One thing that never hit me about dividend growth investing versus income investing was the raises you get throughout the year. Solid companies that have been paying out and raising dividends for 25 to 50 years tend to continue doing so. I mean I understood it on a cursory level, but I didn’t really intuit it – I didn’t feel it.
I’ve seen a few increases with O (Realty Income) since I opened a position with them. And they were nice, but they weren’t very noticeable. But with JNJ (Johnson & Johnson) recently giving a 4.2% increase in their dividend payout with an average increase or raise of 6.1% annually, it really hits different. PG (Proctor & Gamble) did the same with a 7% increase in their dividend payout. CL (Colgate) gave me a 4.2% increase back in March. ADM even gave me a raise back in January despite the financial reporting issues they were facing. An 11.11% raise in fact.
I’m really starting to feel these increases. The time I’m putting in is increasing my understanding of and helping to further develop my income portfolio ideas – a mix of dividend stocks, funds, CEFs, and bonds. Some will continue to payout, but remain flat, others will grow and hopefully make up for any losses. I still haven’t gotten into managing tax efficiency, but I haven’t made enough to worry about it yet.
I’m going to continue my two-pronged approach of investing in monthly payers that I believe are solid, but also invest more in quarterly payers that have a long history of paying and increasing dividends.