Freedom Fund Update – October 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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and keeping track of total return, as well as giving context to the dividend income I earn, my main focus is on the rising dividend income stream the Fund provides.

So, guys, September ended up breaking all kinds of records for me. For many of you readers paying close attention to my investment activity, you’ll notice that I’ve been investing a bit more often (and with a bit more capital) over the last, say, six months (compared to my historical norm) as my online income has exponentially increased beyond my wildest dreams. That’s, of course, largely thanks to you guys. And, as you all know by know, I’ve taken on changes that will impact that long-term story. My near-term cash flow has been positively impacted by that change, but the long-term income is dramatically reduced.

But I’m living up to the message I preach: Choose time over money. Choose freedom over slavery. Choose passion over work. Choose simplicity over complexity. I’ve freed up time by simplifying my life, which will allow me to focus on my passions.

September was off to a roaring start even before these changes were cemented, but I definitely finished strong. All in all, I couldn’t be more pleased to see my cash flow get this temporary increase exactly at the same time that volatility across the broader stock market has also increased. Time in the market matters more than timing the market for the long-term investor, but I’ll tell you that I wouldn’t mind being able to somehow take advantage of both whenever possible.

Now, I don’t sell stocks very often. I’ve published just 10 articles discussing stock sales on this blog since early 2011 (against more than 120 “Recent Buy” articles), and that’s because I’m a buy-and-hold long-term investor. Selling off pieces of great companies limits the effects of compounding and your ability to build a growing snowball. However, I did record a couple sales this month. I first eliminated my position in BHP Billiton PLC (BBL) completely by selling all 115 shares at $33.28. I then significantly reduced my position in National Oilwell Varco, Inc. (NOV) by selling off 65 shares at $38.62.

I didn’t sell stock in these companies because I’m any less enthusiastic about their long-term prospects. It was simply a tax move. I used a tax-loss harvesting strategy to reduce the more than $3,000 in capital gains I registered this year after Medtronic PLC (MDT) acquired Covidien PLC and relisted its stock, and Lorillard Inc. was acquired by Reynolds American, Inc. (RAI). I’m now down to essentially $0 in gains this year, which should reduce my tax bill by more than $450. I’ll be buying back into BBL and NOV as soon as the 30 days relating to the wash rule is up.

So the sale of stock in BBL and NOV provided me with even more firepower (more than $6,000) for my BB gun than usual, which, when combined with particularly strong near-term cash flow, meant I was flush with capital. And as I’ve said over and over again, I prefer cash flow (especially growing, passive cash flow in the form of increasing dividends) to cash, which is exactly why I went on a shopping spree so as to convert the latter into the former.

Now, I started the month off with adding to my position in Omega Healthcare Investors Inc. (OHI). I really, really like this business and its business model. Love the valuation, the yield, the quality, and the future prospects. Toward the middle of the month I picked up another 45 shares at $33.12 per share. Not sure I’ll add any more, as I’m pretty comfortable now with 150 shares.

A similar real estate investment trust, HCP, Inc. (HCP) has long been on my radar, but I’ve felt (and still feel) like Omega Healthcare is the better business, overall. However, my position in OHI is now quite large and I like the diversification that HCP offers (operating across senior housing, post-acute/skilled nursing, life science, medical office and hospital). Moreover, the valuation and yield are also both compelling (like with OHI). I initiated a stake in HCP with 30 shares at $38.24 just before the Fed announced that interest rates wouldn’t change over the near term. HCP’s stock zoomed up, but then fell back down with weakness across the broader market. Perfect! Just the opportunity I needed to double my position at a cheaper price – I added another 30 shares at $36.97. This stock yields over 6% with 30 consecutive years of dividend raises.

I also added to my positions in a couple energy supermajors for the first time in a long time. I haven’t been particularly interested in a lot of energy plays, especially supermajors, lately due to a combination of my overexposure to the Energy sector as well as concerns over some stocks holding up a bit better than I had expected them to.

But I’ve been buying around these stocks, slowly reducing their weightings. And Royal Dutch Shell PLC (RDS.B) and BP PLC (BP) have been hammered over the last year, even though they weren’t that expensive from the get-go due to company-specific issues. Both now have sky-high yields (supported by plenty of cash) and the valuations are extremely compelling here, respectively speaking. Moreover, I had a little room in the portfolio for both, especially RDS.B. So I picked up 30 shares of BP at $30.76 per share and 20 shares of RDS.B at $50.74 per share.

Staying a little more active in the energy patch than I had planned on (or really wanted to) due to extreme volatility, I also added to my stake in Kinder Morgan Inc. (KMI). The stock is down almost 15% over just the last month and almost 35% YTD. It now yields over 7% even though a lot of the company’s revenue is fee-based, with limited exposure to commodity pricing. I didn’t plan on ever buying any more stock in Kinder Morgan due to my position size, but I just couldn’t pass it up here. Didn’t go too crazy, however, adding just 25 shares at $27.95.

ONEOK, Inc. (OKE), another high-quality midstream play, has also been absolutely hammered – it, too, is down ~35% YTD. This is another stock I wasn’t particularly interested in buying more of due to my general exposure to energy and more specific exposure to midstream pipeline companies, but the valuation was screaming at me. I grabbed more OKE twice this month – 15 shares at $34.39 and 20 shares at $30.84.

I then initiated a position in Colgate-Palmolive Company (CL) at $62.38 per share. Picked up a hefty 50 shares here. Admittedly, I paid a little more for this stock than I would have liked. But it’s a stock I’ve long wanted to add to the collection, and I don’t think the valuation is completely outrageous or anything. It’s a little pricey, but it also depends on what future dividend growth turns out to be. The company is about as high quality as it gets, and I love the brand power here. I paid up for quality here.

I was also quite busy in the Industrials space this month, as I happen to think that there are a lot of high-quality companies in this sector trading hands at extremely compelling valuations for long-term investors.

I added to my position in United Technologies Corporation (UTX) twice – picking up 15 shares at $92.61 and another 10 shares at $87.91. I also added to my stake in Caterpillar Inc. (CAT) after the stock fell off a cliff, down substantially after announcing layoffs amid softness in key end markets. I purchased 10 shares at $65.79. This isn’t a company that I see myself investing heavily in, but I couldn’t pass it up here. If it drops substantially more, I might add another handful of shares, but that would probably be it. I also added to my stake in Emerson Electric Co. (EMR) at what seems to be a ridiculous price – grabbing 25 more shares at $44.28. I’ll probably just hold pat now with 105 shares in Emerson. Yielding well over 4% with a P/E ratio of just over 12, Emerson – with its 58 consecutive years of dividend increases – is a no-brainer here.

But I didn’t just add to existing stakes in high-quality Industrials.

After many years of watching this stock relentlessly rise, 3M Co. (MMM) finally took a short breather and I jumped on it. I initiated a position in MMM with 10 shares at $137.41. 3M is an amazing company that has exposure to just about every industry in the world. Love the thought of owning a small slice of more than 100,000 patents. Another great company that I’ve watched for some time, Fastenal Company (FAST), has also become quite reasonably priced lately after falling more than 20% YTD. No debt, yield over 3%, double-digit long-term dividend growth, and operating in a great niche. I bought 50 shares at $37.50. This is another new position for the Fund.

I also went hunting in the Financials sector.

I initiated a stake in ACE Limited (ACE), a global insurer that’s extremely high quality by itself, but that will likely be even higher quality after the acquisition of Chubb Corp. (CB) (assuming it goes through). I think the valuation is fairly attractive here considering the prospects and track record – they’ve increased their dividend for the past 23 consecutive years with a 10-year dividend growth rate of 12.3%. Flies under the radar, but probably shouldn’t. My stake in ACE was started off with 15 shares at $101.80 per share.

Canadian banks have also been incredibly weak lately. Bank of Nova Scotia (BNS) is down more than 20% on the year, bringing the valuation down to a very attractive level and the yield up to over 5%. Fundamentals remain sound, however, and I had a little room in the portfolio. Added 20 shares at $43.06. I also added to my position in Toronto-Dominion Bank (TD) for the same reasons. Was fortunate enough to be able to buy 24 shares at $38.42.

One industry I’m not a huge fan of is retailing. Nonetheless, there are a few great retailers out there with outstanding dividend growth track records, strong competitive advantages, and excellent fundamentals (relatively speaking; big margins are hard to come by here). Wal-Mart Stores, Inc. (WMT) is one such retailer. More than 40 consecutive years of dividend growth, though recent dividend raises have left something to be desired. Still, a low payout ratio and plenty of free cash flow gives me hope that they’ll be back on the horse soon. The valuation is also very compelling here however you look at it, especially with a yield that’s more than 70 basis points higher than the five-year average. I added to my stake in the world’s largest retailer by purchasing 10 shares at $63.76.

Anyone following recent news will know that biotechnology stocks were hammered after Hillary Clinton tweeted about drug pricing. This kind of stuff makes me laugh. I ignore the noise and keep my eye on the long term. Although this came right around the time my cash was almost exhausted for the month, I did have a few BBs left in the gun. Adding just 5 shares to my Gilead Sciences, Inc. (GILD) stake at $95.81, it was the perfect spot for me. I view GILD as a speculative play due to the business model and newly issued dividend, and this small transaction was right-sized for my cash flow and willingness to invest more.

Finally, I initiated a position with 10 shares at $104.99 in Diageo PLC (DEO). This is another stock that has been on my watch list for what seems like forever. I’ve long wanted that exposure to the world’s largest spirits producer, with leading brands ranging from Smirnoff to Johnnie Walker to Baileys. Although I have some indirect exposure to alcoholic beverages through my position in Altria Group Inc. (MO) and its 27% ownership stake in SABMiller PLC (SBMRY), I wanted to own a stake myself in a great company in this space. And I don’t think it gets any better than DEO with their unrivaled scale and collection of brands. Moreover, while major beer producers become somewhat marginalized by craft brewers, the business of large-scale spirits seems to remain robust.

Whew! What a month!

I’ve never experienced anything like it, and it’s unlikely I’ll ever experience anything like that ever again. But it was incredible while it lasted. I felt like I was running an insurance company with a really tiny float that was sending cash flow my way to buy stocks. It must be what Warren Buffett feels like for, oh, about 1/10 of 1 second.

The sales reduced my annual dividend income by $401.80, though I plan on building my stakes in BBL and NOV back up in October. Both positions will probably be a bit smaller when it’s all said and done, but that’s only because those positions were bigger than I ever planned on them being.

However, the purchases added $1,089.16 to my annual dividend income. So the net addition to my annual dividend income (after factoring out the sales) was $687.36. Just absolutely incredible. That’d be a nice annual addition, so the fact that I was able to do this in just one month just really speaks to how fortunate I am. It’s been a really, really fun and busy summer, with both June and September both being absolute bonanzas for stock purchases.

The current market value of the Freedom Fund stands at $211,444.20, which is a 7.4% increase since last month’s published value of $196,826.45.

FFUpdate

The Fund continues to prosper and hold up really well. Heavy exposure to some big names in the energy patch adds a little volatility, but, overall, the swings on a day-to-day basis really aren’t that bad. Moreover, I don’t mind volatility at all. Quite the contrary, I view short-term volatility as a long-term opportunity, hence the activity you see above.

This past month (and, really, the entire summer) has resulted in far more activity than my historical norm. Up until the summer, I’ve averaged a rate of about $2,000 in monthly fresh capital. So this is way above my long-term average. And it doesn’t look set to last, unfortunately. As I’ve noted a few times, my long-term cash flow is going to be reduced somewhat substantially due to the changes I’ve made to the blog. As such, I’m trying to make up for some of that via dividend income. Moving forward, I’ll be a bit more aggressive in terms of yield than I’ve been over the last year or so so as to increase my current dividend income as much as possible (though, not sacrificing quality in the process), which will, perhaps, move my overall time line up a bit. We’ll see about that.

Either way, thank you all for your continued support. I can only hope that this post adds some value for you. You can see exactly where I’m putting capital to work with recent volatility, and I think all of the above stocks offer something to like. I’m certainly glad to add these stocks to my collection, which I think boosts the quality, overall. But you’re looking at a nice mix of industries there, along with value and yield.

The Fund now has positions in 70 different companies. This is an increase since last month. I eliminated my position in BBL, but made that up with initiating stakes in six different companies. I can see the Fund one day having exposure to 80 or 90 companies, but, looking at my watch list, I don’t foresee extending past 100 companies.

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 to build a rising and sustainable 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. I 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 all aforementioned stocks except BBL, CB, and SBMRY.

Did you also have a busy September? Take advantage of all of the recent volatility? 

Thanks for reading.

Photo Credit: BimXD/FreeDigitalPhotos.net

Edit: Added share count and price information for CL, ACE, and DEO.

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167 Comments

  1. Nice, Jason! Sadly, I didn’t have much fresh cash this month due to a wedding and FinCon. But I’ll be ready for the next downturn. I’d love to be investing about $2K per month. Congratulations again on your success with the blog!

  2. Jason,
    A few months ago, you said that I was buying the market. It looks like you are doing the same 🙂
    D4s

  3. Dividend Mantra,

    That was an incredible month of deploying capital. What better time deploy capital, if available, then when the market is going down. Unfortunately, we don’t have crystal balls and therefore do not know when the bottom will happen. But buying a stock at a lower price, as the fundamentals of the company are still sound, is a win in my books. Lower price purchase, in a great company that pays dividends, means higher yield and therefore more cashflow.

  4. 7% is more realistic than the 12% returns Dave Ramsey lectures about. I love how you disclose which stocks you buy because on DR’s show he doesn’t say which stocks/mutual funds he invests in. Don’t get me wrong. I love DR. His Financial Peace University class has helped me personally.

    I got out of debt using his debt snowball so I’m appreciative of his pragmatic advice but he never shares what he invests in so you know I take what works from him and leave the rest. There’s also something to be said for how nice his kids are. They seem well behaved and don’t seem to be involved in egregious behavior like some wealthy kids end up in (I watch his show even though I don’t always agree with him and his kids sometimes appear on it).

    Oh and I can’t wait what your new site will be like. Keep on succeeding. There’s nothing that annoys trolls more than to see someone happy & successful. That old adage of the best revenge is success, is so true. BTW, I hope you write more investment books in the future and would love it if you would publish a tangible book of your first one. I’d like to give physical copies to loved ones, whether they want to take action afterward is up to them, but would love to give them as gifts.

  5. Also had a windfall come my way during September. Added/initiated to so many stocks, and a few risky ones, though I believe most have been over-punished where I decided to allocate some dollars. VER, DIS, CAT, XOM, KMI, BLK, PX, and UNP. Nice to see some overlap, and a few differences. There’s a lot that I start to like when yields get close to the 2.5-3.5% range and are growing payouts in the high single to low double-digit rate. Even crazier are some of the REITs yielding 6%+. May be interested to add a bit further there to juice my current yield, but no complaints.

    Finally got my (our) wish of a bit of overall market weakness. I’m overjoyed to see the Dow down ~10% from 18k to the 16k range. Would be happy to see more weakness, but I’ll take whatever I can get.

    Congrats on the personal/business moves. It’s all about time, and hopefully the partnership let’s you focus on what you actually enjoy… writing. What’s more money if you’re not happy? I’m sure you’re still quite a distance from the 20k dividend goal, so it makes sense to look for a sustainable work/life balance for the next 5+ years. Looking forward to the added content!

  6. Quite an impressive month there, Jason! Judging by the net additional yearly dividend you plowed what – around $20,000 in new capital in one month? It must feel surreal especially knowing where you came from. The timing seems fortunate too – not like it matters of course. Congrats!

  7. You have been very busy… nice work Jason! I anticipate you will be back in BBL at some point. But it must have been nice to sell it and collect that semi annual dividend!

    My September was busy- I added to BBL, KMI, UTX, EMR and AMNF plus initiated a position in TROW. I didn’t quite catch the lows of the month but I added to my positions at a much lower price than what I paid before. I’m hoping we will stay in a depressed market for a few more years so I can continue accumulating shares.

    -Mike

  8. I averaged down 6 positions today. Good bargains in the market 🙂

    BHP Billiton (BBL) dividend is getting extremely high. Seems like a rate cut is inevitable. What is your opinion ?

  9. Sorry- all added positions were lower than the original price paid except AMNF- I averaged up there at $2.19. I think it’s a great company with a nice long runway ahead.

  10. Hi Jason,

    nice to hear from you. This looks like a very successful month deploying a lot of money in real nice companies. Funny, I´m thinking of most of the companies as well and I want to add in October HCP and Royal Dutch Shell. Its a good time to invest money right now. Yesterday I opened a new position in General Mills. I was thinking about this company for about nine months.

    Selling the 2 companies reducing taxes is quite smart. May be you have luck and will get these two companies even a little bit cheaper next month. I don´t think that oil or raw materials will rise this year because of the lower growth in Asia. There are still problems in Europe and we will face lower shares prices the next months. But this is only my opinion and may be I will be wrong. BBL ist still a nice company but I won´t buy any additional shares there because I have enough. But the dividend was quite nice last month. I love it :).

    I wish you the best with the changes. You have now the half of the journey behind you and even if your new solution will cost you money it is not a bad decision to get more time. I like this thinking. And a 211.000 $ portfolio is really very nice.

  11. Wow! Talk about a busy month. Lots of great companies on your radar for the month. I did’t make any purchases during September but I wanted too. Unfortunately for me my cash flow wasn’t flush so I couldn’t pounce on the opportunities. That’s truly impressive that you were able to add $1k in forward dividends through one month of purchases. I know that’s not going to be a typical month but that’s a solid yearly increase let alone for one month. Keep up the good work and looking forward to see what else you do.

  12. Wow Jason, that was EPIC!

    For a minute I forgot where I was and thought I was reading Buffett’s annual letter to shareholders. Then I almost shot coffee out of my nose when you echoed my thoughts saying you sort of felt like Warren Buffett.

    Also, glad to learn about HCP & DEO, I wasn’t really looking at those.

    I only see great things for you. Very inspiring, thank you for sharing.

    Max

  13. Hey Jason congrats on the purchases.

    Any concern with ACE and DEO both being foreign companies and withholding a foreign tax on dividends? Something around 20% that I believe you can get a credit for at tax time but you lose out on throughout the year.

    Your thoughts please? Big deal or no biggie? Thanks as always

  14. Hi Jason,

    Just recently found this site and am excited to begin my journey on dividend investing. I am still in the learning phases and am reading some of the books you recommended. Really appreciate all the information you share here. As I have a nice little chunk to invest, I am going to take my time and continue reading the information you provide to help me set goals and invest wisely.

  15. Hey Jason,

    what a month! I really like all your purchases – especially your bullseye with your last OKE purchase.
    And I see many names, I’ve on my list too. Too bad, we can’t add to them all.
    I really love this volatile market – it’s so much fun to search and hunt with so many (new) opportunities!
    Thanks for your update!

    Cheers & good luck to you
    DivRider

  16. Kate,

    Oh, I can totally imagine that FinCon and a wedding ate up the cash, but those events are what life is all about. 🙂

    I really hoped to attend FinCon this year, but I had so much going on behind the scenes here that it just wasn’t possible. I really hope to make it one of these days, though. Seems like an incredible opportunity to learn, network, and have fun.

    Appreciate all the support. Keep up the great work over there on your end as well!

    Cheers.

  17. Jason,

    Holy crap, what a month. Between the moves and the site news congrats. That might be the most comprehensive and or insane month, depending on how you view it.

    I really like some of your new positions, esp. FAST. Having used their equipment personally, I must say I like it, and boots on the ground guys love it. Their products might have a better on the ground rep than Grainger (GWW). That is impressive to me.

    I almost want to own about all of the stocks you mentioned especially MMM.

    Added some WMT myself too!

    Keep crushing it,
    Gremlin

  18. Mike,

    Hmm, it’s tough to say. I’m going to take a look at the projections at the end of the year and make a call on 2016’s goal. But I would say right now that I probably won’t. That would be a big move up from my $7,200 goal for this year, which already is going to be tight. I would say $9,000 should definitely be possible, but it would be stretching it to hit $10k. We’ll see, though. It’d be fantastic (and way ahead of schedule) to do that. 🙂

    Hope you’re on pace for all of your goals over there. Let’s keep it rolling!

    Cheers.

  19. D4s,

    Ha! Yeah, it was a lot of fun this month. Now I know what it feels like to be you. 🙂

    I seriously doubt I’ll ever have another month like this, but it was fun while it lasted. The BBL and NOV sales added to what was already going to be a busy go at it. Next month (and probably every month thereafter) will be much more quiet. But that’s okay. I don’t need this kind of activity to get to where I’m going. Sure is nice when it’s possible, though!

    Thanks for dropping by. Looks like you had a really busy September over on your end as well. We’re so, so fortunate. Keep it up.

    Best regards.

  20. IP,

    Definitely don’t have crystal balls. I would buy a stock like OKE at what I thought was an incredible price, and then see it drop something like 10% soon thereafter. Cheap stocks can become cheaper – even much cheaper – especially over the short term. But time in matters more than timing. And value eventually matters.

    Let’s keep it rolling, my friend!

    Cheers.

  21. Hi DM,
    Good move on your new business, I have seen your blog when your freedom fund was 100k, whew now you are at $200+….Nice job! Keep it up. I did some recent purchase, can you review and let me know if I did good….
    Dividend Mom

  22. Anonymous,

    Indeed. I don’t think anyone should be using a 12% forecast when they’re looking at their annualized total return. That’s awfully aggressive. My own hurdle rate is right about 10% for most stocks, which I think is a great number to aim for. It’s just a little above the broader market’s long-term total return, so that puts you in a great spot as far as wealth goes. Of course, it’s really about the growing income for me, but I do like to see that I’m doing well insofar as picking out high-quality stocks at solid values goes. However, the 7% number you see above includes all that fresh capital added. I’m quite sure my portfolio decreased organically, assuming I didn’t add any capital. But looking at that kind of activity on a month-to-month basis is really pointless over the long run.

    You’re absolutely right there about trolls. They hate it when someone they don’t like succeeds. I pay absolutely no mind to the naysayers. If I actually cared about what people think of me, I wouldn’t be in this position. I would have never rode the bus, moved into a modest apartment, quit my job, started up a blog, or anything else. I would have never had the audacity to believe. I’d be like everyone else.

    I’ll definitely consider a physical copy of the first book. I had a certain sales target in mind before doing so, because I felt like if the demand wasn’t strong enough at $4.99, it wouldn’t be strong enough at a higher price point (to account for printing costs). But we’ll see. I do want to put together other books. The book is really the first in what’s supposed to be a trilogy, so I have plans to complete that. The second book will be once I reach FI. The third one will be written about 20 years after FI, to discuss success, regrets, changes I might have made, and what it’s like to be financially independent. I also want to write a book specifically about valuing and analyzing stocks, because I zoomed over that a bit in the first book.

    Thanks for dropping in. Hope you’re having an excellent 2015 over there!

    Cheers.

  23. Ravi,

    Nice moves over there. You’re obviously staying very busy as well. That’s great to hear. And it looks like we’re on the same page there with a lot of focus on the Industrials and Energy stocks. 🙂

    I’m also hoping for more weakness. October is starting out very nicely, so let’s see if that continues. Wouldn’t mind at all seeing another 10% or so drop from here.

    “I’m sure you’re still quite a distance from the 20k dividend goal, so it makes sense to look for a sustainable work/life balance for the next 5+ years.”

    That was exactly the motivation behind the move. I knew that there was NO WAY I could continue on like things were. There was absolutely no way I was going to keep up with things. I’ve always stressed balance, even if at times I’ve been out of balance myself by working too hard on things. I think being off balance for spurts here and there in the name of extreme progress is okay, but it’s unsustainable (unless you like being miserable) over the long haul.

    Keep up the great work over there. I hope we’re both able to have another outstanding month here in October!

    Best regards.

  24. parul,

    Gosh, I love the company. It was available for around $48 per share just a few months ago. I view that as a much better entry point. This is really at the very upper end of what I’d be willing to pay, and I wouldn’t be very enthusiastic about it. Keep in mind that the five-year average yield for MO (even considering the run up) is 5.1%. I’d be willing to bet it’s even higher looking out over 10 or 20 years. The yield is now near 4%. So I’d be careful there. Not sure there’s any kind of margin of safety present.

    Hope that helps.

    Take care!

  25. Insourcelife,

    I don’t think I put quite that much fresh capital to work, but I haven’t added it up yet. I occasionally move over the deposit information to my spreadsheet, but I haven’t done that in a few months. I’d be willing to bet it was something like $14,000 or $15,000, though. Will probably never happen again, but it was sure nice while it lasted.

    It is VERY surreal. When I first started, I was glad to be able to invest just $1,000 in a month (and I’m still glad if I can do that). So to be able to put away what amounts to a year’s worth of capital for the Jason of 2010 is amazing. I’m very, very fortunate.

    Hope you had a great month as well.

    Thanks for dropping in!

    Take care.

  26. Wow. A very busy month indeed. A lot of your new buys are starting to resemble holdings in my portfolio. Always happy to be a fellow shareholder with you in some truly awesome long term dividend payers. HCP, CL, CAT, EMR, MMM, ACE (CB), BNS, TD, DEO. Qaulity busineses belong in all long term portfolios. As you stated, the market may rise and fall on a whim but the focus is on the rising dividend income. So true. I never really paid that much attention to overall portfolio value as much as rising dividend income. Great update. Keep rolling the snowball!

  27. Hi Dm,

    Wow seems like you had an awesome month:o So many buys.
    I did buy one stock because I was replenishing my warchest to go hunting again.

    Cheers,
    G

  28. Mike,

    Awesome work over there. We’re pretty much on the same page there. I only sold BBL for tax purposes. I’ll definitely be back in that name here pretty soon.

    AMNF is a gem, isn’t it? They operate at such a high level for such a small company. I’m nothing but impressed with them. Glad to be a fellow shareholder.

    Keep it up over there. TROW was a great move as well. Not sure how heavy I want to go there, but might go ahead and add one more tranche. Their track record through volatility is phenomenal.

    Cheers!

  29. I noticed that you added shares in CL, DEO, MO, ACE, and SBMRY but did not include the share count. Is this because you only got one share?

    Honestly, I was trying to back into see how much new money you put to work 🙂

    Cheers,

    Dominic

  30. Sam,

    Awesome work over there!!!! 🙂

    I’m not concerned about BHP Billiton’s dividend. Not right now, at least. If commodities stay depressed for another year or two, that could be a problem. If you look at the last earnings release (which discussed full-year numbers), FCF just about covered the dividend, though not much else. That’s actually pretty solid if you compare that to a lot of other players in the commodity space (like some supermajors). BHP Billiton is in a great spot in terms of its competitive position when prices drop so heavily. This forces weaker hands out. But, yeah, the dividend could become hard to afford if things continue on for a significant period of time. Although, even with a cut, you’d probably still be looking at an attractive yield that would at least be on par with the long-term average. We’ll see.

    Take care!

  31. Looks like we’ve been doing the same thing, making lots of purchases during this volatile time. Great stuff to see a 7% increase in your portfolio value. That’s fabulous!

  32. FF,

    That’s fantastic. I guess we’re totally on the same page there. What fortunate timing for you to receive that bonus just as the market’s volatility picked up so much. Good things happen to good people. 🙂

    Have fun!

    Cheers.

  33. olli,

    I’m hoping I get lucky and score both stocks at an even lower price. We’ll see, though. They’d have to move up very dramatically for me to somehow come out of this the wrong way, but I don’t see that happening. 🙂

    I’m with you on BBL, though. I never intended for it to be a very big position. I think they’re the best miner in the world, but they’re still a miner. They’re mostly a price taker, so one has to be careful there. Very cyclical as well.

    Appreciate the support. The solution is really designed to improve my schedule and allow for more balance. Anyone who thinks there’s some ulterior motive at play just doesn’t appreciate/understand everything that goes on with this blog.

    Keep up the great work over there. Hope you’re able to land the prices you’re looking for on Shell and HCP!

    Cheers.

  34. JC,

    Insourcelife is correct. It wasn’t quite $1,000+ in forward dividend income. It was the $687 after accounting for the sales of NOV and BBL. Either way, I’m really fortunate. Never had a month quite like that.

    I’m sure your cash flow will improve in short order. You guys are handling the situation really well, and I wish nothing but the best. You have a great income over there, and you guys live pretty frugally. Tough to sink a boat like that when you guys are rocking something so ironclad.

    Keep it up!

    Best regards.

  35. Max,

    Ha! Yeah, I felt like Buffett for the first second he wakes up. And that’s about it. I couldn’t even imagine working with his kind of capital. What an incredible/otherworldly feeling that must be. Just a completely different universe.

    HCP and DEO are both solid businesses. I honestly prefer OHI to HCP, but I also see a lot of merit in the additional diversification. OHI is very concentrated. DEO has some incredible brands. If you pull up their investor relations page, you’ll be amazed at how many #1 brands they’re rocking over there. Really good stuff. And I think the spirits business is better insulated against craft options.

    Appreciate the support. Best of luck with the blog and the journey. It’s really so much fun. 🙂

    Cheers!

  36. Brazo,

    Thanks so much!

    That’s a great question there in regards to taxes.

    First, DEO is UK-domiciled. We have a tax treaty there, so no worries about foreign withholding:

    https://www.dividendmantra.com/2014/11/considering-foreign-domiciled-dividend-growth-stocks/

    As for ACE, they’re a bit unique. Usually you’d be looking at withholding. But they have a unique structure:

    “Our dividends are generally subject to a Swiss withholding tax at a rate of 35 percent; however, payment of a dividend in the form of a par value reduction or qualifying capital contribution reserves reduction is not subject to Swiss withholding tax. We have previously obtained shareholder approval for dividends to be paid in such form. We currently intend to recommend to shareholders that they annually approve the payment of dividends in such form but we cannot assure that our shareholders will continue to approve a reduction in such form each year or that we will be able to meet the other legal requirements for a reduction in par value, or that Swiss withholding tax rules will not be changed in the future. We estimate we would be able to pay dividends in such form, and thus exempt from Swiss withholding tax until 2023–2028. This range may vary depending upon changes in annual dividends, special dividends, fluctuations in U.S. dollar/Swiss franc exchange rates, changes in par value or qualifying capital contribution reserves or changes or new interpretations to Swiss corporate or tax law or regulations”

    We’ll see what that looks like in a decade, but we’re good for now.

    Source: http://investors.acegroup.com/files/doc_financials/2015/ACE-Limited-2014-Annual-Report.pdf

    Cheers!

  37. carbolady,

    Thanks so much for dropping by!

    Glad you found the site. And I’m glad you’re taking your future self so seriously. There is this version of you that exists out there in the future that is already benefiting from the decisions you’re making today. Every great decision you make compounds itself, and can dramatically improve your life.

    This is all a lot of fun. The fact that the results are so tangible in real-time makes it almost addictive, which further propels you.

    Keep it up. Good luck. 🙂

    Best regards.

  38. DR,

    I’m with you. Too bad we can’t buy them all.

    But it’s just one stock at a time. One brick at a time. One step at a time. We’ll get there. 🙂

    Cheers!

  39. Hi Jason,

    What an awesome month for you! I was very busy in August on the buying front. In September only one buy for me. I’m curious do you have a rule concerning dividend cuts? Will you sell automatically if a dividend cut happens? Thanks and have a great October!

  40. Thank you! Thank you! Thank you Jason for allowing me peer over your shoulder while you work, make decisions, and share your results. You are a huge inspiration to me!

    I have struggled for a long time to understand corporate finance and the mind numbing list of value ratios, technical indicators and stock analysis techniques. Finally, as welcome as a bright porch light in a dense foggy forest, I stumbled on your web site. Your web site points the direction to go, your posts explain how and why. You have a way of explaining stock analysis that really make sense to me, enough so that I made my first purchase, 50 shares of PM. I have a lot to learn yet but you have given me the inspiration and courage to take the first step.

    Thank you again and best of luck to you my friend.

  41. Gremlin,

    Yeah, I thought June’s records were going to stand for quite a while. Guess you just never know what’s around the corner. That’s why you just have to work hard, stay optimistic, and keep grinding away. 🙂

    But I’m super, super fortunate. Never thought I’d be in a spot like this. While it won’t last, it feels good just to be able to say I had “that one month” where it all came together.

    Thanks for sharing your thoughts on Fastenal. They have some great products. I’ve read some interviews that discussed the CEO’s preference for frugality both in their personal lives and business lives (which explains the balance sheet and profitability). It’s just a super tight ship. It’ll be interesting to see how the management changes go, but I think it’s a great business. Store growth is slowing, but they’re maximizing store profitability. And there appears to be a lot of growth potential abroad. In the end, they’ve got a lot of market share to capture.

    You keep crushing it as well, my friend. Better days ahead!

    Best wishes.

  42. DM,

    Looks like I’m not the only one staying busy. Nice!! 🙂

    I like the buys. A really great grab there on PG. The valuation is skewed by the adjustments, but it’s a very solid company. And you caught the supermajors at good prices as well. More importantly, you added a tidy sum to your annual dividend income by virtue of the high yields (some are near or at all-time highs) you nabbed.

    Keep it up!

    Cheers.

  43. Keith,

    I know you’ve been really busy over there with the Canadian banks. I finally decided I couldn’t ignore them any longer. I think BNS and TD are both severely undervalued right now, though not without risks. The nice thing is that both banks have spent a good long time now diversifying away from the home market. That chips away at their moat due to the strong regulatory environment up there, but it’ll also somewhat limit the effects of a housing bubble burst.

    DEO, ACE, CL, and, to a lesser degree, HCP are all stocks I’ve long wanted to snag. It’s funny because so many people have come by the site over the years and talked about how I own too many stocks. Yet here I am just now grabbing the likes of Diageo and Colgate. Just goes to show how many high-quality businesses are out there. Those that artificially and arbitrarily limit themselves to 20 or 30 businesses are making a mistake, in my opinion.

    Thanks for dropping by!

    Best regards.

  44. Hi Jason,

    I’m a recent time follower of you Awesome blog! in which you mentioned that is always better to buy a stock from the USA or Canada for better tax purpose.

    Now my question is in regard to ACE, they appear to be located in Switzerland, how come you decide to venture outside the USA/Canada market?

    What are the tax consequence if we buy ACE?

    Regards,
    Fausto

  45. Geblin,

    Hey, we all have those times when we have to reload. Hopefully, more volatility enters town before you’re ready to go on the hunt again. 🙂

    Take care!

  46. Tawcan,

    Don’t think it’ll be very often that I keep up with you over there, but now I know what it feels like to go hunting with more BBs than usual. And I gotta say, it feels pretty good. 🙂

    Keep it up. Every day is a chance to get closer to our goals and dreams.

    Cheers!

  47. Sampo,

    That’s a great question. I consider it on a stock-by-stock basis. If the dividend cut is due to some permanent shift in fundamentals, the business model, or the competitive nature of the industry, I’d probably have to sell. If the dividend cut is due to a drop in business due to a business cycle or some kind of general economic malaise, I’ll most likely hold. As with a lot of things, “it depends”. I’d be careful not to apply sweeping rules across your portfolio because every business is different. I’ve, in the past, done that and regretted it. Takes time to learn that every business is different. We are investing in real-life businesses here, and every business has to be considered on its own merits (or lack thereof).

    Hope that helps!

    Best wishes.

  48. Chris,

    No, thank you. It’s readers like you that make this all worth it. 🙂

    I truly believe that financial independence is attainable for the everyday person. One doesn’t need some sky-high income or insider knowledge to live below their means, save a good chunk of change, and invest in well-known businesses that (rightfully so) share growing profit with shareholders in the form of growing dividends. Living in any first world country gives us incredible advantages that, while easy to throw away, make it so easy to achieve incredible results for those willing to work hard and put those advantages to good use.

    Keep it up over there. There’s a future Chris out there that is already financially independent. But the Chris of 2015 and 2016 (and so on) has to put in the work to make that happen.

    Best wishes.

  49. Fausto,

    That’s a great question. I was obviously quite mindful of that situation before I invested. But that’s why we research and read annual reports. For the sake of not copying and pasting again, you can see the answer I gave above, which goes over why there aren’t foreign withholding concerns on ACE’s stock right now. That might change in a decade or so, but we’ll have to cross that bridge when we get there.

    Hope that helps!

    Take care.

  50. Dominic,

    Doh! That was honestly just an error on my part. I’ll go through and edit it. Definitely not one share or anything crazy like that. You can actually view the portfolio live right now and it’ll show the share count. I didn’t finish this article until past 3 a.m., so that’s just a tired Jason forgetting to insert that information.

    I’ll do it now. 🙂

    Cheers!

  51. Hi Jason

    Welcome on board with Diageo, awesome company in my view and one I will be looking to add to in the near future. Also see you added to Shell and BP, if the oil price recover we should clean up!.

    I will be updating recent purchases in the next couple of days or so

    Great to see your Freedom Fund is still growing.

    Best Wishes
    FI UK

  52. Dominic,

    Just to clarify, I went ahead and edited in the missing information for CL, ACE, and DEO. But I didn’t add to MO this month. And I didn’t initiate a stake in SABMiller.

    Cheers!

  53. FI UK,

    Thanks for dropping by!

    I’m glad to be on board with you there. DEO is a great company. It’s been on my watch list for what seems like forever, and it was time to change that here with recent weakness. While I don’t think it’s overly cheap right now, it’s a really fine business trading at a fair value or slightly better. And I’ll gladly take that, especially with a stock that can sometimes trade at a large premium.

    Looking forward to your update. Glad to know you’re staying busy over there and still marching toward freedom!

    Best regards.

  54. Hi Jason, follow your blog for a few months now, great update and interesting journey!
    Would be interested to hear your opinion on MAT.
    Take care!

  55. Same here, been following the blog for a while now and I’ve been looking at MAT as well. Also wondering his thoughts on STON.

  56. BD,

    Thanks so much for following along! 🙂

    MAT is interesting. I’ll first say that I’m not a huge fan of the industry in general. Just not sure where traditional toys are going to be in, say, 10 years. So I’ve never been interested in investing there, though I quite like Disney’s licensing deals.

    That said, MAT is a value/turnaround play here. But I wouldn’t be surprised to see something happen to the dividend. However, with a yield this high (due to the falling price), a right-sized dividend (and yield) would still probably be appealing. Not really a dividend growth stock, but just really a turnaround/value play. So it’s not really in my universe. The company probably doesn’t have to do much to make some sense of that investment at $20/share, but, again, I’m not a fan of the industry in general.

    Just my take on it.

    Cheers.

  57. Beth,

    Can’t say I’ve ever looked at or considered STON. I’m just not informed enough to have an opinion either way. Sorry I couldn’t help more!

    Take care.

  58. nice job jason..

    Wow!! Over 211 large! That is quite a portfolio my friend. I too added to KMI. I’m overweight in energy as well but I just couldn’t pass it up! I also picked up some CVX. I haven’t seen it this cheap since the Clinton administration! Well maybe not that far back, but you know what I mean.

    I’ve been following your blog for the last couple of years or so and I’m just in awe to see how much it has grown; not only your freedom fund portfolio but your online income and readership as well.. I’m sure you’ve heard it again and again, but I’ll have to repeat it.. Congratulations!

    I’m really looking forward to your December dividend income update. We have similar payers in that month, and seeing you your December payouts in the last few years have been, I’m guessing a $1200 month in dividends. I know it will crack the 4-figure mark. Once again.. congratulations ..

    tc,
    j

  59. Jason,

    I have been contemplating tax loss harvesting as well. Particularly with CVX. Do you have any worry that BBL and NOV may run up a lot in the meantime? That is my worry. That Oil and commodities will rise and I will have to buy back at a higher entry point than anticipated.

    Guy

  60. Nice work, DM. Worthy of a smile or one thousand to celebrate!

    Our portfolio’s are near similar in value right now. It’s always reassuring to see you’re not alone.

    I recently started following your Twitter account so it was cool to see the purchases in real time. I may start doing that as well even though my purchases have slowed down over the course of the year. I did grab some KMI under $30 and RDS.B under $49 (initial position) recently 🙂

    Congrats on your new endeavors!

    Best,

    DWC

  61. Jason,

    Nice month! I had a record dividend paying month as well and even managed to add almost $290 in options income by selling covered calls. Great idea on the tax-loss harvesting. The more I think about it, I will sell portions of my BBL and BP stake as well in order to harvest those losses and offset capital gains in AAPL. Like you, I’ll hope that they drop in price or stay close so that I can buy them back just outside of the wash sale rule. In fact, I wouldn’t even mind paying slightly more because a month of stock gains likely wouldn’t be enough to make up for the taxes I’d be saving.

    Take care,

    Scott

  62. j,

    Thanks so much. Appreciate the support. It’s been a wild ride. So much fun, but so unexpected in many ways. I’m truly blessed. All I’ve ever done is try to be the change I want to see and, hopefully, inspire through that. It’s gone way above and beyond my expectations.

    Sounds like you had a great month as well. That’s fantastic.

    Tough to pass up on some of these big names in the Energy sector. KMI is just ridiculous here. And with oil supermajors yielding this much, it’s not like you have to chase yield with something you don’t know anything about. Very easy to get yield right now.

    December will be a lot of fun. Not just in the sense that it should be a huge month, but because I’ll get to finish out the year and see where things ended. That $7,200 was a big goal, and it’s going to be tight. If I hit it, I’ll feel like nothing can stop me. 🙂

    I can tell you that the upcoming dividend income report (for September’s dividends) is going to be outstanding. Had an insane month. Very excited to get that report out very soon.

    Keep it up over there. Every dollar saved and invested puts you that much closer.

    Cheers!

  63. Guy,

    Yeah, it’s a risk. I look at it like the tax hit is a guarantee if I do nothing. I’m for sure going to pay that $500 if I sit on the stock. BBL and NOV would have to rise by a combined 8% or something for me to come out behind on things, so it’s just a risk I’m okay taking. If they move up that much that fast, then I might lose a little money on it. But I think it’s worth the stretch. Really just an individual call. I don’t see any near-term catalyst, but I could be wrong. If it were a smaller amount, I probably would have just sat on it. But $500 is worth the stretch for me.

    Hope that helps. 🙂

    Take care.

  64. DWC,

    Worthy of a Coke and a smile. I’m enjoying both of those things right now. 🙂

    Don’t drink too much pop during the weeks anymore, but I felt like I could go ahead and crack a can open today. Tastes better than usual!

    Man, you snagged some great deals over there. KMI under $30 and Shell under $50. Crazy stuff. It’s tough to not just go absolutely crazy on these stocks, but I really do have to manage that risk/exposure. But I continue to nibble there after mostly holding off thus far this year.

    Glad to be on par with you. You’re earning some really impressive dividend income over there, so it feels good to know that I’ll know what that feels like pretty soon.

    Keep it up!

    Best regards.

  65. Scott,

    That’s fantastic. Congrats on the record month for dividend income. It’s amazing what’s possible when you believe in it and keep working hard, inching closer month after month. It’s just incredible.

    I hear you on the tax-loss harvesting. The odds of stocks moving up that much that fast are fairly low, in my opinion. Anything could happen, of course, but the tax hit is a guarantee if you sit on it. It’s worth the stretch if it’s a decent chunk of change.

    Thanks for dropping by!

    Best regards.

  66. Jason,

    The logic is sound, but help me think through this.

    If its logical to take the loss, and reap the tax benefit and then buy back the stock 30ish days later, then what stops us from using that strategy with ALL of our stocks that we have big losses on? Why shouldn’t we use this strategy with ALL big-loss stocks that have gloomy near-term outlooks, say the oil majors, the CATs, the EMR’s? What is to stop us from doing that with all those types of stocks? Appreciate the insight on this tricky issue.

    Guy

  67. Well Jason, sounds like you had a remarkably busy month, both in terms of your portfolio, your life and your website. HOLY COW. I don’t think I could handle scrolling anymore 🙂

    That’s an interesting move with BBL. Just to make sure I understood you correctly, you liked the stock but this was more of a business/reduce my tax burden transaction? I know that Lanny is enjoying his period of re-investing dividends at this low price. Or are you also concerned about the long-term health of the company and their ability to maintain their dividend going forward. Luckily you have the cash to reinvest the funds, so it isn’t like you are giving up the high yield completely.

    Regardless, you know I loved the names of the companies you invested in. They are great long-term stocks and as always, your moves were well thought out. Cheers to many more months of amazing activity.

    Bert

  68. I have a love/hate relationship with Coke. I love the taste but hate the health risks. Like any evenly matched fight I turn to the tie-breaker: 300+ shares of KO in the portfolio. Love wins 🙂

  69. Jason,

    Avid follower of your blog. Glad you back.
    I am a little confused with your statement below:

    I used a tax-loss harvesting strategy to reduce the more than $3,000 in capital gains I registered this year after Medtronic PLC (MDT) acquired Covidien PLC and relisted its stock, and Lorillard Inc. was acquired by Reynolds American, Inc. (RAI).

    Why would that generate capital gains if you didn’t sell those stocks? Will those stock gain show up in the Schedule D statement from your brokerage come Jan/Feb?

    Thanks.

    Max

  70. Guy,

    You could very well do that, but, like I said, there’s risk. It’s essentially a short-term trade. Whether or not it works out depends on how much of a loss you’re sitting on and what the stock(s) do in that 30-day (or longer) period. It also depends on what kind of capital gains you’re trying to offset, if any. And that’s because, for a single filer, you can only claim up to a $1,500 annual loss to reduce your taxable income for any year (before factoring in anything that’s carried forward). The tax-loss harvesting strategy is really quite fairly common, but it’s something that you have to use for your specific situation. I had more than $3,000 in capital gains this year, so this trade makes sense for me. But if BBL and NOV move up by a combined ~8% over the next couple weeks (unlikely), I’ll come out worse off.

    Hope that helps!

    Cheers.

  71. Jason,
    Congratulations and I’m sure everyone was glad to see this update from you! It sounds like September was a great month for many folks on the dividend front, as was the case with us. Like your previous commenter Scott, a record month. Great to see so much progress by everyone with similar goals.

    Earlier today I was just thinking about having to pay taxes on the dividends in our cash account, then I read your comment on tax loss harvesting! Thanks for that info. Out of curiosity, you mentioned plans to use that strategy for your capital gains. Wouldn’t you also use the same strategy for minimizing taxes on your dividend income?

    Take Care,
    Dividend Daydreamer

  72. Bert,

    It’s been a crazy month or so around here. Just glad to have a lot of the drama behind me. Instead of spending all day today working from the time I woke until, basically, four hours from now, I instead took my time to read some articles around the web, polish up some articles I wrote earlier in the week, take a look at some investor reports, and generally just relax. I’m really enjoying the slower pace. 🙂

    As far as BBL goes, it was a tax move only. I plan on buying back in to both BBL and NOV after the 30-day wash rule is all done. I included a link in the article on how tax-loss harvesting works because some readers/investors aren’t sure how that works or what it’s all about. I had more than $3k in capital gains this year, so I get to knock that out completely, which will save me a hefty tax check. And, hopefully, NOV and BBL don’t run up too much over the next couple weeks. All in all, it should save me a lot of money.

    Congrats on your recent milestone of investing $15,000 this year. That’s fantastic, bud. You’re putting yourself in a great spot over there. Just imagine what things will look like in four or five years. Big things lie ahead!

    Cheers.

  73. Max,

    I didn’t sell those stocks, but corporate action effectively sold them for me. LO was acquired by RAI, which generated a capital gain just the same as if I sold my LO stock. The stock was essentially “sold off” (that part of the deal which was not RAI stock). That then generates a capital gain for me.

    As far as Medtronic goes, it’s the same thing. My old MDT shares were “sold off” and then I was right away given stock in the new company, Medtronic PLC. Same ticker, but different company that is now headquartered in Ireland. That’s why my cost basis was stepped up so much. I actually bought MDT way back in the day for much, much less money than what my portfolio shows. But the difference is that capital gain.

    I’d recommend a little further reading (which is easy to access, and I talked at length about LO on the blog here) if any of that is confusing. Medtronic still has quite a bit of literature on that on their investor relations site. And you can find the Lorillard acquisition information through Reynolds. But, occasionally, you may run into situations where capital gains pop up even if you don’t sell stock due to various corporate actions. Your stock can be “sold off” even if you don’t sell it. Just depends on the situation.

    Hope that helps!

    Cheers.

  74. DD,

    Glad to hear that. A record for you must be a hefty chunk of change with that portfolio you’ve built over there. That thing’s a monster. A nice thing to look at and be proud of. I’m sure it’s taken a very long time to do that. Very much looking forward to the day when I’m looking at something similar. Awesome work!

    “Wouldn’t you also use the same strategy for minimizing taxes on your dividend income?”

    No. I included a link in the article to a piece which provides a comprehensive review on how tax-loss harvesting works. I did that because I figured it would generate some commentary/confusion by those who aren’t aware of how it works. But it’s used to manage capital gains. Has nothing to do with dividend income.

    Thanks for dropping by!

    Best regards.

  75. Hey Jason!

    Awesome work! Curious on to what percentage you keep in cash to be ready when dips happen to deploy more capital?

  76. WOW! When you said you had a busy month you weren’t kidding. A busy month for me is 2 purchases let alone the 15 or so you had. The timing really couldn’t be better either with p/e ratios falling and valuations looking better and better (IBM has a forward P/E of 9 for example). I would really love to average down in my KMI position here but I really heavy in energy so I think I may go another direction with my next purchase. Glad your back.

  77. Captain,

    Ha! It was just one of those crazy months. If I end up having just this one experience during my entire 12-year journey, I’ll be very, very happy. 🙂

    Definitely some crazy valuations out there. Emerson with a P/E ratio of around 12 and a yield well above 4% is just mind-boggling. I’ve never seen Emerson yield anywhere near that. Definitely enjoying this volatility. Let’s hope it continues!!

    And thanks for the support. Great to be back to writing.

    Best regards.

  78. Big move, DM! I also have been on buying spree last month and put my capital in many of similar companies: KMI, OKE, BNS, COP, GSK, PM, RDS.B, PG, SO, VZ, WPC, DLR and VTR. So far, I’m hitting my goal for the month. Keep racing towards FI!

  79. R2R,

    That’s awesome. Glad to know I’m not the only one taking advantage of this volatility. Looks like quite a few of us are out there doing some serious shopping. Good stuff!!! 🙂

    We’re on the same page there pretty much across the board. I actually just added to my VZ stake earlier today at the 52-week low with a 5.3% yield. Tough to pass that up.

    Keep up the great work. Keep racing, bud.

    Cheers.

  80. You sure have been busy this month Jason! A lot of buys and very good ones at that. There is definitely value out there in the market these days, not enough capital to go around. If I had the capital then I would be adding more to RDS.B and BP in a heartbeat at these prices. I am also on the watch to add more to JNJ and hopefully can start a position in DIS soon.

    I didn’t have any buys, except adding 20 shares of KMI at around $27.65 (almost the same as your purchase). Out of curiosity, do you have a rough idea as to what kind of dividend growth targets you plan on setting over the next few years? Currently, I am setting between 20-25% per year but I expect this to slow down considerably next year, as my aggressive accumulation phase is winding down. It doesn’t help that I bought a condo of my own late last year.

  81. You’re moving forward as usual, taking the market volatility in stride, which is great! I like all of the portfolio moves you’ve made, especially the capital gains tax move. I so rarely sell stocks that I did not know about the so-called wash sale rule and other associated rules. Sometimes Uncle Sam tips the rules in his direction a bit too much!

  82. Hot damn! He’s back and way on track. As I can see from the comments, some of us came into money in September—who cares why (I sold something HUGE, myself)?—and a lot of us spent those dollars on our futures. I enjoy reading the comments of what peeps here are buying or watching. I built out or bought a lot too (XOM, CVX, KMI, EMR, FAST, MMM, OHI, VTR, WMT, BP, DOW…). I’m now hoarding a bit. I know, I know. But, I really don’t think this down is down enough. I’m of the x-generation (we are inherantly cynical (sadly). I’m on a break (window shopping only)…until I’m not. Ha! I’m hoping that the loyal readers will stay in touch and, maybe, get to know each other during the change. If we don’t have DM for every new post–we still have us. Right? And if s#i& hits the fan, he can always intervene. We’re all walking the same path. Congrats, again, DM! Excellent shopping spree. You earned every penny.

  83. Hi!

    Congratulations on your recent moves.

    I am pretty sure you are doing the right thing, since you are smart and doing what YOU need to go forward. I think we should all just be thankful that you over the years have shown how it is possible to invest and save for an “ordinary” person, with humble beginnings. That has been most inspiring! I am sure the site will stay interesting and I think people will stick around as long as they feel that your voice is present here. I certainly will.

    Good luck!

  84. Jason:
    I am glad to see that you have given consideration to taxes.. It’s the other end of your finances that helps you give less to Uncle Sam. I was getting worried for you for a while there.
    Good work .. It’s beneficial to look at ones total financial picture, not just income and expenses.
    You are definitely on course to reach your financial goals

  85. Hi!

    I’m a new reader and haven’t invested in stocks for very long. However i saw that you invested in Kinder Morgan Inc again and i notices on http://www.nasdaq.com/symbol/kmi that their EPS is $0.77 and the annulized dividend is $1.96. Isn’t this kind of worriying? How can they give higher dividend then they earn?

  86. Mantra,

    Sorry if I have to pick up my mouth off the floor… Almost $700 added in forward income… talk about GAINS right there! That is awesome and words cannot begin to describe how incredible that add is right there, in one darn month. You’re working hard over there and reaping the benefit and rewards. Excited for what’s to come down the road for you DM, great job, cheers and congrats!

    -Lanny

  87. Holy crap, what DIDN’T you buy!?

    Great moves there, selling BBL and NOV for the tax harvesting. But how did you trigger capital gains taxes? I understand the thing with LO (if I’m not mistaken, you took cash instead of shares of RAI), but I’m not quite sure what happened with MDT there.

    You’ve also said before that you weren’t too enthused about RDS.B. So what happened here? Is this just a value play, with RDS.B finally trading at a price you like?

    As we always say, so many stocks, so little capital. I’ve actually gone as far as to take a second job in order to have more money to invest. It’s a part time job, and together with my current full time job, I’ll be working about 70 hours a week, not including time spent developing Angry Retail Banker. It’s a ton of work now, but it will be worth it in the end. More hours working today means less years working tomorrow. If those extra resources are put towards something that provides you with cash flow, that is.

    Great job increasing your annual dividends by almost $700 within a one month period.

    Sincerely,
    ARB–Angry Retail Banker

  88. Wow, busy month! I love these buying opportunities. We ended up having plenty of excess cash on hand so I went ahead and made a $15,000 solo 401k contribution to get rid of the tax liability from my online income. I bought a plane jane mutual fund -VTRIX – Vanguard’s International Value fund. Nothing too exciting but it’s been smashed this year (especially the last month) so I needed to put the whole $15k into that fund to reach my target asset allocation. It yields about 3% if the dividend this year matches last year’s dividend (only pays 1x/yr).

  89. Hi Jason,

    Congratulations on such a very busy month, I can only be jealous at the amount of purchases you have been able to make 🙂 But that comes from your determination over the years building that freedom fund 🙂 I have to say I did tuck into some BBL here on the UK market as it was so downtrodden, and its all wrapped tax free so hopefully the dividends will remain and keep adding to my little pot!

    All the best,
    London Rob

  90. Great stuff Jason, some serious passive income there! Interesting times ahead for you for sure!

    I’m keeping my DGI ticking over too. I started a position in J&J last month and as of this morning started another new position with 10 shares in DIS. Great to get it at $100 per share!

  91. Congrats on all your success with this blog. That, as much as your life and investor journey is compelling.

    You also picked a great month to get extra capital!!! I know you believe in time-in-the-market vs. timing-the-maket, but it doesn’t hurt when you can have both!! (Not that an even better time won’t present itself in the coming weeks, months, years).

    I also added some to CL, MMM, BNS, and FAST in the past month…as well as WFC, USB, MMP, SE. I initiated new positions in DLR and MAIN. Also thinking of adding some to CVX and XOM, then selling, after the december div, shares bought at bad time last year to take a tax loss. I also like ITC, EMR, and DUK here as well, and I also have been thinking of getting some GILD.

    I’m almost capped out, though.

  92. Congrats on a good month. I also bought mmm and its last month. Also grabbed some pg at the lows and I backed up the truck on kmi. 300 shares and 2 puts. I also bought some saft, you should look at them as they offer a unique blend of high div and high growth. Small regional insurance company on the east coast. 5% entry yield and double digit div growth over the years. A nice little operation I’ve grown to love.

  93. Damn your on fire 😀 So many buys in September.
    I have to wait for more money to buy some stocks 🙁 Hopefully next month I could buy some nice ones as well.

    Keep it up 😉

  94. September was a blockbuster month for me. Not only did I eclipse my first $100 month, but I managed $290 in dividends for the month. that is HUGE for me! Now, that did include BBL’s semi-annual payout, but it would still have been over $200 even without BBL. That’s all my cell phone, all my electric, all my gas, all my internet, and some leftover for food paid for. I’m am really loving this journey even though my portfolio is bathing in red right now. Just means there are more deals to be had!

  95. Wow congrats.
    I would love to have your problems of having so much cash to invest.

    I recently added some positions myself. These positions will add 20$ !!! to my annual dividend income ….far away from your 1,000$ of new dividend.

    You can really see the difference in having a larger snowball.

  96. Quite the busy and exciting month! Looking forward to your September dividend stream.

    Best,

    Karl

  97. I loved (LOVED!) this: “But I’m living up to the message I preach: Choose time over money. Choose freedom over slavery. Choose passion over work. Choose simplicity over complexity. I’ve freed up time by simplifying my life, which will allow me to focus on my passions.”

    Words to live by!

  98. Winston,

    Nice move there with KMI. I personally think that some of these high-quality midstream plays are ridiculously cheap right now. That infrastructure isn’t going anywhere any time soon, that’s for sure. And you can’t just build a network like that overnight. Competition is mainly limited to existing players. High-risk, high-reward plays for sure, but the risk is reduced somewhat significantly when they become so cheap. We’ll see.

    I’m not sure what you’re asking there in regards to dividend growth. I hope for ~7% organic dividend growth via dividend raises. Dividend reinvestment should boost that up to something like 10% or so income growth YOY. Then there’s the additions from fresh capital, but it’s really difficult for me to look at percentages like that because the percentages fall as the absolute numbers grow. When I first started, it was easy to accomplish 100% growth. Now it’s difficult to accomplish 30% growth. So I don’t look at things like that in the holistic sense. I simply have long-term targets for annual dividend income, which came about when working backward from my long-term goal of achieving financial independence by 2022. I was originally targeting $6,000 for this year, so you can see I’m a little ahead right now. I’d say, overall, even with reduced long-term income from moves I’ve made here, I’m still more or less on pace.

    Thanks for dropping by! Happy shopping over there. 🙂

    Cheers.

  99. Initiated position in FAST today at $34.50. I was also very busy buying in month of August and September. I mostly bought in Industrial, Oil and Gas pipeline, and Consumer Staples. I also sold BBL, NOV, COP etc. with small losses. I sold to upgrade my portfolio and not for tax loss harvesting.

    I am very heavy weighted in mid yield and mid dividend growth stocks like KO, PEP, HSY, MMM, XOM.

    I am too looking for higher yielding stocks to buy next follow by low yielding and high growth.

    I am looking at VZ, T, SO and VTR to add and to grow my current income.

  100. Spoonman,

    Just trying to take advantage of Mr. Market. He’s an emotional fellow. 🙂

    Yeah, tax-harvesting isn’t something I look at very often because I don’t often have capital gains (because I don’t sell much). But this year Medtronic and Reynolds through things for a loop, and the capital losses from NOV and BBL added up perfectly. Worked out.

    Hope you’re enjoying France over there. I hope within maybe five years I end up where you’re now at. Enjoy the spoils of success (and passive income).

    Best wishes.

  101. divy,

    Wow, nice work over there. We were really on the same page. KMI, EMR, FAST, MMM, OHI, etc. I’m right there with you. Glad to be a fellow shareholder, and I’m especially glad to be able to pick up shares on the cheap. Emerson is just nuts here.

    Nothing wrong with window shopping. That’s sometimes the most fun aspect of all. I noticed even way back when when I was a spender that I enjoyed the shopping more than the actual transaction. So sometimes it’s fun just to look at stocks and think about what you might buy when the values are there for you. The great thing about what we’re doing here is that it’s a constant cycle of window shopping and closing transactions. So you’re always experiencing those great emotions. At least, during the accumulation phase.

    Thanks for the support. Yeah, I hope that long-time readers continue to stop by and remain part of the community. I’m still here. The community is still here. And we’re not planning on just releasing an endless parade of articles on coupons or something. The message is still here as well.

    Have a great weekend!

    Cheers.

  102. Use the search button on this website to read his analysis of KMI. Its a leveraged pipeline company.

  103. Sensim,

    Making tough decisions isn’t easy for anyone. It’s unfortunate when you’re on this road that you want to keep traveling but all of the sudden a fork presents itself, forcing you to choose a direction. That’s what happened to me. I wanted to keep on keepin’ on, but I was really just unable to. It was becoming physically impossible unless I wanted to give up all of my free time, and, eventually, my sleep as well.

    But none of what I’m doing changes the message or the progress up until now, or even the progress I’ll continue to make. I’m a regular guy. I blew an inheritance when I was 21. I dropped out of college. I don’t have an education related to finance. I worked at a car dealership. I’m just a guy with a big dream, but I’ve always been willing to learn, work hard, stay patient, and do that which is necessary to make that dream come true. So I think as long as you’re hungry and you’re willing to go that extra mile, you can accomplish amazing things. I’m nobody special. If I can do these things, so can you. 🙂

    Appreciate the support. Let’s keep marching forward!!

    Best wishes.

  104. Amegalo,

    Yeah, I usually don’t have to worry about a tax-loss harvesting strategy because I don’t sell often, which means I don’t often generate capital gains (or losses). But this year, Medtronic and Reynolds forced my hand. The easy win was there with BBL and NOV, so I took it. Hopefully, BBL and NOV stay low, which means I saved a nice chunk of change. 🙂

    Thanks for dropping by. Hope you’re on course for all of your goals as well!

    Cheers.

  105. Daniel,

    William is right. I’ve certainly written extensively on Kinder Morgan, which you can find via the search button. Or you can read about Kinder Morgan elsewhere. A simple Google search will provide you with a wealth of information.

    Up until recently (due to a consolidation), Kinder Morgan operated under the master limited partnership structure. They’ve since consolidated as a normal corporation, but their results are still reported like an MLP, with DCF, etc. They may fly under a normal corporate flag now, but they still have financials just like any other MLP out there. So you have to look into the company and do a little research there.

    Hope that helps!

    Cheers.

  106. Lanny,

    Ha! It was a crazy month. Probably a once-in-a-lifetime event for me. But it was a wonderful experience. I’m fortunate in that I really don’t need these kinds of big leaps forward to get to where I’m going, but they sure are fun (and very helpful).

    Appreciate the support. You’re doing great over there as well. Congrats again on your big month of September dividend income. Four figures is just around the corner for you now. It’s an inevitability, just like financial independence is. 🙂

    Have a great weekend!

    Cheers.

  107. ARB,

    Well, when RAI acquired LO, LO shareholders were issued cash and shares of RAI. Most of the deal was cash, so my LO shares were essentially “sold”. There was no election there.

    MDT acquired Covidien and relisted in Ireland as part of a tax inversion. You can read up on it via Google or Medtronic’s investor relations, but legacy MDT shares no longer trade. They were turned in for shares in the new Medtronic PLC, based out of Ireland (no longer based out of Minnesota). That triggered a capital gain and a change in one’s cost basis. That’s why my portfolio registers the higher cost basis now even though I bought my MDT shares years ago at something like half the current price. I think some people sold out of their MDT shares before it all went down because they weren’t very happy about it. But the sale was going to happen one way or another anyhow, and I’d rather keep equity in the company.

    Shell is, in my view, the worst of the majors. But, yes, it’s a value play. It’s substantially cheaper than XOM and offers a much higher yield than XOM or CVX. I’m concerned about their track record for major projects and their cash flow, but they have a lot of cash on the balance sheet. I don’t see the dividend going away anytime soon, even with low oil. And I also had a little room there. It was a small position (and still is), and the stock has been absolutely hammered. Even with the lower quality, the valuation allowed me to become much more enthusiastic.

    You’ve got a really full schedule over there, my friend. I think I mentioned somewhere else that I don’t mind spurts here and there where I’m extremely busy and working toward that goal, but I don’t think that’s sustainable long term (for me, anyway). I prefer a harmonious balance between enjoying time now and later, but I’ve definitely been known to get a little crazy here and there. What’s great about that is that it doesn’t have to (and probably shouldn’t) last very long. Even big moves forward here and there help the long-term compounding, and that allows you to slow down at times and march forward at a slower pace. Just make sure you don’t get burned out over there. My recent move here with the blog was designed to avoid burnout. I don’t ever want to resent that which I’m fighting so hard for.

    Thanks for dropping by. Have a great weekend!

    Best regards.

  108. Justin,

    Nice moves there. Nothing wrong at all with ordinary investments. One doesn’t need to invest in exotic assets to do incredibly well, as you already know. I quite like investing in stuff like toothpaste, beverages, insurance, O&G, and mayonnaise. Exotic mortgage plays are best left for others. 🙂

    Keep it up over there!!

    Best regards.

  109. London Rob,

    Yeah, this has all been many years in the making. There were many, many months where it was tough for me to muster up even $1,000 to invest. But you just have to stick with it and keep your eye on the prize. 🙂

    Nice job there on BBL. I’ll be buying back in here in a couple weeks. I think it remains substantially undervalued.

    Have a great weekend!!

    Cheers.

  110. EDH,

    That’s fantastic. Keep that snowball rolling with quality companies. If I didn’t already own 100 shares of JNJ, I’d be all over it. Solid valuation, attractive yield, excellent fundamentals, and one of the best dividend growth track records in existence. 🙂

    Keep it up!

    Take care.

  111. IB,

    Thanks so much. I’ve done my best at inspiring via action, and remaining as honest and forthright as I can. I’ve had a lot of victories and I’ve had a few setbacks over the years. But, through it all, I’ve remained optimistic, enthusiastic, and persistent. And I hope readers continue to take away that message for years to come. 🙂

    Great job over there staying so busy when the volatility cranks up. It sure is a lot of fun to take advantage of Mr. Market. He wants to sell Kinder Morgan in the mid-$20s and Emerson in the low $40s? Great!!!

    Looks like we were on the same page there. Many high-quality stocks in the Industrials space have been absolutely hammered this year. And these are companies that aren’t going anywhere. Operations are cyclical, but you just have to be mindful of that and pick your spots. And even though operations might be cyclical, the dividends aren’t.

    I hear you on being capped out, though. Wish every month could be like this, but, sadly, that’s not the case. Fortunately, we don’t need blockbuster months to achieve financial independence. It’s that consistent saving and investing that will do the trick.

    Have a great weekend!

    Cheers.

  112. t2s,

    Wow. That’s definitely backing the truck up on KMI. Nice. I really, really like the company, but I have to manage my risk. And I view the midstream plays as high-risk, high-reward, all in all. Do love that yield, though.

    SAFT is interesting. I’m very leery of really small insurance companies due to wipe out risk, and it seems like their results oscillate quite a bit. But I wish you the best of luck with that. I do quite love the insurance industry. Actively interested in increasing TRV in the near term.

    Have a great weekend!

    Cheers.

  113. Remco,

    I was really, really fortunate. Never had a month like this before. And it’s unlikely I’ll ever have one again. But one is one more than I ever thought I’d have. 🙂

    Hopefully, you can bring the cash reserves back up and get back to shopping. I know it’s not fun to sit on the sidelines, but it’s sometimes necessary. You’ll be back out there before you know it!

    Take care.

  114. Ken,

    Congrats on the big month over there. That’s awesome!

    I love thinking about dividend income in terms of what expenses are covered, because, in the end, that’s what this is all about. I love looking at it like the “wall chart” from Your Money or Your Life. Seeing that passive dividend income rise against expenses and seeing one expense after another covered is just an amazing feeling. Cell phone? Check. Electric bill? Check. Internet? Check. Food? Check. So on and so forth. Before you know it, you’re covering half your expenses.

    Keep it up!

    Best regards.

  115. LD,

    A bigger snowball makes a big difference. When you’re working with $1,000 in capital (from dividends) before even moving cash over to your brokerage account, you’ve got such a big head start for that month. And then the dividend raises just keep on boosting that capital. It starts to run away from you after a while.

    $20 is better than $0, my friend. I was there not long ago. It gets bigger and better. Stick with it!

    Take care.

  116. Karl,

    I’ll have that dividend income update out next week. It’s the biggest ever. 🙂

    Have a great weekend over there. Thanks for stopping by!

    Cheers.

  117. FV,

    Thanks. I tell you, I wrote that from the heart. It’s the honest truth. I’ve been nothing but 100% honest all the way through, and nothing has changed.

    Those who think I did what I did for money clearly don’t understand the economics of how a website works, how a site makes money, and how much income one gives up by taking on help like I did. They have no idea what they’re talking about, which is why I pay no mind. I once heard a quote: “The fewer the facts, the stronger the opinions.” I think that’s pretty apt.

    It’s never been about money for me. It’s about everything I talk about. 🙂

    Have a great weekend!

    Best wishes.

  118. AJ,

    Nice move there on FAST. Looks like you caught it right at the 52-week low. It’s not often you see FAST yielding over 3% like this. A lot of stocks in the Industrials space are near (or at) all-time high yields right now. We’ll see how that plays out, but I’m pretty excited.

    I was looking at the telecoms lately as well after some recent weakness there. I ended up adding to my VZ position yesterday so as to bring it up close to the size of my T position. Not super enthusiastic abou telecoms due to high fixed costs, strong competition, limited switching costs (especially these days), debt loads, and limited growth prospects (due to saturation). But I do quite like the income there. Even if the dividends don’t grow quite as fast as we might expect, there’s still a lot to like there with 5%+ yields.

    Keep up the great work. It’s wonderful to stay so busy right now. 🙂

    Cheers!

  119. Fantastic month for you Jason. You really found some great deals out there. I also added UTX, WMT, EMR, and GILD this month. Great to see you back posting!

  120. IH,

    Thanks! It really was a great month. I’ve never, ever experienced anything like it. It was a rush. I can already see that this month is going to be a lot slower, but I’m hoping for some solid opportunities out there.

    Looks like you stayed really busy as well. So glad to see that. All really great stocks right there. GILD is obviously speculative (for a dividend growth investor, anyway), but the cash flow is prodigious. Really interesting valuation considering the growth trajectory. We’ll see how that plays out.

    Thanks for dropping by!

    Best regards.

  121. And here I was concerned that we missed out on all the buys in September I didn’t know you were going to put it all in one great article thanks Jason.

    September was a interesting month for me, my wife and i finally got to travel to the country for a week and it was wonderful financially it was also one of the best with me starting a side hustle in order to get down debt and invest with. With that being said I noticed you did some relatively low purchase ($600 or so) I know that you try to do a larger amount usually to try to lower the percentage of the trade price, what is your deciding amount? For instance if tour trade costs $4 do you try to but at least $800 worth of stock so that it’s 0.5% for you or are you ok with less? I ask for curiosity and because I’m looking to start purchasing and I think I will only have $300 a month and was trying to figure out if I should save up to be the 0.5% or just do the $300 a month knowing that that will eventually cause me to have more cash flow each month and the amount I can invest each month will go up.
    Not sure if I made sense there I’m at work and have been for about 12 hours so I may not be making much sense at all at this point but if you can figure out what I’m trying to say and give me your thoghts I would greatly appreciate it.

    Tyler

  122. Tyler,

    Glad you had a great month over there. Traveling the country for a week sounds great. I’m a fan of international travel, but I think a lot of people discount the value of domestic travel. The US is so unique in terms of its diverse topography, temperatures, architecture, etc. There’s so much to see here.

    Yeah, I did have some smaller purchases. I try to average 0.5%, but not every purchase will be exactly that. Some of these transactions were quite large (CL was over $3,000), while some (like GILD) were rather small. But I’m still mindful of those transaction costs. While I’m not super strict on that number because I’m putting away a lot of capital to work here (thus moving closer to the end of the accumulation phase) and fees will only really impact me during the accumulation phase, I think it’s important to not be too liberal there.

    If I only had $300 per month to invest, I’d first think about how to triple or quadruple that before really even worrying about commission fees. And that’s only because it’s going to be very tough to really make a lot of progress with that kind of capital deployment, regardless of the $5 or $7 you’re paying in fees. But, yes, I’d try to limit those fees. If increasing the capital isn’t possible, I’d either save up until I could invest at least $1,000 or I’d look into services like Loyal3 or Computershare where the fees are non-existent or negligible.

    Hope that helps!

    Cheers.

  123. Thanks Jason

    I’m reading and doing all I can. I’m just a few months I went from not having enough income to pay my monthly bills to having money left over at the end of the month due to starting a few side hustles and cutting my costs in other ways. So I know I’m eager to get in the market more no matter the cost but I need to be more patient in order to have my “BB gun” have the most affect.

    Thanks again,
    Tyler

  124. I loaded up on RDS.B with the yield north of 8%. That’s crazy cheap for a company that pays dividends with the devotion of RDS.

  125. Jim,

    Crazy, indeed. They’ve cited a commitment to that dividend, which has been paid out for a long, long time now. I don’t see them cutting it any time soon, especially with the healthy balance sheet. So even if it doesn’t grow much, that’s a strong quarterly chunk of change coming in. 🙂

    Nice move!

    Cheers.

  126. I figured you had a method to your madness DM! Smart tax benefits here. The 30 day window might feel like years; however, with the current market environment, I don’t anticipate the prices rising too much. But who knows, right? Hopefully the market continues to slide and you are able to re-purchase your shares at an even lower cost basis! Now that would be amazing.

    Bert

  127. Hi Jason!
    What is your take on O (Realty Income Corp) at this time with them issuing more shares?

    “Realty Income (NYSE:O) has recently announced a public offering of 10M shares of its common stock. These were priced at $46.88 per share, or 1% lower compared to its closing price on Thursday. Net proceeds from the offering are estimated to be ~$450M, after the underwriting discount. Realty Income also granted the underwriters a 1.5M share greenshoe option which if fully exercised would bring in another ~$67.5M.”

    Thanks…..Steve
    ——————————————————————————————————————

    BTW….Thank’s to you motivating me, I maxed out my Roth IRA and had to open a new TD Ameritrade individual account. Below are my purchases in it for this week using free trades and represents about 1/4 of what I would like to have invested in it by the end of 2015. Note: TOO and TAL are very speculative, hence the very small amounts invested in them).
    My goal for the end of 2015 is to have everything set up for the year 2016 to have about $1,250 dividend income in this individual account plus $3,337 dividend income in my Roth IRA for a total of about $4,587 in dividends for 2016. Additional funds invested in 2016 could boost my total dividend income for 2016 up to $6,000 for the year depending on how comfortable I am in investing it.

    Stock Purchases – Taxable Account Updated October 1st 2015
    1. TOO
    09/28/2015 Bought 36 shares of TOO for $14.23 per share totaling $512.28
    This purchase adds $80.64 to my annual dividend income based on the current $0.56 quarterly dividend. 15.74% Yield

    2. TAL
    09/28/2015 Bought 36 shares of TAL for $14.27 per share totaling $513.72
    This purchase adds $103.68 to my annual dividend income based on the current $0.72 quarterly dividend. 20.18% Yield

    3. STX
    09/28/2015 Bought 30 shares of STX for $42.35 per share totaling $1,270.50
    This purchase adds $64.80 to my annual dividend income based on the current $0.54 quarterly dividend. 5.1% Yield

    4. POT
    09/28/2015 Bought 65 shares of POT for $19.95 per share totaling $1,296.75
    This purchase adds $98.80 to my annual dividend income based on the current $0.38 quarterly dividend. 7.62% Yield

    5. RDS.A
    09/28/2015 Bought 30 shares of RDS.A for $46.25 per share totaling $1,387.50
    This purchase adds $112.80 to my annual dividend income based on the current $0.94 quarterly dividend. 8.13% Yield

    6. DE
    10/01/2015 Bought 20 shares of DE for $72.50 per share totaling $1,450.00
    This purchase adds $48.00 to my annual dividend income based on the current $0.60 quarterly dividend. 3.31% Yield

    Projected dividend income for the next 12 months as of October 1st 2015…..
    TOO – $80.64
    TAL – $103.68
    STX – $64.80
    POT – $98.80
    RDS.A – $112.80
    DE – $48.00
    Total Projected Annual Dividends – $508.72 ($42.39 per Month average)

  128. I have a feeling you are going to have plenty more months like this in the future. I am sure eventually you will have months where you dwarf this one. Thats the whole idea behind building this snowball isn’t it? I am a bit torn with my next purchase, but I think I will probably be splitting my next chunk of available cash between PAAS and T. I don’t expect much from T other than to keep pumping out that nice dividend and raise it by a penny for next year :-). As far as PAAS they are still paying out 3% in yield and you could be picking up a sector at rock bottom prices.

    Thoughts?
    Andrew
    SHM

  129. Wow, Nice job! My portfolio did not do very well and my net worth has been stagnating for a while now. Considering the circumstance, your portfolio held pretty well. Not to mention you purchased so many great stocks this month. $700 of additional dividend is impressive. Keep it up Jason, As always, you are my inspiration.

    Cheers!

    BSR

  130. Steve,

    Wow. Looks like I’m not the only one who was busy buying stocks up! That’s a big addition to your annual dividend income, though it’ll be interesting to see how some of those dividends look over the next year or so. TAL has been hammered this year, though it’s outside my circle of competence. But great job there putting away some capital. As long as you’re okay with the potential loss there from the spec plays, you’re okay.

    I’m not concerned at all about Realty’s issuance. That’s a regular thing with Realty (and other REITs). You hope to get a good price there on the equity (equity is almost always expensive), but you just have to take what you can get there sometimes. Wouldn’t mind more O here, though I’d prefer it closer to $44 or so.

    Keep it up! 🙂

    Cheers.

  131. Andrew,

    Well, even my snowball at its peak when I’m nearing the end of the accumulation phase won’t provide enough extra firepower to come anywhere close to this. It’ll largely be excess cash flow from active income sources that will continue to propel things along for the next few years, though the snowball does continue to help tremendously. Before I even thought about how much to invest this month, I knew my portfolio was going to contribute four figures all by itself. That’s an amazing push. And the BB gun is reloading itself at this point. 🙂

    Can’t say I know anything about PAAS, as I don’t follow it. I see it recently cut its dividend and it’s not profitable right now. That’s not really a stock in my universe, and I’m not really a big fan of gold/silver or companies that are heavily exposed. T’s solid, though. It’s really more of an income play. I wouldn’t expect big growth there, but I think the valuation right now is reasonable for the yield and dividend growth you’re looking at. I recently added to my VZ stake for those reasons, and because I had less exposure there. I’m a little leery of the entire industry due to high fixed costs, extremely strong competition, limited growth opportunities (saturation and geographical limits), and low switching costs. That said, mobile devices are ubiquitous. That’s not going to change any time soon.

    Best of luck with the choice!

    Cheers.

  132. BSR,

    Hey, nothing wrong with that. The stock market has been really volatile lately, so it’s not a surprise to see your wealth decline. If I wouldn’t have added so much fresh capital, I’m sure my portfolio would have dropped substantially. But I’m fortunate to have some capital available just at the right time here. Doesn’t work out like that all the time, but I’ll take it when I can get it. 🙂

    Appreciate all the support. Let’s keep marching forward. One month at a time!

    Best wishes.

  133. Mark,

    I’m so, so fortunate. A record-breaking month right here. Never happened before and will probably never happen again. But it sure was a lot of fun while it lasted! 🙂

    Love the Canadian banks right now. I think there are serious concerns to be mindful of, but I like the long-term prospects. And one is paid rather handsomely in the meantime.

    Thanks for dropping by. Hope you’re having a great weekend over there.

    Best regards.

  134. Hi Jason,

    Following your blog regularly and looking forward to you reaching your goals!

    As an investor with similar goal of FI, am wondering if options selling wouldn’t enhance and accelerate your journey?

    I’m doing it regularly the past year (using one of paid services for guidance) and with similar portfolio size as yours, the income from options selling actually beats my dividend income (though my portfolio is geared towards growth, rather than pure dividend plays).

    Whatis your take on options selling for income, as complimentary strategy to DG?

    Thanks!
    Granko

  135. Granko,

    Thanks for dropping by!

    I’m not really a big fan of options. I very rarely sell stocks, so puts are off the table. And I don’t keep a ton of cash around to try to generate income from calls. Options is just a fancy word for trading. So you’re looking at the potential for increased taxes and fees. I see some value in calls during the accumulation phase if there is a stock you’re specifically looking at but want at a lower price, but I just look at a business and I buy shares if the value is there for me. I’ve never really run into a situation where I couldn’t find a good direction for my capital. The income generation then happens from the growing dividends. It’s really a very simple system that will absolutely get me to where I want to go. Trying to complicate the matter via options is, in my view, unnecessary.

    Cheers!

  136. Phenomenal job there Jason! The purchases you had last month were incredible! Wouldn’t it be nice to do that every month hahah… one day maybe. Congrats on all that additional income as well! Roughly $700 that you do not have to work for, some people can only dream of. You accomplished that in one month. Glad to see you back writing on the blog as well. Keep pushing my friend, FI is becoming closer and closer with every passing day.

    You are an inspiration. You go after what you want and do what you want when you want to do it. There is nothing better to live your life the way that you want to live it.

    Take care,
    ADD

  137. That’s such a great month, Jason! Love every purchase you made here, excellent work. Keep at it and I can’t wait to read the next post!

  138. Hello Jason

    I liked your great month!!, all the buys (except one) and the sells, I didn’t like the DEO buy – in my watchlist there is company TAP at the same industry as DEO and will bring more cash flow to the future me..

    FAST was the first company that I bought in my portfolio, but I don’t have the cash to average down 🙁

    Hope that the nice new addision to your dividend income will bring more new companies.

    Sharon – Divorcedff

  139. Hi Jason,
    I can relate to that, but its great to see someone who is further down the line getting that level of income and reminds us all why we are doing it 🙂 I have some more cash and dividends to reinvest in October, question is what, there are quite a few things to choose from – more BBL, RIO, top up Shell or BP (although already a fair whack in those), an Investment Trust at discount, or something else – who knows! 🙂

    Cheers

  140. Thanks mate.

    Actually, in relation to my Disney purchase this month, it was something you said in a previous article that stuck out when looking through my shortlist.

    I think the article was something along the lines of “If I knew what I know now, what would I have done differently at the start of my DGI journey” or something to that effect. Essentially what you said was that you would have invested more in smaller yielding companies, instead of chasing big yielders initially so that you got your income off to a bigger start.

    It was equally tempting for me, seeing as this is only my 4th position in my portfolio. I could have gone with the big yielding energy giants or construction etc that have taken a big hit recently. But Disney just appealed to me, and certainly at $100. I think Disney and Visa are two companies in particular that I may try to load up on over the first year of my DGI, and slowly buy into some of the other big guys along the way.

  141. Jason,
    Son of a gun! What a month???? When are you going to change your name to Buffet? HA! If you keep trading like this, WOW! I hope that you have many more months like this! With the ups and downs, there are many bargains. An with a little extra capital. What a great time to take advantage of great stocks. When the price declines a little, then it’s time to jump on it! It’s kind of like the Black Friday sales at WalMart??? BARGAINS everywhere!
    I have a question about stocks? Why are you not getting into some of the credit card stocks? I have been looking at Discover Financial Services (DFS). DFS has a yield of 2.15%. With the possible rise in interest rates, that is if the Fed ever decides to raise the rates. Credit card companies should not be touched by interest rate increases. They do not have a lot of debt. They make money on every transaction. More people are using credit cards to make purchases. It would appear that credit card companies would be growth companies?
    What are your thoughts on DFS and other credit card companies? DFS is close to it’s 52 week low of $50.20.
    Thanks, for keeping us encouraged by sharing your real life experience in the stock market! By the way, I hope you will remember us when you become a billionaire? HA! I really enjoy sharing your excitement of being financially independent! That is the best feeling in the world! Good luck my Friend!
    Nut501

  142. Simply an astonishing month for you Jason! I recently started following your journey and it inspired me to document my own progress. I’m just starting out so I can only dream of so many buys for high-quality stocks all in one month. That must feel great to have added so much passive income at attractive valuations. I see quite a few names on my own watchlist that I hope to own someday such as: RDS.B, BP, CAT, CL, WMT, MMM. I’m from Canada so I’m holding off on USD transactions for now. Great job adding BNS and TD both are great, diversified choices. I’m sure one of those two will be next when a add more financials. Keep up the great work and congrats on your recent partnership.

  143. ADD,

    Hey, thanks so much. Really appreciate that. I’m honestly just trying to live out my message. I live what I write. I truly believe in chasing after time, not money. And I think one should always be mindful of not turning a passion into work, which might destroy that raging fire.

    This was definitely a crazy month. I wish every month could be like this. Not just because I’d achieve financial independence that much faster, but also because it was just incredible fun. A piece of me is going to miss buying stocks when I switch from accumulating assets to living off of dividend income. But I am looking very much forward to “flipping that switch”. 🙂

    Keep up the great work over on your end as well. $8k put to work this month is nothing less than impressive. Congrats as well on your big dividend haul. You’re getting closer and closer!

    Cheers.

  144. Ryan,

    So fortunate that I had some rather significant capital available just as the market took a turn there. The last couple days have been disappointing, though. Let’s hope for more volatility in the near future.

    Excited for your upcoming life changes and trip. Bigger and better days still ahead. 🙂

    Best regards.

  145. Sharon,

    TAP is interesting. Never really been on my radar, in no small part due to the lack of dividend growth. But I certainly wish you much luck if you invest there. 🙂

    FAST appears to be an excellent company to me. I don’t know what else you’d really want. Excellent fundamentals, great growth, and a penchant for rewarding shareholders with increasing dividends year in and year out. It’ll be fun to see how that plays out.

    Thanks for dropping by. Hope all is well on your side of the world!

    Cheers.

  146. Nut501,

    Ha! I’ll never be a billionaire, that’s for sure. But millionaire status is inevitable at this rate, which is pretty amazing to me. In the end, though, I’m just me. Money changes some people. Hasn’t really changed me at all. I still walk everywhere, live in a modest apartment, and live a very quiet life. And that’s all I’ve ever wanted – minus the stressful 50-hour workweek.

    I think credit card companies make excellent investments. However, I prefer V and MA to DFS and AXP due to the broader networks, lower risk (partnering with banks instead of issuing credit directly), and significant growth spread. That said, DFS and AXP trade at much lower valuations (as they should). So perhaps hedging your bets across all four isn’t a bad idea. However, I have to be mindful of the lower yields in this area. Every $1,000 I invest in something like DFS with the 2% yield is $1,000 I’m not investing in something yielding 3% or 4%, which would bring me that much closer to where I want to be. But I do try to mix it up across the yield and growth spectrum. That’s why I have a small stake in V. Both DFS and AXP seem like solid investment ideas here based on valuation and quality. I would be mindful of the risks involved in terms of technological changes and how that would affect the networks in play.

    Appreciate the support. It’s incredibly rewarding for me to share this journey with the world. I came from humble beginnings, but financial independence is indeed possible for just about anyone that lives in a first world country. You just have to want it.

    Best regards!

  147. dividendniche,

    Thanks for following along. I appreciate it!

    You know, there was a day – and it wasn’t long ago – where the thought of being able to invest this much in one month was nothing more than a dream for me. But believing in yourself and working incredibly hard for years on end can bring about amazing results. That said, having blockbuster months like this isn’t necessary. My portfolio was built on steady contributions month in and month out, typically on the order of around $2,000 or so. If you’re able to maximize that spread between income and expenses and consistently put away as much as possible, you will see life-changing results.

    Keep it up over there!

    Take care.

  148. Donny,

    The frequency of my articles is going to decrease, as I mentioned previously. So how many “Recent Buy” articles I post will really depend on what other content I’m producing and how many stocks I’m buying in a given month. I’ll probably end up putting out about one article per week for the foreseeable future. So factoring out the FF update and the dividend income update, that’ll be two other articles per month. I tend to purchase at least two stocks per month, so not all stocks will get their own article. I’ll still try to do analyses on new stocks if/when I come across them, but my ideas will be competing with each other a bit more than before. As such, there’ll be more summaries like I did here.

    Take care!

  149. Great post dividendmantra! Lots of great additions to your portfolio, I have quite a bit of those stocks in mine as well, am expecting great returns in the long term!

    Also, I have watched BNS for atleast 8 months now, are there any extra steps in reguards to taxation for taxable accounts when purchasing non-US stocks? I’d love to add that to my portfolio as well.

  150. Dividendcouple,

    That’s a great question there on BNS.

    If you hold it in a retirement account here in the US, you don’t have to worry about Canadian dividend withholding tax. If you hold the stock in a taxable account, there will be a 15% foreign withholding. But that can be reclaimed at tax time. So the withholding ends up being a slight drag on your cash flow in terms of not having access to it until you reclaim it the following year when you do your taxes. But you end up with the whole dividend.

    I went over some of this in a post here:

    https://www.dividendmantra.com/2014/11/considering-foreign-domiciled-dividend-growth-stocks/

    Hope that helps!

    Cheers.

  151. Good work, and yes very inspiring! I recently started my own blog as well and hope to build my portfolio, although thinking of holding out on investing until I see what happens with the Fed and interest rates! Just building a pile of cash in the mean time. Thanks again for your post!

  152. wgmast01,

    Best of luck with the blog, and with building out your portfolio. Definitely exciting! 🙂

    We’ll see what happens with rates. I personally couldn’t care less. I’ll be accumulating high-quality assets either way.

    Cheers!

  153. Hey Jason,

    thanks for sharing your investments and wow it is an impressive number of investments in September. I only added IBM last month. Btw do you know the insurance company Old republic? I am having it on my watch list for October.

    cheers

    Andreas

  154. Andreas,

    IBM sounds like a really solid move there. I continue to consider adding to my position, but I’m not sure I want to go any heavier. Great value, though.

    I’ve looked at Old Republic before. Wasn’t really my cup of tea. Didn’t like the fundamentals/growth. Best of luck if you invest there!

    Cheers.

  155. That’s crazy I picked up some of ORI on my blog Dividend Miracle last year and its been doing ok for me. Hopefully I can keep adding to that position!

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