2023 was the year I graduated twice. Once from my ICT bachelor’s program — cap, gown, diploma. And once as a dividend investor — crossing the threshold from cautious beginner to someone actively building income streams across two continents. Whether that second graduation was wisdom or overconfidence, the results would take time to reveal.
In year one, I earned €22.70. In year two, that jumped to €534. This year: €719.67 — from 13 different companies, across dozens of separate dividend payments. The income machine I’d been building was no longer a concept. It was running.
The Context — Graduation and a Bold Bet on Yield
I graduated before the summer of 2023 with my ICT bachelor’s degree. That milestone gave me more time to focus on my portfolio, and — combined with income from my internship — more capital to deploy.
But looking back honestly, what I mostly deployed that capital into was yield. Pure, aggressive yield. 2023 was the year I went all-in on US Business Development Companies, and it taught me lessons I’m still processing.
The Purchases — Going Deep Into US BDCs
The numbers tell the story. Here’s what I bought in 2023:
February: Prospect Capital (PSEC) — 36 shares at €7.13 — €256.61
April 5: Ares Capital — 23 shares at €16.28 — €374.44
Main Street Capital — 20 shares at €35.28 — €705.60
April 20: Ares Capital — another 19 shares at €16.58 — €315.02
Prospect Capital — another 120 shares at €7.13 — €855.36
That’s over €2,500 invested in a single year, and the vast majority went into three US BDCs. I also expanded my NN Group position and added a few smaller positions throughout the year.
Why BDCs? The answer is embarrassingly simple: the yields were enormous. Prospect Capital was yielding around 10-11%. Ares Capital and Main Street Capital were yielding 9-10%. Coming from a portfolio of Dutch stocks yielding 3-6%, these numbers felt like a cheat code. Monthly or quarterly dividends at double-digit yields? Sign me up.
What I didn’t fully appreciate at the time was that high yields exist for a reason. The market wasn’t being generous — it was pricing in risk. BDCs lend money to mid-sized companies that can’t easily get bank financing. That’s inherently riskier than selling groceries or providing telecom service. The yields reflected that risk. I knew this intellectually, but the dopamine of high-yield purchases has a way of drowning out caution.
The Dividends — €719.67 From 13 Companies
Total dividend income for 2023: €719.67
A 35% increase over year two’s €534. The income was now flowing from 13 different companies — a dramatic expansion from the single KPN payment in year one.
The Dutch Core — Steady and Growing
My Dutch holdings continued to be the reliable backbone of the portfolio, paying in euros with no withholding tax friction.
Shell — €117.62 across 4 quarterly payments. The largest single contributor to my dividend income for the second year running. Shell’s quarterly rhythm created a reliable stream that I could count on every three months.
NN Group — €94.24 across 2 payments. This was a breakout year for NN Group in my portfolio. I’d been building the position, and the progressive dividend policy was delivering. The combination of a growing dividend plus a structural share buyback program makes NN Group one of the more compelling capital return stories on the Amsterdam exchange.
ING Group — €80.47 across 3 payments. ING continued to be a strong income contributor. In a year of higher interest rates, the bank was thriving — exactly the dynamic I’ve since explored in my analysis of how bank dividends work.
Ahold Delhaize — €75.60 across 2 payments. The defensive anchor. While I was busy chasing BDC yields, Ahold Delhaize quietly kept doing what grocery companies do: selling food and paying dividends. It’s the holding that never makes your heart race — and that’s its greatest strength.
KPN — €73.50 across 2 payments. My very first investment, still paying reliably. The 500 shares I’d accumulated over year one and two were now producing meaningful income from a business model — subscription-based telecom — that generates cash with the predictability of a metronome.
Randstad — €54.15 in 1 payment. A large annual dividend from the Dutch staffing company. Cyclical and dependent on the job market, but a solid payer when conditions are decent.
PostNL — €23.22 across 2 payments. The income was declining, and so was my confidence. Falling mail volumes and structural pressure on the business made this feel less like a dividend stock and more like a position showing warning signs.
SBM Offshore — €5.98 and Heijmans — €3.03. Small positions, small contributions.
Dutch total: €562.56
The US BDC Sleeve — The Yield Experiment
This was the year my US positions started contributing meaningfully. The combined US income was approximately €191.87 — roughly 27% of my total dividend income was now coming from across the Atlantic.
Prospect Capital — €72.47 across 9 payments. Monthly dividends at a sky-high yield. The payments felt incredible — money arriving almost every single month just from this one position. But Prospect Capital’s management practices and capital allocation decisions drew criticism from more experienced BDC investors. I was starting to understand that payment frequency and payment quality are two very different things.
Ares Capital — €60.59 across 4 payments. A higher-quality BDC than Prospect Capital, with stronger management and better risk controls. The dividends were consistent and the company felt institutional — more like NN Group’s disciplined capital allocation than Prospect’s more aggressive approach.
Main Street Capital — €55.11 across 16 payments. Main Street pays monthly dividends plus supplemental dividends throughout the year, which is why 16 separate payments landed from a single company. The internally managed structure (no external management fees eating into returns) set it apart from many other BDCs.
Altria Group — €3.70 in 1 payment. A tiny tobacco position, but it opened my eyes to the US dividend aristocrat world — companies with decades-long track records of annual dividend increases.
US total: ~€191.87 (converted to euros)
The Two Philosophies Running in One Portfolio
Year three made something visible that I’d only vaguely sensed before: I was running two completely different strategies inside the same portfolio.
The Dutch core — KPN, Ahold Delhaize, ING, NN Group, Shell — was a dividend growth portfolio. Moderate yields, growing dividends, strong businesses, no withholding tax. Income I could rely on for decades.
The US BDC sleeve — Prospect Capital, Ares Capital, Main Street Capital — was a pure income maximization play. Double-digit yields, frequent payments, but more complex businesses, 15% withholding tax on every payment, and a nagging question about long-term sustainability.
Recognizing this split was a turning point. It helped me understand that portfolio construction isn’t about finding the “best” stocks — it’s about understanding what role each holding plays and whether the overall system is balanced. The Dutch core provided stability and growth. The US sleeve provided yield and payment frequency. Together, they created a diversified income stream — but the balance was tilting heavily toward the high-risk side.
The Honest Reflection — Was the BDC Bet Smart?
Looking back, spending over €2,500 on BDCs in a single year was the most aggressive move I’d made as an investor. It wasn’t necessarily wrong — the companies did pay their dividends — but it revealed a pattern I needed to check: I was letting yield drive my decisions rather than quality.
Prospect Capital yielded 10%+. But the share price was drifting lower, meaning part of my “income” was being offset by capital losses. Ares Capital and Main Street Capital were better businesses, but even their yields came with the 15% US withholding tax haircut that reduced my effective income.
This was my first real, portfolio-scale encounter with the yield trap concept. Not the devastating kind where a company cuts its dividend entirely — but the subtle kind where a high yield slowly bleeds value through share price erosion and tax drag. The dividend payments feel great. The total return tells a different story.
The lesson that was forming: a 4% yield from Ahold Delhaize that grows every year and arrives without withholding tax is likely worth more over 20 years than a 10% yield from a BDC that erodes in value and loses 15% to the US government before it reaches your account.
The Numbers in Perspective
| Metric | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Dividend income | €22.70 | €534 | €719.67 |
| YoY growth | — | +2,254% | +35% |
| Paying companies | 1 | 8 | 13 |
| Cumulative dividends | €22.70 | ~€557 | €1,272 |
Every metric was moving in the right direction. But the most important number isn’t any single year’s income — it’s the trajectory. The flywheel I started pushing in year one with €502 and a nervous click was now generating real momentum. I’d received back over €1,272 in cumulative dividends — roughly 10% of my total invested capital — while still owning every share.
What Year Three Taught Me
Quality Over Yield — The Lesson That Takes Three Years to Learn
In year one, I bought whatever I recognized. In year two, I started reaching for yield. In year three, I went full yield-chaser with the BDC binge. The income grew — no question. But so did the risk and complexity. The beginning of understanding that the best dividend investments aren’t necessarily the highest yielding ones started here.
The Withholding Tax Reality of International Investing
By year three, the US withholding tax was no longer an abstract concept — it was a visible drag on my returns. On approximately €192 in US dividends, roughly €34 was deducted before I received a cent. For Dutch investors, this creates a clear hierarchy: Dutch-listed stocks like KPN, Ahold Delhaize, ING, NN Group, and ASR deliver their dividends without friction. US stocks lose 15%. A 5% Dutch yield often nets you more than a 7% US yield after withholding.
Payment Frequency Is Not a Buy Signal
Receiving dividends almost weekly was psychologically powerful. But I learned that frequency shouldn’t drive decisions. Prospect Capital’s monthly dividend felt wonderful; the underlying business quality was questionable. Main Street Capital also paid monthly but from a much stronger foundation. Same frequency, very different quality. Always evaluate the business first, the payment schedule second.
Graduation Created a Compound Advantage
Finishing my degree and having more time to research companies, read financial statements, and think strategically about portfolio construction accelerated my development as an investor. The combination of more time and more knowledge made me more intentional about every purchase — even if, in hindsight, I should have applied that intentionality to questioning the BDC thesis more rigorously.
Where This Was Heading
At the end of year three, my portfolio was producing roughly €60/month in average dividend income. Not enough to live on. But the trajectory was accelerating. The companies in my portfolio were raising their dividends. I was adding fresh capital. The reinvested dividends were buying more shares.
But the graduation high was about to meet reality. The job search that followed would test my patience — and my portfolio — in ways I didn’t expect. That’s a story for year four.
Read how it started: My First Year of Dividend Investing — €22.70 Received
Read the previous chapter: My Second Year of Dividend Investing — €534 Received
