$100 Annual Dividend Income Milestone Reached

By | May 15, 2020
milestone

Dividend Portfolio has crossed the $100 per year milestone in forward annual dividends. This is an important psychological achievement as well as a monetary one. Starting over from scratch is never fun. Although I expect the road to financial freedom will be long and difficult, it’s good to stop and reflect every once in a while. Celebrating the small wins along the way helps to keep me motivated. Sure, we all want financial freedom, but I expect that is decades away for me. But having small goals along the way, and achieving those goals are keys to success. Let’s see how I was able to achieve this $100 per year milestone.

Adopted Stock of the Month: Exxon Mobile

Exxon Mobile (XOM) was the adopted stock for May 2020. Based on my calculations, it was the stock in my portfolio that was the most undervalued. As indicated in my description of the Adopt A Stock project, I will adopt the most undervalued stock in my portfolio every month. That way, any additional money I invest over and above the minimum contribution to my portfolio will be invested in that adopted stock.

On May 14, 2020, I bought 12.4706 additional shares of XOM at a share price of $40.65. XOM now comprises 26.5% of my portfolio. The target allocation in M1 Finance for XOM is 4%. So what does this all mean?

Well, any additional money I invest into my overall portfolio will likely not be invested into XOM for a while. Unless of course, I specifically buy shares of XOM directly, which I will if XOM remains the adopted stock in June. While XOM, which is only one stock, comprises such a large percentage of the portfolio, its position size relative to the entire portfolio is only temporary. That’s because, as I invest in my overall portfolio, all shares except XOM will be increased.

Additionally, when I adopt a stock, it will only outpace the rest of the portfolio up to about 100 shares. At that point, the stock won’t be eligible for adoption until all remaining shares reach the 100 share threshold. Then I will resume the process to 200 shares, and so on. So, over time, no one stock will have much more than 100 shares beyond the stock with the fewest shares. However, this process allows me to build the portfolio 100 shares at a time, with an emphasis on the most undervalued stock.

If you have any suggestions on how to improve the Adopt A Stock project, let me know.

The Most Undervalued Stock

The following shows how Exxon Mobile was the most undervalued stock for May 2020. Specially, this stock will be adopted from about May 15, 2020 to June 14, 2020. To see the current list of the most undervalued stock in my portfolio, visit my Projects page to check out the Adopt A Stock project.

There is still about two more weeks left in May, and the first two weeks in June. I hope to add more shares to XOM. I will chose the next stock to be adopted around June 15, 2020. There, I will report on any additional funds added to the previous adopted stock (in this case XOM), and what the next adopted stock will be.

Adopting a stock is such a fun way to invest in my dividend portfolio. I anticipate that this is the first milestone of many that I will cross in the future.

Minimum Contribution Maintained

I maintained the $500 minimum monthly contribution to my dividend portfolio. As a reminder, prior to adopting any stock, an important requirement is for me to maintain the minimum contribution.

For May, I actually contributed more to the adopted stock than I did to my overall portfolio. If I’m able to do this on a consistent basis (doubtful), then the better approach will be to increase the minimum contribution. However, this minimum contribution limit will be conservatively raised because once I raise it, I have to ensure that I can stick with it for the long haul.

I was able to buy more shares in XOM in May because I received a couple of unexpected checks in the mail. Always a nice surprise when that happens.

What Expenses Would My Dividends Cover?

I’ve seen other bloggers post about what they could buy with their dividend income if they were to take the funds in cash. I thought I would do something a little bit similar. Instead of identifying what things I could buy, I figure it would be more useful to identify what current expenses I have that the dividends I earn could cover should I take them in cash. Although I will report on this here, I will likely include this in the monthly dividend income reports.

At present, the forward annual dividends is $110.50. That is an average of $9.21 in dividends on a monthly basis. My subscription to Hulu Plus is $6.41 per month. So right now, I earn enough in dividends to cover my Hulu bill. Not too shabby.

Unfortunately, because my sister and my mom are on my Netflix account, the monthly bill for my Netflix is $15.99 per month. Netflix is my next target bill. I suspect that I will earn enough dividends to cover my Netflix bill by September, the latest.

Slow and steady wins the race! This dividend milestone is only the beginning of what’s to come!

Conclusion On $100 Milestone

I’m very excited about reaching the $100 per year threshold in forward annual dividends. With all the bad news going on around us, it’s refreshing to hear some good news from time to time.

The next big achievement will be crossing the $500 per year in forward annual dividends. I can do it, and I will!

What did you think of this post? Let me know your thoughts by commenting below.

14 thoughts on “$100 Annual Dividend Income Milestone Reached

  1. P2035

    Congrats man 🙂 XOM is risky, to my view MO looks less risky. Have both, sad for high price at January.

    Reply
    1. Dividend Portfolio Post author

      XOM is certainly hurting and the whole industry appears to be suffering. But I believe in the company long term and the safety of its dividend. But we will see.

      Reply
      1. P2035

        Your list just made me to think about ED and O as well. Good yields. Good companies. Not in my portfolio for now. But MMM is on top of the list for now.

        Reply
  2. My Dividend Dynasty

    Congrats DP! It is great to celebrate milestones, no matter how big or small. Since you are starting over you will have incredible YOY growth rates! It is going to be awesome seeing how fast the snowball is going to grow over the next 12 months! Keep up the great work DP! 😀
    My Dividend Dynasty recently posted…Some Mid-May ThoughtsMy Profile

    Reply
    1. Dividend Portfolio Post author

      Thanks MDD. The growth rate will be exciting. I’m just so impatient trying to get my portfolio back to what it once was. So, I think about ways to add more money to the stock market. Yea, my portfolio might lose money once invested, but the shares are still growing, and to me, that’s what is important right now. But I definitely will be jumping for joy when I see my YOY Growth.

      Reply
  3. Chris@TTL

    Congrats on the milestone bump! Having passive income like dividends goes a long way towards feeling more financially secure & financial independence.

    I skimmed through the posts/pages you have, but didn’t catch the answer to my question: what sort of account are you buying your dividend-producing stocks in? Taxes can be a little sneaky with dividends at the end of the year.
    Chris@TTL recently posted…2019 Budget Review: Our Pre-retirement Annual SpendingMy Profile

    Reply
    1. Dividend Portfolio Post author

      Hey Chris,

      Sorry I missed that question. I’m buying the stocks in a taxable account. I do have a Roth IRA where I invest in the Vanguard Total Stock Market Fund and I also have a separate Roth 401K where invest in other funds. I max both the Roth IRA and Roth 401k. The only thing that could use some help is my emergency fund. It’s a starter one right now, but I’m working on building that up.

      Reply
    1. Dividend Portfolio Post author

      Oil is scary right now. I’m hoping that there will be another undervalued stock next month, but we will see. Definitely working towards the next milestone.

      Reply
    1. Dividend Portfolio Post author

      Thanks Mr. Robot. Full speed ahead to the next milestone at $500 dividends per year.

      Reply
  4. Bill

    This website is great. I am in the beginning stages of my portfolio and was coming across examples of 6 figures. Not everyone can get 400 of T quite yet. It’s nice to see this type of level. I can relate more to this. Best of luck!

    Reply
    1. Dividend Portfolio Post author

      Bill, I know the feeling. Thanks for the compliment on the website. I put a lot of work to get it to what it is. I think it’s half the reason why I stay motivated. I hope you visit back soon.

      Reply

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