Why did I start this journey?

It has been a great journey so far!

Just 15 months ago, I did not know anything about DGI.
Of course I knew about stocks, but I thought the only way to make money on the market is to know which stocks will be at a higher price tomorrow than they are today. However, I did not find myself capable enough to find such stocks. As I have learned recently, this is not because I am stupid, but because nobody in the entire world knows.

Fortunately I came across DGI. This strategy enables you to make a profit without relying on rising stock prices, basically without doing anything. It opened my eyes and I really have to thank bloggers like Dividend Mantra, Captain Dividend, DivHut, DivGro and Roadmap to Retire, amongst many others for this insight!

Just knowing about the strategy was not enough reason for me to start the journey.
At the time I was very disappointed in all the major banks in The Netherlands. The average interest you would get at a standard savings account was 1.4% to 1.2%. With inflation taken into account, I was just losing money, instead of gaining some.

This was how it all started.
My primary goal was to beat the 1.25% interest rate I received in June 2014.

So, let's see what happened with the interest rate after June 2014.

Interest rate of a standard internet savings account at the largest bank of The Netherlands.

Ouch! Down 0.45% to 0.80% at this moment.

What would the bank have net me in interest?
In order to determine what the bank would have paid me in interest if I kept my money at the savings account, I calculated the balance of each month and added the according interest rate to it.
The bank would have paid me a total of €108.80 in interest over the past 14 months.

The power of DGI
Meanwhile I invested in 14 solid companies. From June 2014 to September 2015, they paid me a total of $484.04 in dividends. Unfortunately we have to deduct 15% because of tax, meaning a net total of $411.43 was received. This is the equivalent of €367.27.

Kaboom! The blue chip companies I invested in, paid me 3.38 times as much as the bank would have done. Amazing.. I would not have thought that this simple strategy could be this successful.

Keep at it and I'm sure you will beat your local bank as well!

Thanks for reading.

Dividend Income - September 2015

September was an amazing month for me.
Another record is broken! The power of compounding is starting to show off.

Dividend income

CVX $10.70
TGT $15.68
JNJ $12.00
AFL $7.41
MCD $9.35
QCOM $6.24
TROW $6.24

Total September: $67.62 (pre tax)

Comparison with last year (gross)
September 2014: $13.08
September 2015: $67.62

This is a 517% increase!
Let's see if we are able to maintain that percentage in 2016.. ;-)

In order to achieve the annual $300 of net dividends, I should have received $225 by now.
The total net dividends of 2015 are currently at $268.05, so we are ahead of our goal. Looks like I could set a goal for >$100 in one month, somewhere in 2016. That would be a very appealing milestone to look forward to!

How was your September?
Thanks for reading!

Recent buy - September 2015

Looking at my current holdings, we see a reasonable balanced breakdown of sectors I'm invested in.

Those who are familiar with the sectors used in David Fish' CCC list, might miss 2 sectors.
You are right! I am not yet invested in any company related to the Materials or Utilities sector.

Keeping my portfolio diversified is one of my main goals. This is why I was specifically looking for opportunities in these sectors. However, I did not find many great looking quality stocks here. During my research I came across ALB, SYT and CMP as potential purchases, but they didn't make the cut for different reasons. If theres anyone who might have a good suggestion, please let me know down below.

The next best thing was adding a position to either Information Tech, Energy or Industry.
This is where I found Caterpillar.

Caterpillar Inc (CAT)
Buy 12 shares @ $73.75 at 9/8/2015

Caterpillar is a huge company that manufactures mining and heavy industrial equipment. It is founded in 1930 and has grown to be the largest company in their business.

Most of their segments, like mining, energy & transportation and resource industries are depended on natural resources. This is why their profits are not steadily growing, but making pretty big swings instead. In Q2 2015 they suffered a 13% decline in revenues, compared to Q2 2014, as indicated by the comparison below.

Source: CAT Q2 2015 earnings release

Growth
The company has been raising their dividends for 22 consecutive years.

Their growth over the years has been amazing. As with many other companies, I wish I knew about this company about 25 years ago. If you would have invested $1,000 in CAT at 8/31/1990, it would have been worth $13,823 right now. (source)
Of course, this is just hypothetical, as people probably did not have the ability to for see the future, back in 1990.

However, recent growth numbers are still double digits.

DGR-1, 11.1%
DGR-3, 13.0%
DGR-5, 9.1%

Yield & competitors
The yield of 4.03% is well above the sector average of 2.06% (all industry contenders).

Valuation
With a payout ratio of almost 53%, the payout of future dividends should be maintainable.
With a forward P/E of just 13.11, it sure looks like we get some value for money.

The Coca Cola Company (KO)
Buy 1 share @ $38.76 at 9/8/2015

This is an addition to my existing holding, because I had a little bit of money left in my account.
KO goes ex dividend tomorrow.

What do you think of these purchases?

Thanks for reading!

Dividend Income - August 2015

August was a great month. As a matter of fact, it was my best month ever!
This is very exciting to me. I did not expect to have $50+ months within just 14 months.
I'm loving this and I hope to break records many more times!

It was the first time I received dividends from OHI (wow!) & KMI.

T - $23.03
PG - $8.62
OHI - $18.15
KMI - $9.20

Total August (gross): $59.11

Total dividends received in 2015: $210.57 (net)

My 2015 goal for dividends is to receive a net total of $300 of them.
Currently, I received an average of $26.32 per month.

If this continues, we are passing the goal!
Thanks to August, our expectation changed from failing to passing. Great news!

Comparison with last year
July 2014: $32.79
July 2015: $59.11

This is a 80.26% increase.
This is where the true power of compounding and steadily investing with fresh capital kicks in!
I'm very happy to see this is possible, even with a small income.

How was your August?

Thanks for reading.

Dividend income - July 2015

July was an OK month.
2 of the 13 companies I am currently invested in, paid me their dividends.

It was the first time I received dividends from GE.

KO - $13.53
GE - $9.20
Total July (gross): $22.73
Total dividends received in 2015: $160.33 (net)

My 2015 goal for dividends is to receive a net total of $300 of them.
We are 7 months deep in the year, meaning I averaged $22.90 per month.

If this continues, we are failing the goal!
However, August & December should be great months, so I still have confidence I could reach the goal.

The most interesting part to me, is the ability to start comparing to the result of last year.
I have been looking forward to this!

July 2014: $22.08
July 2015: $22.73

This is a 2.94% increase.
Last year my broker paid AT&T dividends in July. That's why the difference is not too big.
Looking forward to August!

How was your July?

Thanks for reading.

Dividend raises - July 2015

The bread and butter of the DGI strategy are the raises you receive over time.

Dividends itself are a great way to earn some money, but increasing dividends are amazing.
Especially if you consider the effort you have to put in, to get those raises: none!

My blog is only 13 months old and I have had the pleasure of receiving several raises.
This month is no exception.

Target Corp (TGT)
On June 9th, TGT increased their quarterly dividend from $0.52 to $0.56.
This is a 7.69% increase! I wish my employer would give me the same..

This increases my YOC from 3.55% to 3.82%.

Kinder Morgan Inc (KMI)
On July 15th, KMI increased their quarterly dividend from $0.48 to $0.49.
This is a 1.85% increase. One penny doesn't seem to be much, but every penny counts!

This increases my YOC from 5.52% to 5.63%.

Omega Healthcare Inc (OHI)
Also on July 15th, OHI declared a $0.55 dividend. This is also a 1.85% increase.

This increases my YOC from 6.09% to 6.20%.

Pretty nice YOC's if you'd ask me. Definitely happy with that.

Did you receive any raises recently?

Thanks for reading!

Recent buy - July 2015 (2)

Recently, I put some fresh capital to work!

Kinder Morgan Inc.
Buy 19 shares @ $34.79 at 7/25/2015

Kinder Morgan Inc is the fourth largest energy company in the US.
They transport and store petroleum on a very large scale.

From an investor point of view, this is one of the few non-Aristocrats I added to the portfolio.
Their current dividend increasing streak is only 4 years, but according to David Fish' CCC list, they are a former Contender.

We have seen recent declines in all Energy related stocks.
CVX, down 16% since I bought it, last September.
HP, down 45% in the same period.
XOM, down 20%.

This does not worry me at all.
We cannot time the market and we have to treat it as opportunities to average down.
I will definitely try to do so with CVX, if their decline continues.

On the bright side: my yield on cost on this KMI purchase starts at an amazing 5.52%.
Theres more good news, as KMI could transfer and store other products as well. For example natural gas. This should maintain a very nice income stream in the future.

DGR-1, 9%
DGR-3, 31.9%
DGR-5, n/a

The yield of 5.00% is below the sector average of 5.45%, but I'd take a 5% yield any day.

What do you think of this purchase?

Thanks for reading!