December Dividend Income

After 33 years of clocking in and out of work and religiously saving 10% annually in my 401K every year, in good times and bad, I have decided to share my monthly dividend income to show what regular saving and investing can accomplish.

For the month of December I made $4,324.88; an increase of +39.93% versus this time last year. I was hoping to hit my very first $4K month and was shocked when I blew by it by $300.

My buying in large quantities has slowed down quite a bit since November as valuations rose significantly across the board. I’ll continue buying in small lots and going into January here are the stocks on my watch list; AbbVie (ABBV), Allete (ALE), BCE Inc (BCE), J.M. Smucker (SJM), Lockheed Martin (LMT), 3M (MMM), Unilever (UL), Verizon (VZ) and Walgreens Boots Alliance (WBA).

Date	Symbol	Company	Amount
12/1/20	ALE	ALLETE INC	$123.50
12/1/20	PFE	PFIZER INC	$214.90
12/1/20	PSX	PHILLIPS 66	$25.30
12/3/20	CMI	CUMMINS INC	$37.67
12/3/20	DFS	DISCOVER FINANCIAL SERVICES	$11.34
12/3/20	UPS	UNITED PARCEL SERVICE INC	$225.60
12/7/20	SO	SOUTHERN CO	$60.16
12/8/20	JNJ	JOHNSON &JOHNSON	$174.10
12/9/20	VLO	VALERO ENERGY CORP	$35.28
12/10/20	CVX	CHEVRON CORP	$21.77
12/10/20	IBM	INTERNATIONAL BUS MACH CORP	$142.13
12/10/20	MSFT	MICROSOFT CORP	$61.03
12/11/20	WBA	WALGREENS BOOTS ALLIANCE INC	$42.67
12/14/20	MMM	3M CO	$48.75
12/15/20	AVA	AVISTA CORP	$122.28
12/15/20	CMP	COMPASS MINERALS INTERNATIONAL INC	$137.52
12/15/20	FAF	FIRST AMERICAN FINANCIAL CORP	$143.84
12/15/20	NWL	NEWELL BRANDS INC	$25.56
12/16/20	DUK	DUKE ENERGY CORP	$57.90
12/17/20	PRU	PRUDENTIAL FINANCIAL INC	$444.45
12/17/20	QCOM	QUALCOMM INC	$153.82
12/18/20	BHB	BAR HARBOR BANKSHARES	$41.10
12/18/20	BP	BP PLC SPONSORED ADR	$8.13
12/18/20	KHC	KRAFT HEINZ CO	$9.20
12/18/20	R	RYDER SYSTEM INC	$51.93
12/18/20	WM	WASTE MANAGEMENT INC	$39.34
12/22/20	FAST	FASTENAL	$16.22
12/23/20	HYG	ISHARES TR IBOXX HI YD ETF	$42.20
12/23/20	PFF	ISHARES TR PFD AND INCM SEC	$70.32
12/24/20	PSEC	PROSPECT CAP CORP	$155.54
12/29/20	BLV	VANGUARD BD INDEX FDS LONG TERM BOND	$187.70
12/29/20	VCLT	VANGUARD SCOTTSDALE FUNDS LONG-TERM CORP BD	$30.63
12/30/20	ARCC	ARES CAPITAL CORP	$460.48
12/30/20	NEWT	NEWTEK BUSINESS SVCS CORP	$364.74
12/30/20	TROW	PRICE T ROWE GROUPS	$13.70
12/31/20	BEP	BROOKFIELD RENEWABLE PARTNERS PARTNERSHIP	$253.70
12/31/20	BEPC	BROOKFIELD RENEWABLE CORP	$63.36
12/31/20	BPYU	BROOKFIELD PPTY REIT INC	$49.77
12/31/20	GATX	GATX CORP	$51.02
12/31/20	GRMN	GARMIN LTD	$61.81
12/31/20	WEYS	WEYCO GROUP INC	$18.87
12/31/20	M1 Finance	M1 DIVIDEND GROWTH ACCOUNT	$25.55

Buys and Sells for the Week 12/31

Looks like I’m ending the year on a whimper with just a few small buys. I usually have little to no cash at the end of a year but this time I will be carrying over a sizeable cash position into the new year. Here is a summary of my trades:

1. Verizon (VZ) – increased position –  This buy is part of my efforts to increase my overall dividend payout in the second month of a quarter which is considerably lower than the other months. Grabbed 3 shares at $58.15 and a 4.33% yield
2. Oil-Dri Corporation of America (ODC) – increased position – This buy was also part of my efforts to increase my overall dividend payout in the second month of a quarter. Grabbed 5 shares at $33.55 and a 3.10% yield.

Buys and Sells for the Week 12/25

Treated myself with some early Christmas presents. Here are my trades for the week:

1. BCE Inc. (BCE) – increased position –  6.1% from this Canadian company was enough to make me go H! Ho! Ho!
2. Oil-Dri Corporation of America (ODC) – increased position – Having a significant snow storm before Christmas was a good reminder to keep kitty litter in the car and to buy more ODC for a 3.04% dividend yield.
3. Bar Harbor Bankshares (BHB) – increased position – 4% yield and I’m hoping for a dividend raise announcement in February around 10%. Hopefully Santa is listening and I have been a good boy this year…

Why Saving 10% in my 401K Worked for Me

Routinely in my posts I state how I have consistently saved 10% in my 401K and I would like to take a moment to walk through how this was successful for me but may or may not work for you.

1. My Retirement Plan Has Never Changed (Retire at Age 60) – Back in 1987 when I first started saving there was no concept of FI/RE.  At that time, a well-planned early retirement was considered to be age 60 and for extremely successful people it was 55.  I focused on age 60 and never deviated.
2. I was Always Invested Heavily in Stocks – In the early years, 401K plans did not offer a wide array of investments.   My plan had a whopping 6 choices.  I chose to invest 90% into a large cap growth Fund and 10% into a bond fund.  Once a year I would rebalance to keep the 90/10 ratio.  As the years progressed my 401K expanded their investment options, and I was told more than once I should diversify into more investments.  I really did not care for spreading out my funds and liked the simplicity of the two-fund portfolio.
3. I Never Withdrew Money – This one is self-explanatory.  Regardless of how financially in trouble we were at times I never once withdrew a dollar. I also forced myself to fix my financial problems through other means like cutting expenses, working over-time, or taking on part-time jobs.  To me my 401K money was for one thing and one thing only, it was not a personal piggy bank.
4. I Had Time on My Side – The most powerful reason why saving 10% was successful can be boiled down to time in the market.

Here is a graphic from a July 2020 Fidelity article that shows the recommend savings rate at different ages.  The graphic depicts the earliest age of 25 with a 15% savings rate and that is where my advantage comes into play.  I started saving 10% at age 19, I had a 6-year advantage!

source: https://www.fidelity.com/viewpoints/retirement/how-much-money-should-I-save

I wish I had saved all my annual 401K statements but alas I did not.  However, I was able to recreate my portfolio performance thanks to Portfolio Visualizer which had the two mutual funds I invested in starting from 1987 and was able to chart from the end of 1987 to the end of 2015 (I took my 401K rollover in Jan 2016). 

When I first started my career, I was making a $15,000/year plus whatever over-time they would throw my way.  Putting this in context, it would be closer to $34,000/year in today’s dollars.  But heck I did not care back then, I was 19 with money in my pocket to burn.  So even starting out with a small salary I was still able to build a sizeable balance (~$400K) by the time I rolled it over and the average annual return was 9.76%.    At this growth rate, I was on a path towards $1.3M by age 60 without adding any additional funds.

However, saving 10% was not the best for me or my family either.  As a young adult I greatly underappreciated the cost of life and in particular family life. 

When I first started saving, I thought all I needed was a 401K, a little bit of emergency cash, and a down payment for a house.  The rest I spent on fun. The reality of my lack of planning for life events set-in when my wife left the workforce to raise our children full-time.  I was unprepared financially to support 3 children and a wife on just one salary and it started a slow spiral into debt which we did not climb out of until my wife returned to the workforce in 2017.

Looking back, I wasted a lot of money on having fun during my single and early marriage years.  If I had to do it again, I would have kept the 10% 401K contribution and I should have been also saving another 20% in a brokerage account for life’s little needs for a total savings rate of 30% and dialed it down to 10-15% after the kids were born.  I obviously cannot go back in time so all I can do is chalk it up to experience.

Buys and Sells for the Week 12/18

The Dow & S&P 500 refuses to go back below 30,000 and 3,650 . Absolutely amazing the market has kept it’s momentum for a month. With few opportunities available here are my trades for the week:

1. AbbVie Inc. (ABBV) – increased position –  This buy is part of my efforts to increase my overall dividend payout in the second month of a quarter which is considerably lower than the other months. Grabbed 3 shares at $102.66 and a 5.06% yield
2. Ventas Inc. (VTR) – sold position – I bought this during the market crash in March but at the time could only afford to buy $250 worth. VTR since has slightly more than doubled and being such a small position I sold out and collected $561 (plus $9 in dividends). Luckily this trade was in my IRA so it did not trigger a taxable event.
3. WP Carey Inc. (WPC) – increased position – Using the funds from my VTR sale I reinvested back into old reliable WPC. Late Friday the stock price came back down below $70 a share so it was an opportune moment.

Buys and Sells for the Week 12/11

Markets continue to hold onto their gains making dividends expensive. The few bargains available I already have a full position in so no need to buy more. Until things cool off I am content to just keep adding money to my brokerage and build up some dry powder. Here is my only trade for the week:

1. OGE Energy Corp (OGE) – increased position –  13 years of dividend growth and a 5% yield. I decided to just finish this one off and have a full position and bought 27 shares to top off my investment.

Buys and Sells for the Week 12/4

Markets just keep inching higher and higher and another week of light trading for me as stocks on my watchlist stayed well outside my buy zones. Until things cool off I am content to just keep adding money to my brokerage and build up some dry powder. Here is my only trade for the week:

1. Oil-Dri Corporation of America (ODC) – increased position – For a brief moment on Monday the stock price dropped to the upper end of my buy range and I picked up 6 shares. ODC has grown their dividend for 18 years, a debt to equity ratio of 7% and I nabbed a 3.0% yield.