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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.

The Dow Jones Industrial Average closed today over 14,000 points for the first time in 5 years, so my portfolio, like many others, has gotten quite a boost lately. Of course, as I always point out, it’s the dividend income that I really care about. A big portfolio value can give one a false sense of euphoria, as that balance you see when you log on to your brokerage account is all based on underlying stock prices that are at the mercy of a bi-polar and very moody Mr. Market. The dividends, however, are completely removed from the market’s mood swings and are rather at the discretion of the individual companies we invest in. The stock market can move up 500 points or come crashing down 1,000 points and the odds are very good that my dividend income will remain the same, or even better it’ll rise like clockwork.

I had a fairly busy January, overall. With a heavy heart I decided to part ways with one of my oldest holdings and sold my entire position in Abbott Laboratories and the recent spin-off Abbvie, Inc. (ABBV). I used some of that capital to add to my position with Johnson & Johnson (JNJ). My portfolio would actually be showing a much larger balance in terms of invested capital, but I have an unusually large cash balance right now due to the sale discussed above. I’m still scanning opportunities to use that cash, but am having a hard time finding something attractively priced. The market is littered with expensive stocks right now, so I’m mainly trying to find high quality stocks trading for fair prices.

The current market value of my Freedom Fund stands at $90,345.18. This is an increase of 2.68% over my last published value of $87,985.11. Not an impressive increase, considering the S&P 500 is up some 6.1% over the same period, but that’s mainly due to the fact that I haven’t reinvested my cash from the sales of two of my larger holdings. My portfolio (not including cash) was actually well over $93k before the sale, but the monthly balances aren’t really a main concern of mine. I also contributed fresh capital to the portfolio this month, but didn’t make a purchase with it due to my desire to remain a little conservative right now due to personal reasons.

Looking forward, I’m quite excited. The market’s epic run creates a possible opportunity for volatility, which could provide attractive entry points on quality dividend growth stocks. The fact that I have such a large cash balance currently (over $5k) means I’ll be ready for such opportunities if they come my way! Defense stocks are already seeing some volatility due to looming sequestration, so volatility is on the horizon.

I’m currently invested in 28 position. This is a net decrease from last update due to the sales outlined above.

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 JNJ.

How are your portfolios doing? Enjoying the market run-up?

Thanks for reading.


  1. says

    Another solid month DM! I always enjoy your updates, they help keep me on track with my own dividend investing adventure. I wonder how much longer the market will run up, the deals may be tough to find but as long as we continue monitoring and cost-averaging down our holdings we will be good for the long-run!

    • says

      Investing Early,

      Thanks! I appreciate it. I’m glad they keep you on track. You know, that’s one of the great benefits of running a blog – they keep you on track. I know I find myself always questioning all my actions due to the fact that I don’t want to report any bad decisions.

      You’re doing great too, so keep up the good work.

      I’m with you on the fact that it’s hard to find deals right now. I keep focusing on higher quality stuff, and even then I’m staying patient.

      Best wishes!

    • says

      The Stoic,

      Haha! Yeah, I’m excited as I get closer and closer to $100k. It’s right around the corner at this point, and I’ll probably cross it before mid-year. We’ll see.

      I hope everything is going well on your end too!

      Take care.

    • says


      I haven’t looked at WU, but I do follow CAT. The time to get in with CAT, however, was around the $82 mark. It’s a cyclical stock…so it’s one you have to buy on the dips.

      Best regards!

    • says


      Hey, thanks for linking me!

      Yeah, market run-ups are always that Catch-22: you get the euphoria that comes with a steadily rising portfolio value, but unfortunately with the side effect that few, if any, stocks are attractively priced.

      I just continue to stay focused on the long-term goals (rising dividend income) and let the rest take care of itself.

      Bet wishes!

  2. says

    Another great report DM!

    I’m not particularly enthralled when the market goes up, the opportunities to buy something at a good value diminishes. But it’s OK yet, I have 5 targets yet, it’s better than nothing.

    Happy wealth building! :)

    • says

      JF Baconnet,

      I totally agree. I’m not exactly thrilled with a rising market either. It makes it difficult to get attractive prices on quality equities. I can’t imagine the market will continue to accelerate like it has…but you never know.

      Happy wealth building to you too! Hope all is well.

      Take care!

  3. says

    Hi DM

    Greetings from Singapore.

    I have been a silent reader of your blog and I must say your persistence in good order has impressed me. And because of you, I am diversifying into some US stocks a little in addition to my Singapore portfolio.

    Best of luck in your journey.


    • says


      Thanks for stopping by. I appreciate your readership!

      I’m glad you are going to diversify your portfolio internationally. Our U.S. multinationals (like KO, MCD, YUM) not only allow you exposure to the U.S. market, but typically to the world market. A great way to invest in the global economy!

      Hope your journey continues to treat you well and I hope we both remain persistent.

      Best regards.

  4. says

    Hey DM,

    Really good to read the update. I read your blogs always and am rooting for you.

    I am experiencing some stress at work as well and it gives me the impetus to do what you are doing. These things are blips on the radar, and your monthly updates show it- in the big scheme of things, stressing out of five or ten years is small compared to actively enjoying retirement/financial independence for 30-40 years.

    I see people in their 40s and 50s stressing out, especially here on the west coast where show biz is transitory and the money flows ever changing, and i don’t want to be that guy down the line. I’ll take the pain now in order to get the pleasure later.

    Anyway, it is inspiring to read your updates and I just wanted to say hey.

    Have a great weekend.


    • says


      Thanks for the continued support. I do appreciate it!

      I’m with you. If I have to trade away 5-10 years of misery to wage slavery in order to get 40 years or so of complete freedom, I’m okay with that. I’ve never been the type of person who identifies myself by a job title, so the faster I’m free to be me the better.

      I hope all is well on the west coast and am glad to see you’re sticking with it. It’s tough sledding for a while, but the continued progress makes it a lot easier the further you go along.

      Best wishes!

  5. says

    Amazing…I remember when I first started reading your blog, I think late 2011, and your total FF amount was like 40k or so(I may be way off base here, Im just going off memory) so you have made truly amazing progress. Grats, grats, grats.

    • says

      High Yield Soldier,

      The progress and success I’ve had so far is amazing and I’m most grateful for it. I think when I first started this blog back in early 2011, my portfolio’s value was around $25k. So, $40k at the end of 2011 sounds about right.

      It looks like you continue to make tremendous progress as well. Keep it up!

      Best regards!

  6. says

    While it’s nice to see the value go up, like you I’d much rather have a flat or downwards market since I’m trying to add to my DG stocks. I passed $80k during January so the value is going up significantly. I certainly hope we can start getting some more volatility to bring down some of these prices. I didn’t get to make a purchase in January, of course I didn’t have any free capital until the last 2 weeks.

    • says


      Congrats on passing the $80k mark. Your success so far has come astonishingly quick. Keep it up!

      I also hope we get some volatility in the market. I can’t imagine we won’t see some profit taking at some point in the near future. We’ll see what Mr. Market gives us!

      Best regards.

  7. Ryan (Chicago) says

    I am having some similar concerns about my employment situation. I work for a very financially solid company. However, I was recently informed that my employer is going to soon be acquired by another company. The company acquiring us isn’t on as strong financial footing. It may or may not impact whether I continue to be employed. Furthermore, I would be surprised if all of the following remain intact: frequency of raises, promotions, bonuses, 401k matching, medical/dental/vision benefits, perks, etc. I am kind of bummed out about the situation. I had hoped to continue working there (and building up my dividend portfolio) for a few more years until I reach financial independence. It seems like that may no longer be the case.

    Stress about employment status is the primary reason why I am also seeking to retire on a stream of dividend (and rental) income.

    • says


      Being at the whim of an employer is one of the main reasons I’m doing what I’m doing. Relying on 30-40 sources of income (dividends, fixed income, rentals, etc.) is much more secure than relying on one (your employer).

      The negativity surrounding employer’s whims is compounded by the fact that my particular workplace isn’t an enjoyable place to be anyway. If it was somewhere fun to work, I could deal with uncertainty easier…but it’s not a fun place to be at all.

      I hope our journeys to building outside sources of income continues to find success.

      Best wishes!

  8. says

    Hello DM. I, too, am a fan of JNJ, as you are aware. I sold a tiny bit portion last week. I thought it was a little overpriced. But, what do I know. Like you say, it won’t make much difference in the long run. Much of the companies I have targeted are expensive at the moment. It’s almost frustrating to be having money and not being able to invest it. We have to exercise patience.

    I, too, was fed up of my job. I quit when the occasion was right and managed to get a decent package. I am too young (I want to accomplish things) and too poor to retire. I have enough money to sustain a decent lifestyle for a year or two without eating up my savings; I intend to use that time to find a job I like (even though it’s not well paid) and continue my freedom plan via investing.

    So I know your feeling and sympathize with you. I wish you the best — and perhaps something you would like to do on your way to freedom. Because, meanwhile, it such a pain to wake up every morning and having to waste precious hours of your life for something you don’t care about. Even though you have a goal in mind. And believe me when I say that.


    • says


      Thanks for the perspective there. I’m glad you decided to part ways with something that brought you no joy or value in your life. Moving on to greener pastures will likely be much, much better for you in the long-term, even if it causes you short-term financial pain.

      You know, I wouldn’t mind something like that. Saving up some cash and taking a year or two off and looking for something I might enjoy more, even if it’s something that pays much less. It would obviously mean my plan to retire by 40 wouldn’t happen…but in the end being happy is all that matters. It’s definitely something to think about.

      I hope you enjoy your newfound freedom and time off. The daily drudgery filled with alarm clocks, commutes and fake smiles is a slow death. Make the most of your time, my friend!

      Best wishes.

  9. Anonymous says

    Hi DM,

    JNJ is an excellent buy at current prices. A very solid compnay! I hold a position in JNJ and may add to my current position in the next week.

    • says


      I’m glad you feel the same. JNJ is a solid holding for the long-term. Again, it’s not a steal at today’s prices…but I’m okay with paying a fair price for high quality.

      Take care!

    • says


      Thanks for stopping by!

      Yeah, 28 positions is plenty of diversification for my total portfolio value. I’d like to eventually see 35-40 positions in the Freedom Fund, but that will come later when the Fund is worth much more.

      I’m sure ABT and ABBV will continue to prosper. I especially like ABT and look forward to possibly owning a piece of the company again someday if the yield is right.

      Best wishes!

  10. says

    Congrats on a solid month DM!. If every month was a January, I may be tempted to shift my focus away from harvesting dividends and just looking to sell capital. Of course it won’t be, and I’m sure the $40K boost that the Integrator $50K fund had will be whittled away over the course of the next few months. Here’s hoping for similar dividend income growth this year!

    • says


      Thanks! January seen a blistering market, and I’m happy to have a little spare capital in the account to take advantage of any dips we may see.

      Congratulations on your success. I don’t know if I’ll ever see $50k in dividend income. If I do, it’ll be many, many years from now. Keep up the great work!

      Best wishes.

  11. says

    Always look forward to reading these updates, it is inspiring to read your updates. JNJ is the best buy at current time. A very solid company. I wonder how much longer the market will run up, the deals may be tough to find, but as long as we continue monitoring and cost-averaging down our holdings we will be good for the long-run!

    • says

      Richard Gere,

      Thanks for the support. I appreciate it!

      JNJ is now my largest position so I’m not particularly interested in adding any more right now. However, it’s one of those rock solid companies you can sleep well at night owning a piece of.

      I’m with you on averaging down and monitoring. That’s the name of the game. :)


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