Freedom Fund Update – March 2014

piggybank1Well, 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 itโ€™s aptly named. My portfolio is my way to freedom; freedom from a job I donโ€™t desire to purchase goods I donโ€™t need to impress neighbors I donโ€™t care about. This journey is all about freedom and flexibility. One day the dividend income this portfolio generates will fully replace my day jobโ€™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 Iโ€™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.

Itโ€™s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.

February proved to be an extremely fruitful month for the Fund. It was a much more exciting month than usual for me, as I actually prefer boring months when my portfolio elicits about as much excitement as watching grass grow. However, I suppose there is nothing wrong with enjoying a flurry of activity every once in a while as long as that activity is actually helping my portfolio achieve long-term goals.

Some of this aforementioned activity was due to actions on my part. I added to my position in Target Corporation (TGT) early in the month as it was setting 52-week lows. I felt this purchase made a lot of sense for me, as I was adding to a high quality retailer that’s been around for more than a century. Of course, while Mr. Market didn’t agree with me right away, TGT has since popped significantly. This exercise is a good example of why you always want to ignore the noise and separate company fundamentals from stock performance.

Then, as the month drew to a close I added to my position in The Coca-Cola Company (KO) as it too was setting 52-week lows. When the stock market gives me an opportunity like this I try to take advantage as capital allows. This was no exception, and I was simply fortunate to have a little excess capital available when the opportunity presented itself.

There were then activities in the portfolio I didn’t initiate. I’ll discuss these below.

ONEOK, Inc. (OKE) completed a spin-off of its natural gas distribution business, ONE Gas Inc. (OGS), as it is now focusing its operations as a sole general partner with limited partner interests in ONEOK Partners, L.P. (OKS). The terms were that every shareholder in OKE would receive one share of OGS for every four shares in OKE they owned. I owned 35 shares of OKE at the time of the transaction (and still do), and as such I received 8 shares of OGS. I also received cash in lieu for the .75 shares I was entitled to as no fractional shares of OGS were issued. This change is included in my portfolio. I don’t know what my long-term plans are for OGS yet, but it may not make sense to sell as the commission fees would be a large part of the overall position due to the small size.

Vodafone Group Plc (VOD) also completed the sale of its 45% ownership stake in Verizon Wireless during the month of February. Three things happened here. I received shares in Verizon Communications Inc. (VZ), my shares in VOD consolidated to reflect the loss of value in the Verizon Wireless business, and I’ll also receive a cash payment as part of Vodafone’s Return Of Value. For more information on this, I published an article shortly after the news of this transaction went public last September.ย  My total ownership stake in VOD stood at 150 shares before this transaction, and VOD did a reverse 6/11 split on the VOD shares as a share consolidation to reflect the sale. This means my 150 shares became 81 shares, with cash in lieu for the .81 shares I was entitled to as there were no fractional shares given under the consolidation. Furthermore, I received 39 shares of VZ. Finally, I’ll receive a cash payment as part of the Return Of Value, scheduled to hit my brokerage account on March 10, 2014. These changes are reflected in my portfolio; however, I believe my cost basis on VOD is a bit off here. I’ll correct this in the future as necessary.

With all of these changes, I have big news to announce. With the small amount of cash in my portfolio due to recently received dividends that have not yet been reinvested, my portfolio balance just eclipsed $150,000 for the very first time just yesterday. I started this journey in March 2010 with $5,000 and a dream. I now have 30 times that amount! I couldn’t be more excited or more proud. Thank you to everyone in this community who has supported me along the way, as I’ve learned as much from all of you as you have from me. As a community of investors and like-minded individuals we’re stronger as a group than we could ever be individually. This achievement is just proof that living below your means and actively investing your savings intelligently can provide huge results over a relatively short period of time. I don’t make much money, but I do have focus and drive. I believe in consistently saving and investing every single month, no matter what. And this is what results. Below, you can view a screenshot from my brokerage account.

brokeragevalue

The current market value of the Freedom Fund stands at $149,982.21. This is an increase of 4.1% over last month’s published value of $144,078.80. This is a big move, but the S&P 500 has gained even more. I continue to see weakness in some of my big stakes, including Philip Morris International (PM) and Kinder Morgan Inc. (KMI). However, I see these as opportunities rather than concerns. And, as always, I don’t compare my results directly to the S&P 500 as I believe this is a rather arbitrary comparison that doesn’t really reflect my personal goals that are focused on increasing income in early retirement.

Looking forward, I’m hoping to make at least one investment during the month of March. I’m hoping for two, but it depends onย  how much capital I have as I’ve been bogged down recently by a large tax bill as well as dental expenses. As always, I’ll look for an attractive opportunity that makes sense on a valuation basis while also considering portfolio weight.

I’m currently invested in 45 companies. This is an increase since last month, as I received the aforementioned spin-off shares in OGS and VZ.

These updates are mainly designed to show the increase or decrease in the value of the underlying equities Iโ€™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 donโ€™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 oneโ€™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 arenโ€™t, and from there I can make educated decisions (based on further due diligence) on which stocks Iโ€™d like to add fresh capital to (while considering portfolio weight as well).

Full Disclosure: Long TGT, KO, OKE, OGS, VOD, VZ, PM, KMI

How about you? Did you have a particularly fruitful February?

Thanks for reading.

Photo Credit: Stuart Miles/FreeDigitalPhotos.net

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75 Comments

  1. Hi DM,

    the picture from your account is awesome!
    150,125.93 USD ๐Ÿ™‚
    The best motivation that can give it.

    What is the target amount of your portfilio, that you can say: Now, I retire!
    I know, the cashflow from the dividends is more important.
    But if you calculate with 3.5% dividend yield – how much money do you need?

    Best regards
    D-S

  2. Great work! I bet 25 year old Jason wouldn’t ever believe he’d have this much money already and all the passive income coming in every month ๐Ÿ™‚ We’re seeing amazing results after just a few years of hard work and serious commitment. Congrats on the net worth milestone, and more importantly I’m excited to keep seeing those monthly dividends go up and up. Can’t wait to see which companies you purchase next. I’m also hoping to add a few more positions to my small portfolio in March, so many options! Let’s hope for some good values!

  3. That’s fantastic progression Jason. Nothing like a graph that goes from bottom left to top right as long as it isn’t debt lol. Hopefully more people will come by, be inspired and do the same thing!

  4. That graph says it all. Not only is has it increased dramatically but there is also limited volatility. Dividend stocks are the way to go.

    Dividend Prodigy

  5. Very nice, Jason. It wasn’t that long ago that we (DW and I) crossed that 150K milestone in our Roth accounts. I’ve read articles that postulate this as an important tipping point when it comes to DGR. Kind of the point where your dividend snowball reaches the precipice of a steeper hill and is about to start picking up speed. Well done.

    My wife is retired and I am about a year away. I’ll be rolling my 401K into an IRA so as to buy more DG stocks. I’m hoping that prices come down a bit between now and then. That should really give our snowball a hearty kick down the hill.

    You are doing a great job. In fact, you are doing so well that the next time you are in Michigan you should buy me an adult beverage. Perhaps a pizza as well. Ok…. I’ll get the tip. ๐Ÿ™‚

  6. Great work!!!

    Do you reinvest dividends or accumulate and purchase every quarter? I know a lot of discussion on this topic is on seeking alpha but wanted your opinion.

    Thanks,

    JM

  7. Congrats on your newest milestone! I know you dividend types like to stay focused on the income, but it’s pretty exciting to know that you could sell your portfolio for 150k today (or that it would cost 150k to buy your portfolio and the income it produces today, whereas you bought that income at a considerable discount!).

    Also, a 50k increase in a year is amazing. I’m interested in how quickly the milestones come now that you’ve made it past the first 100k ๐Ÿ™‚

  8. Thank you very much, DM!

    If you receive 17,500 USD in one year from dividends.
    Do you have to pay taxes in the USA for this amount?
    Or are dividends in the U.S. tax-free?

    Best whises!
    D-S

  9. Awesome progress in such a short period of time. Congrats on all the success! It’s amazing what’s possible when you have a plan and the conviction and will power to stick to it. Early FI is just around the corner for you!

    All the best.

  10. talesfromthetape,

    Thanks! I’m really proud of what I’ve done so far. Although there have been some that have made more progress quicker than I have, I really feel that I’ve done my absolute best. And I find peace in that.

    And I do hope others find inspiration in what I’ve done thus far. It just proves that you don’t need a six-figure income or some crazy investment tip to build a sizable portfolio and make a real difference in your life.

    Thanks for the support!

    Best regards.

  11. Dividend Prodigy,

    Reduced volatility is one great reason to invest in dividend growth stocks. Shares in many high quality companies that grow their dividends typically have lower beta than the overall market, which traditionally results in reduced volatility. And people who compare their portfolios to the S&P 500 should keep that in mind.

    Cheers!

  12. Steve,

    Congrats to you guys for also crossing this milestone! I feel that once I hit $100k I could really feel the power of compounding behind me. It just seems like things are speeding along quite nicely now, which may show why I went from $100k to $150k in less than a year.

    Enjoy your path to FI. It’s great to hear you’re right around the corner. I’m sure you’ll make the most of it! ๐Ÿ™‚

    Speaking of pizza, I have to get some Buddy’s next time I’m in Michigan. I love that Detroit-style deep dish. Good stuff! Maybe we can grab a pizza sometime on me!

    Best wishes.

  13. D-S,

    Thanks! The journey to get to this point has been really amazing. I’m just grateful that I started when I did. I wish I had started earlier, but we all do.

    As far as my “number” I think I could make it on $500k. That would provide about $1,500 per month in dividend income at a 3.5% yield. I’d feel pretty comfortable on that amount as of right now, but I’ll have to see if my expenses rise over the next three years. My spending right now is artificially inflated because I’m accounting for a car purchase. In addition, I likely will not have student loan debt to pay when I reach financial independence, so that will knock more than $200 from my expenses. So I’m almost1/3 of the way there, and I’m 1/3 of the way complete on my journey as I’m 4 years into a 12 year journey. I think I’m on pace. ๐Ÿ™‚

    Thanks for stopping by.

    Take care!

  14. Ryan,

    Thanks!

    Yeah, 25 year-old Jason had no idea what he was doing. To him, having $150k would have required winning the lottery. He was obviously wrong!

    I’m also hoping for some values in the market. I personally think KMI and PM represent attractive opportunities right now. I definitely cannot buy any more PM, but a piece of me is thinking of stretching and picking up a little more KMI.

    Good luck with growing your dividend snowball! ๐Ÿ™‚

    Best wishes.

  15. JM,

    I reinvest my dividends every single month. So I take the excess capital I have from the savings I generate by living below my means and combine that cash with dividends to make my purchases monthly. I reinvest selectively, however, meaning that I do not automatically DRIP, or reinvest my dividends automatically back into the security that paid them.

    I hope that helps. ๐Ÿ™‚

    Cheers.

  16. Your persistence is starting to pay off Jason.. Your compounding machine is also starting to take a nice shape.. I hope we are both alive and well to read your site when your net worth increases by 30 times from here..

    As for your investments, I would keep the shares of OGS if I were you.. Rather than sell and pay crazy commissions, just deploy the dividends elsewhere.

    I am still debating what to do about VZ. I am generally not too bullish on US telecom overall.. Of course it is such a small position that it might not even make sense to do anything other than redeploy distributions elsewhere..

    Keep up the good work Mantra.. I can smell the dividend freedom for you, that is just a few years away ๐Ÿ˜‰

    Dividend Growth Investor

  17. McSaveypants,

    Oh, don’t get me wrong. I focus on the dividend income, but it still feels really great to see that portfolio balance hit $150k. Even though it doesn’t actually change anything for me in terms of my goals it’s just human nature.

    I honestly didn’t think I’d go from $100k to $150k in one year – especially seeing as how I only grossed $60k for the entire year at my day job, and that was a record! If I’m able to keep this pace at work I’m quite sure the milestones would happen even faster as compounding really takes hold, but I’m afraid it won’t quite work out like that only because I’ve taken an income hit at work recently. Either way, I think I’ve made enough progress now to where slowing it down significantly will be difficult. That’s why it’s so important to make as much progress as early as possible. It wasn’t fun eating ramen noodles every day and riding my bike home in the rain for that first year, but it’s all worth it now. ๐Ÿ™‚

    Thanks for stopping by!

    Best regards.

  18. FFdividend,

    Thank you so much. I appreciate the support. ๐Ÿ™‚

    I doubt I’ll come anywhere near $200k this year, but I’ll certainly keep reinvesting dividends and purchasing attractively valued stocks when I can. It’s a slow, but rewarding path!

    Cheers.

  19. FI Fighter,

    Thanks, man. The progress thus far has been really stunning. I’m really proud of what I’ve been able to do on my income. I feel like my focus has never been sharper.

    And you’ve had amazing progress as well. Your shift from dividend stocks to real estate was huge, but obviously it really worked out great for you. That’s an amazing success story, and a template for anyone who is interested in doing the same.

    Keep up the great work! And let me know what FI is like, because I know for sure you’re going to get there first. ๐Ÿ™‚

    Take care.

  20. DGI,

    Thanks so much. I’ve appreciated your support since the beginning!

    I can only hope that I stay healthy enough to continue this journey and I’m able to blog about financial independence on the other side. I had a vision for this blog to be a journey from just above broke to financially independent on dividends, and then what life looks like when you’re living off of dividend income and living your life freely. I hope that I’m able to complete that vision.

    And I’m with you on the spin-off shares. I’ll keep OGS because it just doesn’t make sense to sell it. And I’ll probably do the same with VZ. I’m also not particularly bullish on US telecom because of saturation and competition, but I won’t mind reinvesting those hefty dividends elsewhere. That’s what I’m also doing with T, although that one is starting to get to the level (6%) where I’m interested in buying a little more. Not a lot, but a little.

    I think I’m on pace for my goal of reaching FI by 40. I’m 1/3 of the way into my journey of 12 years now, and I’m almost 1/3 of the way to the $1,500 in monthly dividend income I think I’ll need. I’m going to continue giving it my all, that I promise! ๐Ÿ™‚

    Wishing you the best as you approach financial independence as well. It’ll be pretty amazing as many of us fellow bloggers will likely hit financial independence around the same time. Looking forward to it!

    Best wishes.

  21. Congratulations on reaching $150K!!!! I love that graph showing your account value over time, that’s incredibly motivating and sobering at the same time. That amazing growth is the fruit of your labors, you definitely deserve it!

    I hope this post serves as a great example to naysayers out there who can’t fathom saving that much money on a middle class income. Hopefully this post will open people’s eyes to the real possibilities that are available to them when they reject the consumerist lifestyle.

    I hope things work out well with the proceeds of the OKE spinoff. I dislike it as much as you do when companies undergo that sort of split.

    Congrats again and keep up the good work.

  22. I also have enough PM. I’m holding it at a 4% capital loss right now in that I jumped the gun on the purchase. Still, I’m in it for the dividends so no biggie.

    I’m very tempted by KMI right now. I have yet to buy any of it. Nice div though. S&P and M-star both give it 4 stars. It’s also a holding in the M-star Dividend Investor Builder portfolio with a fair value of $40. It’s a long way from being a Dividend Aristocrat and is a little risky. Still, I wouldn’t mind adding a little juice to our portfolios. I might give it about a 2% allocation if I buy. Can’t go too crazy on it. After all, I’m an old guy that needs to be a little cautious.

  23. Does that mean your freedom fund value has grown by about the same amount as your net salary from last year? Badass.

    The pay cut really sucks, but you seem to be mitigating the damage by increasing your online income. You’re right that there’s no stopping that compounding snowball now that it’s got some momentum! I only started investing seriously at the beginning of 2013, and in October the value of my portfolio increased by more than my household’s pay from work that month. I know that month was exceptional in terms of returns, but it really brought home to me how powerful that pot of invested money is.

  24. D-S,

    Great question there.

    I’ve discussed how tax-friendly dividends are many times in the past, but your question really highlights that.

    $17,500 in dividends coming from qualified sources only would require $0 in income tax. However, I’ll have some non-qualified dividend income as I currently hold a few REITs. REIT dividends count as ordinary dividend income and are taxed at your marginal rate. However, at $17,500 in total income I’d pay very little taxes on the ordinary dividends after factoring in my marginal tax rate.

    Of course, things can change and there is a possibility that dividends may be taxed at less advantageous rates by the time I’m financially independent. But with the amount I’ll be living off of I anticipate to always have very small tax liabilities in early retirement. We’ll see how it goes, as I hope to be publishing all of that here live on the blog.

    Best wishes.

  25. Steve,

    I think KMI is very attractive here considering the valuation.

    However, as you noted the risk is amplified here due to the leveraged nature of the partnership. I wouldn’t put this in the same boat as a Coca-Cola or Procter & Gamble, that’s for sure. However, I accidentally ended up with a large position in KMI because the valuation made much more sense than many other high quality stocks when I made the purchases. That case still holds true today, as I think if the partnership continues to execute and perform properly you stand to do much better over the long haul with KMI at $32 than you do with PG at $80. Of course, with PG you have that safety, and that’s worth a premium.

    Cheers!

  26. McSaveypants,

    Amazing isn’t it? The power of compounding right before your very eyes.

    I’ve said before that money can word harder than I ever could. But when you actually see it happen right in front of you, as you did with last October’s portfolio value gain, the truth really hits home.

    Best of luck with seeing that happen even more and more! ๐Ÿ™‚

    Take care.

  27. Spoonman,

    Thanks. I’m really grateful for the amazing support here. I’m confident that I couldn’t have done as much as I have without the support of people like you.

    I also hope this is the proof in the pudding that proves the naysayers wrong. You could argue with my investment approach or the level of my frugality, but you can’t argue with the numbers. ๐Ÿ™‚

    I think 2014 is going to be a great year for many of us. There’s many of us hitting FI, like you, and there’s many of us really hitting great strides with our dividend income. Cheers to our success!

    Best wishes.

  28. Never had Buddy’s pizza. I think they are only in the Detroit area. The closest one is a little over an hour away. Might have to make the trek sometime. They certainly get rave reviews.

  29. Steve,

    Buddy’s is the king, but there are many suitable knockoffs. Jet’s, for instance, is probably the best and they’re readily available throughout Michigan. They dish up a pretty good Detroit-style pizza too.

    Take care.

  30. It is always good to see the market go up from a psychological view. It helps a investor sleep better a night. But it is nice to have Mr. Market have one of his moods to the downside to take advantage of buying stocks cheaper

    Nice 4.1% increase in the portfolio balance.

  31. I’m not a tax professional, but I do my own taxes and I’m pretty sure that whether you pay 0% or 15% or higher rates depend on your total income and whether you are married and probably other factors.

    Thanks for talking about the tax consequences, both of you, as I think this topic is really important when attempting to calculate what you need for early retirement.

  32. Congratulations on breaking that 150k mark! TGT’s performance this last month was fantastic and I only wish I could have accumulated more at such low prices. Thank you for continuing to inspire and keep up the good work!

  33. Investing Pursuits,

    I’m with you. While it’s psychologically wonderful to see the portfolio balance climb to these levels, I remind myself that it’s easier for me to create long-term wealth via the ability to accumulate cheaper shares if Mr. Market’s mood sours. Hopefully his euphoric mood ends soon!

    Take care.

  34. Great job! There’s no better feeling than to see life-long goals come to fruition. The wife and I should clear 200k in our 401s this year. I only wish I could invest that in DG stocks. Until I leave my employer, I’m stuck with mutual funds.

    I’ve got a separate taxable account that I’m using to invest in DG stocks and it’s doing well. Like you, I was accumulating TGT over the past few months but it looks like I’ll have to wait until it cools off. Until I started DG investing I never thought I’d be frustrated when a stock I owned went UP but here I am growling at my Scottrade account!

    It looks like I’ll be adding to KMI this month instead.

    Congratulations on your portfolio. You should really start seeing it take off now.

    Take care.

    Steve

  35. Dividendasaur,

    Thanks so much! It’s been a wonderful ride so far. ๐Ÿ™‚

    TGT has indeed been on a tear as of late. I anticipated TGT eventually returning to prior levels, but didn’t expect it to happen so soon. I expect TGT to be volatile for the next year or so, but I’m confident it’ll be a great long-term holding. I’m most excited to see what kind of dividend raise we get later in the year. I would expect it to be lower than normal, but it’ll be a little window into what management is thinking.

    Best regards!

  36. Steve,

    Congratulations to you and your wife for passing that milestone. That’s really an incredible number if you compare yourself to the average 401(k) balance. Nice!

    And I hear you on TGT. I wasn’t planning on accumulating any more shares, so it didn’t bother me much. However, this has happened to me in the past when I was actively accumulating. It’s quite a bummer!

    And I think you’d be making a great choice on KMI. I wasn’t planning on buying any more, but it’s quite tempting. I think it’s one of the more attractive opportunities on the market. A 5%+ yield with that kind of growth doesn’t come around every day.

    Thanks for the support. I do appreciate it. I’m looking forward to my snowball rolling itself downhill a bit now after doing some pretty heavy pushing over the last few years. ๐Ÿ™‚

    Best wishes.

  37. Congratulations Jason! A testament to your consistency and adherence to your plan. As I’ve said before, I think you will find your own version of FI long before that 12 years is up. Keep up that work and the inspiration you provide to so many.

  38. Jason,
    Just started following your blog several months ago, first time commenting. Let me add my voice to those above and say congratulations on your perseverance! Quantifying your successful so far is very gratifying I’m sure ๐Ÿ™‚

    I’m just starting out myself on the dividend investment strategy. Reading your blog, along with MMM has been very inspiring. I’m using the new loyal3 site to avoid getting wacked by excessive commissions. Its an exciting concept company, but still very new. So i’ll have see how it goes for the first bit here.

  39. The market definitely did rocket ahead after a brief pause. I’m glad to have around a 50/50 split between individual stocks (mostly dividend stocks, but some that I bought hoping for a pop like AAPL last April at $450) and the remainder of holdings in my 401k and IRAs in mostly ETF’s and mutual funds.

    I like the stocks much more, but like anything it’s wise to diversify, and I also like taking advantage of cost averaging by my monthly contributions to 401k.

    I agree, hitting $100k will be nice to finally feel the weight of the dividend snowball behind my portfolio. In 2013 I entered about $20k in new stock holdings, but this year will likely be much less (around $4k in new purchases so far). I’m trying to grow my liquid cash holdings a bit to have more of a cushion so this year may be a bit slower than last, but between stocks and 401k I still plan to pump in around $20k total.

    Great progress, and I agree. I sort of hope we hit a recession in the next few years. I’ll be waiting with a large cash pile ready for deployment ๐Ÿ™‚

  40. Hi Jason,

    congratulation to 150k dollars! I think it would be interesting (at least for me) to know, how much time did you need for each 50k milestone? I think I discovered your blog one year ago when you hit the 100k mark (which fits with your screenshot). How long do you think you’ll need for the next 50k (or 100k ๐Ÿ™‚ )?

    Keep the good work up – you & your blog were the inspiration for me to save money and invest in stocks.

    Best wishes from Austria,
    Leo

  41. Jason, congratulations on reaching the $150k milestone. That is great progress!

    In one comment you say you could retire on $500k. That’s probably less than 7 years from now… I’m wondering how you think about “ending” this journey. Would it be when you reach the age of 40, or when you reach a portfolio size and yield that combine to cover your expenses comfortably (FI)?

    I’m asking because it seems like you’ll reach FI before you turn 40.

    Cheers
    Ferdi

  42. Hey Jason, i was just hunting around for ‘cheap’ stocks at good value and good dividends and one that kept popping up on the radar was RIG. The book value is currently 46 so it is undervalued, 5.3% dividend, 43% payout ratio, oversold on the long term charts and a PEG way down which is great. Am i missing something with this stock or is one where everyone just hates? I picked some up anyway, fundamentals seem fine to me, just going through a soft patch?

  43. Hey DM,

    Great to see your progress! What are your thoughts on ATT (T) at the current price and yield of approximately 6% (5.78% to be precise)? I know that they have been increasing their dividend by just 1 cent for the last few years.

  44. Congratulations on reaching $150K, Jason! I’ve been following your journey for quite some time (long before Cashville Skyline) and it’s been amazing to see your progress. Your commitment is truly an inspiration!

  45. Great Job Jason. I really enjoy reading your blog. Im only starting and My portfolio has only just eclipsed the 14,000 dollar amount. That gets me stoked and I want to keep putting around half or more of my income into dividend stocks. Just as an aside, I also use scottrade. Do you frip every month quarter or what? Also Ive been jumping around on the companies selected based on their intrinsic value and Ex-dividend date. Thanks for the book recommendation of The Intelligent Investor. Im learning a lot. Mahalo. Kevin

  46. Not Jason (obviously) but I just picked up some T today…I agree it looks really attractive at these levels…

  47. I picked up T almost exactly 2 years ago (8 quarters since) and it’s been a good pick. Avg. basis was $30.50/share. Div at the time was $.44/qtr and now it’s $.46/qtr (not much growth). However, with reinvested dividends, my total holding has grown from $3,345 to $3,879 (CAGR of 7.6%). Far from great, considering most other holdings performed way better, but utilities/telecom is a nice one to have for its cash flow over the medium-long term. It definitely won’t beat a lot of benchmarks, but it does reduce the risk a lot in my portfolio with a consistent 5-6% per yr.

  48. Congratulations on your most recent milestone; your story is truly inspirational. May I ask what retirement structure you use (Roth, general brokerage, etc.)?

  49. DM,

    Congrats on reaching $150! The snowball is growing and starting to gain real momentum. I bet those two weeks off flew by. Hopefully in the next few years instead of 2 weeks it will be 2000 weeks. T is still on my list of stocks to buy along with KMI. They both have some obstacles in front of them as most companies at 52 week lows do. I plan on adding some of both along with Pepsi.

    Keep fighting the good fight!

  50. W2R,

    Thanks so much! I really appreciate the well wishes.

    I hope that I’m indeed able to find my own version of freedom before the 12 years is up.

    Best of luck to you as you continue to increase your passive income at substantial rates. ๐Ÿ™‚

    Cheers.

  51. Seth,

    Thanks for taking the time to drop a comment for the first time. I appreciate it. I think you’ll find a lot of value in the comments. ๐Ÿ™‚

    Congratulations for starting your own journey! I think you’ll find the dividend growth investing strategy really rewarding. It’s hard to argue with steadily rising dividends.

    MMM is a great blog. Pete was kind enough to let me guest post there a while back. Great stuff abound on that site.

    Best of luck building your castle one brick at a time!

    Take care.

  52. Ravi,

    Great job putting capital to work like that. Investing $20k/year is unfathomable to most of our population. I’m quite sure you’ll feel the power of your snowball behind you very soon. Keep up the great work!

    Best regards.

  53. justin,

    I would encourage you to not look at a portfolio like that. A portfolio is designed to generate as much growing income as possible.

    However, I did pull out the numbers.

    I’ve contributed $105,448.00 to my portfolio since the beginning. I’ve also received a total of $8,336.68 in dividends. The rest is capital gains.

    Cheers.

  54. Leo,

    Thanks for stopping by from Austria!

    It will be interesting to see if the $50k milestones do indeed occur at a more rapid pace; however, much of this will be beyond my control. Mr. Market’s emotional pricing policy has much to do with the value of my portfolio, so I try not to take too much stock in it (pun intended).

    However, I went from $0 in early 2010 to the first $50k in December 2011 (24 months). Then it took from December 2011 to March 2013 to hit $100k (15 months). Then, of course, it took until March 2014 to hit $150k (12 months). So the rate is definitely accelerating. It’s hard to say how long it’ll be until I hit $200k because there is so much that is not under my control. However, assuming a best-case scenario, I might be able to hit it in January or February of next year. ๐Ÿ™‚

    Thanks so much for the kind words. I’m so glad you’ve found some inspiration here in what I do and write about. That’s why I do this. I only hope that people read about my journey and are inspired to start their own journey. Every day is an opportunity to better yourself and create real wealth. Keep it up!

    Best wishes.

  55. Ferdi,

    Thanks so much! I’m incredibly grateful for the success I’ve had thus far. ๐Ÿ™‚

    I would cash in my “financial independence ticket” the moment I’m confident my dividend income exceeds my expenses. 40 was kind of an age I picked for myself because it was a nice, round number, and I felt like 12 years would be enough time for me to gain the financial security necessary to retire. However, if that security, via passive income, is gained before 40 then there would be no need to wait.

    And I’m hoping you’re right. I’d certainly love to get there before 40!

    Thanks for stopping by.

    Best wishes.

  56. talesfromthetape,

    Transocean doesn’t seem to have a very clear dividend policy in place. I try to invest in companies that have clear policies on not just paying dividends, but increasing them on a fairly reliable schedule. RIG could be a fantastic investment, but it just doesn’t fit my investor profile.

    Best of luck if you invest in RIG! ๐Ÿ™‚

    Best regards.

  57. Denver,

    I’m lukewarm on AT&T. I’m a shareholder, but it’s a small position. However, I think it’s fairly attractive here. I would consider investing more knowing that it’s likely just going to be a solid income producer without much growth. And I certainly have a couple spots in my portfolio for such holdings. I use the high income from certain holdings (like T) and invest the dividends elsewhere.

    I’m just not sure where the growth is going to come from with T. You’ve got a saturated wireless market, and T has been using subscriber growth in wireless to offset losses in wireline. However, last I looked there appeared to be some stabilization of wireline losses due to the growth U-Verse.

    The competition is stiff here in the US telecom market, and the margins aren’t that great. I look at telecoms as a utility, and that’s why I don’t have much in the way of utility holdings but do have telecom holdings.

    Best of luck!

    Cheers.

  58. Kevin,

    Great job! Congratulations on passing $14,000! It wasn’t that long ago that my portfolio was valued at the same amount. You can go back to some of my original FF Updates and see when it was priced in the mid-$20k range. That was just a few short years ago. The progress is real. ๐Ÿ™‚

    I don’t use FRIP because I actively combine fresh dividends with the money I save from my day job and make purchases with the combined sources of capital. However, I think FRIP is a great program!

    And glad you enjoyed The Intelligent Investor. Probably the greatest book on investing ever written.

    Best regards!

  59. Pipeline,

    Thanks, man. The snowball is indeed turning into a real monster. I’m anxious for the day I can get out of the way and let it continue to roll downhill with no pushing on my part.

    And those two weeks flew by very quickly, unfortunately. It was a great preview of what financial independence looks like, and I now know exactly what I’m missing out on. I’m more motivated than ever!

    KMI is a great pick here. I’m thinking of stretching myself and buying a little more, but I’m already comfortably allocated. I’m going back and forth on it, but it’s a hell of an opportunity. I think T looks nice as well, but I would suspect that KMI can outgrow T handily over the long haul. Of course, you probably have much less risk with the latter. I’m thinking of adding to my T here as it’s a small holding for me. I wouldn’t mind the extra income which I can reinvest elsewhere.

    Best regards!

  60. Congratulations on the 150K milestone Jason! That is a tremendous accomplishment for anyone, but you worked your butt off these past years and you deserve it. Keep at it and and don’t loose your focus as you are not done climbing the mountain of financial independence. See you on top!

  61. DividendVet,

    Thanks. I appreciate the kind words!

    I’ve definitely worked incredibly hard, but what I’ve achieved just shows how far hard work can take you. And I know you’re aware of that.

    So keep working hard and I’ll see you at the top as well. ๐Ÿ™‚

    Cheers.

  62. DM
    Have a difficult time joining the discussion on my iPad and was unable to scroll thru the various holdings you post, but what was visible was just up until PM….

    Which is the point of this comment….

    I’m not sure of the percentage PM is of your holdings, but given your substantial current diversification (42 positions), I honestly wouldn’t even worry about it at this stage of the game. My guess is that it’s probably around 8-10%. If your next available dollars feel like they should continue to go into PM due to the current valuation, an extra 1-2% won’t hurt you in the long run as the dividends and additional contributions will grow other positions around it as valuations change.

    That said, as you approach the end game and dollars will not be as readily available to “even things out” it might make more sense to be cognizant of the percentages individual stocks are of your portfolio. Until then trust your abilities as a careful and thoughtful stock picker. There is nothing wrong with the fact that you are getting better at eyeing value. Evidence is the leaps and bounds your portfolio has grown in the past year. Wouldn’t even say many current holdings are too far overvalued even post this surge in $ value, as it was the result of holding on to rock solid stocks whose share prices were coiled springs. Eventually they had to extend to their normal value ranges.

    I too have had great success in the market over the past year and have been steadily outpacing the averages. What I’m doing is working and my success can be attributed to consistent and calculated individual decisions. This is what DGI is designed to do, and I understand my comparative success will not always play out as favorably, but my plans w on’t change if/when that happens.

    BY4Y

  63. Congratulations. That is quite an impressive performance from just 5k in 2010.

    Just out of interest do you know how much tax you are paying on your US dividend income?

  64. That’s an impressive portfolio, Jason. Well done! I am starting to come around on your way of thinking: that income in early retirement is the real goal, not a large portfolio in and of itself. I think we’ll try to skin the cat in another way (via rental properties), but cashflow/income will be the name of the game.

  65. Sydog,

    Sorry about the difficulties regarding viewing my portfolio on your iPad. I may change how my portfolio is listed, perhaps using a static page in the future. I currently use Google Drive for this, but it has limitations.

    I hear you on PM. I could add, but I’m just a bit concerned about diversification. As Mr. Market recognizes PM’s value in the future it will naturally become a larger part of my portfolio with no action on my part. I currently own 115 shares of PM, which means it comprises about 6.2% of my portfolio. While I feel it’s a great buy right now, I just don’t want to go crazy. It’s actually my goal to own a relatively balanced portfolio once I’m living off my dividend income. While I’ve still got a long road in front of me, if I keep adding to major positions I’ll have a hard time filling in the smaller positions because eventually Mr. Market will realize PM’s value and it’ll then be an even bigger piece of my portfolio pie.

    There’s still many positions that I’d like to add to, and new investments that demand my limited capital. It’s a problem of so many stocks and so little capital. First world problems, of course.

    Best regards!

  66. Under The Money Tree,

    Thanks for stopping by.

    I appreciate the support. I’m extremely proud of what I’ve been able to do thus far, but I know I still have a long road and a lot of hard work in front of me. But I’m ready for it. ๐Ÿ™‚

    I pay 15% on most of my dividends. About 98% of my dividends last year were qualified, and taxed at 15%. But once I’m living off of my dividend income it’ll be likely my total tax rate will be somewhere around 1% or so because I’ll be under the 15% threshold for qualified dividends.

    I hope that helps!

    Take care.

  67. DB40,

    Sounds like you have a great plan there. Ultimately, it’s all about income because that’s what pays the bills. Many successful investors generate a substantial portion of their income from rental properties, so that’s certainly a great way to go. I’d say the risk/reward is a bit more aggressive than blue chip stock investing, but nothing wrong with that if you’re familiar with your market and you know what you’re doing. ๐Ÿ™‚

    Best of luck with the passive income regardless of how you generate it!

    Cheers.

  68. I know you’re more of a dividend investor, but what are your thoughts on the automotive sector?

    I picked up an article recently showing the top 10 companies hold $221B in cash! Seems like a sector ripe for either buybacks, dividend increases, or investment (some sort of future growth). $65B just between Ford and GM.

    With both companies yielding 3% now, I think they are big winners. I’m not sure whether they’ll be bigger growth stocks or cash flow picks, but in either case I don’t think 100% total return over 7 years is unrealistic.

  69. Ravi,

    I’m not enamored with the auto sector at all. It’s way too cyclical to support any meaningful dividend growth records, in my opinion.

    I don’t just look for yields, but I also look for sustainable dividend growth supported by earnings and revenue growth. If a company can’t grow over the long haul then I can’t count on my income growing in tandem. The auto companies may grow substantially from here, but there’s a lot more questions than answers for me.

    Best of luck!

    Cheers.

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