Freedom Fund Update – March 2015

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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.

FebruaryΒ was a particularly strong month, as the S&P 500 climbed 5.49% over the course of the last month. Since a rising tide lifts all boats, my portfolio also performed quite strongly. This is unfortunate, however, in that it limits the number of possible opportunities for fresh capital. I guess I shouldn’t be too upset that I lacked much fresh capital over the past month!

That said, I wasn’t completely inactive. I added to my stake in National Oilwell Varco, Inc. (NOV) one last time at what I felt was a strong long-term value. Though the stock price may go anywhere over the short term, it’s a high-quality company that should do well over a long period of time. In the meanwhile, the attractive yield, large buyback plan, diverse operations, and fairly significant backlog offers a lot to like right now.

Other than that, I was content to let the dividends pile up which will provide a little more ammo for my BB gun over the course of March.

I did make a few adjustments to the portfolio information. I had to change the cost basis and listing for Medtronic PLC (MDT) after it completed the acquisition of Covidien PLC (COV). In addition, I changed the cost basis for Realty Income Corp. (O) and Omega Healthcare Investors Inc. (OHI) to reflect any return of capital over the course of 2014. So the information provided should be 100% accurate as of today.

The current market value of the Freedom Fund stands at $190,209.32, which is a 4.7% increase since last month’s published value of $181,728.90. The portfolio responded well, but was held back in terms of overall performance by its large exposure to energy. Whereas last month I was surprised to see the portfolio hold up well, this month it performed as I thought it would and should.

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It’s wonderful to see that chart move up and to the right, but it comes at the cost of how effectively I can put new capital to work. Nonetheless, I still see opportunities in the market here and there and I’m likely to purchase something on my shopping listΒ sometime during March. How active I might be will really depend on how much cash comes my way. I have a tax bill to take care of, but I’m also anticipating selling our car.

Looking forward, I’m still extremely excited about where things are going here. I’m nearing $200,000, which is really crazy and unbelievable. It appears as though the second $100k will come about faster than the first, meaning the old saying about the first $100k being the hardest rings true. Compounding really is wonderful.

The Fund now has positions in 51 companies. This is unchanged since last month. My sole transaction in February involved an existing investment.

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. Thus, I don’t put too much emphasis on these monthly updates. 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 find it a helpful exercise 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 NOV, MDT, O, and OHI.

How did February treat you? Did the market’s relentless march upward lift your boat as well? Do you still see a lot of opportunities?

Thanks for reading.

Photo Credit: BimXD/FreeDigitalPhotos.net

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120 Comments

  1. Jason,

    At the pace your freedom fund is moving, you are going to reach much sooner the dream goal of 1million invested.

    And as most of the people says the most difficult is the first million, which I can only agree as we reach it last year, an now I am seeing out fund growing at massive pace.

    Well done and cheers,

    RA50

  2. It’s creeping ever upwards! Looking forward to seeing it go over $200,000 as I suppose you are. Here’s to March being good for both of us πŸ™‚

  3. Henry,

    Thanks!

    Yeah, we’ll see about $200k. Largely depends on the market now. The stock market has a lot more to say about my portfolio’s value than I do these days. A 2% change in value is roughly $4k, or more than I can invest in a month. I’d rather see it drop 10% than go up 10%, but I’ll work with what I’m given. πŸ™‚

    Cheers!

  4. Nicola,

    It’s definitely exciting to see it move up, though I’d rather see it drop in value and offer me greater opportunity for fresh capital. But a larger portfolio over time is a byproduct of successful investing. πŸ™‚

    Thanks for stopping by. Hope all is well on your side of the pond!

    Take care.

  5. DM,
    It was a strong market this month and subsequently some opportunities slipped away from me. I did make a few purchases that add nicely to my income.

    Curious about the changes you made to your cost basis of the REITs. Does your broker take care of these changes? Based on some tax docs I received, some of my stocks need adjustments to cost basis too. I assumed my broker would take care of this (but I haven’t double checked yet). Some brokers have that service built in.

    Anyways, good looking month. Steady growth is the name of the game.

    -RBD

  6. The second $100k definitely comes quicker. I’ve noticed it with my own portfolio as well, although I still have a bit of work to do to get to $200k. While I want to build up cash over the next month or so there’s still 3-4 companies that I’m pretty close to purchasing. I just need the share prices to come down just a bit and I’ll be making some new buys. It feels good to get back into the swing of things with blogging and my portfolio. Best of luck with that final $10k to reach a big milestone!

  7. DM,
    You are like a few yards on that 200K milestone, but more importantly the passive income it produce and the regular increase you get from it. I used to dismiss dividends back then and pay more attention on capital growth since the result on capital growth is faster, but now I my mind set is vey different, passive income first, capital appreciation is my secondary goal just like any DG investor. Thanks for sharing your freedom fund update, Ill be tagging along through out your journey.
    Take care,
    FFF

  8. RBD,

    Slow and steady is what it’s all about. πŸ™‚

    My brokerage, Scottrade, handles all the cost basis information for me. They’re required to do that per law, as of 2011. They only update REITs once per year, however, once all of the updated information (ordinary dividends vs. return of capital) is finalized for the prior tax year.

    Best wishes!

  9. JC,

    I bet it feels good to be back on the horse there, as it pertains to both investing and blogging. Hope all remains well with the family as well. πŸ™‚

    Let’s hope we get some decent opportunities in March. February wasn’t kind to asset accumulators.

    Best regards.

  10. RA50,

    Thanks for the vote of confidence! Though, I don’t have any dreams or goals as far as $1 million or any other portfolio value. My dream is to attain enough passive dividend income to live off of and still have a quality of life that’s reasonable for me. That goal, right now, is $18,000 per year. Assuming a 3.5% yield (similar to what it is now), that would require a portfolio value of approximately $500k. But I anticipate hitting $1 million at some point anyway, as it’s really a foregone conclusion at this point. Even if I never invest another dime for the rest of my life, the Fund will eventually hit $1 million and beyond.

    Congrats on your milestone. That kind of portfolio can throw off some pretty substantial passive income, which frees up an incredible amount of time to spend on activities that bring joy and happiness to your life. πŸ™‚

    Cheers!

  11. Congrats on the increase in your portfolio value. My portfolio value increased as well. Like you, I would like the market to pull back, although it makes it easier to sleep at night when the account balance increases .

  12. Congrats or should I say bummer… The portfolio is higher, but new purchases won’t buy as many shares. My portfolio had quite a huge gain as well this past month which I’ll blog about soon. Like you said in a comment above, it is crazy to think that our portfolios are moving around month per month more than we could even invest with new capital over that same time.

    Can’t wait to see that next post about dividend income.. and getting closer to 18K per year!

    ADD

  13. You’re indeed correct with the ‘rising tides’ observation. Just a little bit earlier I was putting together the net worth statement for my wife and I. After I put it together we like to discuss the ups and downs, and where we stand in relation to where we want to be. As part of that we were discussing the impact on her 401(k) at work, where the swell was far in excess of any capital contributions. A simple lesson to all about the potential growth provided by having assets invested.

    Keep on trucking Jason, it’s going to be a great year, no matter which way the markets head.

  14. IP,

    I hear you. The emotional side of my personality likes to see the value rise. However, the logical and pragmatic side of my personality likes to see the portfolio value fall. The latter part of my personality generally dominates, but I make the most of both. πŸ™‚

    Let’s hope for better opportunities throughout 2015!

    Cheers.

  15. ADD,

    Haha. Exactly. Congrats and bummer all at once. Funny how that works for value investors like ourselves who are more income-oriented. πŸ™‚

    Looking forward to seeing how February treated you as well!

    Best regards.

  16. FFF,

    I hear you! I never focused on capital gains because I was keen to invest this way almost right from the start, but the steadily rising dividend income certainly makes it a lot easier to ignore the day-to-day fluctuations of the stock market (and our portfolios).

    Looking forward to reading your updates as well. πŸ™‚

    Best wishes.

  17. Oh very close to the magical $200K mark. Isn’t it amazing that the second $100k comes quicker than the first $100k? I guess that’s why people say the first million is the hardest to make and the other millions to follow are easier to make. The power of compound interest is pretty amazing. The snowball is getting bigger and rolling down the hill faster. Keep it up Jason. πŸ™‚

  18. W2R,

    It’s definitely interesting how that works, isn’t it? I think you really know that you’re succeeding when your portfolio (or net worth) fluctuates much more due to the market’s swings rather than your own capital contributions. That’s when you know the snowball is fairly serious in size and starting to move along without you. πŸ™‚

    Let’s keep on trucking together. Very excited for what 2015 has in store!

    Cheers.

  19. While crossing $200K would be a nice from a psychological point, you and I might be better off if we get lower prices down the road and you see your portfolio at like $150K – $160K. That way it might be easier to grow NW and income over the long run, since any cash you deploy will be buying so much more future income.

    Isn’t it nice though that if you stopped adding new cash, but simply reinvested those dividends for 14 – 20 years you will very likely be a millionaire? You have reached now critical mass, and there are few things that can stop your progress from now on. It seems that your average dividend income is now almost covering the rent payment.. So you are essentially living rent free πŸ˜‰

  20. thanks to you jason, my income fund i sclicking along my march dividends were a record for me and i only started in sept,2014 i see a sleep well at night growing income stream thanks for alerting me to the personal capitol aap since i started it i have imporud a great deal

  21. Gogogogogogogo!

    Do you track your yield on cost basis and/or your current yield as well? I think it would make sense to document all three together each month to give a complete picture.

    I’ve been thinking a lot about the road I took to FIRE and the road so many people I know are taking instead. A huge part, I think, is switching from a P&L or Cash Flow mentality to a Balance Sheet mentality. Madison Avenue wants to do all our thinking in terms of “what is the monthly payment?” We really need to be focused on “what will this do to my stockpile?” You have made the key transition.

  22. Tawcan,

    The snowball is definitely picking up pace now. Unless there’s a major correction, the second $100k will definitely come about quite a bit quicker than the first $100k.

    It’s just great to have our money working for us. My money can work harder than I ever could. I’d rather just get out of its way and go about my life. πŸ™‚

    Thanks for the support!

    Best regards.

  23. DM,

    Thank you for sharing. We just started our journey over here but your story has been an inspiration to us and so many of your readers. Keep up the great work over there. We are looking for better prices as well but we will work with what we have at the moment. All the best as you are racing to the more important $18k dividend income mark.

    FD

  24. DGI,

    You and I are definitely on the same page there. I wouldn’t mind at all seeing the market (and my portfolio) drop by 20%. The dividend income matters far more than the portfolio value, and thus such an event would help my cause quite a bit more than an inflated balance sheet. There have been a few people now remark that I’m “lucky” in that I’ve been investing as the market has basically doubled over the last five years. But that’s really not the case, as stocks have been generally quite pricey for the last couple years. I really only had about two or three years of cheap stocks, and my snowball (and income) wasn’t large enough at the beginning to really take advantage in the way I wish I could have. But you take what you’ve got.

    Appreciate the support. Looking forward to what the rest of the year brings us!

    Best wishes.

  25. tom,

    Glad things are rocking along for you so well so far. I hope it continues that way. Stick with it and keep your eye on the long term. Your future self will thank you. πŸ™‚

    Take care!

  26. DY,

    It’s coming along. The portfolio value (and dividend income) is further along than I thought it’d be at this point in time. Feels great to be ahead of pace. πŸ™‚

    Appreciate the support. Hope you’re off to a great start this year as well!

    Cheers.

  27. Hey new to your blog .. It’s very inspiring .. Can j ask, do you invest every single dollar from.your dividends back into the market? Or do you take a percentage out for your cash reserves for say other projexts? New to investing so sorry if it sounds silly

  28. FV,

    Haha. Thanks! I’m trying to keep the pedal to the metal. πŸ™‚

    I actually don’t track YOC at all. I think it not only provides no value, but I also think it can lead to poor decision making.

    I’m not sure I have a “balance sheet” mentality as I don’t track net worth. Now, I certainly recommend that everyone should have a healthy balance sheet, but I focus more on the cash flow statement because passive cash flow will free me. I think it’s really just that society at large isn’t good at delaying gratification or thinking outside the box. People tend to follow everyone else in one large societal groupthink.

    Thanks for dropping by!

    Best regards.

  29. Looks like I’m where you were two years ago in terms of portfolio value. How much have you been funding your brokerage each month if you don’t mind me asking? Best of luck.

  30. Hi Jason/Sensei,

    You are looking really strong! I know we are focusing on the income over the total value from/of our accounts, but I would like to ask how you feel now with $200k in sight compared to when you crossed the $100k threshold?
    Thanks again for the inspiration you provide for us un-common commoners.
    Regards,
    Tom

  31. It looks like it was about 2 1/2 years to hit that 100k mark and your progress towards 200k is remarkable, you’ll hit that in no time assuming the markets don’t take a break. Our focus is on dividend growth no doubt but it is quite nice to see your money growing as well. Good work DM.

  32. DM, good job with your freedom fund. Yor blog constantly reminds me that the dividend growth strategy works if you continue investing in quality companies when they are nicely priced, and if your investment timeframe is very long. I am currently at $30k so I need to like you and put more work in growing it.
    Div4son

  33. FD,

    Thanks for the kind words and support!

    You guys are off to a great start over there. Each and every day is an exciting opportunity to grow our wealth, regardless of the current circumstances of the market. We just have to take advantage. πŸ™‚

    Best regards.

  34. Tom,

    Thank you!

    It feels great, I won’t lie. I mentioned this in another comment, but I have an emotional side to my personality (like anyone else) and a pragmatic side. Generally, it’s the pragmatic side that takes control and that’s allowed me my success thus far. But it’s emotionally rewarding to see that big milestone in sight, as it’s really just the byproduct of working hard, staying consistent, and persevering through it all. It feels just as good to me as coming upon the first $100k did. In fact, it may feel even better as I’m that much closer to financial independence. πŸ™‚

    Appreciate the support. Glad you continue to find inspiration here. That’s why I write and share.

    Best regards.

  35. the insurance guy,

    I’ve probably averaged somewhere around $2,000 or so per month in terms of fresh capital contributions over the last couple of years.

    Hope that helps. Keep at it! πŸ™‚

    Take care.

  36. Captain,

    Yeah, it took just under three years to hit that first $100k. I initially thought it was almost three years on the dot, but I looked back at my records and found that I didn’t really start into this until June 2010 (as opposed to March 2010). So I took a bit longer between selling initial investments and really cranking back up again. So call it 33 months. I think the second $200k will definitely be quicker, depending how things go with the market. It’ll be exciting to compare the differences. πŸ™‚

    Thanks for dropping by!

    Cheers.

  37. Div4son,

    It definitely works. Absolutely. And I try to be open about everything in the pursuit of showing that it really does work. It’s no “get rich quick” strategy, but you will get wealthy over time. πŸ™‚

    Thanks for stopping by. Appreciate the support!

    Best regards.

  38. Hi DM,

    great progress for you freedom fund! I saw also an increase of 3.8 % in my portfolioΒ΄s value during february and 15.9 % since beginning of this year. Nevertheless, I am not so happy with this, because I will be a net saver for the next years to come. The valuationΒ΄s for some of my stocks are still ok, but I will now save a little bit more cash and wait what this year will hold for us.
    I guess the first 100 $k are so difficult, because the part of passive income, like dividends, is relatively small. The proportion will change over time, when cash savings loose more and more their power. Nevertheless, I also follow you about the idea of not paying to much attention to the monthly noice of the portfolioΒ΄s value. What counts is the amount and increase of passive income.

    Regards

    Marco

  39. Jason – 4.7% is a very nice monthly gain…repeat that for 12-months and you’ll be seeing a 56.4% annual return (compounded!). With returns like that, who knows, the fiancΓ© may not have to work soon. j/k haha Wouldn’t that be nice though! πŸ™‚

    Good luck reaching the $200K milestone…my bet is that you’ll be there in the next month or two so as long as Mr. Market does not decide to correct. Best wishes my friend. AFFJ

  40. Marco,

    Sounds like you’re off to a great start there for 2015. Hope it continues for you! πŸ™‚

    As the passive income grows, so does the power of compounding. And with that, the snowball accelerates, taking on a life of its own. We’re all trying to get to that point.

    Thanks for stopping by!

    Take care.

  41. AFFJ,

    The market just continues to march upward. If you had asked me a year or so ago if a large correction would have happened by now, I definitely would have said yes. But that’s why we can’t time the market. You just never know what’s going to happen. I wouldn’t be surprised at all to see a drop of 10% or more over the near term, but I also wouldn’t be surprised to see the market continue to rise. I’ll just focus on individual values and go from there. πŸ™‚

    Appreciate all the support. Let’s keep rocking it!

    Best wishes.

  42. Hi,

    Nice to see that things are (and have been) going in the right direction for you and the investments.

    I have a question. When you pick up stocks do you look at the pay out ratio?

    Realty Income has a payout ratio (precentagae paid out of earnings) of a whopping 190% and AT&T 153%, Philip Morris about 90% ! Based on the reasearch IΒ΄ve done and the books IΒ΄ve read one should aim to buy stocks that have a payout ration of not more than 60% when focusing on dividend investing.

    Would be great to get your thoughts on this and if IΒ΄m missing someting reagrding these particular stocks.

    Thanks for a great blog!

    Swedish Dividend Investor

  43. My second favorite blog post I like to read just behind the dividend income update which is really what we are all after. As you have stated numerous times, it’s not necessarily about the portfolio value as that can rise and fall on a whim. It’s really about the continued dividend income and growth that really matters for an income investor. Keep on inspiring myself and others. Always love to read these updates and see how other portfolios are blossoming.

  44. Hi DM,

    Great Article as usual

    Hoping you hit the 200k mark sooner than later.

    I just have one question
    Do you recommend share transfers from one brokerage account to another or would it be better to just sell everything and start over again.

    I am asking the question because I am presently based in Qatar and planning to go back to Canada in the near future (2 years).
    I have been accumulating around 300k that I invested in dividend paying stocks (US stocks) here in Qatar but I worked so hard to find the right stocks at fair value that I just don’t have the guts to sell everything and start over again although my investment horizon is at least 15 years or more.

    All the best on your journey to financial independence.

    Jennifer

  45. Hi DM,

    I am a recent starter and reading your blogs with a lot of interest. Currently I am only able to invest small amounts and therefore stock transactions are too expensive (for these amounts it can go up to 4% in my country). So I have started using funds, like the Vanguard High Dividend Yield Index Funds which have no transaction fees. What is your take on funds like this? Can they help me on my quest to financial freedom as well? Thanks!

    Rowan

  46. Good post DM, keep it up. πŸ™‚
    February was good, even after I unloaded an oil company withc bordeline fundamentals. About 1/4 of the rest of the stocks are entered in the green again, since the 2014 tax loss season.
    Talking of opportunities, the ones on my monitoring passed, for most of them, outside my price ranges. So I think I will put my cash into a broker’s saving account fund. The return is a joke (1-1.25%), but since I wait the next market dip/monkey fear mongering it can take some months, and it’s better than having cash that do nothing. At least it doesn’t cost any transaction fee since they are treated as mutual funds.

  47. DM,
    You are very close to the 200K mark. I know you much feel pretty good about reaching that milestone. You will be officially 1/5 of the way to becoming a millionaire. Good luck investing in March and I look forward to seeing what your buys will be. I know you don’t care much for newer companies with no track record, but have you looked at Store Capital (Stor) at all?

  48. Nearly 200k!
    Just keep it going and you will reach that in no time!
    Selling your car will help you to reach that marker fairly quickly. Too bad that I can’t sell mine because of work. I would rather walk or use bike to go to work, if I had that change! you will save a lot of money.
    cheers.

  49. Hey

    Will u ever get to a stage you will sell some shares to free up some money? I am a big fan of frugality but it’s nice to reward yourself with some luxury items now and again.

    What do you feel about the idea of freeing sole capital buy sales for other passive income projects I.e real estate acquisitions etc ?

  50. Hi Jason!

    Very inspiring to see your portfolio go from 5k to 100k in three years and now so close to 200k. How long has it taken for it to come from 100k to where your at now? And it’s good that your selling your car too. You’ll be able to invest the money you save from all those insurance, gas and repair costs you no longer have. Keep up the great work!

  51. DM,

    It is tough to find a good bargain out there on the market right now, but it is still kind of cool watching the value tick up to the right. Either way it is a snapshot in time, which shows your excellent progress and skill in investing. Keep up the good work.

    – Dividend Gremlin

  52. Awesome DM! Always good to see the Freedom Fund headed in the right direction. Can’t wait for you to break the 200K mark. We should have a party! πŸ™‚

  53. Stefan,

    Thanks for dropping by!

    Yes, I do of course look at payout ratios and I always include that information on my stock analyses. However, you are missing a few things. Realty Income is a real estate investment trust. I would do some research on this if I were you, but using earnings to determine a REITs profitability is incorrect. You should use FFO or AFFO, which adds back in depreciation and amortization. PM has a high payout ratio, but tobacco manufacturers always do. That’s not uncommon there and most actually aim for a high payout ratio because the capital needs are low. AT&T, like most telecoms, has major adjustments to profit somewhat often, which can cloud their EPS. As always, it’s best to do a little digging, rather than rely on a stock quote for all of your information.

    Hope that helps!

    Cheers.

  54. DivHut,

    Yeah, these are also among my favorite posts as well. The dividend income update should be live here pretty soon, and those are the articles I really look forward to reading. πŸ™‚

    Thanks for stopping by!

    Best wishes.

  55. Jennifer,

    Thanks for the support!

    I definitely wouldn’t sell everything and start over again. That would incur fees and very likely taxes. No sense really, as it’s not particularly difficult to transfer assets from one brokerage to another. I would contact a brokerage that you’re interested in using over there in Canada and ask them about transferring assets. I’ve never done it, but my understanding is that it’s a fairly simple process.

    Best of luck to you on your journey as well. Sounds like you’re very far along! πŸ™‚

    Take care.

  56. Rowan,

    Funds can surely get you to where you want to go as well, though the path there will likely be a bit different. In addition, the dividend income may or may not be enough to live off of. If it’s not, you may have to sell assets (chunks of the fund) or work/save longer.

    As far as my thoughts go, you can read these articles:

    https://www.dividendmantra.com/2013/04/why-i-vastly-prefer-dividend-growth/

    https://www.dividendmantra.com/2014/09/the-4-rule-examined/

    But those articles pertain to my perspective and I have access to cheap brokerages. Sounds like you’re doing what’s best for your situation over there. πŸ™‚

    Take care.

  57. farcodev,

    If you see absolutely no value out there, then it probably makes sense to avoid stocks. I would never recommend buying overpriced equities, even those of high quality. That said, I haven’t yet run into a situation where I can’t find one attractively valued stock out of the hundreds available to me. But if I were to, I’d probably avoid stocks until prices become more reasonable.

    Let’s hope we get some cheaper prices sometime this year. πŸ™‚

    Thanks for sharing!

    Best wishes.

  58. DM,

    1/5 of a millionaire. It has a ring to it, I suppose. πŸ™‚

    I haven’t looked at STOR at all. I see it’s a fairly new REIT. After the ARCP debacle, I’m going to stay away from companies without a proven track record (especially REITs).

    Cheers!

  59. Anha,

    I hear you. Cars are just plain expensive. I’ll miss owning a car in some ways. It’s a great luxury that offers a lot of convenience. But we don’t really need it, as most of the places we go are within walking distance or available by bus. I may end up getting a scooter for easier trips to the beach and what not, but living without a car is freeing in many ways. We’ll see how it goes. πŸ™‚

    Maybe you’ll one day find yourself in a similar situation where you can walk/bike to most locations. That would be really nice.

    Cheers!

  60. Jay,

    No, I don’t think I’ll ever get to that stage. There’s really nothing in my life that I want that I don’t already have. If I wanted something bad enough, I’d buy it. I’m not depriving myself. But at some point you just realize that happiness isn’t tied to stuff, as I’ve written about at length.

    As far as real estate goes, I just wrote an article on why I’m not a fan. You may want to read some of my recent articles to get a feel for the blog:

    https://www.dividendmantra.com/2015/02/keep-it-simple-part-2/

    https://www.dividendmantra.com/2015/01/what-ive-learned-about-happiness-from-diego/

    Those were written in the last couple of months, which answer your questions. πŸ™‚

    Take care.

  61. Sampo,

    Things are definitely accelerating, which is what one would expect with the tailwind of compounding behind them. Of course, the stock market’s been on a tear over the last few years. My balance sheet has reaped the rewards at the cost of my cash flow statement. Such is life.

    I reached $100k in March 2013. So we’re now two years down the road. Even with a flat or declining market, the second $100k should come about before the end of the year, meaning the second $100k was faster. Keep in mind that I’m also making less money right now than I was a year or two ago, so that should slow things down. But, overall, it looks like it’ll be faster this time. πŸ™‚

    Best regards!

  62. DG,

    Thanks for the support!

    It’s definitely a snapshot in time. And I’m glad I started blogging about this when I did. It’s really great to go back in time and look at where I was and what I was thinking when I hit the first $100k. I imagine it’ll be just as nice to look back on these moments as well when I’m years down the road. πŸ™‚

    Hope all is just as well for you over there!

    Best wishes.

  63. Stoic,

    I’m down for a party. πŸ™‚

    Looks like you’re still spending very little over there. Excellent work. The housing situation is really working out great for you. Nice!

    Thanks for stopping by.

    Best regards.

  64. Great going, Jason!

    My portfolio just surpassed 141 thousand euros (nearly 160 thousand USD).

    I surpassed 100 thousand euros just last year. A bit crazy πŸ™‚

    I recently added my first JNJ shares and PX in January. Should prove good additions to my portfolio in the long run.

    I hope for a pullback in the market. Like you, I focus more on my dividend income and its growth. A bit more starting yield would help a lot.

    Love these first world problems, in any case. I feel lucky to have the chance to create my own path to FI.

    Regards

    Jarmo

  65. I work for Disney and they use to have a way to buy Disney stocks from your paycheck (but stopped last year πŸ™ ), I remember when Disney stocks were $15 I was so excited and other people I worked with were so upset. I said that I only want the stock to go up when I am going to sell until then I want it low to buy! :-)That was before I found this awesome blog (now I know I don’t need to sell for money, I can build a dividend portfolio) and now understand dividends, thanks for opening my eyes. πŸ™‚

  66. Jarmo,

    Congrats on the success over there. That portfolio is really jamming along! πŸ™‚

    I hear you on the first world problems. That’s really what this is. The key is that, every day, we’re one step closer to financial independence, either way.

    Thanks for sharing. Keep it up!

    Cheers.

  67. Heather,

    Sounds like you know what’s going on over there. Accumulating DIS at $15 was an incredible opportunity. Funny how people don’t see it that way. They want stocks to go up, up, up, even if that’s a headwind for them along the way. In the end, it’s about ownership of real companies. And the cheaper you can get that equity, the better. πŸ™‚

    Glad you’ve found some great information here!

    Take care.

  68. It’s the old problem of the market doing well: we have to buy high.

    I suppose it’s a good problem to have, but is it too much to ask for a tanking market while we’re in the accumulation phase, followed by a hundred years of bull markets? πŸ˜‰

  69. DB40,

    Exactly!

    Who do we have to talk to around here to get something like that done? I don’t think it’s too much to ask for at all. πŸ™‚

    Cheers.

  70. Everyone seems to be congratulating you on your soon and eventual $200k balance. For me (at 38), I have accumulated $116k and would absolutely love to see my account fall in value to 90k or less. I welcome the opportunity to invest my money and get more for it. With the bulk of my funds in roth accounts, I look forward to aggressively growing my account and a big drop in the markets would go a long way to helping me out.

  71. David,

    We’re on the same page. I’d absolutely love to see the market drop by 20% and take my portfolio’s balance with it. That would open up a lot more opportunities for fresh capital, as I discussed in the post. But wishing for something isn’t going to make it true, so we celebrate what we can. πŸ™‚

    I can’t imagine we don’t get a correction at some point in the near term, but I’ll keep plugging away regardless.

    Thanks for dropping by!

    Best wishes.

  72. Thanks Jason. Purchasing the house ranks right up there with becoming debt free in terms of best financial decisions I’ve made. OK, maybe third, I can’t forget the benefits that working overseas provided me.

    I realized awhile back that regardless of whether I continue to live here, rent it, or sell I’m coming out ahead in either of those scenarios. Plus, I can’t emphasize enough the value of the skills I’ve learned in this whole process. It’s allowed me to start my own business and with that flexibility there is nothing stopping me from purchasing another house and do a quick flip. The profit would more than cover my living expenses and give me a surplus to invest in something else all with about 2-3 months of work depending on how quickly I wanted to finish it. If I lived in the one while I did the rehab work then I could rent this place out and have a rental income that covers almost half of my current expenses. OK, so I’m revealing too much that is supposed to be for an upcoming post…

    So many opportunities eh? Life is indeed good! πŸ™‚

  73. Hi, I’ve been following your blog for 3 to 4 months now, and I just think it’s a great thing that you’re doing here, showing the world how you’re accomplishing your FI goals in such an open and honest way. Hey, I’m 60 and it inspires me! Building a 200k portfolio from scratch in 4 to 5 years with a modest income is an oustanding accomplishment. I’ve certainly been “around the block” enough with investing successes and failures to appeciate what that takes.

    I’ve been semi-retired for almost 10 years (I guess that’s what it’s called – I’m enjoyably working part time from home), and currently in the process of converting a portion of my nest egg over to dividend stocks. The goal is to generate a nice income stream to complement SS when I move to full retirement in a year or two. Reading up on dividend investing online is how I came across your blog.

    Keep up the great work, and enjoy hitting that 200k plateau when it happens (of course, it could happen more than once!)

  74. Hey hey, nearing $200k! That snowball is picking up the pace!

    Not much value out there in the market in February, though. I like seeing my portfolio’s value go up, but not as much as I like seeing my dividend income go up. Oh well, best of both worlds. πŸ™‚

  75. Stoic,

    Sounds like you’ve got a great plan going on there. And that’s certainly scalable for you as well. Now that you’ve developed the skills, interest, and know-how, you can scale that to fit your needs. And since your needs are so minimal, it wouldn’t take that long or be that hard. πŸ™‚

    I consider myself fortunate in a similar but also different way. Starting this blog back in 2011 was transformative for me in so many ways. It gave me skills in a manner similar to what you’re talking about and also changed my life for the better. So while your skills are giving you the opportunity to build an income source that you enjoy building, the same goes for me and writing. It’s awesome to have those kinds of opportunities kind of come out of left field when you’re not even expecting them. Life is definitely good!

    Best of luck on the projects.

    Cheers!

  76. Tom,

    Thanks so much. Appreciate the support! πŸ™‚

    I’m so glad the inspiration is ringing through. Building the portfolio in the manner I have with a modest income isn’t easy, but it is simple. Consistency, persistence, and perseverance are oftentimes worth far more than a big income.

    Congrats on your situation over there. Living life on your terms is mainly what this is all about and you’re already there. I’m extremely fortunate to know what that’s like, now working from home and writing for a living. There isn’t a day that goes by that I don’t consider myself blessed. We’re blessed in many ways…even being able to save and invest is an incredible privilege.

    We’ll see how it goes. I’m still plugging way!

    Best regards.

  77. My heart and brain are in constant battle over portfolio value as well! No matter how you look at it it’s some serious progress you’re making…I can’t believe you’re this close to 200K already! Also thanks for reminding me about the MDT / COV completion, I had put that company out of my mind until that acquisition resolved and I want to own the company eventually. Have a nice week ahead!

  78. Hey Jason! I caught up on some of your older posts over the weekend. I am so thankful I found your site! I sat down and did my goals based on an initial deployment of 12k. I was little discouraged when I did the quarterly dividend amount that I would receive if I just did that and nothing else. I continued to click around this awesome site and found your goals! Man this saved me from giving up. I noticed you do a yearly income goal and then try to reach it. So I said, “Sue, start over and do it based on the amount you would like to achieve by the end of each year.” Talk about a refuel! I can totally retire in 10 years or less if I continue to live frugal, budget and invest in great companies. I am beyond excited to get started. I am hoping a bit for a downturn so I can really get a shovel to it! When not “if” it happens I will be better prepared to take huge advantages but for now I will nibble and keep a hawk eye on my watchlist and ear to the financial streets. I know you are not an advisor but I would love to know where you would deploy an intial 12k to start your snowball.

    Thanks!

  79. FREEDOM! Sorry could not help it. Whenever I hear the word freedom I always think of Mel Gibson in the movie Brave Heart.

    What is the end goal for your freedom fund?

    Cheers!

  80. In light of my new found knowledge of dividend power, I took a look at the small amount of stock I own through working at WAG. This stock by the way has been causing my mouth to gap. I have worked for the company for over 12 years and unbeknownst to me I received a 100 worth of options. Also, when I started working as a pharmacist I took out a loan to purchase more options when the stock was at 24 bucks. Needless to say I listened to the wrong person and sold my options (960 shares!) for only 33 about 4 years ago. Stock went crazy to 50.. I discovered I had about 430 shares that I didn’t sell ( thank goodness!) I sold those for 50… now the stock is at a record company high 83! I had a gold mine and sold it off due to my inferior knowledge of dividends! I could have been making money on these bad boys. LMBO
    Walgreens is great though! gave us 50 shares at 50 and I’m buying back at a discount. I made 200 bucks so far in dividends! I look forward to more.

  81. Seraph,

    It’s a first world problem, isn’t it? Bigger portfolio value, but lack of value. I guess we take what we’re given and make the best of it. πŸ™‚

    Thanks for dropping by!

    Cheers.

  82. Sukina,

    I’m glad that some of the things I discuss here are really helping you think through the process. Putting together a reasonable action plan that works for you is incredibly important. I definitely set a goal each year for dividend income based on a holistic approach of how much I think I’ll ultimately need when I’m 40. So it’s basically partitioning that out and working as hard as possible to achieve those annual targets.

    That’s awesome news there with WBA. I imagine it’s a wonderful company to work for and the discounted stock is just another great benefit.

    As far as $12k right now, it’s tough to say. I can’t think of any stocks out there that scream value, but some of my current largest investments would be where my new capital would go as well, if I had the room. So PM and JNJ are a couple of fantastic long-term investments that I’d feel comfortable starting all over with again. And a few on my current watch list are UPS, TROW, MSFT, ADM, and PX. Those are nice companies as well. In the end, the most important thing is to feel comfortable and get started. πŸ™‚

    Best of luck!

    Cheers.

  83. Ryan,

    I hear you. It’s like the emotional side of my personality likes to see the portfolio value rise. But the pragmatic side of my personality – the more dominant side – loves to see value in the market, which would mean a lower portfolio value.

    Let’s hope we get some better opportunities throughout the year. πŸ™‚

    Thanks for stopping by!

    Best wishes.

  84. Gen Y,

    Haha. I used to think of that – the screaming of FREEDOM! – when I was stuck at work on a Saturday from 8-1. I always wanted to shout it to my boss or something on my way out on my last day, but something about burning bridges… I decided against it. πŸ™‚

    I don’t have an end goal for portfolio value. My long-term goal is $18k in annual dividend income. Assuming a 3.5% yield, that would indicate a portfolio value of somewhere around $500k.

    Best regards.

  85. Thats awesome! Over $8,000 increase in a month! Even with a contribution on your part thats still a very nice increase. Could buy a decent car with that if you were inclined to do so, or like 2000 pizza/coke lunch combo’s!!! If energy stabilizes some, you very well may get to 200k next month, then again whats the rush?
    All the best!

  86. Jason,
    Good to hear from you regarding my question! Those were my thoughts as well. I definitely want to own JNJ. I want to pick up some MSFT too. I have been making a spreadsheet of some good solid companies that are in my 401k and it seems like they are in a lot of dividend investors portfolio and Warren Buffet’s company too! I want to learn what to look for so I can use my fresh capital every month wisely and hopefully get in before the ex-dividend dates come and go. I am so excited and your openness let’s me believe in steady and calculated and I am going to get started this month. I missed Quarter 1 payouts but the year is still young!

    Thanks again!

  87. I don’t think you have to worry about energy stocks. They will go up in the second half of this year if not earlier. I am actually accumulating my energy stocks myself and rebalancing into them by trimming some stocks & funds and moving into energy stocks and funds. Once they move up, I will reverse the process trimming energy stocks back down and reallocating to other stocks. I think this will be a winning way to squeeze some juice out of my portfolio.

  88. Jason,

    Not long now until you breach the $200k mark! What an epic journey it has been for you thusfar.

    Lately I’ve been experiencing the power of compounding interest more and more as my portfolio has grown in size and holds an increasing numbers of equities. I can imagine that once you get to your level, the relentless march upward becomes more pronounced as months go by.

    Keep it up!
    NMW

  89. Hi Jason,
    Really enjoyed another great article. If time permits, might you explain what is meant by adjusting the cost basis to reflect return of capital.
    Thanks,
    Carl

  90. This is motivating, after that 200k mark you will be close to 50% of the freedom fund. I can’t wait for the next correction, it will be an AWESOME opportunity to buy in on the cheap.

  91. DW,

    Or I could buy 8,000 cheeseburgers from McDonald’s. Maybe that’ll help turn their ship around. πŸ™‚

    We’ll see how it goes. I’m definitely in no rush for $200k. I’d rather see the portfolio drop to $160k or so and open up more opportunities for fresh capital.

    Thanks for dropping by!

    Cheers.

  92. Martin,

    Well, I don’t think anyone really knows where oil is going over the short term. It’s likely that demand will remain strong when looking out over the next decade or so, but where it’ll be in six months’ time is anyone’s guess.

    But I wish you luck with that strategy. Hope it works out for you. πŸ™‚

    Take care.

  93. NMW,

    The power of compounding is definitely real. And you feel it more and more as time goes on and as your asset base grows. You’re already seeing the effects, but they’ll magnify for you as you continue doing what you’re doing.

    Life is good! πŸ™‚

    Best wishes.

  94. Debtless,

    I’m with you. I’m very much looking forward to a major opportunity like that. I don’t earn as much money as I used to, so I can use all the help I can get. πŸ™‚

    Thanks for the support!

    Best regards.

  95. Great start for the new year and 200k is around the corner. Despite your freedom fund fluctuations up and down you have the patience to stick with your plan and grow the nest egg while receiving dividends in the near term to subsidize your living and future investing without having to dip back to the nest egg well.

    Good Day and Grind On!

  96. Jason,

    Did you read Buffett’s letter to Berkshire shareholders? Do you think you might write about the wisdom of Mr. Buffett again this year?

  97. A-G,

    Thanks for the words of wisdom. Fluctuations don’t only not bother me, but I instead quite look forward to them. As I always say, volatility is nothing more than an opportunity. πŸ™‚

    Let’s keep grinding!

    Cheers.

  98. frankz,

    The meeting hasn’t happened yet. It’s scheduled for early May. However, I intend to go (and write about it) as I’ve mentioned a few times. πŸ™‚

    Take care.

  99. I am literally giving you a mental standing ovation sir, continue your march forward. You’re a living testament to discipline.

  100. sjodom,

    Thank you so much. πŸ™‚

    Appreciate that. I’m doing my best to show the rewards of consistently living below your means and investing that excess capital intelligently into high-quality dividend growth stocks. I like to say that dividends are the “proof in the pudding”. Likewise, my journey and these results are also proof that this works.

    Best wishes!

  101. Jason,

    Awesome, man. Closing on on 200k.. wow…

    I remember just a couple of years ago when you were closing in on 90k or so and I was stoked. Now, I just think you’re there, man.

    I mean sure, you’re not officially there, but you’re THERE.

    Now, it’s about figuring out what makes you happy, instead of how the rent is going to get paid.

    PS: Katie and I were talking last week about possibly coming to see you and Claudia next winter. Looking forward to it. Keep in mind that you always have a place to stay up here in Minnesota if you want to experience our beautiful summers and lakes up north. I’ll take you out on a camping trip!

    Cheers, my good friend!

  102. Kraig,

    Thanks so much, bud.

    I agree, it’s kind of like I’ve hit critical mass now. Even if I stop investing now, I’ll still very likely have a good chunk of passive income hitting my account for the rest of my life. And that’s an amazing weight that’s lifted off of my shoulders. Kind of like what you were writing about recently. Money is one less problem to worry about. πŸ™‚

    Once you take money off the table in terms of decision making, life opens up quite a bit. It’s amazing.

    Would love to have you guys down anytime. You’re always more than welcome. I hope we can make it up to Minnesota one of these days as well. I’m sure that, like Michigan, it’s amazing in the summer up there.

    Keep up the great work!

    Best wishes.

  103. Hi there, I am looking into a divined paying fund like VYM for my income generation. That being said, how much would you say your typical $$ amounts are for savings/reinvesting per month? 1000? 1200? 2000?

  104. CTguitarguy,

    It’s hard to come up with a typical savings amount because my income has always oscillated so much from month to month. In addition, expenses aren’t static. If I had to guess, I’d say I’ve been able to save somewhere around $2,000 per month on average over the last few years. But you can view all of my monthly budgets (which shows exact savings amounts) here:

    https://www.dividendmantra.com/monthly-budgets/

    Hope that helps. πŸ™‚

    Cheers!

  105. Wooow , it’s great to see your portfolio approaching 200k !! You have worked hard mate !
    Never know , with your perseverance it might reach 1M in years to come πŸ™‚ πŸ™‚

  106. harsh,

    Thanks so much. I would prefer cheaper stocks, but this is a nice alternative. πŸ™‚

    The portfolio will eventually reach $1 million; how fast just depends on how much I continue to invest and what kind of market returns I receive. But I imagine it’ll cross $1 million sometime in my 50s if I stop contributing at 40. We’ll see!

    Appreciate the support. I hope all is well where you’re at!

    Best wishes.

  107. My first trip to this blog.You people are a very optimistic group.You are all making quite a few assumptions about the market going forward like it is guaranteed to double,triple or quadruple your money.Good luck with that but 6 years from now your portfolio could be worth less than today.Just a little reality check.

  108. Hey Hoops,

    Since it is your first visit you may have missed that Jason repeatedly states that it is not about the total dollar value of the portfolio, it is about the income it generates. If Jason remains true to his convictions, and I believe he will, he will view your potential market drop in six years as an opportunity to use the INCOME his portfolio generates (which doesn’t change when the stock price does, the dividends keep coming) to buy even more shares of high quality companies that are now “on sale”.

    Welcome and please read some of Jason’s previous articles. They represent an awesome example of what an ordinary Joe can achieve with focus, dedication, and determination.

    Regards,
    Tom

  109. Yay congratulations! I’ve been reading your old posts and it’s really amazing how far you’ve come since then.

    It seems that dividend stocks and being a shareholder is the way to go. Dividend stocks don’t care how much education your parents could afford to pay. They don’t care about the color of your skin, your gender, philosophical/religious beliefs, and they don’t discriminate because of how old you are. Dividend stocks don’t care if you come from a humble background either. As a shareholder you also don’t have to deal with office politics.

    Anyway keep going and don’t let the naysayers discourage you. ^_^

  110. Lila,

    Thanks so much! Appreciate the support. πŸ™‚

    I’m with you. Dividend stocks don’t care about the color of your skin, where you live, how much you work, or what kind of person you are. You don’t need to show up on time and deal with office politics to collect a dividend check. Doesn’t get much better than that!

    Thanks for stopping by. I’m plowing forward, regardless of any naysayers out there.

    Best wishes.

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