The year 2019 is off to a great financial start in two important ways: dividends and salary. It is nice to see both going up. As of mid-March, my portfolio is set to generate $9,562 in dividend income over the next 12 months. That averages out to $796 per month. On the opposite end of the coin, last month I received my largest pay raise ever at work. The raise totaled $5,583. After taxes, this raise added about $350 to my total working income each month spread across two paychecks. This, of course, caused me to re-evaluate things a bit. After all, new income means new options (and opportunities) are opened.
This raise came at a good time. Particularly because I have noticed an increase in living expenses over the course of 2018. This will alleviate those expenses for now and provide me with addition income to deploy elsewhere. Part of that new income will go into building up my emergency fund. With the other part, I plan on making some additional stock purchases. Either I will make larger purchases, build up my position on stocks I already own, or buy new stocks altogether. So, my ultimate plan is to divide that new income up between savings and investing.
Since I started working at my job 2 years and 2 months ago, I received at total of 3 raises amounting to a $7,116 total increase to my working salary. Not too bad. Then there are dividend raises. One of the greatest aspects about dividend growth investing are those dividend increases. Last year was the first and only year I ever tracked how much my dividend increases amounted to. For 2018, dividend increases amounted to an additional $427.64 added to my dividend income. That is money from raises I didn’t have to work for or put in an ounce of labor for.
This also highlights the major difference between pay raises and dividend raises. In order for me to experience the benefits of pay raises, I have to physically show up and work for it. With dividends raises, I don’t have to lift a finger or do any kind of physical labor. I could spend a week sitting at home doing absolutely nothing and still receive dividend raises and collect dividend income. That is the beauty of passive income. With dividends your money works for you. But with salaries, you work for your money.
With DGI investing the snowball will grow bigger and bigger on its own. I have learned never to underestimate the snowball. Eventually, dividend raises will someday match (and surpass) the raises from my working income, without me actually working. The ultimate goal of financial independence will be a wonderful accomplishment. The first quarter of the year is almost over, how are your financial plans progressing? Let me know in the comments below!
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