Well, the time has come to update the Freedom Fund once again as we start another month. The Freedom Fund is my portfolio, and I think it’s aptly named. My portfolio is my way to freedom; freedom from a job I don’t desire to purchase goods I don’t need to impress neighbors I don’t care about. This journey is all about freedom and flexibility. One day the dividend income this portfolio generates will fully replace my day job’s income and my time will be completely my own. What could you possibly want to own more than your time?
I feel extremely fortunate and thankful that I’m able to post these updates every single month which shows the power of monthly contributions to investments because of the high savings rate I maintain. It shows how a relatively large sum of money can be built through the power of time, patience and perseverance.
It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.
The Fund was particularly active during the month of October. I had actually planned on being rather passive due to my cautious outlook on valuations, but I instead decided to pick up shares in solid companies at opportune prices when Mr. Market wasn’t feeling particularly optimistic about them.
I initiated a position in Exxon Mobil Corporation (XOM) very early in the month, which rounds out my holdings in oil supermajors quite nicely as XOM is the most super of them all. Then I laid back until I found that Baxter International Inc. (BAX) was still being priced attractively for the long haul, so I increased my position. That was supposed to be my last activity for the month of October, but Digital Realty Trust, Inc. (DLR) took a 20% tumble over the course of a couple days which compelled me to add a little to my existing position.
The current market value of the Freedom Fund stands at $140,603.90. This is an increase of 7.3% over last month’s published value of $131,084.63. Another wonderful month, and was certainly helped by the strong performance of the S&P 500 (up 4.76% over the last month). Although it’s a psychological boost to log in to the brokerage account and see my balance at all-time highs like this, the significant drawback is that the broader market is also at all-time highs and hence there are not a lot of compelling values out there from which to choose from. However, as always, the value investor in me considers it a fun challenge to spot those opportunities when they do occur.
I’m currently invested in 42 companies. This is an increase since last month, as my investment in Exxon Mobil Corporation (XOM) is a new position.
These updates are mainly designed to show the increase in the value of the underlying equities I’m invested in, but the main purpose of investing in dividend growth stocks is for the rising stream of dividends over time. So with that said I don’t put too much emphasis on these monthly updates on the value of my portfolio. I think it is a good idea, however, to keep track of the rising (or falling) value of one’s securities and be aware of where they are in terms of the marketplace and whether or not certain stocks are attractively priced. It proves to be a useful exercise, for me at least, to update the values monthly. It gives me fresh perspective on which equities are performing well and which aren’t, and from there I can make educated decisions (based on further due diligence) on which stocks I’d like to add fresh capital to (while considering portfolio weight as well).
Full Disclosure: Long XOM, BAX, DLR
How are your funds doing? Was October particularly kind to you?
Thanks for reading.
Photo Credit: Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net
Some good buys there.. Its take you a couple more steps closer to existing the rat race with the increase in dividend income that these companies pay out.
Dang, dude. Is it me or did you just BLOW through that 100k mark? Doesn’t seem like that long ago that you posted it. Now you’re closing in on 150k. It must be true what they say about the first 100k being the hardest, then it just starts taking care of itself from there. I’m not there yet, but hopefully soon. Congrats on solid growth, regardless of whether it comes from a high savings rate or market gains. At the end of the day, growth is growth, and as much as you’d like prices to remain low forever so you can maximize your purchasing power, having to accept a market rise kicking and screaming is a VERY first world problem to have 😉 Keep up the good work!
Investing Pursuits,
Absolutely. Every purchase is like taking one more step closer to FI. It’s a fairly long staircase, but the journey is absolutely worth it.
I hope your pursuit is treating you as well!
Best regards.
Tyler,
“…having to accept a market rise kicking and screaming is a VERY first world problem to have…”
I couldn’t agree more. It’s obviously a great problem to have. By extension, I look at investing in general and all the inherent difficulties as a wonderful first world problem to have. Sometimes I look at an investment that doesn’t pan out and see that I lost a little money on it. But, at least I have money to lose. There’s billions of people out there that don’t have money for food. Just having disposable income with which to be able to invest is really a great spot to be in.
Thanks for the support. It’s been an incredible ride upward since hitting $100k. I didn’t anticipate hitting that mark as fast as I did, nor did I anticipate being at $140k already. Obviously, the strong broader market performance has helped hit these marks a bit faster than I thought I would, but that progress could revert quite quickly as well.
Thanks again for the support.
Best wishes!
DM, Congrats again on getting closer to $150k! what is your bench mark for 2014, portfolio wise and dividend income wise.
Truly inspiring to see your progress.
I recently did not do much buying activity but hope to catch up soon.
Dividend Mom,
Thanks! The progress has been amazing. I’m just doing my best to keep working hard and saving as much of my income as possible. Using that capital wisely is tough in an inflated market, but we do what we can.
I haven’t yet put together any goals for 2014. To be honest, I’m thinking right now that $5,000 in dividend income would be a good goal for next year. That’s a full $1,500 over my goal for 2013 (which I’m on pace to exceed). I think that would be challenging, yet achievable.
I can imagine it’s tough right now for you to buy stocks with the recent vandalism, but I hope you get that behind you with minimal financial damage. Patience and perseverance are both incredibly powerful attributes!
Take care.
Wow, hell of a month Jason! I think you took advantage of some strong opportunities provided by Mr. Market, all while avoiding some of the value traps in this still rapidly rising market. Not to mention it wasn’t that long ago you were celebrating the century mark, and here you are 40% past that. Great progress and awesome investing!
Nice update. You’ll hit 150k in no time. The of the blue pig made me smile. 🙂
The picture*
Nice job! I am just about to 90k myself. Should be joining the 6 figure club shortly here. I’ve been reading your blog for just over a year and was at about 30k at that time so making decent progress! I’m only 26 so time is on my side and trying to take advantage.
I am looking strongly at CVX at the moment and think it is entering a little downtrend. look to pick it up around 110 in the next week or so here, hope I can!
Here’s to another good month
140K! Is it just me, or is your principal balance -accelerating-? It seems like yesterday when you reached the century mark. You are making tremendous progress. I think I’m not alone when I say that you will reach FI way before 40 years of age.
Keep up the good work!
Btw, I finally posted about selling the house in the ERE forums. Check it out when you have some time.
DM,
You are making great progress. It’s easy to stay motivated when your portfolio and dividends grow each and every month. However, I wouldn’t mind a hit to my portfolio value in the midst of a correction since I know my dividend income will keep growing.
Keep up the good work and you’ll be breaking $200k before you know it!
w2r,
The progress has been amazing. I’ll take it when I can get it, but I’m still hoping we get some cheaper prices at the expense of my portfolio value. I’d be more than happy to see cheaper stocks which would allow my current/future capital to go much further. However, in the meanwhile I’ll appreciate the value where it’s at. 🙂
I hope your progress is going extremely well too!
Best wishes.
FFdividend,
Yeah, I like that picture. I look at my Freedom Fund in a similar manner: locked up. 🙂
I think with a static market I could hit $150k within a few months, possibly as early as Jan ’13. That would require rather aggressive investing, and I’m more likely to be less aggressive for the rest of the year. The recent purchase of a car has slowed me down a bit.
I hope your journey is going just as well as mine. :
Take care.
Took2Summit,
Great job! $90k is extremely strong for a 26 year-old! I didn’t even know about investing when I was your age. That’s awesome, man. 🙂
You’re knocking on $100k’s door. You’ll be joining “the club” very soon.
Cheers!
Spoonman,
Just read the post. Congratulations on the sale. It sounds like you guys are glad to have that albatross off your back. 🙂
You’re now incredibly more flexible, and you have a lot of capital at your disposal with which to increase your passive income. Sounds like a win-win!
Best wishes.
AAI,
I’m just trying to keep up with you. You’re a monster! 🙂
Keep up the great work. Let me know what $200k feels like.
Best regards.
Dividend-Sammler,
Thanks for the support! The support here at Dividend Mantra has been incredible, and has really helped propel my journey.
Keep up the great work on your end too. It’s all one step at a time. 🙂
Cheers!
Hey Jason,
I’m shocked to see how many companies (42) you hold with 140K. This makes an average of less than 3% for each position.
you might have mentioned this previously but why do you hold so many different position? Don’t feel that it will become overwhelming to follow so many companies at the same time?
Have you thought of selecting your best 20 and stick with them?
Just my 2 cents 🙂
Dividend Guy,
Thanks for stopping by. Great question there.
I have actually addressed this before. My thoughts on stock diversification are this: the smaller number of positions I have, the less diversified my income is. For instance, if I hold 20 positions and 1 cuts its dividend I’m out 5% of my income. That’s a fairly substantial income loss. However, if I hold 50 positions (my ultimate goal) and 1 cuts the dividend I’m out only 2% of my income. Not only is 2% manageable, but is more likely to be made up for by increases by the other 49 holdings.
Of course, this is assuming equal weights which is difficult to achieve in real-life. However, this works for illustration purposes. In the end, whereas a lot of investors talk about stock/sector/company diversification I look for income diversification. Because, ultimately, this dividend income is going to fund my lifestyle.
Moreover, I don’t anticipate managing 50 stocks to be difficult if I’m able to attain early retirement. In fact, I quite look forward to managing a portfolio that large. This is made much easier by the fact that I mostly invest in high quality, blue-chip stocks. It’s much easier to sleep at night with a portfolio anchored by JNJ, PM, MCD, PEP, CVX and the like than it would be a bunch of biotech stocks and internet startups.
I hope that clarifies my position. 🙂
Best regards.
Shop Teacher,
Hey, that’s great to hear that we’re on a very similar track! It’s always nice to follow along with someone else in a similar situation to see how you compare. I know that there were a few dividend growth investors in my same age range and portfolio value when I started this blog and I was just commenting the other day how cool it is to see a number of us now above $100k with hundreds of dollars in dividends coming in every single month. We’re all growing together…bigger and better every single day. The fact that we have this community to support each other is just icing on the cake.
Sorry to hear about the medical issues. Hope everything is okay.
Keep up the great work!
Best wishes.
100,000 is a psychological barrier. You have exceeded this barrier and now you grab the $ 150,000 mark! GREAT!!!!
In October my own portfolio has increased by 4.28 percent. Of 15,507.47 EUR
to 16,172.60 EUR.
I’m trying to reduce the difference to your portfolio amount as fast as possible … 😉
Best regards from Germany
Dividenden-Sammler
DM… your portfolio is growing like a weed…
I just wanted to add there are tons of companies out there I want to own. I discover a new gem that was previously unknown to me almost every month. I don’t buy the concentrated argument… it takes a lot of faith in those picks and reeks of wanting to “outperform.” I only want “enough” and believe a portfolio of 30-50 is a much safer way to achieve that goal. Not only that, but pick #50 was the best idea at the time of purchase!
A line does have to be drawn somewhere though. I think I’ll stop near 50 as well for the income reasons you talk about.
Hey Jason,
Congrats on your progress. You are a barometer for me because we were both at the same place financially when I started following you not long after you started blogging. You have been slowly pulling away due to my families increasing spending due to a tough year medically. We are at about 130k with 17 positions. I do feel fortunate to be able to purchase quality stocks such as WFC, XOM, CVX and KO in such a rising market this year. Thanks for sharing all you are learning!
Strongly looking on CVX ….want to average down…. will try to buy when yield hits 3.5%
Compounding Income,
Thanks, man. Growing like a weed is exactly what I’m aiming for. 🙂
I agree with you in regards to portfolio size. I don’t necessarily think your 40th pick is somehow less quality than your 20th pick. To say so means that there are only 20 high quality companies that can possibly be owned, and I just don’t agree with that. Of course, in the end you should only own as many companies as you can comfortably follow – and all of us are different in that regard.
Thanks for stopping by!
Take care.
gibor,
CVX looks pretty good here. I’d be inclined to own more if I wasn’t already so heavy into energy/Big Oil. Nice pick!
Best regards.
Hey Jason,
Did you see these fireworks? I am curious what you and your readers think?
http://seekingalpha.com/article/1804462-open-letter-to-exxons-board-its-time-to-sell-assets-to-reward-long-suffering-shareholders?source=email_rt_article_readmore
Shop Teacher,
I think some of the criticism is fair. It does take fairly large projects to move the needle at a behemoth like XOM. That’s really their gift and curse: being that big. They have the scale necessary to get into mammoth projects that require CapEx outlays that other companies may not be able to provide, but at the same time smaller, potentially profitable projects may be too small for XOM.
However, I’m not a fan of XOM selling assets just for the sake of being smaller. Being smaller isn’t necessary better, and if you’re interested in a smaller company there are plenty out there. I think the best approach is to diversify between major oil companies because they all offer something a bit unique.
Best wishes!