Freedom Through Dividend Investing: An Update

Sometimes when I’m flying back to Nashville, I can’t help but notice the other weathered business travelers, slouched over in their chairs, eyes glued to their cell phone screens. They look exhausted. Exhausted in a way that doesn’t occur from just a few nights’ lack of sleep.

As I contemplate how often they’re required to travel, I simultaneously wonder what kind of life is waiting for them at home. Are they well-compensated for their long work days? Do they have a family wishing that they were around more often?

Working like this really isn’t sustainable long term. At least, not for me. And part of what motivates me to invest is the desire to create more balanced life for my future self.

A Commitment To Saving

The only way to ensure that a specific amount of money is saved each month is to transfer that amount out of my checking account as soon as I am paid. I consistently pay myself at approximately 7:00 AM, the morning of the 15th, before there’s time to consider another way to allocate the funds.

If I go over budget that month, I’m borrowing money from the excess cash that sits in my checking account; If I mess with my monthly investment, I’m forfeiting future passive income.

Saving at least $1,458 per month this year hasn’t always been easy and there are constantly temptations to overspend. Like on an expensive therapist, taking an extravagant 30th birthday trip, or splurging on a fancy gym membership.

Are my sacrifices paying off? Let’s have a look:

Screen Shot 2014-06-15 at 6.55.02 PM

In March, I earned $57.46 in dividends from my two Vanguard funds. If I receive a similar payout over the next three quarters, I’ll have $229.84 at the end of the year.

That’s $229.84 that I’ve earned without lifting a finger!

I’ve since purchased 45 shares of Coca-Cola (KO) and 58 shares of Kinder Morgan, Inc. (KMI). This month, I’m planning to purchase 54 shares of General Electric (GE).

All three of these badass companies will pay me quarterly dividends, so with each investment I make, I’m steadily growing my passive income. My day job, maintaining my house, this blog, and my basement Airbnb listing all require varying amounts of work. Work requires time and energy, resources that are finite.

Passive income provides freedom by replenishing these resources, freeing them for other, and presumably, more important things.

Readers: What motivates you to invest?

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Discussions — 55 Responses

  • Income Surfer June 16, 2014 on 12:47 pm

    Good for you Addison. You’re making progress. “A journey of 1000 miles starts with a single step!”
    -Bryan

    Reply
    • Addison Cash Income Surfer June 19, 2014 on 3:21 pm

      Thanks for the continued encouragement, Bryan!

      Reply
  • Roadmap2Retire June 16, 2014 on 12:55 pm

    Congrats on getting started with the passive income. Once the dividends start rolling it, its easier to build up on them and compound your returns.

    Best wishes
    R2R

    Reply
    • Addison Cash Roadmap2Retire June 19, 2014 on 3:22 pm

      I should be seeing a dividend payout by the end of this month. I’m more than a little excited!

      Reply
  • Natalie @ Financegirl June 16, 2014 on 1:42 pm

    I’m all about creating passive income streams! Personally, my student loan debt motivates me to create more income and invest.

    Reply
    • Addison Cash Natalie @ Financegirl June 19, 2014 on 3:23 pm

      That’s a great motivation, Natalie! I think it’s smart to diversify income like that.

      Reply
  • Mr. Frugalwoods June 16, 2014 on 1:55 pm

    Are you investing in your tax advantaged accounts? If you have a high income it can be nice to shield your dividend portion of your portfolio in an IRA.

    While I’m still working I’m keeping my taxable account in a normal total market index fund. Once I’m not making a large income I plan to transition to a heavier focus on dividends.

    Reply
    • Addison Cash Mr. Frugalwoods June 19, 2014 on 3:25 pm

      Unfortunately, my company doesn’t offer a 401(k), however, I do have a Roth IRA. I’ve maxed it out for 2014 with the purchase index funds.

      Reply
  • Tonya@Budget and the Beach June 16, 2014 on 1:55 pm

    Nice job! I think it’s like you said, making money without lifting a finger. We are all so pressed for time and sure we can all run out and get second jobs, but we would be like those exhausted businessmen. With my garage sale I have even more room on the shelves so I’m thinking about asking my renters of the garage if they want the shelf space for $15 more than they are paying. That way I give them the option. Hey can’t hurt right?

    Reply
    • Tonya@Budget and the Beach Tonya@Budget and the Beach June 16, 2014 on 9:57 pm

      An update: I texted my renter and said I had shelf space available for $20 more per month if he was interested and he said yes! Yeeeh-haw!

      Reply
      • Addison Cash Tonya@Budget and the Beach June 19, 2014 on 3:26 pm

        Woah, amazing! You work fast 🙂

        Reply
  • E.M. June 16, 2014 on 3:38 pm

    Nice work! I haven’t been investing heavily as I’m more focused on my student loans, but I do plan on studying up on dividend stocks once they are paid off. I think it’s worth the initial investment. Who doesn’t like making money without having to do anything?

    Reply
    • Addison Cash E.M. June 19, 2014 on 3:30 pm

      Agreed, E.M. I think it’s smart to focus on paying down your debt first.

      Reply
  • Kurt @ Money Counselor June 16, 2014 on 3:49 pm

    I love dividends, and I’ve been fascinated by interest since I first got a passbook savings account when I was probably 6 years old. Someone will give me money for doing nothing?!? Sign me up! 🙂

    Reply
    • Addison Cash Kurt @ Money Counselor June 19, 2014 on 3:31 pm

      Me too, Kurt! I remember getting super excited about small amounts of interest at an early age.

      Reply
  • Nicola June 16, 2014 on 4:24 pm

    I’m all for income streams that don’t require you to do anything! You’ve made a great start 🙂

    Reply
    • Addison Cash Nicola June 19, 2014 on 3:33 pm

      Thanks for the encouragement, Nicola! I really appreciate it.

      Reply
  • Mel @ brokeGIRLrich June 16, 2014 on 6:32 pm

    You’re so right about transferring the money out immediately. I get paid weekly, so the first paycheck of the month goes right into my IRA. When that’s maxed out, I plan to try to buy $1000 of stock. Anything left will go into my emergency savings.

    The second paycheck of the month is spending money and the third and fourth are rent and utilities. But if I hesitate on transferring that first month’s paycheck into savings, it disappears before I even realize it.

    Reply
    • Addison Cash Mel @ brokeGIRLrich June 19, 2014 on 3:34 pm

      Great strategy, Mel. You’re way ahead of most people.

      Reply
  • Shannon McLay June 16, 2014 on 8:18 pm

    Awesome results! Great job staying motivated! Looking forward to see your outcome of these new purchases!

    Reply
    • Addison Cash Shannon McLay June 19, 2014 on 3:35 pm

      Thanks, Shannon. I am too!

      Reply
  • Kassandra June 16, 2014 on 8:20 pm

    Good work Addison! I like you, don’t like to see money sitting idle in a bank account when it can do more being invested.
    I am also starting to see my dividends increase quite a bit and it makes me smile lol.

    Reply
    • Addison Cash Kassandra June 19, 2014 on 3:36 pm

      Thanks, Kassandra. Doesn’t it feel great? Extra money for nothing!

      Reply
  • Lauren June 16, 2014 on 8:27 pm

    It’s great that you make it a priority, no matter what. Gotta be exciting to earn those dividends without having to think about it too much.

    Reply
    • Addison Cash Lauren June 19, 2014 on 3:37 pm

      Absolutely, Lauren. Paying myself first is extremely important. I’m looking forward to seeing the dividend payments start to add up!

      Reply
  • Dividend Mantra June 17, 2014 on 2:59 am

    Addison,

    Great stuff!

    I’m obviously a big fan of dividend income, and as you note this passive income comes your way with no work on your part. Making one great decision in your life to invest in a high-quality company can pay you rising income for the rest of your years with no additional work necessary. How cool is that?

    Financial freedom via passive dividend income is definitely attainable, even on a modest salary. And I’m going to prove it. 🙂

    Keep it up!!

    Best wishes.

    Reply
    • Addison Cash Dividend Mantra June 19, 2014 on 3:38 pm

      Thanks for commenting, Jason. As you know, your journey has been an inspiration to me!

      Reply
  • DivHut June 17, 2014 on 7:42 am

    The number one motivation for investing is the ability to achieve as much passive income as possible for the future. As generic and cliche as it sounds it’s what drives me to make stock purchases every month in good times and bad. Your dividend stocks will take care of you down the road as you take care of them now by always reinvesting your dividends and by adding fresh cash every time you can to accelerate the compounding effects. Thanks for sharing!

    Reply
    • Addison Cash DivHut June 19, 2014 on 3:39 pm

      Thanks for sharing your motivation, DivHunt. I’m investing for the future, as well. I know I won’t be able to work this hard forever!

      Reply
  • Holly@ClubThrifty June 17, 2014 on 11:55 am

    I think I have the same Vanguard Dividend fund as you but I’d have to check. I’m all about earning money with very little effort. I think you’re doing great!

    Reply
    • Addison Cash Holly@ClubThrifty June 19, 2014 on 3:41 pm

      Thanks, Holly. I love the minimal expenses of my Vanguard funds. More money for less work is where it’s at 🙂

      Reply
  • Bee @ The Budgets and the Bees June 18, 2014 on 12:29 am

    I love Vanguard. I know I know, everyone loves Vanguard, but they just make it so easy. Passive dividend income is great – you get some instant gratification to keep you going and your money just grows and grows. Great job!

    Reply
    • Addison Cash Bee @ The Budgets and the Bees June 19, 2014 on 3:41 pm

      I’m a big fan of Vanguard and their index funds. It makes it easy for people with minimal investing knowledge (like myself). Thanks for reading and commenting, Bee!

      Reply
  • EL @ Moneywatch101 June 18, 2014 on 6:42 pm

    Thats a great start I believe I own one of the vanguard funds you own as well. That savings rate will def. get you financial freedom sooner than most people. Keep at it.

    Reply
    • Addison Cash EL @ Moneywatch101 June 19, 2014 on 3:42 pm

      Thanks, EL. I’d love to eventually save 50% of my gross income. 20% just isn’t enough to reach my goals.

      Reply
  • Mr. SFZ June 18, 2014 on 8:51 pm

    Good work Addison! Nothing better than getting paid just because you are a part owner of a high-quality business. I do the same thing as far as saving money each month by transferring everything out of my checking on the 1st and 15th of each month except for what I need to spend per my budget. Makes it easy to stay on track.

    Best wishes,
    SFZ

    Reply
    • Addison Cash Mr. SFZ June 19, 2014 on 3:43 pm

      Thanks for sharing, Mr. SFZ. I really enjoy transferring the money each month. It always gives me a sense of accomplishment.

      Reply
  • FI Fighter June 19, 2014 on 5:22 am

    Awesome stuff! Great job saving and you gotta love the dividends… The growth becomes addicting and the returns will manifest in no time… I’m so thankful I bought a ton of shares during the recession between 2009-2012.

    Happy investing!

    Reply
    • Addison Cash FI Fighter June 19, 2014 on 3:44 pm

      Wow, amazing! I wish that I had been savvy back then, but I’m ready for the next market correction 🙂

      Reply
  • brian June 19, 2014 on 7:20 pm

    Awesome Addison….get going at it. I know you can get that dividend income mark over the $1,000 mark in short order!

    If your looking for more stock ideas, you should give STAG a look. I gave a quick rundown of them in my latest buy of my portfolio. They pay a dividend monthly, so you get that warm feeling of money coming your way every 30 days 🙂

    Long Term Brian

    Reply
    • Addison Cash brian June 20, 2014 on 3:34 pm

      Thanks, Brian! I’ll definitely look into that. I appreciate the tip!

      Reply
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  • Passive Income Mavericks June 21, 2014 on 7:38 pm

    Good work Addison! A small step of dividend income, but a giant step forward, my friend.

    Keep it up!

    Reply
    • Addison Cash Passive Income Mavericks June 21, 2014 on 10:18 pm

      Thanks, buddy! I’m feeling optimistic for future growth.

      Reply
  • A Frugal Family's Journey June 21, 2014 on 10:05 pm

    Way to go Addison! It may be only $57 this month, but years from now, you’ll look back and be thankful for all the sacrifice and investment you are doing today. Keep it up!

    To growing that passive income…Best Wishes! AFFJ

    Reply
    • Addison Cash A Frugal Family's Journey June 21, 2014 on 10:17 pm

      Thanks so much for the encouragement! I’m definitely looking forward to future growth!

      Reply
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  • Allan June 28, 2014 on 1:15 am

    Addison,

    I like your intro :

    “I can’t help but notice the other weathered business travelers, slouched over in their chairs, eyes glued to their cell phone screens. They look exhausted. Exhausted in a way that doesn’t occur from just a few nights’ lack of sleep.”

    Well said! I feel the same. I recently wrote a post comparing “workers” to zombies… I sometimes feel I’m surrounded by zombies and slowly becoming one… Scary feeling! 😉

    You did great so far. Saving 1500$ per month is far from easy. I preferred increasing my salaried income over cutting too much on expenses to make it easier… I guess I’m a lazy guy lol

    Keep going!

    Reply
    • Addison Cash Allan June 28, 2014 on 1:41 am

      Thanks for the kind words, Allan! There’s only so far one can cut back on expenses if they really want to save. Working to increase your salary is a smart move!

      Reply
  • Evan July 2, 2014 on 6:46 pm

    It wasn’t until a few months ago that I thought about tracking my dividend income:

    http://www.myjourneytomillions.com/articles/tracking-dividend-income-last-years/

    Creating that chart has completely re-motivated me!

    Reply
    • Addison Cash Evan July 2, 2014 on 7:35 pm

      Neat! I’ll have to check that out.

      Reply
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