This is the Captain speaking with my feathery companion Norry to discuss finance!
Welcome to another month of money (and life)…and other things!
-Why are we posting? Everyone knows the answer is 42.
No no no, that’s the answer to “life, the universe, and everything.”
Our blog is about “money (and life)… and other things!” It’s in the tagline.
-We have a tagline?
Yes we have a tagline, it’s up…over…left….WHERE IS THE TAGLINE???
-Should these people really be coming to you for advice?
Probably not, I hope they come to be entertained at least. I gotta figure out how to put the tagline up…
BUT I shall not fix that today! Today we shall be talking about dividend income!
-What the heck is dividend income?
When companies on the stock market make a profit, they can choose to share it with the stock holders. For every share in the company you own, you get a share of the profits. That’s a dividend!
I currently own stock in 28 companies that provide dividends, and all of them grant the dividends at different times of the year. Some are quarterly, others annually, and the pay dates vary all over the place!
This is good though because it means every month of the year I get free money from the companies I have shares with!
Yup! I didn’t clock in at any of these companies, no overtime, no work at all. Just by being a shareholder, I get a piece of the profits.
-You had to pay for the shares you fish stick.
True, but I can pull that money at any time. Once paid out, the company can’t get it’s dividend back. It’s mine to do as I please.
-Dare I ask what you do with it?
Reinvest of course! The more money I have invested with a company, the more money I can get in dividends. The more money I get in dividends, the more I have invested with the company! Its a mutually beneficial cycle of increased net worth.
-All right, I’m starting to get interested. So how much free money did you get last month?
I earned $37.67 in dividends for September 2015!!
Hey now! This is my highest month so far! It may seem a little low to you my feathered friend, but that is still a potential lunch completely paid for by multiple companies.
Here’s the breakdown:
BHP Billiton PLC (BBL): $7.71
BP PLC (BP): $3.47
Conoco Phillips (COP): $2.75
Chevron Corp (CVX): $2.58
Digital Reality Trist Inc (DLR): $3.17
International Business Machines Corp (IBM): $1.85
Johnson and Johnson (JNJ): $1.89
McDonalds Corp (MCD): $2.20
Pepsico Inc (PEP): $1.86
Praxair Inc (PX): $1.43
Royal Dutch Shell PLC (RDS/A): $3.81
Target Corp (TGT): $1.63
Walmart Stores Inc (WMT): $1.59
Exxon Mobile Corp (XOM): $2.06
-I thought you said you own shares in 28 companies? Only 14 are listed here!
Yup, only 14 of the companies paid out dividends last month, which is the most I’ve seen so far. This month I’m expecting dividends from only 5 companies.
ALSO, every single year, the companies increase their dividend amounts. This means that even if I stopped investing now (which I wouldn’t), my dividends would still increase over time. That is very cool!
-It’d be cooler if you were making 1,000 doubloons per month instead of just 37.
Give it time Norry! I’ve only started dividend investing this year. My goal is to try to get my dividend income up to 36,000 doubloons a year so I can retire. That’s 3,000 doubloons every month that I don’t have to work for! That will be very cool indeed.
To reach this goal, I am putting 250 doubloons a month (plus all earned dividends) into my account every month. Once I purchase a house and/or have a little extra pocket money, I will increase this to 500 or even 1000 a month to really get things rolling!
In order to get 36,000 doubloons yearly, I will need to have about 1,200,000 doubloons invested.
-That’s a lot of doubloons! What do you have invested right now?
-…umm…you appear to be just a little bit low…
Again, I have just started. I look forward to seeing how my account will grow over the next few years!
Well, that’s all I have for today. You have any other comments Norry?
-You should invest in worms.
I shall keep that in mind.
Until next time, avast ye scoundrels!
Photo Credit: (c) Dim Dimich