Welcome to My Dividend Report. This Report is dedicated to tracking my quarterly dividend income. Many of you already know I love Growth and Income stocks as a great way to beat inflation while companies pay you to wait while they execute there growth plans. My Goal is to average $5,000/month or $15,000/ quarter in dividend income.
Current Dividend Income
Behind the scenes graph data
Money Sense With Kyle Quarterly Dividend Income
My dividend income is devised of investments in Altria (MO) in the Tobacco Industry and Blackstone Group (BX) in the Asset Management Industry. Blackstone Group current stock price $44.42 and dividend yield 5.0 % (.54/share $2.17/year pays a fluctuating dividend based on company results. Altria's current stock price $47.35 and dividend yield 6.76 % (.80/share $3.20/year) pays a consistent dividend and has raised the dividend 53 times the past 49 years. As you can see in the chart above annual total dividend payout dropped (-15.9%) in 2016 due to Blackstone Group reporting market fluctuations. 2017 and 2018 bounced back at 15.2% and 13.0% increase in total annual income. Also in 2018 Altria raised the dividend twice 6.1% and 14.3% for a total 20.4% dividend increase in 2018 due to the Trump administration corporate tax cuts. Altria's corporate tax rate dropped from 35% down to 21% which freed up a lot of cash to be distributed back to stockholders in the form of dividends and stock buy backs. This is why Growth and Dividend stocks make good Money Sense. I will see you next quarter and report the distribution.
I recommend getting a college education so that you have a good earning potential with a solid company who pays a competitive salary or wage and offers a competitive benefits package including Medical, Dental, Vision, Profit Sharing, 401K with company matching etc. I had worked as a Summer Intern with Cooper Tire & Rubber Company my Junior year of college and had an opportunity for a position after graduation in 1982. I was offered and accepted a competitive Salary starting out in a Quality position. After 6 months on the job I was eligible for 401K Profit Sharing with company matching up to 6% of the amount I contributed of my salary. I started out contributing the 6% of my salary which is what I could afford, and the company matched up to that amount, so I was getting a 12% contribution in my 401K account even though I contributed only 6%. You can’t get that kind of return at any bank. I slowly increased my contribution 2% each year after my progress review and pay increase until I reached 14% in my 25th year. At 6% company matching and 14% contribution I was socking away 20% each year.
What to invest in?
Cooper Tire offered a 401K with a taxable or tax-deferred account based on your contribution level. Over the years I did contribute to both, but the majority was tax-deferred which defers paying taxes on what you contribute to your 401K now but defers it until you retire where you will probably be in a lower tax bracket. Having a small amount in your 401K taxable account made sense as an emergency fund if needed and it was needed. So, you may want to sock some in a taxable account but not required. Do what makes good Money Sense but contribute to a tax-deferred 401K account for the tax benefits of not counting toward your total income but deferring to later years when you retire.
Cooper Tire 401K offered potential investments in cash with interest, money markets, mutual funds domestic and overseas funds, and Cooper Stock itself which was the most aggressive. Since I was 23 years old and had many years to grow my account, I chose Cooper stock because they were doing very well financially and split the stock. The stock had split in 1983, 1988, 1990, and 1992. I was able to start buying Cooper Stock about $12 per share in 1983 and with continuing increased contribution amounts and company matching over the years and three stock splits in ’88, ’90, and ’92 amassed 16,000 + shares of Cooper Tire stock. I would be aggressive investing in the early years and slowly reduce that risk as you get closer to retirement.
After buying Cooper Tire stock for 25 years Cooper Tire and Apollo Tire struck a deal in 2013 and Cooper stock jumped 40%. I sold all my shares and collected approximately $600,000. The deal later fell through and did not happen, but I pulled the trigger at the right time. I had opened an Individual Retirement Account with Vanguard and had the money transferred to Vanguard which can be done online and executed by the trustee between Cooper Tire and Vanguard. I chose Vanguard because they offer the lowest fees for funds and transactions especially if you are an experienced investor. Otherwise, Fidelity, ETRADE, TDAmeritrade etc., offer more analytical, trading tools, and learning tools for the beginning investor.
I took my $600,000 nest egg in June 2013 and after setting up my Vanguard account began to research opportunities to invest in. After a couple of months tracking the stock market on CNBC and online research sources, I chose Altria Group Inc. (MO) in the Consumer Defensive sector, Tobacco Industry, and Blackstone Group L.P. (BX) Financial Services sector, Asset Management Industry. Both investments offer growth and dividends which means you get paid every quarter each year. You can either reinvest the dividends and buy more stock which means more shares and more dividend income or withdraw the dividends to your checking account to supplement your retirement or use the dividend cash account for new investment opportunities.
I invested $457,000 of my $600,000 nest egg in Altria (MO) $325,000 and Blackstone Group (BX) $132,000. After 4 years in June 2017 my Vanguard IRA was over $1,000,000+. That’s approximately a 40% return in Altria (MO) and a 50% return in Blackstone Group (BX) in 4 years. The remaining $143,000 of my original $600,000 nest egg is invested in Solar and Cannabis stocks.
Retirement and Income Streams
After my retirement May 2018, I now have income streams from my IRA Altria (MO) and Blackstone Group (BX) dividends, my pension from Cooper Tire & Rubber Company, my 120-acre Loblolly Pine Tree Farm, and not yet old enough to draw Social Security Income. I currently could draw $70,000 per year from dividends and Pension. I do not live on $70,000 a year but much less, so you don’t have to draw all this income, but you do have to be strategic about it due to the IRS rules, income limits, and tax brackets. The truth is it is as hard to grow and retire on a $1,000,000+, as it is to hang on to it without giving back to Uncle Sam. I plan to take profits from my investments in Solar, Cannabis, and Tree Farm and invest in future income streams.
I plan to use this blog to share my path to financial freedom, teach others, continue to learn and share with others how to save, budget, grow assets, invest, develop income streams and have financial freedom.