Recent Buy

The market hasn't been as cooperative as I would have liked over the past month. I would have enjoyed a 500 or 1,000 point drop in the Dow Jones Industrial Average to bring some of the share prices in companies that I'm interested in down to earthly levels. But, alas, such was not to be. That's fine. I continue to make my monthly purchases in high quality dividend growth stocks, as I become a part-owner in these fantastic companies for the long-term. Meanwhile, as a benefit of being a part-owner I collect rising dividends which I combine with fresh capital from my day job and make further investments as opportunities present themselves. Sounds like a winning strategy to me!

As part of my Recent Buy series, I try to let my readers know of any equities I purchase soon after the transaction is completed. This is just one way I try to document my progress toward early retirement and financial independence.

Three Canadian Stocks On My Watchlist

I'm always looking for ways to improve and grow my Freedom Fund through international diversification when possible. Most of my portfolio is currently invested in major U.S. blue chip companies like Johnson & Johnson (JNJ) and PepsiCo, Inc (PEP). The great thing about these companies, however, is that they are multinational companies that operate on a global scale, so even though they are headquartered here in the U.S., they are truly international companies.

But that doesn't mean one shouldn't still own companies that are based in countries other than the United States. Many great companies operate in other countries and have great exposure to markets outside our borders. There are thousands of companies out there that aren't U.S.-based. The great thing is that you don't have to fly over to London to buy U.K.-based stocks. Many great international companies trade on our exchanges here in the U.S. using American depository receipts (ADR). Also, some foreign-based stocks trade on our exchange just like any other stock. These are "interlisted" stocks, which means they trade on multiple exchanges. This is typically true of major Canadian stocks.

Lately, I've been looking at some of these interlisted Canadian stocks as possible additions to my portfolio. There are some inherently attractive qualities to Canadian companies. First, they operate in a very stable country. Canada has one of the most stable governments in the world, and as such also have a very stable currency. They are neighbors to this country with a shared language and often common goals. Another great thing is that many of the Canadian companies that have common stock that's interlisted on our exchanges have operations that are easy to understand and translate well for an American investor.

After some research over the last week or so I've narrowed my interest to three specific Canadian stocks, which I'll discuss below.

Weekdend Reading - February 22, 2013

2013 has gotten off to a bang for us dividend growth investors. No, I'm not talking about the epic run the broad market has had so far, as that only makes quality companies more expensive to purchase and hence impedes my ability to purchase shares in great businesses at attractive prices. Rather, I'm talking about some big dividend raises from some of our favorite holdings. One of the keys of dividend growth investing is the growth of the dividend of course. And with some big raises I recently wrote about, you can also count PepsiCo, Inc. (PEP) for a 5.6% raise, The Coca-Cola Company (KO) with a dividend raise of 9.8% and Wal-Mart Stores, Inc. (WMT) with a monster raise of 18%!

Just quality companies with global operations continuing to reward loyal, long-term shareholders with bountiful dividends. These dividend raises just show how quickly one can grow their own dividend tree. Mine started off as a $5,000 seed back in early 2010. It has now grown into a $95,000 oak tree.

I sit here on Friday night, after a long 52-hour work week that drained me dry. I continue to become more and more motivated by the dividend growth investing strategy and the increasing dividends that have been coming my way. I love few things more in life than being a part-owner in 29 high quality companies that continue to grow their operations, earnings and dividends. I look forward to the day that I can wake up on a Monday morning and realize I don't have to go to work, because the companies I'm investing in are working for me!

Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.

The Big Three

This Is Ridiculous

No, this article isn't about the three major U.S. auto manufacturers or a trio of basketball players.

This post is going to hone in and focus on the three major expenses that most of us face and why it's so important to minimize these as much as possible. I'm also going to provide you with examples where I have done my best to minimize these expenses.

Recent Buy

Hi. My name is Dividend Mantra. I have a problem. I'm addicted to dividends.

Ha! I'm just kidding of course. But, if there were a "Dividend Addicts Anonymous" I would probably be a founding member. Who wants to join me?

I had planned on refraining from purchasing any more equities until next month, choosing instead to sit on a small cash position hoping for some market weakness heading into March. But I always go back to remembering what I'm doing here in the first place: building a dividend growth portfolio to supply me with rising passive income to fund an early retirement. It's hard to build a portfolio if you're not buying stocks. Besides, as always I believe it's possible to find attractively valued/fairly valued stocks in all market conditions. I don't focus on the value of the market as a whole, but instead focus on the individual businesses behind the stocks and the valuation of those individual stocks. And so with this viewpoint I decided to deploy some capital and add a new position to my portfolio.

As part of my Recent Buy series, I try to let my readers know of any equities I purchase soon after the transaction is completed. This is just one way I try to document my progress toward early retirement and financial independence.

Recent Dividend Increases

As a dividend growth investor, one of the primary objectives I seek is passive dividend income from my investments that increases over the rate of inflation, annually. It's always wonderful news when companies decide to reward loyal long-term shareholders with a dividend raise. Some recent dividend increases include:

Recent Buy

The Dow Jones Industrial Average crossed back over the 14,000 point mark today, a level it's been hovering just under or just over for the last couple of weeks. It's no secret the stock market has been like a rocket ship since the beginning of the year. As such, us value investors that focus on dividend growth stocks trading at attractive long-term prices relative to their intrinsic value face an uphill battle. What I've been focusing on over the last few weeks is buying quality on dips, as you can see here and here.

In a market that's as strong as this one, I like to increase my ownership stake in high quality businesses (even if they're trading for a fair price) that have durable economic moats. This affords a certain level of comfort in case the market starts to decline precipitously. High quality dividend growth stocks tend to do well in falling markets due to their defensive nature and investors history of fleeing to safety in the face of volatility. As such, I recently increased my ownership stake in one of the highest quality companies in the world.

Income/Expenses For January 2013

Each month I will post my income/expenses for the previous month. I track every dollar in and out, so what you see is exactly what I earned and spent (rounded to the nearest dollar).

Recent Buy

I haven't seen too many attractive opportunities available lately. Many of the dividend growth stocks I follow (somewhere around 100) have had quite a run-up with the general market over the last six months, and as such it's priced me a bit out of equities right now. I continue to keep an eye on my own holdings, as well as those companies I'd like to own a piece of for any significant dips which would create an opportunity to purchase shares at an attractive price relative to intrinsic value. As with my Johnson & Johnson (JNJ) purchase, I'm willing to pay all the way up to full fair price right now seeing as how there are few, if any, significantly undervalued stocks available on the market right now.

As part of my Recent Buy series, I try to let my readers know of any equities I purchase soon after the transaction is completed. This is just one way I try to document my progress toward early retirement and financial independence.

Who Are You?

No, this isn't a WHO song. This is your life. 

You ever go to a party and introduce yourself? Usually you say hi and make small chitchat, but shortly thereafter the conversation usually tends to gravitate towards work.

"What do you do for a living?"

How common is this question? I'd say pretty damn common. Why is that?

I think the answer is that we, as a society, identify ourselves by our occupation. And that's really not all that surprising, considering many of us spend a great deal of time earning a paycheck at whatever it is we all do. Not only is there usually an education that one must receive to do certain jobs in life, but there's also the waking up early, commuting and then spending 8-10 hours a day at our jobs.

Does it have to be this way? Should we identify ourselves by our jobs? 

Dividend Income Update - January 2013

Another month has passed by, and it's time for me to post an article on my favorite subject: dividend income. The reason why I love to post articles on dividend income is because it's pure numbers. It's hard to argue the success of long-term dividend growth investing when you can slowly and surely see dividend income rise over time and get closer to covering one's expenses.

January's dividends were not particularly spectacular. This was due to the fact that a number of companies that usually pay out in January decided to accelerate their dividend payments in time for a December payout in case there were dramatic tax changes affecting dividends due to the Fiscal Cliff concerns. Obviously we all know those concerns were overblown, but the fact that some of these companies are so thoughtful about individual investors makes me smile. I would have preferred to keep the dividends on a regular schedule, but again the decision was made with shareholder's best interest in mind. In any case, I'm always excited to post these updates and I'm always grateful to receive a piece of profits from the ongoing business operations of companies I own a stake in. It does give me great joy!

I hope these monthly dividend income reports provide inspiration for any investors out there that are just starting out. It's easy to see these payments rising month after month and it shows that it's possible to one day pay for monthly expenses with dividends, which would provide an investor opportunities and freedom to pursue other interests than full-time work. Without further ado:

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.