My First $100K
I started keeping track of my portfolio upon finishing school. My chart begins in Q3 2011 with a brokerage account (including cash) worth $14,929. Through a combination of saving, investing in dividend paying stocks, reinvesting those dividends, and, in large part, to a roaring bull market, my account hit a total of $102,050 on July 23rd, 2014. (This final figure includes brokerage account, Roth IRA, options trading account, and cash in investment accounts.) By Q3 2013, my account reached over $50,000 and less than a year later was over $100,000.
It finally seems like I’m beginning to hit the point where things are starting to snowball. (Dividend Mantra just wrote a great post about that!) What I mean by snowball is that as the account size increases, the amount of dividends increases along with it. Each subsequent dividend increase then contributes even more.
It is a self-sustaining machine that keeps fueling itself to grow bigger. How TV pundits can say this isn’t an exciting way to invest, I’ll never know!
At this moment my forward 12-month dividends is estimated at $2574. That means I could count on nearly a guaranteed $214/month on average without adding any new investments. Easily enough to pay for utilities, Internet access, laundry, etc. Additionally, the high quality companies that I’m investing in will most likely continue to raise their dividends. For example, so far in 2014, 14 out of 20 companies have increases (and I expect those last couple to raise them later this year!). As of today, I’m receiving an additional $136 in annual dividends simply due to these increases. That’s the equivalent of adding over $4500 in fresh capital at a 3% dividend yield!
To understand the power of dividends, just imagine what would happen to that snowball if you choose to continue to add more capital, reinvest those dividends, AND have those nice annual dividend increases?!