Freedom Fund Update – March 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 markets continues a rocket-like ride to new highs. The Dow Jones Industrial Average closed over 13,000 points for the first time in 4 years this past Tuesday. An amazing ride, although one that is not without its gut churning moments as the markets slide up and down. It’s one ride that I’m hoping has a slight dip in its near future. Due to the frothy markets, as well as my diligence in managing it to the best of my ability, my Freedom Fund has now climbed to all-time highs.

I made quite a few changes to the Fund since my last update in early February. I’ve made more moves than usual over the past month, as I believe it’s important to keep an eye on positions and make moves when it’s appropriate. I added to my positions with PepsiCo (PEP) and Norfolk Southern Corp. (NSC) earlier in the month, sold out of my Exxon Mobil Corporation (XOM) position, and initiated positions with Avista Corp. (AVA) and UniSource Energy Corp. (UNS).

The current market value of the Freedom Fund now stands at $62,145.02. This is a very large increase since the last published value of $57,730.84. This increase is due to the added capital at the beginning of the month, with which I purchased PEP and NSC shares, my reinvested dividends and the strength of the markets.

I’m currently invested in 25 positions. This is an increase since last month, where I was invested in 24 positions. This increase is due to the sale of XOM shares, and the new UNS and AVA shares to the portfolio.

I’m extremely excited, proud and elated to post this update for all my readers. My portfolio reached a value exceeding $60,000 much earlier than I had anticipated and I’m far ahead of my schedule to become financially independent by 40 years old. I’m extremely lucky to be employed in an environment that has historically high unemployment rates and making better money than average. I continue to try and manage this good fortune by putting away large amounts of my income for the future, as a form of delayed gratification.

How are your portfolios doing?

Thanks for reading.

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28 Comments

  1. Congrats! I wish mine was at 60k. I’m actually having a hard time finding good dividend stocks to buy that are priced right. I did pick up some PEP this month but still have a good amount of cash waiting. I’ve been thinking of maybe getting some MMM but I keep expecting to see a dip and its not happening..

  2. Congrats on reaching the $60K mark. I’m looking forward to $50K, which I should be able to reach in about two months. I’m glad to hear you’re ahead of schedule on your journey to financial independence. Keep up the good work!

  3. Keep up the great work DM! The snowball effect is really snowing with this update. Btw, how long did it take you accumulate $60+k?

  4. Well done! I have to apologize if you have already addressed this in your blog posts (I have not read the blog beginning to end yet) but how do you find your stocks that you invest in? What books did you read or classes did you take to learn about how to value stocks and find those that are under valued?

  5. Damn! Nice update DM. That is a nice increase in a month. You’re doing a great job. Keep at it and you will be retired before 40! That has to be a nice feeling.

  6. Wow, doesn’t it feel nice to be ahead of schedule? Way to go! I love your FF Updates, I can just tell your excitement and it’s contagious, in a good way.

  7. CONGRATS DM!! I love your blog and it is always so exciting to read!

    I wish you all the best and keep up the good work!

    My portfolio has started 2012 in a good way as well and I will post an update tomorrow.

    Take care!

  8. Congratulation DM. It is good to see that you are successfully working your way to Financial freedom.

    Bill

  9. 60,000? That’s awesome. I am trailing you a bit (a very big bit). I am waiting like you for the markets to drop before I make anymore buys. Hopefully it is not too long before I can post my investment updates without it being needless. With such a low total the month to month changes do not amount to much.

  10. 60K, I’m a long way behind you at 19K. I’m taking a beating with: ANR,X,F,MFC, and SNC. I hope there are better days ahead.

  11. Investment Road to Freedom,

    Thanks. It was a big month. I’m surprised I got here as fast as I did. I guess the next step is $100k from here. Hitting almost $1k in savings for a month is huge, especially in an economic environment of high unemployment and low growth.

    Best wishes for your March!

  12. officeark,

    Thanks!

    It’s definitely hard to find value in the market right now. I think PEP offers pretty solid value, and one of the few blue chips to do so right now. It has been trending below the market for a couple years and except for a short spike to $70 has generally trended between $60-65. I hope it stays that way for a while because I’ll continue to build my position for the long-term.

    I’m waiting for the dip as well, but in the mean time I continue to scan the horizon for a small value and I’ll buy when I find it. If you sit on the beach waiting for the perfect wave, you might not ever get wet.

    Take care!

  13. deedubs,

    Thanks buddy. We’re providing each other mutual inspiration.

    You’re right behind me and I’m sure we’ll continue to achieve similar levels of success as we both try to find value and save large portions of our income.

    Keep up the good work on your end, and I’m looking forward to what you buy in March.

    Best wishes.

  14. Henry,

    Thanks. I’m certainly trying my best.

    I started investing in March of 2010 with about $7k. So, it took me almost exactly 2 years to go from $7k to $62k.

    Hopefully I can continue on that level of success and increase it as my dividends grow.

    Keep in touch!

  15. The Kechi One,

    I wish I could point you in the direction of great investing books, but to be honest I haven’t really read any from “cover to cover”. I’ve scanned a few books about Warren Buffett, I read parts of Josh Peters’s book, and I took bits and pieces of other books when I first started, but to be honest I kind of jumped in head first. I read a few blogs and found Seeking Alpha pretty early on. I then fairly quickly dumped almost every dollar I had into my Scottrade account and started buying stocks. When I received my first dividend payout I thought “this could work”. I’ve been doing the same thing ever since.

    I guess I’m a bit “self-taught”. The only book I really read all the way through was “Your Money Or Your Life”. It’s not an investment book per se, but it’s all about achieving financial independence. I highly recommend it. As far as investing goes, I believe that you can read all the books in the world but at the end of the day you just have to get your feet wet and learn as you go. We all make mistakes. It’s just important to note where you went wrong and try to correct it in the future.

    Hope that helps!

  16. The Stoic Investor,

    Thanks! It’s much appreciated. That was definitely quite a month. The markets have been very strong, and as my portfolio grows it swings heavier in both directions. I used to get a little skittish when my portfolio would go up or down by $100, now it can swing by $1,000. I’ve adapted to that.

    Just the same, if the markets turn tomorrow I could post a huge loss in value next month. I would welcome that, however, as it would provide better entry points for my available capital I’ll have shortly.

    I definitely hope to be retired before 40, but a part of me does think back on my “semi-retirement” article and wonder if quitting in my mid-30’s to work part-time might be fun as well. We’ll see!

    Take care.

  17. MySavingStyle,

    It does feel great. Thanks for the support!

    I do try and convey excitement, because I’m definitely 100% enthusiastic every time I post an article on this blog. I only write and post when I’m inspired to do so, and it all comes from the heart.

    Keep in touch and good luck to you!

  18. EyesOnTheMoney,

    Thanks so much! I’m glad you enjoy the blog. I put my heart and soul into it, so I’m glad you find it exciting and inspirational!

    I’m glad 2012 has treated you well so far and I certainly hope it continues to do so.

    Best wishes!

  19. Poor Student,

    Thanks! It is awesome. I’m definitely not one to become jaded. Whenever I post these updates I’m truly excited and enthusiastic about it. It never becomes old or boring to me.

    You’re getting there. Remember that it’s all scalable and you’re still much younger than I am. You’re off to a great start just thinking about your financial future at a young age.

    Once you start making some cash, you’ll be posting huge updates every single month.

    I sometimes think about the quote “don’t wish for retirement, it’ll come soon enough” or something like that. Keep enjoying your time!

    Best wishes!

  20. Anonymous,

    $19k is still a ton of money, and more than most have.

    I don’t really follow the stocks you listed there, but am familiar with F and MFC. I think F represents some value at these prices, but certainly with a high amount of risk as well. I generally don’t find myself too interested in investing in automakers or jet makers for the long-term. Too many economic jitters and cycles to think about. Trading might be another story, but I don’t enjoy trading either.

    Best of luck to you!

  21. The book I like best is “Dividends Still Don’t Lie”, followed by “The Little Book of Big Dividends”. While they both are pushing their own databases, you can extract some good information from both.

    Beware the advice to invest through a dividend reinvestment plan (DRIP) in the second book. I got burnt. There is a long time delay between when you give a DRIP money and when the DRIP buys the stock, so the price can vary greatly in this volatile market. The main advantage of a DRIP is no cost reinvestment; however, this doesn’t matter if you invest regularly, since the dividends will get folded into your fresh capital.

    Another good book is the “The Little Book that Still Beats the Market”. This book promotes formula investing for value. That particular formula doesn’t match my dividend investing style; however, you can develop of formula for dividend investing that takes the emotion out of stock picking.

    By reading a variety of books, you can develop a feel for what is important and develop your own style.

    Ken

  22. very interesting, DM, it almost reads like a mutual fund quarterly report. a good thing.

    Have you thought about tracking your performance against a benchmark?

  23. JC,

    I do track my portfolio and I use the S&P 500 as my benchmark, but I don’t compare the two on this site because I care most about the growing stream of passive income. I may beat the S&P 500 some years, and some years I won’t…but if my passive income stream continues to rise against my expenses and eventually exceeds them then I will have reached my goal.

    Hope that helps.

    Take care!

  24. Thanks DM and Anonymous for your replies. That actually makes me feel much better. I have tried to read a few investments books as well (A Random Walk Down Wall Street, The Intelligent Investory, etc.) but find I get bored and they all seem to have the same message: Buy and hold.

    I’ve taken your advice, without even knowing it, and had started to pour my excess capital into investments. I will be receiving my first dividend payments this month. They don’t match yours DM, but I hope that one day I’ll be there.

    Thanks always for the inspirational and well thought out posts.

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