Disclosure: I am not a financial advisor. None of the securities listed in this post should be taken as investment recommendations.
My favorite form of passive income is dividends.
Each month I receive dividends from a combination of stock funds, individual stocks, REIT’s, and interest from my Ally Savings account.
I love this type of income because it requires no effort on my part. After my initial investment I just sit back and watch the dividends roll in each month.
I track these dividends using a simple Excel spreadsheet:
On the left side I have the stock tickers color-coded according to the type of investment.
The pink names are index ETF’s
- VYM = Vanguard High-Dividend Yield ETF
- VDC =Vanguard Consumer Staples ETF
The blue names are individual stocks
- CVS = CVS Pharmacy
- KR = Kroger
The orange names are REITS (real estate investment trusts)
- WPC = W.P. Carey
- OHI = Omega Healthcare Investors
- JCAP = Jernigan Capital
- LADR = Ladder Capital
The purple is my Ally Savings Account, which currently pays 1.25% annually in interest.
Along the top of the spreadsheet I have the months listed.
The green cells represent the dividends I received each month as well as the dividends I expect to receive in the upcoming months. For example, in December I see that I’ll be receiving dividends from VYM, KR, and my Ally Savings account:
The easiest way to find out when these companies expect to pay dividends is by looking up their stock tickers on Nasdaq’s website:
I like to track my dividends in this manner because it lets me see the individual dividend growth of certain investments over time and the total amount of dividends I receive each month.
For example, I received my first dividend payment from CVS back in May for $9.50 and just by reinvesting the dividends I have increased my dividends to $9.62 in November. Over time this number will only continue to grow larger and larger as CVS increases their dividend payments and I continue to reinvest in the company:
Also, I can see that the total dividends I’m receiving each month are increasing over time:
For me, tracking my monthly dividends is an adrenaline rush. It’s exciting to see the numbers increasing each month so rapidly and it’s fun to watch the dividend growth over time. My monthly dividends will continue to grow over time due to:
- Companies I invest in will (hopefully) declare higher dividends
- I will continue to reinvest dividends
- I will continue to make new investments in dividend-paying sources
Ultimately I plan on using dividends as a source of passive income when I eventually quit my day job.
Is dividend investing part of your investment strategy? Do you track monthly dividends? Do you have your own spreadsheet you use to track dividends? I’d love to hear your thoughts 🙂
Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.
Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.
Although the bulk of his net worth is invested in index funds, his favorite place to invest in individual stocks is M1 Finance, a site that allows you to build a custom portfolio of stocks for free.
His favorite way to save money each month on his recurring bills is by using Trim, a free financial app that negotiates lower cable, internet, and phone bills with any provider on your behalf.
His favorite place to find new personal finance articles to read is Collecting Wisdom, a site that collects the best personal finance articles floating around the web on a daily basis.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.