Passive Income – 6 months into the dividend investing experiment

Greetings my upwardly mobile friends,

A few months back, I revealed that I had begun an experiment in dividend investing as a means of generating passive income. As of today, I’m 6 months into the experiment and ready to reveal some findings.

Why dividend investing? I’m extremely busy with a full time career and parenting an infant. A side hustle would not be worth it from a financial perspective and I’m not willing to trade more time for money at a lower rate of return. That pretty much left some form of investing for me. I chose dividend investing because it met my goal of passive income without the huge capital requirements involved in real estate.

I started a new job earlier this year and they do not have a 401k plan set up yet. As I didn’t want to squander the money from my paycheck that usually goes to 401k contributions, and as I’m already dedicating a minimum of $3,500/month on student loan payments, that basically meant I have $900/month in after tax money to put into the experiment.

I started my experiment in early April of this year. I put in a couple thousand as seed money and took advantage ofSchwab’s sign up promo and received a free $100 for investing $1,000. I started investing $900/month, and investing cash back rewards from my cash back cards… and then my motivated streak kicked in and I started finding new ways to cut our expenses and invest more. 6 months in and the portfolio is ~$14,500. I’m now dedicating a minimum of $1300/month toward the portfolio. By the time my new job has a 401k in January 2019, I’ll have paid off my student loans and I’ll be able to use the freed up cash to max out my 401k and increase my investments into this project too.

But… none of this is what you care about. You want to know how the portfolio has done. My investments into PFF PGX SCHD and SPYD have yielded $224.49 in dividends since starting in April of this year. I’ve actually seen a few hundred dollars in appreciation in share values in SCHD and SPYD as well. September was the best month yet and brought in $102.20 in dividend income. That’s $40 more than the last quarterly dividend that I received in June. On a monthly payout basis, PGX is bringing me at least $25 each month. It’s close to buying two full shares every month. If I don’t add anything else, I can look forward to receiving $300+/year from PGX alone.

I think this is a success story so far. I think I will continue this experiment. At a minimum, it’s been hugely motivating me to save more so that I can grow the dividends. I’m a fan.