Freedom Fund Update – February 2012

Well, the time has come to update the Freedom Fund once again as we start another month. The Freedom Fund is my portfolio, and I think it’s aptly named. My portfolio is my way to freedom; freedom from working at a job I don’t enjoy to purchase goods I don’t need to impress neighbors I don’t care about.

I feel extremely fortunate and thankful that I’m able to post these updates every single month which shows the power of monthly contributions to investments because of the high savings rate I maintain. It shows how a relatively large sum of money can be built through the power of time, patience and perseverance. 

The market correction I figured was just around the corner has not yet come to pass. The S&P 500 is up 4.36% since the beginning of the year, which is a pretty strong performance considering the markets ended the year on a pretty strong run. Because I lack the ability to forecast the future, I don’t base my purchases on what I think is going to happen. I continue to purchase attractive equities every single month, as evidenced by my latest purchases. That’s just part of my dividend mantra. I like to build my dividend growth machine one month at a time.

I made a few changes to the Freedom Fund since the last update. I purchased shares with Philip Morris International (PM), which is now my largest holding. I also purchased shares with Norfolk Southern Corp. (NSC), a new holding of mine. I look forward to the dividends and dividend growth that these two holdings will provide my fund.

The current market value of the Freedom Fund now stands at $57,730.84. This is a large increase since my last published value of $54,852.73. This increase is due to my recent purchases with fresh capital, as well as dividends received. The strong markets have also helped push the value of the fund up.

I’m currently invested in 24 positions. This is an increase since last month, when I was invested in 23 positions. This increase is due to a new position I opened in NSC.

Another fantastic month, and another month where I can sit back and realize how fortunate I am to continue to be employed in a down economy and contribute fresh capital toward investments. At a time when some people are struggling to put food on the table, I’m lucky enough to be able to save 60%+ of my net income and invest the difference. I’m fully aware of that, and extremely thankful. I’m starting off the year fantastically, but I am hoping for a market correction. Although that would bring the value of my fund down, it would provide me better entry points for future investments. I’ll keep my fingers crossed.

How are your portfolios doing?

Thanks for reading.

Comments

  1. says

    DM Nice job man! You are making some crazy progress and with a year under your belt already this year should be even better.

    I’ve followed your blog since you started last year and visit the site frequently. I’ve enjoyed watching the progress and seeing how a real person actually executes his strategy. We frequent some of the same sites as well, ERE, seeking alpha to name a few. Although I admire your openess and discipline it is what you demonstrate in this post that is most impressive: gratitude.

    We all come from different experiences and means, but we all should step back from time to time to consider how lucky we are to pursue investing at all. We are truly blessed. Thanks for reminding of that this morning.

    It was largely from your example that I was motivated to begin my own blog just a little over a week ago. It revolves around my own thoughts of investing. I look forward to bouncing some ideas off of you in the coming year.

    “ExpatERE”

    • says

      ExpatERE,

      Thanks for continuing to follow my journey. Your support is much appreciated. I’m glad to see you started your own blog. I’m looking forward to following your thoughts and progress. I’m really glad that I’ve provided some inspiration to you. I really wish you nothing but the best!

      I agree with what you’re saying. It’s definitely important to step back from time to time and have a little perspective. There are a lot of people struggling out there, and I’m really grateful to be in the position I’m in. A few bad breaks could come my way and put me in a really bad spot. Sometimes we’re all just a few bad breaks away from disaster, so I’m really thankful to be in a good position in life.

      Best of luck with the blog, and I’m looking forward to following. Take care.

  2. says

    Mantra,

    Well done. I too am predicting a market pullback (and mentioned that on my site several days ago). Have you considered active trading at all? Results have been great for me thus far. Take care,

    Dividend Partisan

    • says

      Partisan,

      Thanks for stopping by.

      This is something I’ll probably write about in the future: active trading vs. buy and monitor (hold).

      In the end, I don’t believe my abilities to forecast market trends are strong enough to counter the drawbacks of incurring taxes and trading fees. I believe that a lot of traders and investors alike are making money right now because the market has been on a tear. If the market turns south, it’ll be much more difficult to attain great results.

      Second, and just as important, I’m an investor not a trader. I invest in companies like Philip Morris and Johnson & Johnson because I believe that long-term they’ll continue to make money and share some of that money with me. Trading is just buying something with the hopes that you can quickly unload it to the next sucker down the line at a higher price. That’s simply not a game I’m willing to play. I liken it to gambling.

      Best wishes with your trading though!

  3. Bo says

    Hi,

    Very interesting blog, you inspired me to start saving and investing for my early retirement through dividend growth investing. I’m 21 years old, and my ultimate goal is to be able to retire when I’m 32.

    Your blog gave me some good insights and good tips to help me start my own journey and I’d like to thank you for that. I also picked up some PM shares last monday.

    Good luck in the future, I will be following this.

    Kind regards,

    Bo.

    • says

      Bo,

      Great news there! I’m glad to hear you’re starting at such a young age. Man, if I had started doing what I’m doing at your age I would probably be financially independent right now.

      Keep up the great work and welcome to the world of PM shareholders. It’s a good spot to be in!

      Keep me updated on the progress. I wish you the best.

  4. says

    Hi DM,

    Good job! It looks like 2012 is off to a nice start for you and I hope the rest of the year goes well.

    I would also like a market pullback, but I’m not going to try to predict if or when it might happen. I’ll just stay on the lookout for good investment opportunities and try to invest on a regular basis. After making 4 purchases in the second half of January, I will likely make just one or two purchases in February.

    Best wishes,

    Deedubs

    • says

      Deedubs,

      Thanks buddy! I hope the rest of your 2012 goes well also.

      I feel the same. I hope for a market pullback, but plan to continue my equity purchases as planned either way. It’s like the saying “hope for peace, but plan for war”?

      I went a little heavy in January, just simply due to the fact that I also had such a large cash outlay for my vehicle. We’ll see how things go in Feb. Looking forward to seeing what you buy!

      Take care.

  5. says

    Just wanted to let you know that I enjoy your blog. I found you via Dividend Growth Investor a while back but haven’t posted till now.

    I have mixed thoughts on the early retirement plan. I think you have some really solid ideas, but my biggest holdup is that I would suggest you might want to save a little more than you think you have to for “what ifs.” I’m excited to keep following your journey.

    I hope your fan base helps the AdSense revenue help you hit your goals.

    • says

      The Med Student,

      Glad you’ve been following all along, and glad to see you finally post a comment. I’m happy you enjoy the blog.

      Well, the early retirement plan could go a lot of different ways. Life always has a way of throwing a wrench in even the best laid plans. Keep in mind, though, that even if something happens I can always go back to work, even if it isn’t in the same field as I’m in now…or even making the same amount of money.

      Thanks for the last part of your comment. That would certainly be a great bonus, but so far it hasn’t worked out that way. I think I’m up to $425 in earnings since this blog’s inception. I do it for the fun of it, however.

      Best wishes and please continue to stop by!

  6. Anonymous says

    I agree I am also an investor not a trader. Sometimes you have to learn the hard way. Yours is one of the few blogs that I follow and my only comment is that I think that reporting your year over year monthly increase to your dividend stream would be more meaningful especially as you near “retirement”.

    • Anonymous says

      I agree…it would also be beneficial for those on the fence to see just how incredible the dividend growth is as those reinvested dividends compound.

    • says

      Anonymous 1 and 2,

      Thanks for the comments guys and I appreciate the suggestions. That was actually something I planned on implementing, but you beat me to the punch. 2011 was the first full year I’ve received dividends so now I can accurately keep track of dividend changes from year to year. You’ll see this first year over year change in my upcoming post on January’s dividends.

      Best wishes!

  7. says

    Great progress DM! I do have MO and I’m not complaining! The dividend is nice and the industry is setup in such a way that it is almost impossible for new entrants.

    We had the best Jan in a decade! Looks like we are off to a great start!

    • says

      MoneyCone,

      Thanks for stopping by! I appreciate your support.

      I agree, I’m definitely not complaining about that huge dividend from MO either! January is always a nice month for me in terms of dividends because of my tobacco holdings. Gotta love it!

      January was huge. I’m anxiously awaiting a pullback for better entry points on some of my favorite equities. We’ll see!

      Take care.

  8. says

    Philip Morris Int’l is a great company to own. Emerging markets are where the greatest growth in brand-name tobacco and cigarettes will be, and PM is ideally situated to capture a big chunk of that.

    • says

      farmland,

      I agree. PM is in a wonderful spot to capture a large portion of overseas tobacco profits. I think it’s a solid business, and I’m fine with it being my largest holding right now.

      Best wishes!

  9. says

    You’re absolutely right about being fortunate in this economy. It’s easy to forget good luck. Lately a lot of people close to me haven’t had good fortune at all. My girlfriend was diagnosed with leukemia, she’s only 27. My buddy who graduated college last semester is having trouble finding a good job. One of my subordinates had his debit card number stolen. Being able to save at all, let alone 60%, is a blessing. I hope your good fortune continues, you seem like a good guy.

    • says

      Compounding Income,

      I totally agree. I’m fully aware of my good fortune and not a day goes by that I’m not thankful for that. A small dose of bad luck or misfortune could quickly put me in a bad spot, and life is certainly short.

      I hope that your girlfriend makes it through treatment ok. My best thoughts go out to you and her. All the best!!

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