We are through the first month of 2022. Holy cow, we are off with a bang. The stock market continues to surprise. Between inflation, interest rate hikes, and potential global conflicts, the market continues to swing up and down on a regular basis. Despite the noise and wild swings in the market, the dividend income continues to flow in. That’s the goal of building a growing dividend income stream with companies that have demonstrated their ability to increase their dividend over the long haul. Time to check out my January dividend income summary.
Why I Invest in Dividend Stocks
I invest in dividend stocks to grow my passive income. One day, my dividend income will be large enough to cover my monthly expenses. That is why we are relentlessly searching for undervalued dividend stocks to buy. To put our hard-earned cash to work.
We save a high percentage of our income each month, to help fuel our dividend stock portfolio. Having a high savings rate is a key pillar of our strategy and helps fuel the fire and push the snowball further downhill. While we are waiting to invest our money in the market, it is earning a high-interest rate in accounts such as Yotta (1-2% APY, on average. Although I had over 3% last month).
We use our dividend stock screener with every stock purchase. Our stock screener continues to help us find undervalued dividend stocks to buy. This simple, 3-step stock screener is designed to identify undervalued stocks with a strong payout ratio that have a history of increasing their dividend. Fundamental dividend growth investing at its finest.
Building a large dividend income stream takes time, consistency, hard work, saving, and most importantly, investing. I have been investing in dividend growth stocks since 2012. Saving a high percentage of my dividend income allows me to invest as much as possible, so we can retire as soon as possible.
Slowly, but steadily, my income has grown. Brick by brick. DRIP by DRIP. It is really exciting to see the growth and larger dividend checks trickle into my brokerage account.
Each month, we share our dividend income summaries to highlight our growth and progress. It is a fun and helpful exercise that keeps us accountable. Further, it helps you, our followers, see the stocks we are purchasing.
Bert’s January Dividend Income Summary
In January, we received $ 621.58 in dividend income. This was only a 4.34% year-over-year increase. I’m pumped up with the total income we received, although the percent increase was lower than expected. The devil is in the details though. The following chart summarizes each individual dividend payment we received during the month.
I always like to include a few observations in the remainder of the section about our dividend income, growth, and any trends worth highlighting.
Observation 1: This Was a Pretty “Boring” Month
Last month was filled with companies that paid me for the first time or did not pay me a dividend last year. This month, on the other hand, it was relatively quiet. Only one new company paid me a dividend compared to last year. Thank you very much Dimeco Bank (OTCPK: DIMC). On the other hand, only one dividend stock did not pay this month compared to last year. Luckily, it was just a timing difference with Canadian Imperial (CM). I’ll benefit from that bump next time.
Observation 2: The Power of Dividend Investing is Real
I continue to say it every month. The power of dividend investing is real. Why? The chart proves it. My dividend income was received from nearly all of my holdings due to dividend increases and dividend reinvestment over the year. The small increases for each stock add up over time and really make a difference. $ 3 here. $ 2 there. Throw in 10 more $ 2-4 dividend increases and now you’re talking. This is why we are dividend investors.
The Impact of Dividend Increases
We love dividend increases. We can not say it enough (trust us, if you see our Twitter feed – you know exactly what I’m talking about). Who does not love the feeling of seeing your dividend income grow without lifting a finger? That’s part of the reason why we think dividend investing is the best, and easiest, form of dividend income. That’s why we are always writing about dividend increases and recording videos about the recent dividend increases announced.
Each month, in our dividend income summaries, we demonstrate the impact each dividend increase has on our forward dividend income. The following chart summarizes the impact of each dividend increase:
Bodda Bing. Bodda Boom. Over $ 50 extra in passive income without having to lift a finger. Now that’s what I’m talking about right there. The largest increase came from Norfolk Southern (NSC). The 13.76% dividend increase added over $ 18 in dividend income. The best part is that NSC increases its dividend twice every year. Hopefully, the second dividend increase will be larger than the first one.
That wasn’t it though. Cincinnati Financial (CINF), Archer-Daniels-Midland (ADM), and Intel (INTC) added a nice chunk of change as well. Hey, I can not complain about adding over $ 54 in dividend income without lifting a finger.
Summary: Bert’s January Dividend income
Wow. Here we go. 2022 is starting off with a bang. It was not a record-setting dividend income month. This is what it is all about. Save as much money as you can. Buy income-producing assets. Grow your income stream. Let the power of reinvesting take care of the rest. Seriously everyone, let’s continue to make 2022 count and push ourselves closer to financial freedom.
What was your January dividend income total? How many dividend increases did you receive? Did your January dividend income total crush it compared to last year?
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.