don’t know much about riding mowers, but $2,900 should be enough to afford a decent one.

Saving the dividends. Now, it’s time to save the dividends for the spending spree. I don’t take all my dividends as cash, so I must create a savings schedule.

I take cash dividends from these accounts: Charles Schwab ($600), Cash App ($400), and Wells Fargo ($400). I reinvest dividends from SoFi, STASH, and M1 Finance.

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Therefore, I have $1,400 each month to play with and build my shopping spree. We are currently in July 2024, so I will set my shopping spree for December 2024.

That gives me six months to save the cash. That amounts to roughly $835 monthly needed for my dividend spree, leaving me about $566.

Honestly, I don’t spend that much from my dividends. Letting them sit in my account is nice, but dividend investing is my passion and hobby.

When I have money sitting in my account (called dry powder), it’s tough not to reinvest it. Therefore, I would transfer the $835 every month to my M1 Finance savings account, which earns 5% interest.

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Getting started with your shopping spree. That’s my plan in a nutshell; it seems simple enough. Now it’s time for you to start planning your dividend shopping spree.

I recommend that you start small—something like $100. Yes, it doesn’t sound sexy, but it is very realistic if you are just starting out as a dividend investor.

Most people will never know what it feels like to earn money in their sleep. Our parents condition us to work for money from an early age.

That’s why using some of your dividends along the way is essential. You must break the belief that you must exchange time for money.

The more proper path to wealth is to exchange time for assets—in this case, dividend-paying stocks. There is nothing more vital than believing in the process.

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When I retired from the military, I used my dividends to float me until I settled everything with my pension. I had already learned to trust and depend on the dividend process.

Conclusion. The sooner you learn to trust your dividend income, the better. That’s why I help my sons and nephews invest by adding $1,000 to their Cash App.

They invest the money in AGNC Mortgage REIT, which pays them roughly $11 on the 10th of every month. I tell them to start looking forward to receiving those dividends.

When the time is right, they will begin to invest in other high-yield dividend stocks, such as AT&T (T), Altria (MO), Pfizer (PFE), and Verizon (VZ).

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Because they are young, they can add high-growth dividend stocks like Costco (COST), Facebook (META), Google (GOOG), Visa (V), and Mastercard (MA).

The shopping spree helps me visualize my dividend income and motivate myself throughout the process. One day, I will earn $10,000 per month in dividends. There is no stopping the process. All I have to do is be smart and follow the money.

If you want to start dividend investing, read my article “Your First Five Dividend Stocks.” Dividends will change your life, as they have changed mine. Good Luck!

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