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Jan 01 2015

2014: The Year in Review

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2014 is over. Done. History. Gone. Finished. Kaput. No blog is complete without a “Year in Review” posting, and here it is. The sixth year of my dividend quest is in the books, so how did I do? What would I have done differently? What will I do in the coming year?

First, just to put 2014 in some perspective, here’s my annual dividend income for the past six years:
2008 $ 251.63
2009 $1349.98
2010 $3453.20
2011 $4074.18
2012 $4086.27
2013 $4513.42
2014 $5760.87

When I began my quest in the summer of 2008, my dividend income for that year was, of course, quite small, but the overall yield immediately put my bank’s 0.1% interest CDs to shame, and so I was hooked on dividend income investing. The next couple years, 2009 and 2010, saw considerable growth in my dividend income as I poured more capital into additional dividend paying stocks. 2011 saw only modest growth as I was not shoveling as much capital into my dividend machine. I lost focus the following year (dating and marriage can do that), making few buys and as a result dividend income for 2012 was barely more than 2011 (dividend cuts didn’t help the situation either). My dividend income grew modestly in 2013, as I sold off some of my employer’s stock, which helped me make more stock buys and further enhanced my dividend income.

Finally we come to 2014, where my dividend income grew at a rate not seen since 2010. With consistent monthly cash infusions and boosts from stock sales, I had the capital to make regular stock buys which steadily raised my dividend income. This year saw a couple important milestones being reached and exceeded, where dividend income reached:
• 1.00 cents per minute ($438/month)
• $500 per month (projected average monthly income)

Here’s a look at quarterly performance:
Q1 $1333.68
Q2 $1391.65
Q3 $1388.99 (adjusted: $1500.99)
Q4 $1646.55 (adjusted: $1534.55)

Hindsight is always 20:20, so what would I have done differently? The most obvious error I made was selling off so much of my employer’s granted stocks when it was still trending upwards (and still rising at the time of this writing) <Sigh>.

And what are my plans for the new year? Well, I will certainly continue my dividend matching program, as that really helped to fund my stock buys (albeit at the expense of my savings, which was largely flat in 2014). But I may dial it down a little in order to rebuild my savings. I have stock options expiring in May, so I will keep a close eye on my employer’s stock (which I think will continue to grow) and sell when I think the time is right. I also have some more granted restricted stock vesting next summer. The stock options and granted stocks will, when sold, boost my investing capital. My monthly dividend income goal for 2015 is $600 (which shouldn’t be too difficult), and $650 may be achievable (a serious stretch, but not impossible). Of course, there’s always potential setbacks such as dividend cuts, the much dreaded “correction” that will end the current bull market, another financial crisis, or some other unexpected personal financial issue.

Also for 2015, I will make some minor tweaks to my personal finances. I plan on raising my monthly mortgage payment a little to pay down the principle of my mortgage. Now that I qualify for the mortgage interest deduction from my taxes, I plan on taking the extra tax refund dollars and put them towards paying down my home loan’s principle. By doing this every year, I should be able to shave 10-15 years off my 30 year home loan. Of course, if I really wanted to get this home loan gorilla off my back ASAP, I could focus every dividend income dollar towards the principle. It wouldn’t grow my dividend income, but it would seriously accelerate my mortgage payback schedule. Ultimately, that’s what having a source of passive income is all about: having OPTIONS and the ability to choose.

As for this site, I will aim to make more Philosophy, Strategy, and Thoughts posts, because there’s more to the quest for dividend income than just monthly reports of income, buys, and sells. I also have some ideas that may add a little extra value to this site, so keep your eyes peeled.

For most people, dividend investing may seem dull and boring, as it doesn’t have the thrill and excitement of capital gains trading. For me, my six years of dividend investing has been FUN. When I buy stock, I enjoy the anticipation of setting a limit order price and waiting for when the order goes through. I enjoy playing around in spreadsheets doing “What if?” scenarios with the numbers. I enjoy checking my account to see the expected dividends roll in like clockwork. Dividend investing has become my newest and most expensive hobby, but its monetary rewards far exceed that of any other past hobby of mine.

So a toast to 2014 is in order, as well as a toast to the new year. May 2015 bring you and I closer to our goals and dreams. Cheers!

Image Credit: steinchen (pixabay.com)

2 comments

  1. A Frugal Family's Journey

    You made great progress in 2014. After 3 consecutive years of dividends in the $4K range, you really made quite an improvement in this category this past year! Definitely shows that you had put more capital to work for you this past year. Keep up the great work.

    Wishing you continued success in 2015 and beyond! AFFJ

  2. Dividend Quest

    Thanks for visiting AFFJ. Yes, last year’s little matching program and selling off most of my employer’s stocks really juiced my capital for investing this year. If I maintain my matching program and cash out my employer’s stock options this spring, 2015 has a very good chance of being another great dividend income year. For 2016 and beyond, capital from sales of my employer’s stock will slow to a trickle and I may need to trim back my dividend matching program.

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