Freedom Fund Update – March 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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.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 market has not been cooperative with me. I would have genuinely jumped for joy had we seen a 1,000 point drop in the Dow Jones Industrial Average over the last 30 days. Such an event would have provided much more attractive prices on some of my favorite dividend growth stocks. Unfortunately, as a long-term investor and net buyer of stocks on a monthly basis, I had to make due with a DJIA that instead found itself up just over .5% for the month.

I actually had a fairly active month as far as investing fresh capital goes. I didn’t actually plan on this, but rather planned on sprinkling a purchase in here and there while simultaneously holding a tight fist on the majority of my available capital in case a market correction came my way. But I tend to always come full circle to what I’m doing. I’m trying to build a portfolio of high quality businesses that are paying me dividends that rise annually over the rate of inflation. Value is paramount to my strategy. Overpay for even the highest quality stock, and your returns will suffer. However, I’m willing to pay fair price for a great company. I know 30 years from now I’ll be very happy I did so. It’s important to note I’m a very long-term buy and hold (monitor) investor.

Over the past month I added to my position in Aflac Incorporated (AFL) and also added to my burgeoning position with The Coca-Cola Company (KO). Later in February I decided to initiate a position with Wells Fargo & Company (WFC). Just before February came to a close I initiated twin positions in The Bank of Nova Scotia (BNS) and Toronto-Dominion Bank (TD) after doing some lengthy research on Canadian banks and other dividend paying stocks. Big month! I’ve had some people in the past come to my blog and state how I’m a market timer. If I were a market timer I wouldn’t be unloading such a large amount of capital when the market is near an all-time high. I’m instead an opportunity taker and a capital allocator. I think those titles suit me infinitely better.

The current market value of the Freedom Fund stands at $98,166.64.  This is an increase of 8.66% over my last published value of $90,345.18. This was mostly due to new capital and reinvested dividends as the market was mostly flat over the last month.

I’m fast approaching the 6-figure mark for my Freedom Fund, which is quite dramatic for me. I don’t make a lot of money. As noted on my About Me page, the first year I was ever able to gross more than $40,000 in one year was in 2010. I am a man of relatively modest means. I’ve done better than average over the last two years, but for most of my 20’s I was making $30k or less per year, sometimes significantly less. This just goes to show you what setting a goal and giving it all you’ve got can accomplish. I plan on writing a special article for the $100k mark. As you can see here, my first Freedom Fund update showed a value of $28,845.28. This was just under two years ago. I just want to say THANK YOU to all you readers that continue to support my journey and stop by and comment and give me the inspiration I need to keep going. Thank you!

I’m currently invested in 31 companies. This is an increase since my last update, as I initiated positions in three banks as 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 AFL, KO, WFC, TD, BNS

How are your portfolios doing? 

Thanks for reading.

Comments

    • says

      Journey,

      You’re going to cross that $100k mark very soon as well. Probably around the same time as me, or quicker.

      Although the value of my fund isn’t my primary focus, and by wishing for a falling market I’m actually wishing for a lower fund value, it is nice to hit milestones and chalk up the success.

      Best wishes!

  1. says

    Great job emphasizing frugality while building your impressive portfolio, and congratulations on the imminent crossing of the 6 figure mark!

    Like you, I’m also waiting for a DJIA correction for some choice stocks to go on sale to deploy additional capital.

    • says

      Net Worth Snowball,

      I see you’re quite frugal yourself, and your spending closely mirrors my own. Great job there! You’re sticking to it, even though you could clearly expand the spending a bit and not even feel it.

      Yeah I would love a correction! I’ll continue to invest in the best opportunities as I see fit, but cheaper prices would have me rejoicing!

      Best regards.

  2. Anonymous says

    Hey DM! Excellent progress. 100k is well within reach for you. Please keep up the good work!

    Do you have any watch list for the month of March?

    • says

      Anonymous,

      Thanks! I appreciate the support, I really do.

      I’m not sure what will be on the table for March. VOD is cheap right now. I’ll be looking to increase the overall yield on my portfolio, if possible. Utilities and major consumer stocks are all way up right now, so it’s tough.

      Nothing is screaming at me, as bargains are few and far between. Like I said, VOD is one of the cheapest stocks in my portfolio right now. INTC is also cheap, but I’m already fully allocated. Some of the defense names aren’t bad.

      Take care!

  3. says

    DM your 2013 updates are looking good so far. You have inspired me greatly over the last year with your progress. Without you and a few others~ I would be left with a non-diversified real estate portfolio as my only source of early retirement income.

    My dividend investing portfolio is coming along well. My dividends are really helping me get the ball rolling with my new purchases. Thanks DM!

    • says

      Investing Early,

      Thanks so much! You equally inspire me. Keep up the great work.

      I’m so glad to see the portfolio coming along nicely. The sources of passive income, the merrier!

      Best regards.

  4. says

    A busy month indeed! I was surprised by how many purchases you made lately.

    I look forward to seeing you pass the $100K mark, which is a major milestone. You’ve done a phenomenal job of building up a solid portfolio over the past few years, and reaching six figures is just one sign of that.

    • says

      DGM,

      Yeah I was surprised a bit too. However, I just love being a part-owner in these companies.

      Thanks so much. I appreciate your ongoing support. I look forward to you passing that mark too. You’ll be right behind me, and the additional income from your new employment this year will supercharge your journey.

      Best wishes!

  5. says

    DM, this is outstanding. I am happy for you. It is very motivational. I have the exact same experience as you. When I at the fourth quarter of the last year decided to stop my gambling madness and start dividend investing, reinvest all dividends and additional money besides my regular savings and my portfolio is growing in outstanding pace too. I am truly surprised how smooth it is and I am kicking my lower back part of my body why I didn’t do this earlier. Good job man and let us know when the party starts at 100k mark!

    • says

      Martin,

      Great job on your success so far. I’m glad this strategy is treating you well so far!

      I could kick my own ass for not starting earlier as well. I could be halfway done by now had I started just a few years earlier. Live and learn!

      Best regards.

  6. Anonymous says

    Hey DM I too love your blog. Great job keep up the good work on the blog and investing!
    I too have my eye on VOD but my gut says no. Is there a price that would get you to buy more VOD or is there a reason you are not. I’m still on the fence but keeping it on my watch list (I added INTC last month)
    -Jersey Jerry

    • says

      Jerry,

      Thanks for stopping by. I appreciate your readership!

      VOD is a fine company. Obviously they are having difficulties in certain markets, as is many companies that have significant operations in Europe. The stellar U.S. assets are picking up the slack. The dividend is very robust and I think long-term this will be a great company.

      The only issues I have are the allocation I already have with the company and also recent interviews where the CEO has discussed the possibility of selling off the Verizon Wireless partnership. I can’t imagine this would happen, but anything is possible.

      Best wishes!

  7. says

    DM,
    I’m on the same page as you – it’s tough to NOT continue to buy high quality companies at fair prices, despite a view that the market needs a breather. I’ve had quite a bit of strategic cash awaiting a correction, but continue to buy shares of companies I will be happy to own as time passes.

    Can’t wait for you to breach six figures. It feels pretty awesome to get there.

    • says

      Headed Home,

      Absolutely. It’s all about the long-term. I’m fairly confident that the me of 10 years from now will be happy the current me picked up shares in high quality companies like the ones above.

      Thanks for the support. You’re building your portfolio at a pretty rapid pace yourself! Keep up the great work.

      Best regards.

    • says

      writing2reality,

      Thanks! I had a busier month than I had planned on. But there’s just a drive inside me to own pieces of wonderful companies. I don’t think I overpaid for any assets, but I didn’t steal anything either.

      I’m actually getting pretty excited about hitting that six-figure mark. Progress is a wonderful thing.

      Best wishes!

  8. says

    I’ll echo what several others said. I’ve had a tough time finding buys in the current market. I’m impressed you made so many new purchases in February. Hope they work out for you in the long run.

    • says

      The Executioner,

      Yeah, like I said above I don’t think I stole anything away. Especially KO. But I think they’re all attractively priced for the long-term investor. I don’t believe any are vastly overpriced, and I would actually argue a couple (AFL and WFC) are nice values here, considering the market.

      Hope all is well on your journey to executing full-time work.

      Take care!

    • says

      Compounding Income,

      Thanks! It was a solid month moving the portfolio forward to bigger and better things.

      I’m a little overweight in some positions, specifically PM. But I bought it as it ran up, so I’m okay with that. Besides, the portfolio is only about 25% built, so positions will naturally temporarily be overweight or underweight at any given time. I’ll gladly buy a high quality company that’s vastly undervalued, even if it throws off my allocation. I don’t ever want to pass up a fantastic opportunity because it’ll “throw my 3% or 4% off”. That would be ridiculous.

      Best wishes!

  9. says

    DM,

    I was surprised with all the purchases you made, but if the markets give you a good opportunity you have to capitalize on it. I hope to cross the $100k mark in April as long as the markets stay flatish, although like you I would love to see the value take a 10% hit to let me make some more purchases.

    Keep up the great work!

    • says

      Pursuit,

      It looks like we’ll be crossing the six-figure ribbon together! It’s great to grow our wealth, especially when it’s with like-minded investors.

      Keep up the great work!

      Best wishes.

  10. says

    Congrats on another great month! You are very close to the 6-figure mark. I hit that point fairly recently myself.

    You made a string of great additions to your portfolio. I think the Canadian banks will be solid long-term and provide you some additional diversification.

    I look forward to seeing what opportunities March will bring us. Perhaps some defense companies with the automatic cuts that went into effect?

    • says

      AAI,

      Congratulations on passing the six-figure mark. That’s really fantastic!!

      I’m also looking forward to what opportunities March bring us. We’ll see if the defense companies drop significantly. You would think we’d be seeing that.

      I’ll definitely be keeping my eyes open!

      Take care.

  11. Anonymous says

    Hey DM,

    Have you ever looked in Reality Income Corporation (O)?

    They seem to have consistent growth and a long dividend history. The current yield on the stock is approximately 4.74%. What do you think?

    • says

      Anonymous,

      I’ve looked at O, among other REITs. I’m interested in that sector, but it’s been red hot over the last year or so. O seems to be one of the most solid choices in this sector for a dividend growth investor.

      I do eventually plan to expand into real estate at some point, whether through an REIT or direct ownership in property (a home or rental property).

      Thanks for stopping by.

      Best wishes!

    • says

      Ninja,

      Thanks! I appreciate the support. I also appreciate the shout-out on your site!

      It’s climbing. I’m a man of relatively modest means, yet I’m on the verge of a six-figure portfolio at 30 years old. It sounds cliche, but it’s true: if I can do it, anyone can.

      The community of investors, specifically dividend investors is amazing as well all really support and motivate each other. It’s a great thing!

      Best regards!

  12. says

    Another great month DM! Just shy of the 100K mark which you will pass in weeks. Some really good additions to your portfolio.

    For someone like me who is at $16k now, to see that you have gone from just under $29k to $98k in 2 years gives me great hope.

    Hope you have a great March

    • says

      Gareth,

      You’re right where I was about three years ago. It doesn’t take long to build a really fantastic portfolio of wonderful companies if you create a plan and stick with it. It’s all about setting realistic time-based goals and being persistent. Living well below my means, avoiding debt and investing the difference in high quality companies has been the best decision I’ve ever made.

      Best of luck!

      Take care.

  13. says

    Joining the crowd in cheering for your success DM! Excellent post and very much inspirational for many of us.

    Have you ever broken down the portfolio into your own contributions, dividend reinvestments and how much came from the market growth?

    This will show that an investor does not need to put down every penny of its portfolio. Even modest contributions will eventually grow into a cool 100k and will keep growing. The quantification of each of the impacts would be interesting.

    Cheers!

    • says

      AverageCFA,

      Thanks for the continued support. Much appreciated. I’m just a regular Joe living below my means and investing as intelligently as I know how.

      I logged into my brokerage account just now and tallied up all my contributions after 4/11 and it adds up to: $47,975.00. So the difference (about $21k) is all capital gains and dividends. Hope that helps!

      Keep in touch!

      Best regards.

    • says

      My Own Advisor,

      Thanks! I’m doing the best I possibly can. I think so far the plan is going well.

      I’m not quite that high in forward dividends as my overall portfolio yield isn’t that high. Last I tallied it up, my portfolio yield average was somewhere closer to 3.5%. That would put me closer to $3,500 in forward dividends on a balance of $100k. I am, however, looking for opportunities to boost the portfolio yield up. It’s difficult right now though as a lot of high yielding sectors like utilities have been bid up in the current low interest rate environment.

      Hope all is well up north!

      Best wishes.

  14. Larry says

    Wow 98k, that’s some nice saving there and put to good use as well. I wish you had a youtube channel too so we could hear you talk about stocks. Cheers

    • says

      Larry,

      You know, I’ve honestly thought about doing something like a video blog (a vlog?) on YouTube, or even posting them in video format here on the blog. It seems like these aren’t as popular. If you ever go to YouTube and look up investing videos the pageviews are very, very low. It’s much more popular to post a dancing cat. I guess that just goes to show you something about our society.

      It is something I continue to think about. But I’m a blabbermouth when I get talking about investing and living frugally. It’s easier to control myself when I see a written article getting out of control! :)

      Best regards!

    • says

      Anonymous,

      Thanks for the links. I haven’t seen those before.

      The videos do look time consuming, but could make for an interesting addition to the blog on a limited basis. Maybe once a week or something? It’s something I’ll definitely give some thought too.

      Best wishes!

  15. Anonymous says

    I forgot to mention.

    http://www.pullingourselvesup.blogspot.com (aka pullingmyselfup on youtube) started a model portfolio with his own money with 100 weekly deposits. Recently he changed this to 3 separate fantasy accounts for 3 different types of investors. He is trying to show people that the average joe CAN do this. He was an investor before is public presence and his videos are good. Talks about some companies that he invested in and why he did.

    http://www.nononsensetrading.com Aileron (formerly Airelon) has been on over 500 videos. He is a trader of 17 years and an investor for 9. He likes to help the low funded as this is how he started. He never through hype at you or the other two links I mentioned.

  16. soggy says

    Congrats man! Your blog continually inspires me to save and invest. I’m really impressed by what you’ve managed to do. Keep it up.. They say the first 100 grand is always the hardest!

    • says

      soggy,

      They definitely say the first $100k is the hardest. Next, it’s the first million is the hardest! :)

      I’m glad you find inspiration here. That’s the whole reason I started this blog back in March of 2011. I wanted to show it’s possible to have a middle class income and actually retire at a young age by simply living below your means and investing intelligently.

      Best wishes!

  17. says

    Congratulations again DM! You probably were the first one to view it last friday, but Buffet’s Annual Shareholder letter is public, and a very very interesting read.

    Looking forward to seeing your progress and freedom fund increase to your ultimate freedom, as i have been increasing my savings and investing for the last 3 years. Especially Capital gains last year during the bull market, but mostly dividend gains. I can’t believe i wasn’t even aware of the power of savings and componded investing could do when i was fresh out of college. Glad i stumbled upon some Early Retirement books, then Jacob’s early retirement extreme blog and MMM’s blog, then your blog as well!

    • says

      Freeyourchains,

      Yeah, I’m a fan of all things Buffett. I’m a Buffettophile! :) I think he’s an incredibly wise man, investing and otherwise.

      I’m glad to hear you’re aggressively pursuing freedom as well. That’s what it’s all about! Freedom to live our lives however and wherever we want.

      Best regards!

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