I don’t pay particular attention to my dividend income since it is so low, but I was inspired the other week when reviewing a client’s file. The individual, a police officer, built a very impressive balance sheet with his wife, an administrative assistant, but I was shocked when I saw the tax return. This couple had almost no discernible non-qualified investment income. Maybe they are super efficient and everything that provides income is held in qualified accounts, but either way it gave me a little inspiration to actually look at my dividend portfolio for a reason other to purchase my monthly lot or two.
An Example of a Dividend Stream Starting to Trickle After Growing
This is one of the smaller of my 20 or so holdings:
It looks like in December of 2011 and January of 2012 I thought that BDX was undervalued. Back then I was only updating my dividend watch lists every 6 or 8 weeks and it was way more important to horde cash then it was to buy stocks. Little did January 2012 Evan know what was ahead of him with the move that is documented on this site, but I digress.
As it can be see, I bought 2 separate lots of 4 shares. Those shares purchased what seems like a life time ago, have provided me with a growing income stream of $3.60, $3.62, $4.01, $4.03 and $4.05. This amount equal approximately 3.2% of my original principal outlay. That number is only likely to increase exponentially if BDX follows the past 40 years and increases its dividends year in and year out regardless of recession or correction.
Makes me wonder if 2022 Evan will still be reaping the dividends of making that tiny investment in 2012?
Not really the point today, but those shares have also increased 36%!
This is a very good story. You start out small, with a few shares, but it is nothing to sneeze at. The 2022, 2032, Evan’s will be very glad you bought BDX and the rest of the dividend paying stocks in your portfolio.
Now, the problem is that the kids and grandkids of 2062 might end up getting too spoiled living off the dividends from their trust funds.. But you can worry about that later…
I am really bad about not paying attention to dividends. My husband pays much closer attention and sadly I get lazy, but I trust him implicitly and it is more his thing. I take care of other areas of our financial life together, so I guess it works out. I do sometimes feel like I should show more interest, but not because I don’t trust his judgment.
I love dividend stocks too. Those quarterly payments seem insignificant at first but if you keep reinvesting them they can really grow into a viable income stream.