April is shaping up to be a very important month. In many ways, it is really the beginning of my long term strategy to invest in dividends. This is my April 2017 Major Update: Dividend Portfolio Freedom Fund report.
This month will see new purchases, increased contribution, new goals, and a change in brokerage account. Also, having just received my tax refund, I will be able to respectably contribute to my dividend portfolio. Needless to say, I’m very excited about this month and very excited about the future.
Continue reading to see why I am so excited.
NEW PURCHASES
Previously, I had minimal positions in Realty Income (O), Coca Cola (KO), Apple (AAPL), and Exxon Mobile (XOM). I have now added new positions to my dividend portfolio. I’ve purchased shares in Johnson and Johnson (JNJ), Abbvie (ABBV), 3M Company (MMM), AT&T (T), and Proctor and Gamble (PG). Therefore, I am currently invested in nine companies.
I’ve also restructured how I invest. Before, I was mainly using Robinhood for most of my investments. Robinhood is good as it is free and simple to use. However, it doesn’t offer me fractional shares or the automatic investing that I was looking for. I therefore switched my brokerage to Capital One Investing. For more information on why I switched to Capital One Investing, visit my Capital One Investing review.
I still use Computershare. At present, I use Computershare to drip ABBV, JNJ, and XOM. I do that because the fees are either free or very minimal. I could participate in Coca Cola’s DRIP through Computershare, but those fees are ridiculous. That’s why I use Capital One Investing for Coca Cola and for all the remaining stocks in my portfolio. Those stocks are either too expensive with Computershare, or otherwise non-existent because there’s a different transfer agent for that company. For example, Realty Income’s transfer agent is Wells Fargo Shareowner Services.
You’ll noticed that my annual dividends went down. No, I didn’t sell any of my shares. I still have my shares in Robinhood. With 15 shares in KO, 10 shares in O and 2 shares in AAPL, my total account value in Robhinhood is about $1500. I’m going to leave those shares for now. I might liquidate most of that amount and reinvest it in my Sharebuilder Plan with Capital One Investing, but I’m not sure. I’ll decide that in the next couple of months. So, the annual dividends you are currently seeing is reflective of only my Capital One Investing and Computershare accounts. I do not plan on adding to Robinhood for now, unless they add the key features I like such as automatic investing and fractional shares.
INCREASED CONTRIBUTIONS
In addition, the total amount I’ve allocated to my dividend portfolio has risen significantly. Before, I was mainly contributing $90 a month to XOM. In addition to that $90, I will now contribute $250 every first and third Tuesday of the month ($500 total) in my Sharebuilder Plan aptly named Dividend Portfolio Freedom Fund. I will also contribute $130 a month to buy JNJ, and $80 a month to buy ABBV. I might tweek those numbers in the coming weeks as I adjust to my new budget, but there shouldn’t be drastic changes.
A word about fees. I am not unmindful that the $12 a month I’m paying for Capital One’s Advantage Program represents 2.4% cost per month just to invest using Capital One Investing. However, as explained in my Capital One Investing review, I easily waste more than $12 in a month, and so I’m very comfortable putting that amount to good use. That $144 a year cost will eventually allow me to invest in 12 different stocks inside of Capital One Investing. Furthermore, as the amount of money I invest increase, the lower will be the cost as a percentage of my investment.
As for Computershare, I realize that there will be a higher cost incurred to sell shares. I did a rough calculation and, assuming the fee schedule don’t change, I’m not planning on selling for a very long time. However, I will definitely keep an eye out for changes to the Prospectus to ensure I’m not paying more than I expected to in fees.
The other thing you may notice is that I doubled my goal regarding the amount of annual dividends I earn. Before, I had a goal of making $100 a year in annual dividends. I technically reached that goal with the purchase of the above new stocks. However, because I’m am no longer including my Robinhood account, it’s going to be a little while before I hit that $100 figure again, but not too long. I fully intend on exceeding my new goal of $200 in annual dividends this year. Indeed, though the total annual dividends has decreased, I expect that number to dramatically rise given the increase in my monthly contributions to my Dividend Portfolio Freedom Fund. By my rough calculations, I’m investing $800 a month in my dividend portfolio.
TAXES
Finally, I just got my tax refund and I received more than I ever had before. I believe most of it is due to the fact that I just bought my first house last year. I itemized my deductions for the first time. However, after the dust settles with other obligations, I will about $3000 to put to my investment. I was going to write a post asking what to do with that $3000 (and I still might), but I’m looking to add it to my portfolio in the upcoming weeks. As Realty Income is one of my favorite stocks (because they pay dividends monthly), I’m thinking about putting most of my tax refund in that stock. I want to get to the point where Realty Income pays me enough dividend to purchase one share of Realty Income. Then, I’ll move on to my next favorite stock, etc.
This has been my April 2017 Major Update: Dividend Portfolio Freedom Fund report. Let me know what you think of my new stock purchases. What other stocks do you suggest I include in my portfolio. I’m looking at Abbot Laboratories, Hormel Foods, and HCP, Inc. Also, what would you do with $3000? Invest in Dividend stocks, P2P lending, stock options?
Don’t forget to leave a comment below.
I think Apple is a good long term buy. Apple is a really good cash cow, and out of the tech companies has a relatively low P/E ratio. In addition, with all that cash in the bank Apple is either going to have to do a massive stock buyback or issue a massive dividend in the coming years. Either way, the stock price should go up.
Troy, that’s what I’m hoping for. I wish the price was less so that I could buy more shares. In any case, it’s definitely one of my favorite stocks for long term investing.
Nice job putting your tax return to work in the market. I don;t get returns anymore 🙁 but when I did, I always took at least half the money and invested it.
Yea, I’m all about investing these days. I can’t wait to see my portfolio get bigger. I plan on doing whatever I can to spearhead that goal. Taking and investing at least half of your tax return is a smart strategy. I’m closer to the 80% mark.
I know they say that you should organize your finances throughout the year so that you don’t really get a tax return. For me, I’m happy that I don’t owe the Government any money, but recognize that there are those folks who do. Even if I knew exactly the amount of withholdings that should come from my paycheck so that I wouldn’t get a refund, I probably still wouldn’t withhold the exact amount out of the abundance of caution. Plus, I consider it forced savings anyway.
That is a big increase compared to previously what you were doing. I hope in the long run you will see the returns that you are really hoping for. P.S. I really like the name of the dividend portfolio freedom fund, it has a catchy ring to it. Very exciting name. Thanks
Thanks BHL. This is an exciting year for me. I’ll be receiving a lump some of money in the next few months and I have to figure out what I’m going to do with that money. In addition, depending on when (or if) I decide to pay off my last remaining student loan, I might actually be significantly increasing my monthly contribution to my portfolio.
I’m glad you like the name Dividend Portfolio Freedom Fund. I’ve seem references on other blogs that their fund is called the Freedom Fund. So, I can’t take all the credit, but I liked that idea and went with it.
It is a great name. A new splash of cash is always a nice way to boost those earnings year over year. Just have to keep working hard at it and it will come.
That’s the plan for right now. I’m just going to keep plugging away at my strategy. I read other blogs, like yours, for motivation, inspiration, and education. I love the dividend portfolio community. Thanks for the insight.
It’s a very smart move using your tax return to buy stocks. I have been doing that for years now and it makes for a very exciting time of the year!
Great work.
Thanks. This is actually going to be my first year using my tax returns for investing. I plan on following in your footsteps for future tax returns, if I get them.
Looks like you are very focused and have a clear vision of how and where you want to invest as a DGI. Your new purchases show many great buys in quality companies that are known for their dividend distributions and your plan to contribute more each month to your shares will help enable a fast passive income growth. Good job! I have been using CapOne Financial (Sharebuilder) for about ten years and think it’s great. When I started, being able to buy fractional shares was a big draw.
Thanks. I clearly love Sharebuilder too which is why I went with that approach. These stocks will give me a good starting point. I’m just going to remain patient and keep contributing. I won’t be neglectful. I will still pay attention to the stocks. But I love the passivity involved with DGI.
This looks like a solid portfolio. The companies you add are great DGI companies, and will help you get your freedom.
Great job and I´m impressed by your DGI focus.
Thanks Stockles. I think focus is important and a good thing. I leave work, and then check on my blog or read information on other DGI blogs. I’m very interested in this subject and can’t wait to have a more significant portfolio. But I’m not foolish. I don’t want to just throw my money in a random stock.
Thanks for visiting and commenting. It helps to keep me motivated to continue writing and blogging.
As discussed in my comments, those are great freaking additions to your portfolio! Congrats making some freaking awesome moves!
Bert
Thanks Bert!
I like the companies in your portfolio. They are very solid and will provide you with an ever increasing passive income stream over time.
I’ve had an eye on Johnson & Johnson and Apple over the past years, but the stocks kept eluding me. The share prices litterally ran away before I pulled the trigger. These companies really have a broad and deep economic moat.
Keep up your great work!
Cheers
Thanks MFS. I am happy with my portfolio, but not content. I am looking at adding stocks from such companies as HRL and potentially HCP. The magic number that I want to reach is 12 stocks with Capital One Investing plus however many I have through DRIPs. But, as a general matter, I do like companies with broad and deep economic moats as you’ve indicated.