November Dividend Update

"Image courtesy of Master isolated images  / FreeDigitalPhotos.net".

“Image courtesy of Master isolated images / FreeDigitalPhotos.net”.

I have now received all the dividends from my share holdings for November, and again I have received more money than I did for the same month last year.

In November 2013 I was paid £332.00 from the shares in my SIPP and £69.92 from the shares in my ISA, which was a total of £401.92. This November I have received a total of £485.07, which is an increase of 20.69%, this is made up of £409.45 in my SIPP (an increase of 23.33%) and £75.62 in my ISA (an increase of 8.15%).

COMPANYSIPPISATOTAL
£409.45£75.62£485.07
Aviva£146.25£20.53£166.78
PHP£195.00£55.09£250.09
Thorpe FW£114.70£0.00£114.70
Account Charge-£46.50£0.00-£46.50

I have achieved this increase mainly from increased dividends (some of the increase is due to a reduction in the account charges levied by my SIPP provider), and although one of my holdings has paid a special dividend in November the increase in my regular dividends is still 4.45% which easily beats the current level of inflation so has given me an increase in real terms.

One of the fun parts of dividend investing is seeing the steady flow of dividend income into your account (I will be paid 67 times in 2014 and this number will increase in 2015 due to the addition of new holdings in my SIPP and ISA), which of course is 55 more than the number of times I get paid by my employer, and although the payments are nowhere near the amount I do receive as a salary, I will have received more than £500 in two months in 2014 (and came close to £500 in another 4 months).

Although I will not post the dividend values for December until they have been received, I already know how much they will be as all the companies have passed their ex-dividend dates, and this year I will receive a total dividend income of over £5,000 (approx. $7,750), which is probably about a quarter of the total I calculate I will probably need to earn to achieve Financial Independence. This may sound like I am still some way short of FI, but I do have two company pensions which will pay me an income, and we are planning on downsizing our home to free up some capital, which will bring me to around 80% of the total income I should need.

I hope these posts do show how regularly saving and investing into high quality dividend paying companies and then re-investing the dividends as they are paid, can accumulate to a point where you earn sufficient to be able to live without the need of working (and bear in mind I was 43 when I started saving into my SIPP, so anyone who can start in their twenties or thirties should easily be able to achieve FI long before the UK state retirement age.

 

10 thoughts on “November Dividend Update

  1. Huw

    Hi FIUK,

    I never get bored of seeing YOY increases in dividend payments from fellow Bloggers. A 20%+ increase is a substantial amount too. I like the fact that your increase is based on the dividends going up, and involve no additional work on your part after your initial investment.

    £5,000 in a year is very impressive. This would represent half of the amount I need to cover my expenses. Thank you for sharing the numbers as I, and I’m sure many others, find it very motivating!

    All the best
    Huw

    Reply
    1. Financial Independence UK Post author

      Hi Huw

      I don’t get fed up of seeing YOY increases either, and like yourself, the part I enjoy most is the increase I receive without having to add extra cash, truly passive investing.

      I am glad my blog is motivating, and hope you reach your FI by your target date (lucky you, as that would be at least 17 years earlier than I could achieve, just shows the benefit of starting early)

      Best Wishes
      FI UK

      Reply
  2. Dividend Mantra

    FI UK,

    Impressive numbers, my friend. Excellent work!

    £5,000 in dividend income this year is fantastic.

    I didn’t understand, however, why the chart shows £416.87 in dividend income, but you state you earned £485.07. Is there something missing?

    Keep up the great work!

    Best regards.

    Reply
    1. Financial Independence UK Post author

      Thanks for dropping by and commenting, it’s always a compliment when a blogger like yourself drops by and comments.

      Thanks for pointing out the error in my chart, I have corrected it now (formula error, and I had missed the account charge).

      Look forward to continuing to follow your progress, and nice to see you buying companies that I also own.

      Best Wishes
      FI UK

      Reply
  3. weenie

    Hi FI UK
    I love how you said that you will be paid 55 times more than you would get paid by your employer – what a great advert to get into DI! 🙂

    Great work in getting your total income to £5k, a fantastic achievement. Like you say, it doesn’t sound like much (although it is!) but with your company pensions as part of your plan, it will be enough!

    Although DI will only ultimately form a small part of my investment portfolio, I really enjoy following your updates and progress.

    Reply
    1. Financial Independence UK Post author

      Hi Weenie

      I love the 55 more paydays than working too 🙂

      £5k isn’t a huge amount, but it’s a great step on the way, and with my pensions and house equity, I am getting close to FI, oh how I look forward to leaving the wage slavery (please let it be before my current, totally ineffective and useless, so called manager leaves).

      Hope you can find a way to find out the value of your final salary pension. I am lucky as my deferred pension is online and will give an estimated transfer value, and I was amazed that for a pension that will pay me approx. £7k per year the transfer value is currently £117k! If I could get my SIPP provider to take a transfer from a final salary pension, I would seriously consider doing so, as I would love the flexibility of choosing to do how and when I could take the money from it (and it wouldn’t be all at once and wasted) as I think the pension companies are very conservative with their layouts.

      Best Wishes
      FI UK

      Reply
      1. weenie

        Hi FI UK
        My pension is online too, just no transfer value! However, I’m very unlikely to transfer it as I think I would like the security of some guaranteed income. It means I can be a little bit more creative with the rest of my savings/investments!

        Reply
        1. Financial Independence UK Post author

          Hi Weenie

          I am not sure I would actually transfer if it was possible, I would have to think long and hard before I did.

          As you say it has security so is pretty good, but there is always the nagging thought in my mind that the return on £117k would currently be around £5.5k, and if I re-invested this for the next 10 years (pension pays out at 65), I would probably be beating the £7k that my pension will pay.

          Best Wishes

          Reply
  4. Alberto

    Hi Fiuk,

    I’ve just started reading your posts. Great stuff.
    I started investing in stocks few years back. Lot of small caps which would go up 10% in one day and loose the same percentage the following day.
    At some point I started to build a portfolio focussing on dividend stocks and my life as investor has changed.
    Now I don’t have to check my stocks every 2 hours and I know my assets will increase in value, slowly but constantly.
    I was wondering if you could share your view on stock brokers you use to invest.
    I can see your reinvesting your dividends but most of the stock brokers I’ve found here in Uk do not allow you to do that.

    Best wishes,

    Alberto

    Reply
    1. Financial Independence UK Post author

      Hi Alberto

      Thank you for reading my blog, and your kind comments.

      When I started my investing it was in the same manner as yourself, looking for capital gains, and ignoring the interest, however after I failed to become immediately rich I started to look for shares that paid dividends, not necessarily high yield at first, but have slowly moved to what I believe are high yielding quality companies, and now I am receiving over £5,000 a year (and increasing).

      I have to own up to still checking my stocks through the day, just in case one of them does something incredible, but I don’t let this change my long term approach (I haven’t sold anything since November last year), but have bought on several occasions.

      As regards the dividend re-investing I use Barclays Stockbrokers who do provide this facility, the only small downside is that you can only apply re-investment to a whole account, not individually by company. If you do automatically re-invest the minimum commission is £1, so the costs are not ridiculous.

      I hope this information has been useful, and that you continue to enjoy my posts.

      Best Wishes

      Reply

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