Freedom Fund Update – August 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 a job I don’t desire to purchase goods I don’t need to impress neighbors I don’t care about. This journey is all about freedom and flexibility. One day the dividend income this portfolio generates will fully replace my day job’s income and my time will be completely my own. What could you possibly want to own more than your time?

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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.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 Fund had rather light activity last month as I continue to find it difficult to find compelling value in the market. I’ve talked at length about this, but even factoring my caution in I still remain completely committed to my plan to build an ever-growing passive income stream via dividends from high quality companies. As such, I initiated a position in what I felt was one of the better value opportunities on the market at the time in Royal Dutch Shell plc (RDS.B). The market actually did most of the heavy lifting for me, as the S&P 500 was up an astounding 4.95% over the month of July.

The current market value of the Freedom Fund stands at $123,154.37. This is an increase of 5.17% over last month’s published value of $117,096.07. I’m obviously very excited to see numbers like this, but in the end the emphasis remains on the passive income the Fund can generate, as well as the valuation of companies I’d like to add to the Fund. A rising value of my Fund means attractive opportunities are becoming rather rare indeed.

Looking forward, I continue to keep my eyes peeled for value. I have a small watch list of equities I’m interested in, most of which are companies I’m already invested in, but are currently trading for prices that are less than my cost basis.

I’m currently invested in 37 companies. This is an increase since last month, due to the initiation of a position in RDS.B.

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 on 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 RDS.B

How are your funds doing??

Thanks for reading.

Photo Credit: Vichaya Kiatying-Angsulee/  


  1. Anonymous says


    Continued solid growth! I’m hoping I can catch up to you one day.

    Just saw RDS.B with a significant earnings miss. I bought in last month around the same level you did to establish a position within the industry, if it drops past my basis it is definitely something I will consider in August.

    The movement of the market continues to worry me, people see bad numbers as good numbers for the economy (because the Fed will continue the asset buying program) and revised numbers continue to tell us that we are not improving as expected. As I originally started building my portfolio in January I have had trouble finding quality stocks to invest in. I remain 33% in cash atm waiting for some kind of opportunity to dump my money in!


    • says


      Thanks! I’m extremely lucky and blessed to be able to continue the progress at this rate. I’m in a good place right now, and I’m really thankful for it.

      I seen RDS.B today. It’s still trading above where I bought it, and I obviously still really like the company. The next couple years may be a bit choppy as they bring some huge projects online, but long-term I really like Shell.

      The market is really crazy right now. It just means that you need to have your wits about you and stay cautious. When the world starts crashing around you, you’ll know it’s time to buy. I continue to purchase monthly as I always do, but I’m certainly not all that excited right now.

      Best regards!

  2. says

    Great job building up your fund. I love the slow and steady approach that you use. If you just keep on building the fund, you’ll hit the crossover point eventually. Given your savings rate, that will probably be sooner rather than later. Keep up the good work.

    • says


      Slow and steady wins the race, right? At least I hope so! :)

      You’re doing great as well, and you have the same approach. Save a good portion of the net income and invest wisely. It’s a surefire recipe for success.

      Best of luck in August!

      Take care.

  3. says

    Congrats on another great month, DM. I am with you that I think it’s best to be cautious right now. I have some capital ready to deploy, but I just can’t find the right place as of yet. I know I’m in it for the long term, but I don’t want to buy and then have the market tumble 20% when I could’ve just waited and invested then. We’ll see how things go the next few months.

    • says


      Not a lot of great looking opportunities out there right now, no doubt about it. I think you’ll be well positioned to take advantage of opportunities when they do come around. And they always come around.

      Best wishes!

  4. Spoonman says

    Looks like another solid month for the Freedom Fund, you were able to make it happen even in “inclement” market conditions. Btw, RDS.B sounds like an excellent buy. If I wasn’t saturated in the energy sector I would have added it to my list of holdings.

    Good job.

    • says


      Thanks for the continued support! I hope July was another solid month of progress towards early retirement/FI for you and the wife! :)

      Keep up the great work.

      Best regards!

  5. says

    Good to hear you had a solid month, I’m rolling over a 401k at the moment and just opened up a Roth IRA and put in money into the S&P 500 Index to start off. I found your blog a few weeks ago and it inspired me to start my own blog to document my journey on the path to independence!

    • says

      Kill the Grind,

      Great name! I’d love to kill it too. :)

      I’m glad you found some inspiration here. That’s exactly why I write.

      You’re off to a great start, especially for your age. Keep it up and you’ll be FI before you know it. Every month and every dollar saved counts. It all adds up!

      Best wishes.

  6. says

    I wish I had such a good story to tell. I’m STILL working on releasing my money from some real estate investments. Hopefully I’ll be joining you on this journey soon!

    • says

      Pretired Nick,

      You’ll be joining me soon enough! Once you get the real estate sold off you’ll have plenty of capital to use. You’ll have your own little elephant gun. :)

      Good luck!

      Best regards.

  7. says

    Nice month! I like the RDS.B buy even after the earnings miss. I just see it as an additional opportunity to add more shares. It’s now slightly under my cost basis so I may start adding more shares next week.

    • says



      Yeah, I know you’ve invested fairly big in Shell. I’m a fan of the company long-term, especially as natural gas applications continue to increase.

      It’s still a bit over what I paid, but I wouldn’t mind at all doubling my position if the situation is right.

      Keep up the great work. You’ll be hitting $200k soon! :)

      Best wishes.

  8. Paige says

    Congratulations on your portfolio DM! I think I am more excited about you hitting your goals than I am about hitting mine! You’ll be there in no time!!

    • says


      That’s very kind of you! I’m sure you’re doing quite excellent over there as well. :)

      I hope we’re both able to continue growing our wealth. Cheers to that!

      Best regards.

  9. says

    I’m not sure what’s growing faster, your portfolio or you blog. Over 1.1m views already, sheesh! Keep up the great work!

    I was at work today and happened to look up RDS-B and saw it was down considerably, what a great time to buy I thought. I just made a purchase so I’m tapped at the moment but I imagine many DGI’s will be all over it next week.

    • says


      Yeah, the blog has been wonderful. I started this as a little spot on the internet to share my thoughts and my journey, and I’m really glad that there are a lot of like-minded investors and frugalists out there! It feels great to be part of a strong and wonderful community like this.

      I see you bought some MCD. Great purchase. They’ll be slinging Big Macs until Armageddon! :)

      Take care.

  10. says

    Dividend Mantra,

    Excellent work in such a short time! You continue to do a great job of proving the power of dividend growth investing. Sticking to a solid long term plan is surely paying its dividends! Hope you are able to make some great purchases in August.

    • says


      Thanks so much. I agree. Consistency is such an underrated quality. If you formulate a high quality and actionable plan and stay consistent you’ll see tremendous progress over a relatively short period of time in most cases. I believe my persistence is one of my strongest traits.

      I hope you had a great month of July as well, and I hope we both see some good opportunities throughout August. I already struck, so I’ll be talking about that this weekend sometime.

      Best wishes!

  11. says

    I think 5.17% monthly growth of value is nice, very nice. Although it is not as important as the income, it is nice to see your portfolio growing up. I like it myself too. I like seeing it up. And when it goes down? Well then it is time to start buying shares on sale, right?
    It is impressive growth. Was it made by additional contributions and reinvested dividends or by just growing stocks or both?

    • says


      Thanks! It was a great month. Although I’m with you. If the portfolio’s value starts crashing, that means it’s time to start buying. :)

      “It is impressive growth. Was it made by additional contributions and reinvested dividends or by just growing stocks or both?”

      All of the above. The portfolio’s value went up through a combination of a rising market and the purchase of shares in Shell, of which was a combination of reinvested dividends and fresh capital.

      I hope you had a very fruitful July as well!

      Take care.

  12. Anonymous says

    Dividend Mantra,

    I am not new to your posts. I regularly check your writings as well as others on SA. I relate to your conservative approach as well as your in depth detailed thought process.

    Like you and everyone else I spend a lot of time finding value in this current market. Looking at my list of candidate tickers I understand that purchases done at fair or under intrinsic value today will require me to accept a certain level of risk yet without compromising company quality.

    Looking at your portfolio you do not hold IBM. In previous posts you state your aversion to tech companies and I agree with your arguments supporting this view. In order for these companies to continue increasing earnings they must innovate new technologies in accordance to the changing demands of the population…Still IBM deploys a smooth uprising earnings curve even during the great recession of 2008 and by some metrics it is undervalued. For disclosure I bought IBM on a dip in July.

    You hold in your portfolio the financial companies AFL, BNS, WFC. I also own these quality comapnies understanding that the finacial sector’s intrinsic risk is greater than say the consumer staples sector risk which in my opinion is overvalued at present.

    The point I am trying to make is that in today’s market I believe an investor must be willing to consider the purchase of fair to undervalued quality companies in market sectors that represent greater intrinsic risk. If someone is willing to take on the risk of the financial sector I believe this risk can be mitigated by exposure to other sectors like tech. For a large enough portfolio like yours the risk will be diluted across sectors. IBM would only represent a small percentage of your entire portfolio. (I am not trying to sell IBM. I am just using it as an example.)

    My intention in this post is not to be argumentative or to breed negative sentiment. Again I respect your site greatly and have learned a lot from your writings. I would be interested to know your thoughts on the above.

    Best regards.

    • says

      I will jump on the band wagon here. I bought IBM on recent DIP also at like 193.50. IBM has been consolidating for over a year, its warren buffett’s newest 10 digit portfolio holding that he is aggressively adding to. and what us dividend growth investors like to hear the most, the dividend growth has been very nice!! albeit the entry yield is still somewhat puny but I’m okay with that if the dividend growth can continue.

      Another thing that really impresses me about IBM is their ability to evolve. In 2004 they foresaw a slowdown in hardware and they began to sell/divest their hardware business and begin building their services business. I believe IBM now derives over 40% of its profits from services. So when you buy IBM you aren’t even buying a commodity-like business as most tech companies give you.

    • says


      Thanks for stopping by and offering the enlightening comment.

      I like IBM. Although I am averse to tech companies in general, I view IBM a bit differently due to their diversified nature and concentration on direct services. The high switching costs and entrenched services they offer allow them a sort of moat you don’t get with many tech companies. ADP would be another company I would view in a similar fashion. The only reason I am not yet invested in either company is because IBM has a very low yield and ADP has a valuation that is not favorable currently, in my opinion. I view IBM to be the better buy currently, because the valuation makes sense. I will likely own IBM at some point in the future, more likely sooner rather than later in spite of the relatively low entry yield.

      I also agree that one must look for value in sectors that maybe isn’t a first choice. For instance, I’ve been buying stakes in REITs even though it isn’t my favorite sector because many of the highest quality REITs have been falling quite hard and are now trading at relatively attractive valuations on a historical basis.

      Thanks again for stopping by.

      Take care!

    • says


      I agree 100%. I like IBM. I like the company a lot. It’s one of a very few tech companies I would be comfortable investing in. I like the diversified nature of the business, and the focus on services. Like I said above, I view the company in a similar light as ADP. Even though it’s tech, it’s information services as well. And those services, once installed, are hard to switch from. The low yield keeps me at bay for now, but after some recent REIT purchases, I might feel more inclined to venture out into a lower yielding security like IBM because, on balance, my portfolio yield won’t be affected too much.

      Best wishes!

    • says

      $25000 Dividends,

      You got it! I actually was just very recently talking about that on a radio interview. I’m three years in to a twelve year journey, so being about 25% of the way there works out perfectly. And in all reality, as I get closer the power of compounding should supercharge me to the finish line.

      You’ve already sprung ahead of me. Great job! Keep it up.

      Best regards!

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