Hola Dividend Portfolio
It’s becoming a sort of a ritual that every time I lose money, I create a post named “Hola – something new”. 🙂
Last time, after my algo trading loss, I introduced my net worth as a positive way of continuing the journey. This time it couldn’t be any different.
So far, I have focused the blog mostly on my ISA investments and alternative investment portfolio. The latest is the funniest to track as well as the one that has the change to produce me some income via affiliates and referrals, but it’s also the most time-consuming.
Following my recent decision of reducing the allocation percentage of my alternative investments’ portfolio, brings the fact of increasing my dividend portfolio.
So, I thought I would spend this so British grey rainy and windy Sunday to work on a way to track and share my dividend portfolio transparently, and I think I have come out with something! YAAS!
Table of Contents
Using Google Sheets to Track Dividend Portfolio
The first thing I’ve done is getting myself familiar with Google Sheets. I am not an IT or software engineer guy, so these things take me some time.
After messing around with it, I completely fell in love with the GOOGLEFINANCE function. It allows you to pull data straight from Google finance and paste it on your spreadsheet. And what’s even better, embedding a Google Sheet into WordPress is a piece of cake. This has been shocking to me up to the point of “Why the hell I didn’t know that before?”
Thanks to the work of software engineers, tracking my dividend stock portfolio on the blog using livestock prices is an easy-peasy Japanesey and quick process.
My Dividend Journey So Far
My dividend journey is short, I don’t think I can technically be called a dividend investor just quite yet, albeit my blog has been recently been listed here (#40).
I earned my first dividend back in 2018. At that time, I traded stocks in and out without leveraging, and some of them coincidentally paid dividends.
I’ve used Trading 212 since the beginning. I downloaded the app to initially trade Forex (remember the trading addiction I mentioned here?). The app was in fact originally marketed as a Forex and CDF trading service. Along with these two years, they have enlarged their ETFs and stock list as well as split CDF into a separate account. In the UK you can even open an ISA account.
Then in 2019, joining the FI movement, I disconnected from market news and suddenly my trading ideas were gone. Most of my trades had worked (except First Solar that I still carry today, see data table down below), but it was merely to add some fun to the game, nothing serious.
Why am I taking the Dividend Investing Path Now?
As I continued my blogging experience in 2019, I connected with many dividend investors, you know, real ones I mean! Those who compare their growing dividends over the last 5 years on the same chart.
I jumped all over several dividend blogs quietly, like a ninja :), observed and compared these charts one against the other. Most of them had one thing in common, they showed consistent growth, I barely could find any chart going backwards (like my portfolio basically).
That changed my view of investing. Continuous and consistent growth is what I need. Dividend stocks that have been raising dividend payments over the last 25 years? Oh yeah! Aristocracy… I am all yours!
By saying this I don’t mean that I will dumb all my P2P investments and purchase dividend stocks only, I mean that I will improve my passive income stream stability by diversifying across different asset classes while taking advantages from the UK dividend tax allowance, which is £2000 as per 2019-2020 tax year, more info here.
Considering that I would earn an average dividend of 4%, my dividend portfolio value would have to be above £50,000 before I need to pay any tax on income.
So, as a final personal conclusion, disinvesting from P2P and relocating to dividend stocks improves the safety of my passive income stream whilst avoiding large charges from the taxman, at least temporally.
Ok, enough chit chat.
Are you looking forward to seeing my dividend portfolio? I know you probably aren’t but I am happy if you pretend you are! haha 😛
My Dividend Portfolio
I am running out of time, so excuse me for being short.
So far, my portfolio consists of 8 stocks only, where in fact, only 6 pay a dividend and 3 are aristocrats stocks (JNJ, T and MMM). A long growth journey awaits here, but I am happy to use this a formal introduction of my intentions in regards to my future investments.
I am working on a separate page to display not only my dividend portfolio but also to track dividend payments from all companies. You can have a look here.
Thanks for reading and have a great time 🙂
Tony
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We pay 27% tax on the first dollar of dividends we make (goes up to 42% after you hit £6000. You guys have it so sweet over there! I would be doing the same if we had a £2000 tax free allowance Per year thats for sure! ?
I know, I love this country, hehe 🙂
It used to be even better in 2017-2018, when the dividend allowance was £5000, then reduced to £2000 in 2018-2019.
How much tax do you pay when you get above the allowance?
It depends on your income tax band.
Basic rate earners (myself) pay 7.5% above the £2000, which is still pretty good.
If my taxable income would be over £50k, then I’d be a higher rate earner and would have to pay 32.5% instead.
That’s a big difference.
Hi Tony,
Great to see that your moving into dividends!!
I have a few dividend paying shares that took a back seat through the P2P journey, however I am also looking at identifying some more stocks (through value investing). I have been playing around with some intrinsic values of companies recently, and it seems like everything is priced pretty high.
Do you do some sort of valuation before purchasing your shares? Are you holding some cash inn case the market comes down any time soon?
Matt
Hi Matt,
I haven’t calculated any intrinsic value for my recent purchases. Besides experience and knowledge on the matter, a deep understanding of the business and its risks is required, so any guess on projected shares value I can come with would be pretty much an speculation. I look at some financial ratios of the past ten years of the company. I like to see things as a continuous growth on revenue, earnings per share, a dividend increase, free cash flow, book value growth and right debt levels (especially current assets and liabilities). Besides this, I read motley fool articles and free analysis on Seeking Alpha.
However, I am focused on building a sustainable dividend portfolio, and I am basically looking at dividend aristocrats to start with only (except Disney or some others that I have followed for years). They all look quite expensive but are also high-quality stocks. Some of them are defensive, these are the ones I would like to concentrate my portfolio and I would expect a quicker price recovery in a market crash scenario (we could argue that this is another speculation). Anyway, whatever happens, the idea of having dividends kicking in during any market scenario gives me peace of mind. It’s similar to owning and renting a house, although house price drops -30%, a continuous stream of rental income makes a huge difference over the long term. A good proof to this is REITS and S&P500 Aristocats Index Fund outperforming the S&P500.
Seems like you have got a pretty good grasp of it all. Good thing with the aristocrats, is that their dividends have increased for so long (representing the underlying business increasing as well). Just make sure your always on top of the debt ratios!!
Welcome to the club. Funny fact JNJ was also my first US dividend stock that I bought back in 2017. Kinda to think now that was 3y ago ?
Thanks P2035. Time flies indeed! It makes you realise why time is the most valuable asset we have.
[…] UK I could enjoy from £2,000 of dividend allowance (no tax payment below that amount) as I wrote here. In Spain, the dividend allowance is none existent. Every single cent earned will be taxed at the […]
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