Micro Blog #26: My Dividend Glide Slope

If you have been reading my blog for a while, you probably know I like to make cool graphs to track my investments and dividend income. In the past, I've shared with you my Dividend Radar, a Dividend Paradise, and a Dividend City.

Today, I'm going to show you how to build and use a Dividend Glide Slope to land the target dividends, like an airplane uses a glide slope to land on target a runaway.

The idea is to use a glide slope to graphically track your progress towards meeting your annual dividend target and to see and correct any deviations from the glide path. If you follow the glide path, you are assured to meet or exceed your annual dividend target. I've been using such a glide slope to track my dividends for several years now and love it!


Each year, I set my dividend target lines. These are the two flat lines at the top of the graph. The red flat line is what I call a 10% dividend growth line and what I'm hoping to hit as my target. The dark blue flat line is the baseline dividend target for the year that I must not go below. I usually set the baseline target equal or close to what I made last year in dividends.

The two dotted lines, where the airplane is flying, make up the glide slope. If my monthly dividend payments as indicated by the bright green line stays within the glide slop, I would hit or exceed my annual dividend target. To determine the angle of the glide slope, I simply take the annual dividend target and divide it by 12. That gives me roughly how much I should be making in dividends monthly to hit the annual target.

The other thing I like to do with the graph is track historical dividend growth slopes. These are the two lines with circles in them, just under the animated line. These two lines show me what the dividend growth slope was in the previous two years and provides additional guidance in keeping my current year dividend slope much above the previous year's glide slope. You can track as many previous years as you like, I just do it for the last two years.

Animated Line Shows the Monthly Dividends Paid

Here is what an example spreadsheet looks like for creating such a graph:

Example Data and How To Set it Up

Once the spreadsheet is setup, I only have to update it once a month to enter monthly dividend income and watch the current year dividend graph progress in relation to the preset glide slope. If I see any major deviations in the flight path of my dividends, then I would take necessary measures to correct the flight path to bring the dividend payments inside the glide path.

And finally, at the end of the year, I can see my complete dividend income glide slope while meeting or even exceeding my annual dividend target flat line. Isn't that cool or what? Ha!

A complete graph at the end of the year


I hope, now you can build your own glide slope to track your dividend payments fly like an airplane, while ensuring they meet your annual dividend target.

Comments

  1. Hi Mr. ATM, Cool graphics aside (which they are) the basic principles are very solid. It's like building an annual revenue plan at a business. Set targets, understand the drivers to reach the target, execute, monitor progress and adjust as necessary. It is the essence of why I like dividend stock investing. The investor is in control. Capital gains are much less predictable, at least for me. Tom

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    1. Well said Tom! And why we like to invest in dividend paying stocks.

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  2. Wouldn't be a Mr. ATM graphic without some sort of animation. I am in the process of revamping my portfolio/ dividend income pages to include some cool dashboard metrics, but haven't gotten around to it yet. This graph is perfect for tracking progress toward yearly goals. Nice work.

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    Replies
    1. You got that right Daze! Though, I had to scale it down a bit on animation this time as it takes too much time and effort. But still it's a fun way to get a point across.

      Looking forward to seeing your upgrades to your dashboard metrics.

      Thanks!

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  3. I love these posts! Which Boeing model is that plane? :)

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    1. Thanks DS. It's a Boeing 737 :) I don't do Airbus, just for the record ;)

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  4. As always, your graphics are so awesome! This is really what makes me read every one of your posts.

    Keep up with the Good work.

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    1. Thank you very much. Reading comments like yours is how I get paid to write these blogs and why I'm still writing. Thanks again!!!

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  5. BRO! Sick! Another post I have to include in my blogroll and top3 were you are nr 1

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    1. Very kind of you Stockles. It's an honor to be on your blogroll.

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  6. I've never been really interested in dividend investing (dividend stocks tend to underperform growth stocks). But now that I'm married, I'm thinking of going down this road so that my wife and I have some more financial stability. I don't want anything happening to us from a financial standpoint.

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    1. When we are young, we like excitement and exciting things like owning or driving a sports car. As we get a little older and have a family, we realize we need stability, predictability, and safety in life, and hence we then buy a boring but safe sedan or a mini-van.

      I look at pure growth stocks as the sports cars of the stock market, they can give you a nice thrill for a short period of time but they are also more susceptible to crash and burn, especially if you don't know how to handle them.

      Whereas dividend investing (for the most part) is like driving a Toyota Camry of stocks, it will last you almost forever while giving you safe and predictable returns year after year.

      Of course there are hybrid options too. It all depends on where you are in your life and how much risk you can accept. Both growth and dividend stocks have their place in a portfolio and many dividend stocks can behave like growth stocks.

      I tend to be more of a Toyota Camry kind'a guy and glad I didn't buy that Porsche when I was young. My Camry is almost 20 years old now and still going strong. Ha!

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    2. It's not entirely that. I'm a professional trader, so that I tend to know what I'm doing. But there's no certainty in the markets, and I might have a bad year or two. I can't let me career problems impact my family.

      I think you're right. I never really felt the need for stability before.

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    3. Interesting point of view Troy. Hope to see you more at ATM's forum.

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