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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.

August was just another spectacularly boringΒ month where the dividends kept pouring in and the Fund continued to benefit from ownership stakes in 49 wonderful businesses across a variety of sectors and geographies. I’ve purposely built the portfolio into a powerhouse where no one business, geography, or sector has an overwhelming effect on its ability to generate regular and reliableΒ dividend income that rises well above the rate of inflation.

McDonald’s Corporation (MCD) is struggling because of food supplier issues, menu complications, expanding health awareness, and changing eating habits? That’s okay becauseΒ Kinder Morgan Inc. (KMI) is consolidating operationsΒ and planning to increase their dividend by a 10% annual rate from 2015-2010. Where and when one business may falter a bit, there are five other businesses in line to pick up the slack. Thus, the snowball keeps rolling!

I had very little activity over the previous month. My sole transaction was to add to my burgeoning position in Deere & Company (DE), which is a company that I believe looks pretty solidly positioned for the long haul.

My overall capital availability for new stock purchases has decreased somewhat since quitting my role inΒ the auto industry to pursue writing on a full-time basis, but I continue to allocate as much capital as I can to the portfolio so as to stay on pace for my ultimate goal of financial independence by 40 years old. I think if I can stick to the plan whereby I still save substantial portions of my income and use those savings to invest every single month I’ll be in a position that looks an awfully lot like financial independence by the time I’m four decades old.

The current market value of the Fund stands at $171,328.09, which is a 4.06% increase over last month’s published value of $164,642.84. This is the first time my portfolio has ever ended a month with a value over $170,000. Cheers to another milestone!

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That’s a solid performance over the last month, and these types of increases on a percentage basis become increasingly harder to attain both as my portfolio value has increased and available capital for stock purchases has decreased. Furthermore, my portfolio is basically like a small raft floating in the market’s ocean – market fluctuations have a significant effect on the Fund’s value, much more so than any purchasing activity I can initiate.

The portfolio’s performance this past monthΒ was helped by the aforementioned move KMI announced, which caused KMI’s stock price to advance quite appreciably. In addition, major stakes in companies like PepsiCo, Inc. (PEP) and The Coca-Cola Company (KO) have done well over the course of August.

I’m currently invested in 49 companies. This is unchanged since last month.

These updates are mainly designed to show the increase or decrease 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 MCD, KMI, DE, PEP, and KO.

How was your August? A great month for your portfolio?Β 

Thanks for reading.

Photo Credit: Stuart Miles/FreeDigitalPhotos.net

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108 Comments

  1. Looking good! And congratulations on hitting the 170k milestone! Just out of interest, would you consider selling MCD at any point if their profits continue to show a downward trend in the immediate future? Or just ride out the storm?

  2. Congratulations on reaching another milestone, Jason! I received my first dividend payout from KMI this month. $25 may not be much, but it feels pretty amazing when you’re unemployed. Enjoy the rest of Labor Day!

  3. August is really shaping up with some good gains. MCD has some challenges ahead as long as they can adapt things they will be ok. Grats on 170k. Wonder how this next year will shape up for u and hopefully u can hit 200k by next spring or sooner. Your online income should increase.

    Do you listen to smart passive income podcast at all? Some good tips there that apply to you to get your online income rocking.

  4. Congrats on the 170k milestone! Gearing up for 200k? πŸ™‚

    My portfolio did pretty well too – it ended at 17.5k this month (WOW your freedom fund is 10x the size of mine), and I am aiming for 25k by the end of the year! πŸ™‚

    Can’t wait for your dividend income update!

  5. Way to go Jason…Congrats on $170K. A 4% monthly gain is really impressive. CDs and savings accounts don’t make that in a year! πŸ™‚

    Wishing you continued success as you inch closer to the $200K milestone! AFFJ

  6. DM,

    Think about this – your portfolio is up almost 30K since 12/31 based on capital infusion and market appreciation. With two powerful months of dividends – September & December – still looming, as well as an uncertain Mr. Market – you may be close to $200K aka a GIGANTIC milestone. But we all know it’s about yield and income. Let the market smack us 10-20% and let us pick those companies up that would be undervalued fundamentally. Great job DM, persistence, as you said, is key and you need to stick with your strategy and gut, and all else will play out well. Talk soon, hope you were able to enjoy Labor Day!

    -Lanny

  7. Great job! That’s a great achievement! The nice thing about dividend stocks is there are always others to choose from. If one is under preforming you can always keep your eye’s open for others.

  8. Awesome Jason… even more spectacular (from a valuation standpoint) is that your portfolio has gained value of almost $30k, which is pretty much half of what your old salary was. Amazing what a little investing and dedication can do given the opportunity to compound on itself.

  9. nice job mantra. I’m currently $95K and some change.. I made big purchases in mcd, ko, cop, and duk within the last few months. Incidentally, I got lucky with kmi. I made several purchases within the last 4 months of about 2K and 3.5K, all before the announcement of the consolidation. And then boom!

    Got to love them divvies starting next year!

  10. Great job Jason! $200k is just around the corner. That’s a very exciting number that we hit with our dividend portfolio recently. πŸ™‚

  11. DM,

    Fantastic results! The best part is that most of the hard work building your portfolio has been accomplished. You should start having months where your increases exceed your contributions. In the mean time, keep adding more coal to the fire as circumstances permit and enjoy your snowball.

    MDP

  12. “August was just another spectacularly boring month where the dividends kept pouring in… ”

    Haha! I love that line. Boring but steady wins the race =).

    I’ve more or less gotten over the KMP debacle and I’m ready to embrace KMI. I’ll just hang on to the shares and let things happen as they will. The 10% dividend increase over the next several years will more than make up for the near term inconvenience.

    Congrats on surpassing the 170K milestone!

  13. Hi Jason,

    congratulations to you and your performance so far. You are really on the way…
    My August dividend income was far away from July, but I was able to increase the numbers compared to last year. Therefore I am also confident.

    Wish you a good week.

    Best regards from Germany
    rickrack

  14. Congrats on another great month. 170K is great for the portfolio. I hope to reach it sometime soon. KO and PEP had a great August. I had these two in my watch list for august, but didn’t end up buying either one as I was hoping for some lower prices. Let’s see what September holds for us.

    DGJ

  15. Nicola,

    Thanks so much!

    I have no reason to sell MCD right now. The growth has stalled over the last few years, but it’s still a very profitable enterprise and the dividend is well-covered. However, if the fundamentals deteriorate strongly I’ll have to consider whether or not I still want to own a slice of that business. I think they’re still positioned very well for success, but they must adapt to changing tastes, consumers, and markets.

    There’s a lot of negativity regarding MCD right now, which is usually when I look to buy. However, I’m not quite sure that some of this negativity isn’t warranted.

    Not interested in buying, but I’m not interested in selling either. I’m glad to hold right now and let MCD management figure it out. We’ll see how it goes!

    Thanks for stopping by!

    Best regards.

  16. Henry,

    Thanks so much. Getting closer every single month. πŸ™‚

    Glad you also had a great month over there. I know you’ve been very busy buying stocks. You’re killing it. Keep it up!

    Cheers.

  17. Addison,

    Congrats on your first KMI payout. I hope it’s just the first of many for you. πŸ™‚

    Every dollar counts right now. Flexibility is one aspect I love about dividends. That’s $25 more than you would have otherwise had, which now comes in pretty handy.

    Best of luck finding the right opportunity.

    Cheers!

  18. A-G,

    I’ve never actually listened to that podcast before, but I probably should now since I’m generating most of my income from writing. I honestly never intended to get to this point. This kind of all worked out accidentally for me, but I’m certainly glad it did.

    Appreciate you stopping by and offering the support. The crazy thing is that you just bought REITs on margin to the same tune of what my entire portfolio is worth. Slow and steady… πŸ™‚

    Cheers!

  19. Tauri,

    Thank you!

    $200k will depend largely on Mr. Market. Assuming no major corrections, I might be able to get there by the end of next year. We’ll see how it goes!

    Hope all is well over there.

    Take care!

  20. IP,

    Absolutely. The value of the Fund would decrease, but my current capital (which is now more limited) would be able to go much further. Let’s keep our fingers crossed! πŸ™‚

    Cheers.

  21. August was a quiet month but rocked some serous gains.

    Investment portfolio edged a bit over 130 while net assets are approaching 170. Difference in cash and an old CD.

    Decided yesterday to max out the 401k this year so income will drop a bit through December while I catch up, but with cash approaching my heavy target balance, I may be pushed into more taxable investments next year anyway.

    Looking forward to 2015 when I hit my cash target and can get back into the rhythm of things with a maxed out 401k, Roth, and some more investing fun!

  22. Seraph,

    Thank you so much!

    It might be 10x your portfolio right now, but that will change. Stay consistent, stay aggressive, and keep your eye on the prize. You’ll be there before you know it. Plus, you’re starting off WAY younger than I did. By the time you’re my age you’ll be far ahead of where I’m at right now. πŸ™‚

    Keep up the great work.

    Best wishes!

  23. JC,

    Thanks so much!

    The value of the Fund ultimately matters very little, but it’s nice to see that the businesses I’m invested in are generally doing well. Their stock prices are generally just a reflection of that.

    Hope all is well with the family over there. πŸ™‚

    Best wishes.

  24. AFFJ,

    I’d hate to be in CDs or savings accounts right now! πŸ™‚

    Thanks so much for the ongoing support. Really appreciate it! Wishing you and your family continued success as well.

    Cheers.

  25. Lanny,

    Labor Day has indeed been good here. Played some cards with family. Didn’t stay as busy with moving furniture and painting as I thought we would. Hope you had a great Labor Day as well! πŸ™‚

    And you’re right. The value of the Fund ultimately matters little against the rising dividend income it spits out. Let’s hope we get some cheaper stocks here pretty soon and our current capital can work even harder for us!

    Thanks for stopping by. Keep up the great work over there.

    Best regards.

  26. FF,

    Exactly. When one stock is priced quite expensively, odds are fairly good that you’ll be able to find another stock that’s a bit cheaper relative to fundamentals. That’s one great thing about buying individual stocks, rather than trying to buy the whole market.

    Thanks so much for the support! Hope your journey is proving even more fruitful than my own. πŸ™‚

    Take care.

  27. W2R,

    That’s exactly it. I see some people out there with big time net worth numbers out there and they’ll gain more than $100k in a single year, which is sometimes more than they could make at their day job. I always say money can work harder than I ever could, and it’s true. πŸ™‚

    Looking forward to seeing your updates get all caught up! And I hope married life is treating you very well.

    Cheers!

  28. jm,

    The big stock price pop is nice for the moment, but those KMI dividends that are going to be pipelined into your brokerage account are going to be even sweeter! πŸ™‚

    Enjoy the ride, my friend.

    Best wishes.

  29. Tawcan,

    Congrats to you guys! That’s a very exciting milestone, isn’t it?

    The value ultimately takes a back seat to dividend income, but it’s nice to see the collection of businesses humming along. πŸ™‚

    Thanks for stopping by. Keep it up!

    Best regards.

  30. MDP,

    I’m glad I did the heavy lifting while I had the income to do so. I’d feel really bad if I would have wasted it all away. Now the snowball is rolling downhill a bit and I can let off the throttle. Of course, I’m going to keep doing as much as I can with what I’ve got, so it’ll be exciting to see how things progress.

    I won’t be catching up to you anytime soon (or ever), but it’s inspiring to see you rocking out! πŸ™‚

    Cheers.

  31. Spoonman,

    Yeah, I can understand how that KMI/KMP move kind of stung you a bit. But I think this will serve you well over the long haul. The payout will be more sustainable, and should rise faster.

    Thanks again for stopping by! I hope the first few days of freedom have been fantastic for you guys. πŸ™‚

    Best wishes.

  32. rickrack,

    Thanks for stopping by from Germany!

    Improving things YOY is the name of the game. I don’t really track from month to month because payouts can fluctuate so much. But if I’m achieving solid growth from year to year then I’m very happy. πŸ™‚

    I hope you have a wonderful week as well!

    Take care.

  33. DGJ,

    Let’s indeed see what September offers. I’ve already spilled the beans on my watch list, and am closely looking at GE, VZ, and T right now. Looking forward to deploying a little cash. πŸ™‚

    Thanks for stopping by!

    Best regards.

  34. Ace,

    Thanks! Glad you like the graph. I know that visuals can be more exciting than words, and it kind of paints a picture all by itself.

    Thanks so much for the support. And congrats to you on a solid month of dividend income this past month. Keep it rolling! πŸ™‚

    Best wishes.

  35. Ravi,

    That’s a great number there! You’re right there with me, but it sounds like you’re putting away a lot more capital these day. I’m sure you’ll far surpass me pretty soon. πŸ™‚

    I’m also looking forward to 2015 to see how the first full year of freelancing (if I can keep it up!) turns out. I’m hoping to make at least one stock purchase every single month. Two would be better, but I doubt I’ll have that kind of income.

    Keep up the great work. I hope we both have a strong finish to 2014.

    Best wishes!

  36. Finally someone who is bearish on MCD. I see the dividend yield dropping. A lot.

    http://www.idivs.org/ticker/MCD/year/2014/month/9/day/1/preliminary/false

    DE also doesn’t look great to me, with a half a percent drop perhaps:

    http://www.idivs.org/ticker/DE/year/2014/month/9/day/1/preliminary/false

    On the other hand I see KMI’s yield hitting 5% over the next year or so. Nice growth.

    http://www.idivs.org/ticker/KMI/year/2014/month/9/day/1/preliminary/false

  37. Hi Jason,

    Congrats on surpassing the $170,000 mark! I can’t wait to get there myself, but I have a few years to go (I’m 29 right now). I need to initiate a position in PEP; I have KO and I don’t know why I stopped there when it came to soft drink manufacturers. I don’t even drink soda, so it’s not like I’m loyal to one company after all.

    I was trying to send you a private message on your contact page (I spoke to you about it on your “Think Like An Owner” post, but it doesn’t seem to go through, so I figured I’d post on here.

    I wrote an article about people who I consider stock investment success stories, and I included you alongside the likes of Warren Buffett and a Saudi prince (obviously for very different reasons). I had really wanted to get the OK from you before I posted the article on the comments section in one of your posts (because I figured it would be kind of tacky otherwise). Feel free to either promote the article yourself or stick it in the Media section, but like I said, I just wanted to get the OK from you before I posted the link on your website.

    Thanks!

    Joey Batz

  38. Jake,

    Good question.

    I’m not concerned. DE’s debt level is actually misleading, as they have financing operations. They own and operate a network of dealerships that sell some of their machinery, and a lot of product is sold on credit.

    I hope that helps!

    Best wishes.

  39. Mark,

    Thanks! You never know what you’re going to get, but the last month was a good month for the Fund. Unfortunately, it was a bad month to put capital to work, which is one reason my activity was rather muted.

    Hope all is well over there!

    Cheers.

  40. johnorford,

    I’m not bearish on MCD, but rather just concerned. I think the company is positioned well, and has the tools to execute. But I think they need to simplify the menu to focus on speed, and also make strides with customer service. I also wouldn’t mind a marketing shift.

    “I see the dividend yield dropping. A lot.”

    A stock price drop on MCD would result in the yield rising, not dropping. So I’m not sure what you’re implying. Unless you think MCD’s dividend is in danger of being cut, which is extremely unlikely.

    Furthermore, I clicked on one of your links and I have no idea what you’re trying to convey with those numbers. Best of luck, though.

    Take care!

  41. Joey Batz,

    Thanks for the support! Being only 29 years old puts you in a great position to leverage time. Compounding does wonders, but exponential growth really takes off if you give it a long runway.

    I’m obviously in no league with Warren Buffett, but I appreciate the kind thoughts there. I would love to read the article.

    I went ahead and deleted your duplicate comment over at the ‘Contact’ page. You’re more than welcome to post links on comments. I don’t have a policy against that unless it’s spam. I’m not sure why you’ve been experiencing issues with the contact form. I tested it myself just a couple of moments ago and it worked fine. And I’ve been receiving emails over the last couple of days. Sorry you’ve had issues with that.

    Cheers!

  42. It is a great chart Jason. The jump in value in 2012-2013 is very impressive. I am glad for you and your speedy freedom building effort!
    Thanks for sharing those numbers as those put it all into perspective and it is very motivational. I want to work on my own harder now πŸ™‚

  43. Thanks for sharing your FF update with us. I guess the close of August was less volatile than the close of July when Mr. Market gave us some nice discounts on many dividend stocks. I realize that the main focus of your FF is dividend income but at some point a re-balancing will need to be done when capital appreciations of certain stocks throw your overall portfolio out of balance. Enjoyed the update and look forward to more.

  44. Great to see your progress Jason. I will pass my first milestone of €50,000 this month and I’m really excited about this. Keep up the good work and let the dividends come in!

  45. Great Jason !

    That’s a very good rise. Huh ! I didn’t do so well in August. Hold on tight to your stocks ! I am very curious how you do to decide how much weight you set for each stock ?

    I feel delighted that you will soon be off the rat race.

    Good to you

  46. Congrats Jason, awesome job. Not far off till the end of the year but this year has been really interesting, so far it has been different to what i expected at the beginning of the year – that is the fun of the market πŸ™‚ cheers T

  47. Martin,

    Thank you! I was able to really put some savings away there for a while, but the rate has slowed a little recently. But this is a marathon, not a sprint. And I’ve got plenty of energy left. πŸ™‚

    I’m glad you’ve found some inspiration in this. That’s exactly why I share everything. I know for sure that if I can do it, anyone can. Keep working hard over there!

    Best regards.

  48. Joey Batz,

    Thanks so much for taking the time to write that. I really appreciate you sharing it here. πŸ™‚

    It’s way cool to be in the same company as Buffett and a Saudi prince, but I’m glad that you shared my story as a more approachable way to invest in stocks and do well over the long haul.

    I obviously have no inside connections or advantages otherwise over anyone else, so I’m really using my experience as kind of a real-life experiment to hopefully motivate others out there into financial action. Financial independence is a concept that most people find unrealistic or too abstract, when it’s really not the case. I’m simply attempting to change that mindset a little bit.

    Appreciate all the support!

    Best wishes.

  49. DivHut,

    Yeah, you never know what you’re going to get with Mr. Market. Seems to have been mostly in a good mood over the last five years or so, but that could change in a second.

    As far as rebalancing goes, I attempt that by buying, not selling. I simply aim to purchase stock in smaller positions over time as their valuations make sense, so as to increase their weighting when necessary. However, some stocks will purposely be smaller positions, in which case I don’t find myself worrying about their small weighting. For instance, I’m considering adding to VZ and T right now because I wouldn’t mind doubling those positions. But the valuations aren’t necessarily all that advantageous right now. So there’s a lot to consider when trying to balance things. In the end, one’s portfolio is being “balanced” all the time. And if you’re nowhere near living off of your portfolio, that balance is not quite as important and will be changing all the time with new purchases anyway.

    Cheers!

  50. Dutch Dividend,

    Thanks for stopping by.

    Congrats on that milestone! Just the first of many, I’m quite sure. πŸ™‚

    Let’s continue to let those dividends roll in, which will help keep our snowballs rolling down the hill.

    Cheers!

  51. Aspenhawk,

    Well, you may have had a great August if a drop in your portfolio’s value allowed for any current investment capital to go further via cheaper stocks. πŸ™‚

    As far as weighting goes, I don’t have an exact number in mind. The portfolio is constantly changing and growing, so weightings are changing all the time. I eventually want weightings to vary from 2-4% or so when I’m all said and done, so that no one company’s fortunes will have an overwhelming impact on my fortunes. That being said, companies that I’m especially enthusiastic about will likely have a larger weighting, as you can see now with JNJ, PM, KMI, NSC, PEP, etc. Companies that I view are higher risk will have lower weightings. And these companies with higher risk will likely also have a higher yield, which counterbalances their effect on my income. You can see this with companies like ARCP, O, OHI, T, etc.

    Maybe I should write an article specifically about this? But I hope that helps in the meanwhile.

    Best regards!

  52. FerdiS,

    Thank you so much. I do hope the motivation is just as strong as it ever was. I know I’m personally as motivated as ever, and anxious to keep going. πŸ™‚

    Thanks for stopping by.

    Best wishes.

  53. Tales,

    Yeah, this year has been totally different from how I imagined it would be. But that’s really for a number of personal changes I’ve made, and less due to the market.

    But let’s hope Mr. Market has one more firework in store for us before the end of the year. I need all the help I can get, as my capital availability is lower than what I’m used to. πŸ™‚

    Cheers!

  54. It looks like you are doing well Jason! I am just excited to see you still ADDING to your portfolio with the career change! Doing what you love matters the most, so good job on making the most of that opportunity!

  55. congrats, Sept. looks to be starting out as a potential down month! Finally values are showing up, MCD,DE,BP all with some great yield. Maybe mr. market will give us more bargains, time will tell?

    Best of luck,

  56. Great job on the 170k milestone. That is awesome. I too hit a milestone this month. My Dividend Income account hit 60k. I have only truly been investing in Dividend Companies going on about 1 year now. I have taken my account from around 20k at the beginning of 2014 to hitting 60k this month. My goal for the end of 2014 has now been raised from 50k to 75k. As for McDonald’s unless the dividend is cut I see this as a buying opportunity. I plan to take the position up to around $3k as long as I continue to lower my cost basis.

  57. Kipp,

    Thanks so much! πŸ™‚

    I definitely wanted to continue adding capital to the portfolio, even through this transition. And so far I’ve been doing fairly well in that regard. We’ll see if it continues, but I’m optimistic and very excited!

    Being able to write for a living while still marching down the path to FI is really a dream come true for me. So I wake up every single day grateful for everything I’ve been able to accomplish thus far.

    You’re off to an exciting journey over there as well. Stick with it and you’ll be surprised by just how far you can go.

    Best regards.

  58. j-harr,

    All of those stocks are trading at pretty solid values. Of course, they all have some lingering issues going on to varying degrees of concern. It’ll be interesting to see how the ruling on the violation of the Clean Water Act goes for BP. I believe there’s a ~$15 billion swing at play here. But I think either way BP will be a solid investment over the long haul. I can see the stock (and dividend) recovering once they’ve got all of these issues behind them.

    Cheers!

  59. Mr. Stock Fox,

    Congrats on your recent milestone! That’s a lot of progress made from just the beginning of the year. I’m guessing a lot of that progress occurred due to you putting away a lot of capital, which is to be commended. Keep it up! πŸ™‚

    I hear you on MCD. I have a sizable position in the company, relative to my own portfolio. So I’m not interested in adding here. It’ll be interesting to see how they turn it around. They certainly are positioned well, but I think changes are necessary. We’ll see if Mike Andres has some fresh ideas to bring to the table.

    Keep up the good work!

    Cheers.

  60. Steady as she goes :). Nice work and inspiring. I find myself checking your blog several times a week to read new articles.

    August was a solid month in terms of gains in market value, but was even stronger in terms of passive income for me. I found myself making one exception to a mostly dividend growth portfolio. This exception was that I doubled up my position in GILD.
    I also bought some WAG after it dropped after the ‘no inversion’ news.

    Next I want to aim to buy a little bit more utilities and energy as I am underweight in those sectors.

    Good luck going forward, both in finance and in life!

  61. Thanks Jason! I haven’t seen you stop by recently (at least haven’t seen a comment). But things are going well in the blog front, J Money just put an article on rockstar finance. Not sure if that will break my daily record from the day you did your Grand Rapids post, we shall see!

  62. That’s a nice looking Freedom Fund. Congratulations on the $170K milestone. You’re getting some nice momentum going which will hopefully bring you to $200k sooner than expected.

    My August was pretty good, although a low month dividend-wise with only about $40. But I’m moving along nicely and every step gets me closer to financial freedom!

  63. GMS,

    Thanks so much. It’s rolling along now, whether I push or not. πŸ™‚

    Congrats on a solid August there. That’s about where I was just a few years ago, so you can see how fast things can progress for you. I hope you continue to turn that money stream green!

    Thanks for stopping by.

    Take care.

  64. Chuck,

    Thanks a lot! Really appreciate it.

    I never loved snowballs as a kid, because I hated the winter. It was cold and dark most of the year. But I sure love snowballs now! πŸ™‚

    I hope things are rolling along nicely for you as well.

    Cheers.

  65. Congrats on your progress! I’ve been following your blog for a few years now and you are truly an inspiration!

    I would like to start tracking my portfolio using spreadsheets, I think you did an article on this once maybe? Any suggestions?

  66. Keep up the good work!
    I’m trying to save some money for a few home improvements – windows, new concrete, replace a section of floor, painting. The good news is that my house was appraised 0.5% above what I paid for it. Can’t wait to see what the next 6 months brings as the house gets updated and my early retirement gets back on track!

    Keep the updates coming!
    WE#1

  67. Chris,

    Well, KMI is a general partner of a MLP. As such, earnings are not the best metric to use for valuing the company or assigning a payout ratio. MLPs typically use a metric called “distributable cash flow”. Last I looked, Kinder Morgan’s dividend was somewhere around 90% of DCF. That’s high, but not uncommonly high among peers. Perhaps once the consolidation is complete it’ll be easier to get a snapshot of their health, but it’s hard to say since this is the first time this is being done (that I know of).

    Cheers!

  68. David,

    Thanks so much!

    Every milestone counts, especially if it keeps you motivated on the road to FI. The next real big milestone I’m actually looking forward to celebrating is hitting $1,000 in dividends in a single month. I’m a long way off from such a thing, but it’s coming. πŸ™‚

    Keep on marching over there!

    Take care.

  69. Michael B,

    Thank you. I really appreciate the support! πŸ™‚

    As far as tracking the portfolio, I use a simple Google Drive spreadsheet. Very easy to set up and maintain. My brokerage (Scottrade) offers some other tools, where they can analyze your portfolio and what not…but I prefer to keep it simple. Sometimes too much information and analysis is overload, and can lead you to analysis paralysis.

    If you have a Google account then you can load up a Drive spreadsheet and track it online. πŸ™‚

    I hope that helps. If you have any other questions, let me know!

    Cheers.

  70. WE#1,

    I can imagine the house might bleed you a bit here at the beginning, but the intangible (and tangible) benefits of improvement will surely pay off for you. Enjoy your new abode! πŸ™‚

    Thanks for stopping by.

    Best regards.

  71. Congrats on the 170k milestone, Jason! Up seems to be the only way for your fund!

    Still being able to buy new stocks while quitting your full-time job is a massive achievement. You should be proud of yourself.

    Because you mentioned DE quite often in your latest posts, I decided to look into the company. I believe it’s quite undervalued. A lot of folks look at its short term ‘problems’ rather than its long-term potential. The P/E ratio of about 10 doesn’t make any sense at all. Initiated a small position last week, thanks for the tip.

    All the best from Belgium,
    NMW

  72. DM,

    I rounded out my KMI position today. Looking to add DE on this pullback(hopefully in the high 70’s- low 80’s. Looking to add another oil stock. Currently own BP. What’s your thoughts on CVX,or XOM.

    Thanks,

  73. Happy,

    Thanks so much! It’s been an extremely enjoyable journey thus far. And sharing it with everyone just makes it that much sweeter! πŸ™‚

    Appreciate you stopping by.

    Cheers.

  74. NMW,

    I appreciate that. I’m really fortunate in that I not only get to do what I really love, but continue marching down the path that I set out for back in 2010. While I love to write, not being able to continue buying stocks would certainly take a lot of wind out of my sails, and probably force me into something more lucrative to keep to my plan. But it’s working out fantastically thus far, thanks largely to the support of all you readers. So thank you. πŸ™‚

    Glad you looked at DE and liked what you saw. I think it’s a solid long-term opportunity, even factoring in cyclic earnings. The P/E ratio may expand from here, or the price may drop…but I’m very confident that DE will be a much more valuable company spitting out a much higher dividend a decade from now. And that’s really what I’m after.

    Glad to have you on board as a shareholder!

    Best wishes.

  75. NMW,

    I also wanted to mention that I’ve had problems visiting your site recently, from different computers and different internet connections. Not sure if anyone else has given you notice about that. But the site doesn’t load at various times of the day. Just wanted to give you shout on that.

    Cheers!

  76. j-harr22,

    Nice buy there with KMI. That’s currently one of my largest positions, so I’m very pleased with some of the recent announcements.

    I prefer CVX to XOM right now, but I don’t think you can go wrong with either. CVX has announced that their capital expenditures have kind of peaked, and some of their big projects (like Gorgon and Wheatstone) are coming along nicely. Plus, they have a slightly lower valuation and higher yield. But XOM has long been superior with capital allocation and taking on great projects. I like both, but prefer CVX at this price and moment in time.

    Cheers!

  77. Thanks for your opinion, CVX looks great, should hold up nicely if we see a pullback as well.

    Thanks Again,

  78. This is interesting. The debt/equity ratio of the equipment operations division has been less than 0.5 for the past few years. The debt/equity ratio for the financial services division has been around 7 for the same time frame which seems crazy high. That is, until I looked at the equity/asset ratio of the financial services division as compared to several banks. DE’s financial services division has an equity/assets ratio of 0.11 with several banks coming in at: WFC 0.11, BAC 0.11, and JPM 0.09. So, what gives? DE’s financial services division is not any more leveraged than a bank yet it reports a high level of debt. I guess with a bank leverage is treated as “deposits” instead of “debt” for accounting purposes?

    From an equity standpoint DE is about 2/3 equipment manufacturing and 1/3 bank. That’s not necessarily a bad thing but it’s definitely an aspect of the company that a potential investor should keep that in mind.

  79. Jake,

    Well, DE’s debt load will always be categorized differently from a bank because they don’t have a depositor base with which to work from. And their lending activities – as far as I’m aware – is through the retail side. But their industrial arm is pretty conservatively leveraged. And their financial services arm appears well-capitalized with low provision for loss (.03% of portfolio).

    I guess I don’t look at the company 2/3 industrial and 1/3 financial like that, because I don’t anticipate the company being liquidated. I look at how the company generates rising income, and how that rising income will come my way via increasing dividends. And from that aspect, the financial services arm is a smaller part of that side of things. However, that doesn’t mean it’s any less important. The financial side of the house is integral for sales. But it’s not like a GE where you had this sprawling financial arm that was in everything.

    Best regards!

  80. Hi DM

    Wondering if you can help?
    I’m UK based and am looking to build up a index fund that pays monthly/quarterly dividends. I liked the look of fusing vanguard, but the uk version looks like you have to invest Β£100k min which is well out my limits. Can I buy into the us version of vanguard from the Uk? I’m kinda new to this, I have some property, but now looking to diversify into dividends, what site can I use to manage my investments? Looking for least cost…any insight appreciated!
    P.S – loving the blog, your line of thinking is the same as mine, I’m looking to hit FI as soon as possible and get away from the grind.!

  81. Paul,

    Thanks for taking the time to comment. Appreciate your readership from the UK! πŸ™‚

    I don’t invest in index funds, but I’m quite familiar with how they work and everything. Vanguard offers a lot of funds, so I can’t speak to which fund in particular you’re speaking of. However, I can’t imagine it’s a lot different over there.

    Vanguard offers traditional funds across a wide variety of products, and then they offer what are called Admiral Shares. Admiral offers lower fees, but you must invest larger amounts. It’s $10k, $50k, or $100k, depending on what you’re investing in:

    http://investor.vanguard.com/mutual-funds/admiral-shares

    So if you’re looking at a traditional index fund, you’d be looking at a $10k investment. Alternatively, you could just pick one of their traditional funds and pay slightly higher fees.

    As far as buying into the US version, you’d want to contact Vanguard directly about that. I can’t speak to that as I don’t work for Vanguard, and I’m also not familiar with UK investing regulations/taxation/etc.

    I hope that helps you. Best of luck over there. πŸ™‚

    Take care.

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