I have a goal for 2014 to increase my annual dividend income in my taxable accounts to $500/year. This is my “Drive to 5” goal. I measure my progress by looking at the forward projections for my dividend income, rather than the money I have actually received. If I meet or exceed my Drive to 5 goal, at the end of 2015, I will have received more than $500 in dividend income.
Why $500? I don’t know. I probably should have chosen $600, because my average monthly dividend would be $50/month, which is easier to remember than $41.66/month. I couldn’t think of a good rhyme for “_______ to 6”.
How do I plan to achieve my goal? Any ‘windfall’ income that I receive will be invested in my Drive to 5; each month, I invest approximately $200 in a few dividend paying stocks. Lastly, I will simply have to dedicate some of my regular income to the Drive.
To figure out how much money I will need for all of 2014, I assume an average dividend of 5%, which means I will need to invest approximately $8230 for the year. That is a really good chunk of change and a lofty goal, but with careful planning and smart purchases, I think it’s a doable goal. Most of my dividend paying stocks are in DRIP type accounts, meaning all dividends get reinvested into the stock, generally at no cost to me. This helps reduce (slightly) how much I need to invest.
I entered 2014 with forward dividend income of $82.55/year. By the end of January 2014, that figure had grown to $88.54 through the purchase of some additional Intel stock. I still have to make up $411.46 to hit my 5.
My current Drive portfolio includes: GE, INTC, HSY, KMI, O, ARCP.
Please note: I am long all positions mentioned in this post.