Freedom Fund Update – January 2013

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.

It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.

I can’t believe 2012 is already behind us. Happy New Year! I’m really lucky in that 2012 was such a fantastic year for me. I certainly hope 2013 is just as wonderful for you readers as well as myself.

I had another stellar month of contributions during the month of December. I continue to remind myself that it’s the power of fresh capital injections that will drive the long-term success of my portfolio, rather than outstanding investment returns. I was able to add to my positions with Intel Corporation (INTC) and Philip Morris International, Inc. (PM) at what I felt were attractive prices. Both stocks have been suffering a bit lately. Intel continues to face questions about its future as a viable company as it still lacks a significant footprint in the mobile semiconductor space. On the other hand, Europe is considering additional regulations on the packaging of tobacco products which can affect PM’s bottom line in that region.

It’s important to remember, however, that the best time to typically buy stocks is not when everyone is cheer leading for a company. Having everyone agree with your investment decisions can be expensive indeed. That type of consensus is most likely not worth the high price you’ll pay for it. Every company faces occasional problems or headwinds. It’s important to try and differentiate these from longer term fundamental issues when can lead to a permanent loss of capital, and buy when it’s the former and sell when it’s the latter.

The current market value of my Freedom Fund now stands at $87,985.11. This is a nice increase of 3.35% over my last published value of $85,129.19. This increase is completely due to fresh capital additions, with which I used to make purchases listed above, as well as dividends received. Otherwise I would be looking at a portfolio worth less than it was last month.

It feels good to start the year off with a portfolio value approaching the $100k mark, but what I’m most anxious to see is the dividends continue to rise. I’ll be publishing the dividends received from December very soon (which were my biggest ever!) and I’ll also be talking about how I did with some of my 2012 goals over the next week or so. Hint: I did so-so. I think one of the great things about a live blog is that it allows me to catalog my success and failures as they happen.

I’m still invested in 29 companies, as my purchases were with companies I was already invested in.

These updates are mainly designed to show the increase in the value of the underlying equities I’m invested in, but the main purpose of investing in dividend growth stocks is for the rising stream of dividends over time. So, with that said I don’t put too much emphasis in these monthly updates on the value of my portfolio. I think it is a good idea, however, to keep track of the rising (or falling) value of one’s securities and be aware of where they are in terms of the marketplace and whether or not certain stocks are attractively priced. It proves to be a useful exercise, for me at least, to update the values monthly. It gives me fresh perspective on which equities are performing well and which aren’t, and from there I can make educated decisions (based on further due diligence) on which stocks I’d like to add fresh capital to (while considering portfolio weight as well).

Full Disclosure: Long PM, INTC

How are your portfolios doing? Off to a great 2013?

Thanks for reading.


  1. Anonymous says

    Do you have any ethical boundries whan it comes to your investments? Guns, Alcohol, Gambling, Smoking, Childlabor etc or is all OK? The reason I am asking is that I try to have some basic ethical principles but I feel they sometimes limits my investments since many unethical activities are soooo profitable…

    • Anonymous says

      I find double taxing the wealthy investor citizens unethical and those citizens whom overly spend on selfish luxuries just to go broke and depend and abuse social programs, is even more unethical.

    • says

      I don’t put ethical limits on my investments because if you dig around a bit you’ll find problems with any company.

      If there was something that you were hardlined against, say smoking, then not investing in tobacco companies would make sense, and be entirely respectable. Problems arise when you’re opposed to all kind of things, then you have a sort of ethical paralysis.

      If you’re that principled, then maybe you should be doing hard money lending to small businesses with a strong social responsibility mission. Or look into P2P lending, there’s a lot of people who need a loan and can’t easily get one from a bank.

    • says


      I’ve answered this question many times in other posts on this blog. I’ve gotten very long winded about it at other times, but I’ll be rather succinct here.

      Basically, my position is that you’ll likely find something unethical with ANY type of company. If you’re strongly considering ethics, I would say it’s going to be incredibly difficult for you to find a company that will be a suitable investment. Unless, of course, you’re only ethical about certain things.

      I basically try to live my life as ethically as I possibly can. Whether or not other people, or companies, do as well is just simply not up to me, nor is it really my business.

      Best wishes.

    • Anonymous says

      Hello and many thanks for you reply,

      That was really my point, there is no thing as a common ethical standard and depending on who you are you might find different things ethical or unethical the question was more aimed at if there are things that you concider either based on pure ethics or because stepping over certain boundries are just bad business in the long run

    • says


      I’m sorry. I misunderstood your question. Although I’m not sure I understand what you’re asking even now.

      If you’re asking if I consider my standard of ethics when investing, I do. Although my feelings are that people, as an aggregate, are unethical. If we weren’t, there would be no need for police, religion or a military. So, I take things with a grain of salt. It’s the old “people kill people, guns don’t kill people” thing for me. Companies produce things, and consumers consume them.

      Now, if I found out P&G was directly funding terrorism or something extreme like that, than I would sell my investment. Otherwise, ethics don’t really come up for me very often when investing.

      Best wishes.

  2. says

    DM, Great start to the year. I currently stand at $515k in my dividend portfolio. As you say, it’s important not to get too fixated on how your dividend stream is valued by the market, as this will change depending on its mood. Curiously, my effective portfolio yield stands at around 5% which I view as fair value for the composition of what I have. I typically look at anything less than 5% yield on my portfolio as a signal to be cautious on market exuberance, and anything greater than a 6% yield on my portfolio as time to look at adding new positions. Right now, I’m sitting tight with my hands put.

    • says


      Wow! That’s simply fantastic. I think it will be many decades before I get to that type of capital. I could probably get there rather quickly if I were to continue working at the pace I am…but I am getting burned out already and I’m only 30! :)

      5% yield on your entire portfolio is great. I know I’m nowhere near that. The last time I checked I was around 3.7%. Australian stocks must yield quite a bit more than ours. I believe our S&P 500 is only yielding around 2.2% right now.

      Keep up the great work!

      Best regards.

    • says


      Thanks for stopping by and I really appreciate the support. Your quick calc sounds about right to me. I’m extremely fortunate. My portfolio is larger than some people in their 50’s have saved up…so I’m just very lucky and grateful to be in the position I’m in.

      I didn’t do so hot on my goals actually. But, I set them pretty high and I’ll continue to do to the same for 2013. No sense in reaching for the lowest star.

      I see you had a fantastic 2012. It seems like the past year will be the year you remember as when you really “turned the corner”.

      Best wishes!

  3. says

    Outstanding work. Although I have a rule not to own tech, I can see what some folks invest in MSFT or INTC.

    I wish you all the success in 2013 and with that aggressive savings rate of yours, I look forward to seeing your portfolio pass $100,000 :)


    • says


      Thanks for stopping by!

      I hear you on tech. I’m not a huge fan of it either. We’ll see how it plays out for me, but I’m done with it for now. My portfolio would have to increase in value by about 40% or so before I’d be ready for any more tech investments.

      Thanks for the well wishes. I was originally hoping to pass $100k by April, but we’ll see how it goes. A skyrocketing market will limit my capital contributions.

      I wish you the best for your 2013 as well!

      Take care.

    • says


      Thanks for the support! I’m fortunate to have had a great month and a great year.

      Congratulations to you on your success so far! $25k is a lot of money, and that will just continue to grow organically while you also add fresh capital on top of it. I had $25k in my Freedom Fund not that long ago. It can grow very quickly!

      I’m glad this blog inspires others. It’s truly why I continue to write.

      Best regards!

  4. says

    Great job DM!

    In a decade from now, you will have many of us playing volleyball on a beach your touring as we all enjoy the sunset and be financially free from crazy un-needed consumer products, services, etc!

  5. Anonymous says

    I hope you realize how inspirational your quest for financial freedom is for those who follow your blog. Personally, I don’t think your blog is solely about financial freedom. I think what your readers should also take away from your story is what you can achieve when you set a goal, focus on the goal, and regularly monitor your progress. Great work!!!

    My wife and I surpassed the $31K in dividend income in 2012. Our target for 2013 is $38K which is going to be a real challenge unless we see a nice correction. The market is too frothy for my liking to make any significant new investments.

    • says


      Thanks for that. I understand what you’re saying. What I’m doing here could be translated into just about anything in life you want. I wrote an article a while back about how saving money is like losing weight…and that could be said about almost everything. It’s all about setting tangible goals with a time limit, staying patient and persistent and tracking progress.

      Congrats to you on passing $31k in dividend income! That’s a huge amount. I would be ecstatic if I was receiving passive income like that. Great work! $38k would be phenomenal.

      I hear you on the valuation of the market. The recent pop has put a lot of names out of my reach. I’ll continue to watch and see what the rest of January brings us. The DJIA is only 5% off its all time high, so it’s something to keep an eye on.

      Best wishes!

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