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 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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.
September came and went in a flash! I can’t believe it’s already behind us. My personal life has been kind of hectic, with a move back to Florida to be with my significant other once more. But what’s fantastic is that even with all this unusual drama in my personal life, the Fund just keeps on plodding along as if nothing happened at all. I could live in Florida or Timbuktu and the Fund would just continue humming. It needs no captain for day to day rowing, which is wonderful to know when I need to be temporarily alleviated of that duty. Just one more joy of being an investor focused on extremely long-term investments in high-quality businesses.
However, I didn’t let the ship steer itself the entire time. No, sir! I’ve gotta earn my keep, and as the Chief Investment Officer I continue to take my duty of allocating capital to the best of my ability seriously. I’m ultimately interested in increasing the output of this machine, in the form of increasing dividends, and to that end I completed two transactions.
Near the start of September, I added to my position in General Electric Company (GE). I think the investment case is compelling, and I believe management is doing what’s necessary to ensure the GE of 10 years from now is far better than the GE of 10 years ago. It’s not every month that I have enough capital to buy stock in more than one company, but luckily I felt confident enough about my cash flow this month to make a second purchase. Toward the end of the month, I acquired shares in a small food company – Armanino Foods of Distinction Inc. (AMNF). This is a totally new and exciting investment for me, and I’m anxious to see how this decision turns out ten years from now.
What’s amazing is that AMNF is now the 50th stock in my portfolio! It’s been a crazy and wonderful journey thus far, and I’m just as excited today to keep this snowball rolling as I was when I first started back in early 2010. Every month gets better and better from a capital allocation standpoint, because the portfolio continues to spit out more and more dividend income with every stock purchase I make. It’s like giving a kindergartner a task to color a massive coloring book, and then giving that student more and more crayons every month. The job just gets easier and more exciting!
The current market value of the Fund now stands at $170,704.39, which is a 0.3% decrease from last month’s published value of $171,328.09. This decrease largely tracked the broader stock market, which was down by 1.55% for the month of September.
I’m actually quite pleased with this result, as a falling portfolio value means stocks are getting cheaper. Cheaper stocks means I can buy more shares with the same amount of money. More shares means more dividends. And more dividends means I’m that much closer to financial independence!
I’m looking forward to continued volatility in the market, and I’m hoping for even cheaper stocks from here. I wouldn’t mind at all reporting another decline in my portfolio value next month if that means my current available capital – which is more limited now after my recent career change – can go even further. We’ll see what we get, but I’m hoping to have great cash flow numbers in October so that it’s possible to complete two stock purchases once again.
I’m currently invested in 50 companies. This is an increase since last month, as I initiated a position in AMNF.
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 GE and AMNF.
What about you? Have a great September? Is your portfolio performing as expected?
Thanks for reading.
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