Monthly Income Update – December 2023

Dear Readers,

I wanted to wish y’all a Very Happy New Year! I hope you had time to enjoy the holidays with your family, friends and loved ones, and are now looking forward to 2024.

December for me and my family has been eventful. After recovering from the after effects of COVID, we used the last few days of the year to take care of some important projects around the house. This kept us really busy for the most part. However, in between all that, we took some time to chill out and take a bit of breather.

I really did not have a chance to pay much attention to the portfolio or the market. This worked out well because most of the market was green during the entirety of this time, which meant no real buying opportunities. One of the notifications though caught my eye. This was regarding the $15/share special dividend announcement by Costco. I have written at length about Costco in my deep-dive analysis post on that company. This is a well-run company with so many distinct growth drivers. It will be interesting to see how Costco goes from here with the now former CEO Craig Jelinek stepping down and replaced by the former COO.

In any case, I celebrated Costco’s special dividend by visiting Costco for some shopping and then was surprised to run into this:

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A post shared by Costco Buys (@costcobuys)

My wife and I absolutely LOVE Black Forest cakes and I could not control my joy when I discovered that my local Costco was carrying them. We got them home and to our pleasant surprise the taste was very very close to the Black Forest cakes that my wife and I grew up eating during our childhood.

What a way to celebrate the end of 2023 and start of the new year! 🙂

Anyway, let us get into the numbers for how the portfolio fared during the final year of 2023.

Dividend Income Received

AFLAC : $21.86
Duke Energy : $24.29
The Home Depot: $41.01
Johnson & Johnson: $90.57
Lockheed Martin: $67.73
Microchip: $11.91
Microsoft: $41.75
NextEra Energy: $16.55
Snap-On Inc.: $28.49
The Southern Company : $13.57
Target : $54.13
T. Rowe Price Group : $133.22
United Healthcare: $22.81
Union Pacific Corp. : $28.97
Visa: $20.33
Whirlpool Corp. : $76.57
Waste Management : $2.13
Exxon Mobil : $4.03
SCHD: $239.13
Realty Income: $42.50
STAG Industrial: $4.16

Total: $985.71

So a total of $985.71 was contributed by 21 companies/ETFs. There was no additional income through option trading for this month. This was a record total for the portfolio where it crossed into the $900-mark for monthly dividend income and very nearly touching the $1000-mark.

The above graph shows the monthly income trends for the last four years. From some very humble beginnings in the year 2020, this portfolio is now a juggernaut in terms of generating passive income through dividends.

The total dividend income for the calendar year ended up at $5314.16, falling short of the $6000 goal I had set for myself at the start of this year. While not meeting a goal is never ideal, I was aware that $6000 for this year was a stretch goal. And, to be honest, I am actually quite surprised at how the portfolio managed to turn this around especially in light of some companies cutting their dividends (eg. Intel), keeping their dividends flat (eg. Whirlpool) or giving some rather disappointing dividend raises (eg. Clorox).

I am yet to a do a full deep-dive into the portfolio performance for 2023, so I will reserve those thoughts for a future post.

Buys and Sells during this month

Buying activity was at an all time low for this month owing to me being sick during the first half of the month and then busy during the second half.

As far as sells, I sold completely out of JEPI. I had introduced JEPI into my portfolio during late 2021/early 2022 because it was a bet on the market trading sideways. JEPI is ideal for such a scenario because it can provide some downside protection through distributions + investing in defensive stocks by selling upside potential (covered calls protected in ELNs). However, investing in JEPI makes little sense when the market is boomeranging and trading higher. In general, I am happy with the way I timed this trade and I must say I got lucky at both my entry and exit points on this position. However, from my reflections with this experience, I do not think investing in JEPI is a good idea for the long run. While it does generate a high “dividend” (really distribution) income, the performance as far total returns are poor.

Other stuff

My blogging activity over the last few months has been at an all time low as I struggle to find some free time towards this pursuit. Maybe it is a sign that I am working too hard? Not taking a break? Who knows.

I think the early half of 2024 is going to be very busy for our family due to a major life event. So I am expecting my blogging to grind to a halt during that time. I hope to come out with short posts with minor updates. We shall see.

Cheers,

LWD