This is the last dividend update for 2018 and I’m in awe of the market having made history every day in the last week of December. Never has the market dropped this much in a single day since the Great Depression. Never has the market gone negative on Christmas eve. And never has the market gained 1,000 points in one day.
Volatile just doesn’t seem to be enough to describe the market anymore. But as stocks continue to be erratic, I’m happy to report my very stable dividend earnings for 2018.
My dividend goal for 2018 was simple: earn four times more than the $43.21 I earned in 2017 and own a position in seven companies. My goal number was $200 and I needed to purchase two new companies.
While I didn’t set the highest bar for myself, it was still touch and go for a minute. I managed to achieve both goals with a last-minute purchase of shares in PEG and BAC. Then an unexpected dividend increase from SEP officially put me over the $200 mark in dividend earnings for the year.
My dividend portfolio was relatively stable throughout 2017 with one exception. In August ENB (Enbridge) announced the purchase of my favorite and only MLP (Master Limited Partnership) SEP (Spectra Energy Partners). Turns out the government made some big changes to the tax laws that didn’t favor MLP’s, which forced the pipeline industry to consolidate. How did I make out in the deal?
Pros:
ENB is a solid company that’s been around since 1949 and is one of the largest energy transporters that continues to grow itself through acquisitions like SEP. ENB agreed to approximately 1.11 shares of ENB for every share of SEP stock. Having 30 shares of SEP, I ended up with 34 shares of ENB when the merger/buyout was complete.
Cons:
My biggest concern, of course, was the dividend. SEP paid me $0.73/share which was great considering the stock fluctuated between $33 and $36/share. ENB’s current dividend is $0.55/share but they have a nice history of increases and the company currently trades between $29 and $32 a share. The last con and probably the worst as far as I’m concerned is that ENB has suspended the DRIP (Dividend Reinvestment Plan) until the legal work behind the acquisition is complete. Until then, the dividends are sent to my cash account instead of automatically being reinvested to purchase additional shares.
To sum it all up, SEP is now ENB and I have four additional shares after the buyout. The dividend payment per share is lower but the company has a strong history of growth and stability. The lower price of the ENB stock will allow me to easily makeup for the lower dividend with the purchase of additional shares, which I will do early in the first quarter.
A look at my final numbers 2018 and 2017
It took half the year for me to get into a flow of consistent buying since I’m not able to put the purchases on automatic. But once I got disciplined with regular purchases, I started seeing results almost immediately with a jump from $13.60 to $26.25 in one quarter. Being able to see results so quickly is the beauty of dividend investing. The results were motivating and gave me the momentum I needed in the second half of the year to finish with two all-time dividend highs in both August ($43.70) and ($53.30) in November.
At this point in the build I’m trying to make sure each stock purchase is in a different sector and that each stock I purchase checks all my boxes (I’ll talk about my boxes in another post). I’m being patient, still learning and doing a lot of homework on the stocks that I add to my portfolio.
When the market began dropping in November and when the bottom dropped out in December, I didn’t have a care in the world. I don’t say this out of arrogance, I say this because I’m that comfortable with the plan and purpose of my dividend portfolio. I’m not wedded to the rising and falling value of my portfolio. I only care about the streams of income that my portfolio generates…the dividends.
If I need money it just takes the click of a button for my dividends to be sent directly to my checking account. I don’t have to cash in stocks after half the value has been wiped away or wait for them to go back up in value if I really need money. All I need to do is continue to buy quality dividend-paying stocks consistently until I reach the amount I want my portfolio to produce for me. And if the value of the stocks in my portfolio happen to go up over time, that’s just a plus.
2019 goals:
Because I’m determined to keep things simple, my goals this year are to:
- Significantly increase the number of shares I have in my current holdings: BAC, PEG, SBUX, ENB, T, O and PEG.
- Purchase three, no more than four, new companies
- Triple my dividend earnings, which makes my number $600
Additional Passive Income
Additional passive income streams include interest from Bonds and Cash, which brought in another $338.59 this year. I look forward to the income that I receive from dividends, surpassing the income that I receive from interest because unlike dividends the amount of passive income I receive from interest can change abruptly with CDs being the exception.
Interest rates for savers are tied to the whims of the Federal Government’s desire to raise or lower interest rates and the greedy banking industry. That said, I didn’t have to do anything extra to earn this money and that is what’s most important here. So, I’m not complaining.
Between dividends and interest my passive income for 2018 totaled $550.24, which means I managed to double the passive income I earned over last year.
My greatest hope for the new year is that everyone that reads this blog gets on the path to building wealth and mastering their personal economy.
-Copper to Cotton
