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The impact of dividend increases – 2018

The impact of dividend increases of my Vrijheid Fonds in 2018

The last couple of weeks I posted a number of post on my website about the dividend increases my Vrijheid Fonds has received. I’ve done this also in the whole of 2018. With every dividend increase, I receive extra dividend for which I didn’t have to do a thing. You can even say that it is free money. And who doesn’t love free money!

 

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But how much free money did I earn with my Vrijheid Fonds in 2018?

Well, let’s take a look at the dividend increases in 2018 and their impact on my Vrijheid Fonds.

 

Dividend increases are great

My ultimo goal is to live of my passive income from my Vrijheid Fonds. And If I finally reach this stage, it is of great importance that my income will increase over time to beat the increase in cost of goods/living. In other words, my income needs to be growing with at least the rate of inflation.

And that is where the dividend increase will come in handy ;-). So actually, at this moment I’m not only investing for my current income but also for my future income.

Well let’s take a look at one of the companies of my Vrijheid Fonds. Ahold Delhaize (AD.AS) increased its dividend with a little bit more than 10% back in April 2018. This 10% dividend increase beats the rate of inflation, which has been around 2% over the last 10 years here in Europe. So with this increase I have no decline in purchasing power.

Or as the Dividend Diplomats say perfectly: Buying a dividend income stock, that increases their dividend every year, not only pays you a solid rate or income each year, but they also increase their dividend in a way that outpaces or should outpace the increase in costs/prices or “inflation”.

 

My dividend increases

In this post I’ll list all my dividend increases for 2018, the rate of increase, the impact and finally I’ll show you how much money I received for free. In the table you can see the impact of every individual dividend increase of my Vrijheid Fonds.

 

Month Ticker Increase  Impact
JAN BEN 15,00%  4,33
O 0,20%  0,36
T 2,00%  2,89
FEB OHI 1,50%  4,01
O 3,10%  6,51
MAR AFL 15,60%  4,59
ADM 4,70%  1,69
CVX 3,70%  3,93
BBL 28,00%  9,93
APR KO 5,40%  4,35
WMT 2,00%  0,93
SOUHY 14,06%  0,88
AD.AS 10,50%  21,22
O 0,20%  0,37
MAY PG 4,00%  1,95
JUN SO 3,40%  2,75
UN 8,00%  18,00
JNJ 7,10%  5,68
JUL O 0,20%  0,26
SEP TGT 3,20%  2,02
BBL 14,55%  8,21
OCT O 0,20%  0,52
DEC MSFT 9,50%  3,72
MCD 15,00%  2,30

Table 1. Impact of dividend increases 2018

 

So in 2018 I received a total of € 111.40 of free money due to dividend increases. Yes you read it correctly, I’ve been collecting € 111.40 extra free money.

Based on my dividend income, at year-end of 2017 (€3,081.16), this is an extra 3.60%!! Amazing, 3.6% extra just by doing nothing.

Lets take a look at from another point of view. In order to earn this €111.40 as dividend income, based on a 3.58% average weighted dividend yield of my Vrijheid Fonds, I would have to invest almost €3,110 in fresh capital.

This is great, earning extra money, just by doing nothing! Who doesn’t want this?!

 

Finally

As you can see above, not every dividend increase is huge, but when added together they provide a nice extra income just by doing nothing. This is why I love every increase, how big or small they are.

And that is why I’m using dividend growth investing as my primary investing strategy. But I must warn you; dividend growth investing is not easy, it takes endurance, discipline and hard work. It is a specific style of investing that focuses on finding high quality businesses that have the ability to increase dividend payments year after year. It is also very fun and rewarding, with a nice community that is always helpful. And who doesn’t like free money 😉

Did you have dividend increases last year?  Do you use dividend growth investing?  I like to hear from you!

Cheers,

Pollie

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