As 2024 comes to a close, I find myself reflecting on the progress my dividend investing portfolio has achieved. This year was marked by significant milestones: I doubled my dividend income, made strategic decisions that positioned my portfolio for sustained growth, and built a more diversified financial foundation. The journey has been both challenging and rewarding, filled with lessons that highlight the power of consistent investing and forward-thinking strategy. Let’s take a deeper look into my 2024 performance, the insights I’ve gained, and my plans for an even more successful 2025.
Portfolio Performance Overview
This year, my portfolio saw notable growth and delivered steady income. Starting the year with a balance of $276,219, it ended at $324,278, reflecting a gain of $48,059, or a 17.39% increase (22%~ with reinvestment). This performance demonstrates the impact of regular contributions, reinvestment, and a diversified approach to wealth-building.
Dividend Income
One of the most exciting achievements of 2024 was doubling my dividend income. This year, I earned $13,371 in dividends, a 117% increase compared to the $6,156 earned in 2023. This incredible growth underscores the effectiveness of consistent investing and leveraging the power of compounding through the Dividend Reinvestment Plan (DRIP). Over the past five years, since starting in January 2020, I’ve accumulated a total of $22,000 in lifetime dividends—and more than half of this amount came in just the last 12 months.
Portfolio Return
Including DRIP, my portfolio achieved an annual performance of 22%, which, while slightly below the S&P 500’s 25.02%, reflects a robust strategy focused on income generation and steady growth. This approach aligns with my long-term financial goals and is pivotal to my broader plan to retire under the FIRE (Financial Independence, Retire Early) framework. In the next 2-5 years, as I prepare to retire from the military at age 42, I intend to rely on these dividends as a primary source of income. The dream of achieving financial independence and no longer needing to work has both me and my wife incredibly excited about the future.
Passive Income Metrics
As of December 31, 2024, my portfolio generates consistent passive income:
- Annual Passive Income: $14,181
- Monthly Passive Income: $1,181
- Weekly Passive Income: $295
The growing passive income highlights the predictability and scalability of dividend investing, making it an ideal strategy for long-term financial security. Dividend growth investing, in particular, allows for a compounding effect as companies regularly increase their payouts, boosting income without requiring additional capital from the investor. This approach provides both stability and a hedge against inflation, as rising dividends enhance purchasing power over time. By reinvesting these payouts, I’m able to accelerate portfolio growth while building a reliable income stream—a cornerstone of my plan to retire under the FIRE framework. This strategy is key to achieving financial independence, as it offers a sustainable, growing income source that can replace traditional employment. With these dividends, my wife and I can look forward to financial flexibility and the opportunity to fully enjoy early retirement without the stress of active income generation.
Exploring Diversification: Crypto ETFs
This year, I continued to explore diversification through crypto ETFs, which have been both rewarding and challenging. Currently, I have $86,000 invested in crypto-related ETFs, specifically:
- $IBIT (Bitcoin ETF): Up 31.49%
- $ETH (Ethereum ETF): Down 7.33%
While these positions have added volatility to my portfolio, they also present opportunities for significant returns. Looking ahead to 2025, I expect crypto assets to experience a bullish year as their widespread adoption continues to grow. Cryptocurrencies are still in their infancy stages, with increasing recognition and integration into traditional financial systems and industries. This potential for further growth has me optimistic about their performance in the coming year, though careful management of these positions remains crucial to my overall portfolio strategy. As these ETFs approach my target returns—95% for $IBIT and 50% for $ETH—I plan to exit these positions and reallocate the proceeds to more stable dividend-paying investments.
What Are Crypto ETFs?
Crypto ETFs, like $IBIT and $ETH, offer exposure to cryptocurrencies through traditional brokerage accounts. These funds track the performance of Bitcoin and Ethereum, respectively, making them a convenient way to invest in the crypto space without the need to directly hold digital assets. However, the inherent volatility of cryptocurrencies means these funds carry higher risk, requiring careful management within a balanced portfolio.
Top and Bottom Positions of 2024
This year’s top performers and laggards reflect the diversity and resilience of my portfolio:
Top Performers:
- $IBIT: +31.49%
- $VOO (S&P 500 ETF): +27.81%
- $MSFT (Microsoft): +20.88%
Bottom Performers:
- $ETH (Ethereum ETF): −7.33%
- $O (Realty Income): −7.13%
- $QQQM (Nasdaq 100 ETF): +5.35% (added late in the year)
2025 Plans: Strategic Rebalancing
Looking ahead to 2025, my focus will be on strategic rebalancing and accelerating income growth.
Exit Strategy
In the coming year, I plan to:
- Close my $IBIT position when it reaches a 95% return.
- Exit $ETH ETF upon achieving a 50% return.
The proceeds from these sales will be reallocated to three key investments:
- $SCHD (Schwab U.S. Dividend Equity ETF): A reliable growth option.
- $QQQM (Nasdaq 100 ETF): A growth-dividend hybrid.
- $JEPQ (JPMorgan Equity Premium Income ETF): Focused on generating high income.
This reallocation is expected to boost my monthly dividend income by $300-$500, adding an additional $3,600-$6,000 annually to my passive income.
Additional Contributions
2025 will also benefit from increased contributions. My wife’s return to full-time work allows us to channel her earnings directly into our brokerage account, providing a steady and substantial boost to our investment strategy. Additionally, I anticipate a $1,200 monthly pay raise mid-year, significantly enhancing our capacity for regular investments. With these changes, we plan to invest $2,000 to $3,500 each month into our brokerage account.
At an average dividend yield of 3.5%, this level of investment alone could have a significant impact on our passive income. For instance, if we consistently invest $2,000 per month, that translates to an annual contribution of $24,000, generating approximately $840 in annual dividend income. Increasing the monthly contributions to $3,500 would raise the annual investment to $42,000, resulting in roughly $1,470 in annual dividends.
These additional contributions not only grow the principal amount of our portfolio but also create a snowball effect as dividends are reinvested. Over time, the compounding of reinvested dividends and new contributions will dramatically accelerate the growth of our portfolio, bringing us closer to our financial independence goals.
Closing Thoughts
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2024 was a phenomenal year, filled with achievements that solidified the foundation of my dividend investing journey. I doubled my passive income, grew my portfolio by over 22%, and made significant strides in diversification and planning for the future.
As I look forward to 2025, I am excited about the opportunities to further optimize my portfolio, increase my passive income, and continue working toward financial independence. Here’s to another year of growth, learning, and progress in the pursuit of financial freedom.
I’d love to hear how your portfolios performed this year and your plans for the next—share in the comments below!