Quit Your 9-5 Faster: The Auxiliary Fund

seeinglightPerhaps the biggest barrier to entry when it comes to the concept of achieving financial independence early in life is the very nature of the journey itself. Specifically, the length. It’s not like one can just have that epiphany and then go on to retire three or four years later. Not in most cases, anyway.

So there’s that long runway. You need to work really hard, live below your means, delay gratification, and save a high percentage of your net income for a decade or more in order to get to the promised land.

Although, I’d argue it’s really not all that bad. You’re going to work at a job anyway. And if you’re going to work at a soul-crushing grind to put food on the table, you may as well do what you can to get out of that situation as soon as possible.

And delaying gratification gets turned on its head when you realize that what’s really gratifying isn’t what’s in the present; it’s what you’re still striving for. Besides, what’s the bigger sacrifice: living below your means or working for most of your life?

That said, if we can shorten the journey a year or two, that’d be even better. Right?

Right.

I’ve come up with a few ideas over the years that I think can shorten the journey for me even more. And I’m pretty excited by that.

I thought all along that I’d be working my miserable day job down at the dealership until I was 40, not able to escape until my dividend income completely covered my expenses. But I was wrong about that, being able to “retire” from the auto industry at the ripe age of 32 years old.

Looking at where I’m at now, I’m ahead of pace. My overarching goal is to be financially independent by 40 years old. And I view financial independence as being in a situation where my expenses are covered by passive income, not having to work for any money any more (but knowing I could if I wanted to). As of now, I believe dividend income will exceed expenses sometime around 39 years old, assuming my expenses don’t dramatically increase and my investing trajectory stays similar to what it’s been over the last five or so years.

I’m going to discuss one of those ideas I’ve come up with to shorten things even more. It’s an “ace in the hole”, if you will. You don’t have to use it, but I think it would be easy to pull off if you had/wanted to. If you’re miserable at your job and the light just isn’t bright enough, I think this could speed things along by about a year, depending on your own situation.

Why Shorten The Journey?

First, I’ll note that I love writing for a living and doing all that that I do now. But I still crave financial independence almost as much as I did back when I first started the journey. It’s certainly become easier for me over time, especially with the fact that time has slowed for me a little bit.

But I’m the kind of person who craves new experiences because just about anything becomes routine for me over time. I want to be able to live new lifetimes with impunity. I want to wake up every single day knowing that whatever I end up doing that day, I’ll be doing it because, deep down inside, I want to do be doing it without any doubts. I never want to be in a situation where I’m doing something because I have to, just for the money.

Ultimately, I want to be free. It’s not technically binary where you’re either free or you’re not free. I do believe there’s a spectrum there, which is what the concept I’m going to discuss relates to. But while I love my station in life right now, I’m still not completely free. If I can move along that spectrum in a hurry, I will.

The Auxiliary Fund

This is where shortcuts come in. And I think the concept of an auxiliary fund could work out pretty wonderfully, if executed properly.

An auxiliary fund is a sum of cash you set aside to cover the spread between your passive income and your expenses until the passive income grows enough to take over and cover expenses completely.

Let’s use some numbers to illustrate the concept.

Say you’ve cut expenses to the bone and you can’t live on any less than $1,500 per month ($18,000 per year). And let’s then also assume that your dividend income is $1,300 per month ($15,600 per year). You’ve got a spread of $200 per month there.

Adding in some other assumptions, let’s say you’re saving 50% of your net income. So you’re netting $3,000 per month, investing the other $1,500. You can certainly play with the numbers for your own situation, but I think these are reasonable assumptions for a good number of folks out there.

Covering that spread could take a while in terms of how long it would take you to grow the dividend income to $1,500 per month. You’re investing $18,000 per year in this scenario. Assuming you’re achieving an overall yield on your dividend growth stock portfolio of 3.5%, you’re adding $630 to your annual dividend income after a year. I’m currently generating over 7% dividend growth on my portfolio, so that would add another $1,092 in annual dividend income after a year in this scenario. Adding the two together, you’re looking at $1,722 in additional annual dividend income after one year of saving, investing, and collecting dividend raises.

So that now puts you at $1,443 in monthly dividend income against $1,500 in monthly expenses. Close, but not quite there after another year of saving 50% and investing diligently. You could goose things a bit by chasing yield, but that adds risk. And you’d likely still fall short anyway.

But what if you could skip that entire additional year and quit that 9-5 even with the $200 delta?

That’s where the auxiliary fund comes into play.

Instead of directing your $1,500 per month in savings toward investments, you keep it in cash. This isn’t part of your emergency fund. This is used only to temporarily cover your spread between passive income and expenses.

Now, I’m a huge fan of passive and growing cash flow. A much bigger fan of that than cash. I didn’t get to the position I’m now in by preferring cash over cash flow. But I’m also a big fan of living on my terms, which is why we’re all doing what we’re doing here. All that saving and investing is a means to an end for me, even if the investing is a lot of fun in the meanwhile. If some great benefactor came into my life and offered to cover my expenses for life in exchange for never saving/investing another dime, you can bet your bottom dollar I’d take that offer in a heartbeat.

Moreover, with $1,300 per month in passive dividend income, you’re already in very rare company and likely a guaranteed millionaire. You’re already very successful, so try not to lose perspective as you continue to save and accumulate high-quality assets. Some people will never be able to find their enough. Try to not be one of those people.

Getting back to the example, you’re redirecting that $1,500 per month toward a short-term cash position instead of long-term dividend growth stock investments. After four months, you should have $6,000 in cash there (again, separate from your emergency fund). That $6,000 can then cover your shortfall for approximately years.

And guess what’s happening over that 2½ years?

You guessed it: dividend growth.

Your $15,600 per year in annual dividend income should become $16,692 in annual dividend income after a year, assuming 7% dividend growth. After another year, that compounds out to $17,860 in annual dividend income, which nearly covers your expenses. After another six months of compounding at 7%, you should be looking at right about $18,485 in annual dividend income.

Now, it’s probably safe to assume your expenses grew a little bit over this time frame as well, but the end result is still over $18,000 per year. And with inflation being so low right now, the odds are pretty strong that someone who’s frugal enough and good enough at controlling expenses for a long enough period of time to be in this position in the first place can keep running a pretty tight ship for another 2 or so years. In addition, the dividend growth is an ongoing and fluid process, meaning you’re spending a little less than $200 per month as you go and as the dividend income continues to rise, further bolstering the chances of success.

Of course, one could stay on the day job for another month, which would add another $1,500 to the pot, covering another six or seven months of expenses while the dividend income continues to grow and compound. In the end, you’re still looking at cutting the journey short by about a year.

Conclusion

This is just a concept. You don’t have to (and probably won’t) use it if you want that big margin of safety where your dividend income is covering your expenses by 110% or 120% or more. But just keep in mind that every additional day you’re working, saving, and investing is one less day you’re living on your terms. Money can always be made. Time cannot.

Personally, I’m strongly considering employing this strategy down the stretch. I think I’m probably about a year ahead of pace as things sit now. But this could potentially put me in a position where I quite literally don’t have to involuntarily work a minute of my life past 38 years old. And that’s even after quitting the full-time job a day after my 32nd birthday. How crazy would that be?

I just don’t think it’s necessary to have that big margin of safety where dividend income covers expenses by X% over 100%. In fact, I believe organic dividend growth would allow you to exit the workplace even if you are only ~90% there, assuming you have a solid auxiliary fund in place and firm control over your expenses. Besides, it’s highly, highly unlikely you’ll never earn another dime of active income for the rest of your life if you’re achieving financial independence relatively early in life. It’s almost impossible to be this incredibly creative and driven person (the kind of person that achieves financial independence early in life) and just never earn another dime for the value you could (and likely will) add to the world.

You’d have to play with the numbers a little bit, but I purposely used numbers that are pretty true to my own situation. My long-term goal has long been $1,500 per month ($18,000 per year) in dividend income, which I think will more or less free me. Expenses are somewhat of a moving target, especially looking a decade out. But I think it’s certainly a reasonable target for me assuming I’m able to pay off student loans by then and take subsidies for health insurance. In the end, it’s simply a matter of adjusting on the fly and taking a look at things as they go. Regardless, it’d be easy to save cash for 3-5 months toward the auxiliary fund and then go about my merry way. Likewise, it’d be easy for you to do the same. This is a concept that can be replicated by anyone following this strategy.

If you love what you do, then there’s probably no reason to consider this idea. But financial independence isn’t about hating your job. It’s about so much more. And if you want to sprint that last mile of the journey, I think this concept offers the chance for a late-stage burst of energy to cross over the finish line and step into the light.

What do you think? Would you consider using an auxiliary fund to speed things along? Why or why not?

Thanks for reading.

Photo Credit: adamr/FreeDigitalPhotos.net

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240 Comments

  1. Jason,

    Again an excellent article, showing the potential for early retirement. Like us we have been working on saving heavily during the time we have been expat where the found grew much more quickly than usual (twice than now). So every opportunity is important to catch.

    Cheers,

    RA50

  2. An excellent idea to allow all of us to achieve FI slightly earlier. Loved the idea and we’re already doing something similar. Looks like retiring by 40 will be a lot easier for you with this method. 🙂

  3. Hi Jason!

    Nice article! Your writing just keeps getting better and better. Thanks for bringing this concept to my attention. I will definitely consider taking a short cut to financial independence with an auxiliary fund. Stay hungry and keep up the great work!

  4. “Some people will never find their *enough*.” So true. This is probably the single biggest element in our financial success so far: defining our “enough” and saving every dollar that doesn’t serve that.

    I love this concept of the auxiliary fund. We’re more on the index fund and rental property side of things, as opposed to focusing on dividends, but this is really good food for thought. On paper the math all makes good sense, and the timelines are short enough to make the lack of exposure to market growth on the cash funds fairly inconsequential. Most of all, I just love ideas like this that encourage even us “different thinkers” to think even more differently still. Thanks, Jason, for continuing to push the envelope!

  5. Jason,

    First, thanks again for the great coaching session the other day I think everyone I know is tired of hearing about all the stuff we talked about.
    Second, what an awesome article something I had never even considered of having an auxiliary fund set up just to make up the difference. It kind of reminds me of some of the plans I have in place for getting out of debt and investing in order to get to financial independence, many people say that they don’t make sense or are bad ideas, but when you look at the numbers they make sense for me. That’s what this is all about whag makes sense for each one of us. I’m far far away from the point of retiring early yet but I’m sure that when I get closer I’ll be very interested in doing something similar to this to speed it along.
    The other thing I thought of is if all you need is 200 a month at one point most of us can find a job working one day a week and make that in a month so that’s a way to. Not really retired but close really close in my opinion.
    Anyway great article yet again.

    Tyler

  6. Jason

    Great post, and I’m trying to get into your idea , but like you said it is not for all, for me it will be hard to get to the point that I can set a side money, for now the alimony that I pay are 55% from my day job income, so it is hard for me to save fresh capital I only re-invest my dividends for now

  7. Great article Jason. It definitely looks like the transition to having someone manage the day to day behind the scenes stuff has freed you up to put out some quality material. I love the every Wednesday posting too. I’m no longer anxious waiting to read the next gem and not knowing when it may come out lol.

    As for the idea of building up a little cash position… Seems like a great idea! When I get to that point where I should make the decision to keep working and investing or building up a back up fund to fill the gap, I’m not sure what I will do but thank you for giving me the idea!

    Before this article I never really thought about the fill the gap fund but in theory it makes a whole lot of sense. Lets just hope the dividend growth stocks keep doing what they do best over that “gap” time.

    Looking forward to you quit the rat race even sooner than expected! With the amount of purchases you have had this month you are certainly putting yourself in a good position.

    ADD

  8. Good article Jason
    its a idea most diffidently to think about. I know i would love to retire early and get on out the door. Keep up the good work and the ideas coming.
    Cheers

  9. That’s a pretty interesting idea. We have our emergency/cash fund, but we never thought of it as an auxiliary fund to help reach FI. I try to keep about 4 months of living expense in cash. That’s probably a little high, but we also need cash to help deal with rental turnover and maintenance. We might think of see this liquidity in a different light when Mrs. RB40 is ready to retire. We will reduce our rentals holding at some point too.
    Best wishes

  10. RA50,

    Thanks so much. Glad you enjoyed it!

    It seems to me that a lot of people think it’s this linear journey where you work for X years, save X%, and then live off of $X passive income so as to cover X% over $X expenses. But I’ve learned that the journey has a lot of twists and turns, and thinking outside the box can lead to really wonderful results. I was guilty of thinking that it was this lengthy, linear journey, but I no longer believe that to be the case. There are a lot of opportunities to take twists and turns that may lead to totally different results. One can certainly make a lot more fun. And it’s possible to shorten things as well.

    Best regards!

  11. Tawcan,

    Thanks!

    It’s definitely not a concept for everyone. Some people need one margin of safety on top of another. But after really exposing myself to all of this, I think there are already a number of margins of safety built in (active income, dividend growth, ability to massage expenses), making the necessity for dividend coverage above 100% unnecessary.

    Appreciate you dropping by. Hope the idea helps others that think the journey is too long. Thinking outside the box can probably shorten things down more than a lot of people realize.

    Cheers!

  12. Sampo,

    I’m as hungry as ever! 🙂

    Glad you enjoyed the article. I’ve been thinking of some concepts over the last few months to speed things along even more, and I think this is as good as any. Geographical arbitrage is another that seems pretty easy.

    I’m definitely not a fan of cash, but this isn’t avoiding equities in favor of cash. It’s just using cash to further the process – using it to your advantage.

    Appreciate the support!

    Best wishes.

  13. That auxiliary fund is an interesting idea. I can also see this idea being useful in some other situations. For example, I expect my expenses to decrease when my kids grow up and move out. So if I already have enough passive income to cover my expected post-kid expenses, I could build up an auxiliary fund to cover the incremental cost of raising my kids.

    Also, if you expect to receive some pension income, you could create a fund to cover the difference between passive income and expenses until the pension kicks in. (Although depending on your age and expected pension, it might be better just to invest that money in dividend growth stocks.)

  14. Sampo,

    I agree with you on that one. Finding your enough reminds me of the Kurt Vonnegut anecdote. Enough is something that some people will continue to chase all their lives. I just don’t need that much money to be happy. I’ve realized that more and more over time. I could accumulate millions of dollars over the course of my life, but there’s no reason to.

    Yeah, the time frame of using the cash to cover the spread isn’t really long enough to be consequential. And we’re not talking about a lot of money here. That’s why I look at it as an “ace in the hole” once you’re near completion. Trying to stretch it out more than that will probably hurt your long-term income/wealth goals too much.

    Thanks for dropping in! Hope you found some value in the article. 🙂

    Best regards.

  15. Tyler,

    Absolutely. Thanks for taking me up on the opportunity! 🙂

    Yeah, there are a lot of ways to look at this. And there are a lot of ways to think about the journey and how to cover your expenses. Partial financial independence (working part-time at something enjoyable) once you’re far enough along the spectrum is certainly something that I think a lot of people would benefit from. It isn’t binary where you either have to work full time or you’re financially independent. There’s a lot of flexibility built into this, which is something I’ve tried to stress over the years. This is just another concept/example of that. It’s definitely not a linear journey. There are a lot of opportunities to change course and accomplish goals faster while also having more fun. But one has to think outside the box and be willing to take some chances along the way. The comfort of a full-time paycheck isn’t really all that comfortable when you realize what you’re giving up.

    Thanks again!

    Cheers.

  16. Sharon,

    Definitely not for everyone. It’s a concept that I think will help/apply to a lot of people, but everyone’s financial situation is different. As always, your plan has to match your own needs. Of course, things change over time. So it’s always great to be ready/willing to adjust on the fly and roll with the punches. 🙂

    Take care!

  17. ADD,

    Thanks so much. Glad you enjoyed it. I always do my best with quality, and certainly the transition away from the dealership last spring allowed me to keep the quantity going while also increasing quality. But I was only able to stretch that so much when other tasks became so time consuming. The new schedule is really wonderful, although I’m still putting out like 20 articles per month now. So I’m almost as busy as I ever was in terms of content production, but just without all the other ancillary responsibilities.

    I definitely think this idea could work for a lot of people. If you’re in a spot where you’re coming up on financial independence at a relatively young age, then you’re likely also saving quit a bit of money. So it wouldn’t take that long to come up with enough change to cover that spread for a few years. Definitely a lot faster than continuing on with the status quo. But some people would prefer to have that margin of safety. I’m just not one of those people. If I were, I’d have never quit my job and all that. So I just find a lot of value in thinking outside the box and adjusting as you go.

    Appreciate all the support. I’m definitely ahead of pace at this point, and I think this concept will put me even further ahead of pace. I might be in a situation where I don’t have to work even earlier in life than I ever anticipated. It’s just a dream come true. 🙂

    Hope all is well over there. Let’s keep it rolling!

    Cheers.

  18. Interesting point. for those in doubt this does have practical merit. My father in law retired 3 years ago being sick of his job running a super target. He knew he was about 80% dollar wise able to cover retirement and had all his bills paid except for the monthly essentials. He planned on taking 6 months off then managing something like a mall store part time. Well as it turns out when you retire costs go down and his were more than expected. That 6 months turned in to 3 years. He now drives a school bus part time because he wanted to change things up not because his 6 month slush fund was drained. What everyone told him he would need to retire is nowhere close to the actual amount. Very good idea Jason.

  19. Michael,

    Hope this article provided you some food for thought. I truly believe it would work for a lot of people and speed that time frame up a bit, if executed properly. Just trying to help and inspire! 🙂

    Best wishes.

  20. Joe,

    Well, I wouldn’t recommend using the emergency fund for this. It would be separate from the emergency fund, which would be whatever cash you’re comfortable with holding for potential emergencies. This would be on top of that, specifically designed to be used up over the course of a couple years or so. Any cash left over at the end (if there is any) could then be swept into the emergency fund or simply spent.

    Although, I don’t think keeping four months’ cash around for emergencies is a bad idea. That’s a lot less than the 12 that’s usually recommended. I’ve typically kept around $5k around over the years, which is in line with what you’re talking about, especially knowing that I could cut some recurring expenses down if I absolutely had to.

    Thanks for dropping by!

    Best regards.

  21. jd,

    Definitely. A lot of ways to think about this, and a lot of ways to think about the journey, saving, investing, covering expenses, passive income, and financial independence. What’s really wonderful about this whole idea of achieving financial independence early in life is that there’s no “one-size-fits-all” approach to it. There’s so much flexibility built in, which is something I’ve tried to show over the years. It isn’t start at A and end at Z with no deviation possible/necessary/required. A lot of twists and turns, which, when used correctly, could really speed things along while also making things a lot more enjoyable along the way.

    Cheers!

  22. pygmycoho1,

    Thanks for sharing that!

    Yeah, I think that real-life example exemplifies what I’m talking about really well. And not just in this article, but also in most of the articles I’ve written about this strategy in general (many of which were hyperlinked in the article above). Being flexible is really key to things, as is thinking outside the box. If you’re in a position to even be close to achieving financial independence at an early age, you’ve likely already got so many margins of safety built in that it’s not even funny. Cutting expenses further, taking on part-time (but enjoyable) work, monetizing interests/hobbies, organic passive income growth, the auxiliary fund concept, and geographical arbitrage are all possible ideas at that point. And like I mentioned above, you’ll likely find that it’s impossible to NOT make money over time if you’re the type of driven/creative person to be in that spot. The odds of becoming financially independent at, say, 40 years old and never making another dime of active income for the rest of your life are really, really low. As such, I think the need to cover 120% or something of your expenses via dividend income is totally unnecessary. But that’s just me. Others need that safety blanket.

    Best regards!

  23. Creative idea, Jason. I’ve never thought about it this way and I can definitely see how this could help push you across the finish line earlier.

    Interesting concept, thanks for sharing!

  24. Hey Jason,

    What a great idea! I really, really like it, as reaching FI a year or two earlier can make a huge difference. Like you said, it just frees your time up for your other passions – and even some paid employment doing something you enjoy.

    I´ve actually also been thinking of a strategy to accelerate financial independence. It´s a hybrid between dividend growth investing and the famous 4% rule, in which one sells 4% of their investments, which has been proved to be a safe withdrawal rate (albeit in a pretty old and possibly obsolete study). Since I believe that 4% is still quite risky, especially if you live outside of the US, my idea would be to sell a smaller amount of one’s portfolio, in the order of 1%. One could simply cherry-pick the individual stocks in which he/she is making the healthiest profits at that particular time to prevent selling at a low point.

    When you couple this 1% with a decent dividend income (maybe 70-80% of expenses?), I think one could retire a handful of years earlier. In the meantime, dividend increases would catch up and would eventually get to that coveted figure, albeit a bit later than if one continues to invest and reinvest.

    Of course, as that happens, and similarly to your method above, one would be able to withdraw less than 1% the more time that passed.

    I hope this makes sense! I think it’s similar to your idea at heart.

    Thanks again for another great article!

    Dividend Legion

  25. DL,

    That’s an interesting concept, though I think one could easily just achieve a 4% yield on a dividend growth portfolio, meaning they don’t have to withdraw anything above and beyond that. I’m pretty close to that yield level as it sits and I wasn’t even trying. They’d already be “withdrawing” 4% by simple virtue of living off of 4% of the portfolio by way of the dividend income that hits their bank account. And then you have the organic dividend growth on top of that, meaning you’ll likely end up with more income than you could ever spend over time. I don’t particularly like the idea you’re discussing because you’re selling stocks that could, over time, end up being worth much, much more money. The concept discussed above is really only dealing with a small sum of cash up front, exposing one to very little of a cash position and over a pretty short period of time. And I think whatever lack of compounding might be there is worth the extra time (which could be a year or more of your life, free and clear).

    Just for reference, Wade Phau (who was involved in the original Trinity Study) recently took a look at the SWR using current data (because the S&P 500 yield and bond yields are much lower than they were during the historical time period that was used in the Trinity Study) and concluded that a SWR closer to 2% is probably more accurate/safe in modern times:

    http://www.fa-mag.com/userfiles/stories/whitepapers/2015/WealthVest_Sept_2015_Whitepaper/12040-Pfau-Sustainable-Withdrawal-Rates-Whitepaper-.pdf

    Best of luck however you go!

    Take care.

  26. Hi Dm,

    Nice article. I was already thinking of doing such a thing when I’m almost there. I’m so happy I’m learned about the power of compounding early in live but if there are things that can speed up the progress to reach FI I will gladly try them out.

    Thanks for sharing!

    Cheers,
    Geblin

  27. Geblin,

    I’m with you. I’m so glad that I embarked on this journey back in early 2010. I couldn’t even imagine still being in the position I was in back then. But if I can move things along even faster, I’m all for it.

    The great thing about all of this is that, no matter how you go about it, you’re probably going to be in a really great position relative to something like 99% of the world’s population. 🙂

    Best regards!

  28. Hey Jason, glad to see you’re still posting interesting stuff on here to reward me for checking back.

    Thanks.

    I agree that financial independence can arrive before dividends completely cover expenses. Especially because, like you said, the person who is doing this probably has more income in their future anyway.

  29. Grant,

    Thanks for the support. I hope to still have at least a few more years’ worth of interesting/inspirational content left in me. More than 1,000 articles (and a book) into it, I still feel really good. I have so many ideas I want to write about. But the reduced schedule will help me avoid burnout while spreading those ideas out a little bit. 🙂

    Definitely agree with you there. Someone who is capable of achieving financial independence relatively early in life is unlikely to find themselves in a position where they never again add value to the world and, in return, receive value back. Thus, you have a huge margin of safety built right in. But I think, if you were to use this strategy, you wouldn’t really need to worry about that anyway. The dividend growth would very likely catch up pretty quickly, rendering you financially independent with sharply increasing passive income. The bigger issue one might experience over the course of time is what to do with the excess cash flow.

    Best wishes.

  30. I’ve thought about this concept before although with a bit of a different twist. Since my wife and I have a mortgage on our house that’s the largest monthly expense that we have so cutting that out before FI is huge to cutting our FI account balance. $900 per month equates to $300k invested at 3.5% so that’s huge. Once we get to a point where our dividend income can organically grow to cover our expenses then we plan to aggressively pay down our mortgage debt. Yeah it’s “good debt” you get a tax writeoff blah blah blah but knocking out that debt will reduce our passive income requirements immensely. So that’s a no brainer route for me.

    I originally planned on calling it quits once our passive income was 110-120% of expenses but the longer I work and the more I think about it there’s no need to reach that point if you have a cash buffer via your emergency fund and/or your auxiliary fund. The organic dividend growth should be able to make up the difference rather quickly so covering the difference via cash is a great option. Plus this is a simple strategy to significantly reduce the time to FI. You can reach FI 1-2 years earlier without sacrificing much in terms of safety. That’s a big win.

  31. I’m really glad that you wrote about this- although I’m not exactly seeking early retirement, I’ve always wondered why people seem so insistent upon achieving 100% of their “number” before quitting their primary job. With low expenses, you can cover a year’s worth of expenses without too much trouble whether you achieve this through a fund such as the one you mention, or the intention to do a bit of work makes no difference if your goal is transition out of the day job ASAP.

  32. Jason,

    Nice article that lays the math out there. This is a great idea for those looking to be “free” and a logical way to escape the 9-5. Especially those who dislike their job.

    Previously, I was in a situation much like yours, Jason. It wasn’t that I disliked my job, but I truly loathed my employer. I was in the fortunate position have the financial means to leave: no debt and cashed out hundreds of hours of vacation pay I wasn’t allowed to take. With all of the extra cash, I did not budget out and live very frugally, or live on dividends with an auxiliary stash to cover the difference. Instead, I paid forward my home utilities ahead so I had zero expenses except for food. Paid my electric, internet, phone, and water bills out so far, I would not have a bill for a year! With a 5year old daughter, it’s easy to see the money dribble away, so I paid bills. Still had enough to go to Hawaii for a week 2 times in 5 weeks! In short, I got to take the first summer off in around 16 years.

    But I missed having a job. Missed having work friends and found myself bored after the travel and making my yard perfect. So I went out and found something I like doing. New rule for me: If the job even hints at negativity, get out asap.

    So I’m going about it in a different manner. And I am in the fortunate position to enjoy going to work. A very small mom & pop company that includes great benefits and most importantly enjoying being there. Meanwhile, I make about $32K in dividends a year, which I reinvest.

    So I have a different goal set. I plan on retiring by my mid 50’s, pay for my kid’s school, leave her all of the shares, and road trip all over the place.

    Whatever goals anyone has in their life, the info you provided here can definitely help them reach those goals.

    Take care,
    John

  33. So many people in the FI community seem to have a side hustle. They could probably even jump a bit earlier from the 9-5 if they had an aux fund & continued their side hustle. For instance I have been making anywhere from $500-$1000 per month on eBay and Amazon from reselling. I would bet when I get that close to my goal with my dividends I will be doing just what you are talking about. Thinking about that makes me feel lighter, knowing FI can be closer than once thought.

    Best regards

    Andrew

  34. JC,

    I hear you on knocking out that mortgage debt. Might mathematically make sense to keep it and pay it off as slow as possible, but there’s something to be said for the peace of mind that a calculator just can’t factor in. 🙂

    Covering X% above and beyond your expenses via dividend income is, of course, a great spot to be in. But you just have to weigh that against the extra time required grinding away to achieve it. Personally, I don’t think it’s necessary. Money isn’t all that hard to come by if you need it. Time is non-renewable, however.

    Thanks for dropping by. Hope all is well over there!

    Best regards.

  35. Hannah,

    Definitely! 🙂

    Having that “number” is still really important in terms of setting goals, guiding your actions, and putting a face to the problem. You know what you need and then you simply have to reverse engineer things so as to get there. But you definitely don’t need to get all the way there. One can “cheat” the last leg of the race if they really want to. Once you’re collecting that much passive income, you’re already in a financial position that most people can only dream of. In my view, it’s important to make sure you stick to your “enough” and keep perspective all the way through.

    Take care.

  36. For now I want to carry the debt because it’s useful for tax purposes and allows us to invest a lot more each month. But I want to have it gone or at least pretty dang close by the time FI is a real possibility.

  37. John,

    Thanks for sharing that. You’re in an amazing position over there. 99% of the world will never have any idea what it’s like to collect more than $30,000 per year in passive income. That’s a very impressive feat which requires a lot of hard work, planning, patience, and persistence. Congrats! 🙂

    I think your story there just goes to show how “personal” personal finance really is. Everyone’s situation is so unique. The best we can do is just to base our plans and decisions around our individual lives and aspirations, making sure that our actions align well with our values and what we want out of life. I personally couldn’t imagine having a regular “job” ever again, no matter how great the benefits or money, but that’s why I’m doing what I’m doing.

    Keep it up over there. You’ve got a plan, you’re sticking with it, and you’ve achieved incredible results.

    Best regards.

  38. Great article, Jason! It’s always good to have many tools in the tool belt.

    Purely anecdotal, but the scenario you laid out is eerily close to my own situation right now. Been working out a similar “bridge fund” as either an auxiliary fund or as dry powder for next year (depending on whether my contract is picked up for 2016). It’s crazy reassuring to read independent support for the idea out of the blue!

    Thanks for the read, and best regards!

  39. Andrew,

    Definitely. That’s kind of what I was alluding to in the article, and it’s something I’ve touched on quite a bit over the last year or so. There are so many opportunities out there. So many opportunities to convert your time into money. So if you come up a little short for some reason and your calculations are off, the thought of living destitute on the side of the road is just crazy and completely detached from reality.

    The internet has opened up so many possibilities for all of us, so, for me, the idea of working a traditional 9-5 for one more minute than absolutely necessary is really silly. If you’re only short by a couple hundred dollars per month, it isn’t really all that difficult to close that gap via some type of hustle. Of course, the auxiliary fund would make that moot.

    But, like I mentioned, anyone who is enterprising enough to find themselves in such a position to be that close to financial independence is unlikely to be able to figure out how to close the gap creatively or make more money down the line if they have to. 🙂

    Cheers!

  40. RB,

    You nailed it there. I’d rather have an “ace in the hole” and not need it than need it and not have it. You can never have too many options. This is just another option. Another tool in the tool belt. 🙂

    And you laid out a great point. The auxiliary fund could be converted into whatever you need it to be if you don’t spend it all. We’re not talking about a lot of money here because this is only designed to get you to the finish line down the home stretch, but it could certainly become dry powder (or it could be spent) if you end up with a little cash after the dividend income starts covering all of your expenses.

    Thanks for adding that!

    Take care.

  41. You happen to be a major reason I invest the way I do now. I used to look for growth, but after reading your blog, switched out to dividend growth. I have to admit, I got real lucky when I put all my money in TSLA in mid 2012. I had $50K so I got 1800 shares at 28 something a share. All my eggs in one basket. Stupid…but lucky. Well, it grew but after I saw your blog, I freaked out and I sold it all at 218 a share and sort of mirrored many of your picks.

    I am forever grateful to you for opening up my eyes to dividend growth investing. Other than too much AAPL, I am very well diversified and am your biggest fan.

    John

  42. John,

    I’ll never pass up good luck when I can get it. Of course, tough to really capture with any consistency. But good for you for catching a little luck along the way. Certainly doesn’t hurt. 🙂

    Appreciate the kind words very much. I’m just so blessed and grateful to be in a position to help/inspire others. I believe deep down in my heart that financial independence is achievable for just about anyone living in a first world country. But you have to want it and you have to be willing to do what’s necessary. If my journey to FI can inspire others to embark on their own journeys, that’s a huge win-win for us all.

    Best regards.

  43. Hey Jason
    Enjoyed the article like always. Something you might consider also when you get closer your goal and want to be completely free from work is assessing the value of your website. People pay good money for a high traffic high earning website usually at least 10x to 20x monthly earnings. Just a thought not sure if you were going to completely get away from running your blog or not but something that makes you think.

  44. Chad,

    Absolutely. A lot of people out there side hustling away with websites are probably building real assets that could be worth a good chunk of change. The only issue with websites, however, is that the valuations on them are typically quite low. You’re generally looking at 1-2 times annual TTM profit. So when looking at most stocks we buy that are available for P/E ratios that range from ~15 to ~25, most websites are comparatively very cheap with P/E ratios between 1 and 2. Whether or not that’s worth it is up to the individual, but one is usually better off keeping the asset and collecting the (growing) cash flow for life. Of course, one could always sell a website and then go on to build another one. There are so many opportunities out there.

    I recently made some moves with this website, which I already talked about a bit. But what I did was less about money and more about right-sizing my schedule. Financially speaking, the move didn’t help me at all, and perhaps was to my detriment over the long run. But quitting my job in the auto industry and giving up the $60k/year income was to my detriment at the time as well. However, I’m always thinking about way more than just money or I wouldn’t be doing all of this. 🙂

    Cheers!

  45. This is a really great idea that you’ve shared here. I’m nearing the end and have been logging a few thought hours on this myself. I’ve come up with something a little different—but, to each his own—that’s what makes this process so great. We’re all different with the same goal. I’m going to partake in a (strategic) kind of “one-more-year.” My end is January 2019. So, for all of 2018, I will be investing as usual but not reinvesting the dividends. The 2018 dividends will be collected and saved for my next years living expenses in 2019. The 2019 dividends will then be collected in the same way and fuel my living expenses for 2020…and so on. I will always be a year’s pay ahead—because it’s already in the can, so to speak. For me, it will work well. A sizable position in cash will be there also for life’s bumps –or- opportunities ☺

  46. divy,

    Hey, that sounds like a great plan there. It’s really similar to what I’m talking about here, except you’re funding that cash with dividends rather than from job income. But it all works the same. The more cash you have, the more of a drag you might experience on your income/wealth/total return. But I think what’s great about this idea is that we’re really only talking about a little bit of cash and it’s over a relatively short period of time. And the trade-off for more of your life/time is, in my opinion, worth the small stretch.

    Sounds like you should be singing “The Final Countdown” over there. 🙂

    Best wishes.

  47. Yes, I sometimes also thought, what to do when I will come nearby my goal. I want to reach 2.000 €/month and if I will save regularly like today it will take 4 – 5 years. Like you wrote, the dividends will raise every year and if you are at 90% there are a lot of opportunities. I have to pay monthly a rate of 650 €, which will end in nearly 5 years. So after this I have a lot less to pay and have reached the goal.

    I had several ideas like travelling in countries where the costs are cheaper than in Germany not using the normal amount of money. I want to travel anyway, so this could be a nice possibility. Another is just to work some hours/week to close the gap. Thats no sacrifice and there are always some possibilities to find something nice. Your idea is also very interesting. But I believe that I automatically earn some money anyway and its not necessary to work fulltime. What I see: If you have reached 80 – 90% passive income and you don´t sell your shares than you will come to the target automatically. You don´t have to be that disciplined than in the beginning or when you reached 50%. I learned that my portfiolio has its own living regardless what I´m doing and it always tend to grow over the time. Thats a nice learning process. At the beginning you have to do nearly everything to let the portfolio grow (the first 100k), but after this the portfolio ist starting to live more and more organically. Quite interesting.

    You wrote about one really important issue: You have to decide, when its enough. A lot of people, and look at Warren Buffet, are always working a lot to get more and more and more money. At some time if you get more money you really need for your living accumulating is getting really useless. So your idea is completly logical for me to think about what you can do if you are nearly at your target. After reaching the target you are 5 – 10 years later far ahead your target and you don´t have to think about investing any more. You only get too much money you don´t need and for my person I will support with that poor people who will need help or supporting some projects for example. I think, this would be fair.

  48. We have been implemeting a version of the auxiliary fund for a year now and it has worked out beautifully. We call it the “Escape Fund” because it allowed us to hit the eject button from work much sooner.

    You probably don’t remember this, but I pitched a version of this idea to you a long time ago before I posted here as “Spoonman”. In one of the comment threads (at least two years ago), I said that you can make “a mad dash to FI” by deploying a separate pot of cash to cover near term expenses while dividend growth picks up steam. Needless to say, back in those days I was really eager to quite the race.

    I hope more people implement the Auxiliary Fund. At the very least it provides a cushion of cash in case of emergencies.

  49. Hi Jason,

    A great read again as always, and interesting the thread of comments of how people view it and what they are trying – very interesting! For me, I dont think personally I would sleep well at night knowing that my income doesnt cover my expenses, and I had always aimed to have 200% of my income from savings, so that I could reinvest half my income again once I retire, so I could really enjoy some lifestyle inflation (Travelling again, skiing, scuba diving etc. for just a few things I could do more of but for a cost!). I expect in reality I wont ever get to that, but it gives me a really high and tight target to aim for.

    I have got my pension as a backstop at present, my emergency cash fund is growing, as are my savings, but its certainly really helped over the last 4 months when I have logged every penny spent, and every penny of dividend income – its really starting to focus. I need to do this for a full year before I can really get a proper sense of things, so I will need to re-evaluate, but I would rather set myself a huge goal, push myself towards it, and if I can retire earlier, even better 🙂

    Keep up the good posts!
    London Rob

  50. When you say “generating over 7% dividend growth” do you mean that your dividends increased by 7% and that with $630 in dividends a 7% increase would be $44.00?

  51. I think the auxiliiary fund is a good idea. I am doing something like this myself, although I never thought of it as an auxilliary fund, but rather a ‘bridging the gap’ fund for the years between my target FI date and when my privately-managed pension kicks in.

    Looking forward to hearing your other ideas along these lines,

    Cheers

  52. olli,

    You’re definitely right. There are so many opportunities. Like I wrote about a while back when discussing how freedom exists on a spectrum, it’s not binary. If you’re 90% there, closing the gap isn’t really all that difficult. Of course, you can continue to work/save/invest until you close the gap via passive income, but it’s really not necessary. Thinking outside the box is just as useful as the saving and investing, in my opinion. This is just one example of that. Geographical arbitrage (like traveling to or living in cheaper countries) is certainly another one. Monetizing hobbies/interests is also possible.

    Sounds like you’re right on track over there. Keep it up!!

    Take care.

  53. Spoonman,

    Sounds like we’re totally on the same page!

    I don’t remember that specific comment, but it obviously makes a lot of sense to me. So glad that it’s working out so well for you guys. It’s one thing to hypothesize and postulate, but it’s quite another to actually apply an idea in real life. It’s the application that I think worries some people, pulling the trigger before they’re 100% there. But if you don’t trust that dividend growth to come about, then you might want to rethink the entire strategy. If you don’t think it’ll come about in Year 1 or Year 2, then how much confidence in the strategy do you have looking out over 30 or 40 years? Some people need that big margin of safety. But then again these might also be those people that suffer from OMYS and finding their “enough”. You and I don’t have that problem, that’s for sure.

    You’re “thumbs up” really validates this concept since you’re applying it right now. 🙂

    Best regards.

  54. Rob,

    Hey, this idea isn’t for everyone. I personally think 200% coverage is vast overkill, but it’s all about being able to sleep at night. If you need 200% or 300% or whatever it might be, then that’s just what you need. But that’s what’s so great about personal finance in general and this strategy specifically – it can all be customized to our own unique situations. 🙂

    I personally think even with pulling the trigger early like this one would still eventually end up with far more cash flow than they can spend, which is certainly a great position to be in.

    Thanks for dropping by!

    Best wishes.

  55. jon,

    The $630 was assuming this person was saving 50% off of $3k in net income and investing the difference. That’s $18,000 in a year. At a 3.5% yield, that’s an additional $630 in annual dividend income.

    The numbers are already about as clearly laid out as I can get, though I was pretty conservative in some spots.

    Take care.

  56. TV,

    Yeah, that’s exactly it. You can call it whatever you want – bridging the gap is exactly what that cash pile is designed to do. I just think that it’s not necessary to wait until your expenses are covered by X% over 100% to pull the trigger. Once you’re within sight of the finish line, this will get you there. 🙂

    Best regards!

  57. Very impressive article. I’ve always been leaning on real estate rentals as my passive income stream. However, your site and posts really got me thinking more about leveraging dividends. I’ve already started to build that up as a second stream. I’m with you on already being on the path to financial freedom, but just craving to have it come earlier than later. Thanks for article!

    — Jim

  58. Very interesting concept Jason. I don’t think I could pull it through right now, but definitely something to look for sooner than later. Thank you for sharing this, could be very useful!

    Cheers,

    Mike

  59. Jason,

    I am extremely impressed with your dedication and persistence to your admirable goals. You have developed a great system of skills and values to allow you to be in a position to achieve your goals and whether you achieve your objective at 38 or 40 or 42 is probably irrelevant. You are positioning yourself to live the vast majority of your adult life in way that you dream, not at the mercy of some one else. I actually retired 8 years ago at 53. I was very fortunate that I was in a position to easily save a lot of my income..more about being at the right place at the right time.

    Speaking from a lot of painful experience, there is an area in your budgeting that needs to be approached with great conservatism and that is medical costs and health insurance. If an individual is in a position where they have to secure individual medical insurance in the open market, it can become very expensive as you get older. Before the Affordable Health Care Act was implemented in 2014, individual health insurance plans for middle age people with pre-existing conditions could cost up to $30,000 a year (yes, $30k, that is not a typo,) if it was obtainable at all. These were high deductible plans with excessive “out of pocket costs.” Even for healthy people, as one ages, the rates were expensive and increased rapidly due to age. As a 60 year old, I am currently spending $8,000 a year for what I call “wealth insurance.” The cost of this plan has doubled in the past 5 years. This is a high deductible plan that pays 0 benefits until I have incurred $5,000 of medical expenses. Thankfully I am very healthy and do not need to use my insurance.

    Before one “assumes away” the Affordable Health Care Act and then simply assumes they will not pay for health insurance when it becomes too costly, they would need to understand the cost of a few nights in the hospital. Three or four days of hospitalization due to a uncomplicated unforeseen emergency or accident will easily cost one between $50,000 and $100,000 in the absence of any insurance. I recently encountered a man who shared his story of his “$80,000 beer” with me. He had finished a round of golf and was probably dehydrated. He sucked down his first bear and stood up for a second one when he fainted, hitting his head and knocking himself unconscious. He ended up in the hospital for 3 days with a concussion. A month later he nearly passed out again when he received a bill for over $80,000 from the hospital. Given that one would be relatively well off if they have patiently accumulated a reasonable portfolio of stocks, then the hospital will demand payment and purse their rights through every avenue available to them.

    Even though the reported inflation numbers are extremely low, one will need to budget for annual double digit medical cost increases if they are to have a financially robust retirement.

    I find your writing to be extremely informative and enjoy following your blog!

  60. Hey Jason,
    Fantastic site. I just spent almost two hours reading your older post.
    Sorry if you adressed this point already but I could not help but wonder why would you hold on to a stock like Visa if the goal is to generate passive income. V pays less than 1% and you have no issue with diversification. Why not close that positing and increase one or several holdings that provide a higher yield?
    Thanks!

  61. Jim,

    Thanks so much!

    I think it’s food for thought. There are so many ways to think outside the box, regardless of your strategy and goals. This is just one example. 🙂

    Thanks for dropping by!

    Cheers.

  62. Mike,

    Definitely not a plan for everyone, and certainly not for you at this particular time. But who knows what opportunities/flexibility the future will bring? 🙂

    Best regards.

  63. Mike,

    Thanks for sharing your thoughts there!

    In the end, we can’t plan for everything. There are always unknowns. But I think with the right lifestyle, one puts themselves in a pretty good position in terms of avoiding excessive health-related expenses. And I can’t think of a better idea to avoid expensive healthcare problems down the road than to retire early. You avoid the stress of a workplace, you’re freed up to eat better and exercise more than ever, and you’re flexible enough to even seek cheaper healthcare options abroad when you don’t have a 9-5 to worry about showing up to. Thinking outside the box and being flexible can be worth more than money.

    But I addressed all of that already:

    https://www.dividendmantra.com/2014/04/three-reasons-im-not-worried-about-healthcare-costs-in-early-retirement/

    Moreover, someone in a position to retire early/achieve financial independence early is obviously financially well off. If you hit FI at 40 with, say, $500k in liquid assets, you’ll likely end up with something like $2 million by the time you’re 60, even while spending down the dividends. If all of that isn’t enough, you likely have some kind of terminal issue, which can’t really be predicted.

    Cheers!

  64. Jesse,

    Thanks for the kind words. Glad you’re enjoying the content! 🙂

    As far as Visa goes, you have to remember the word “growth” in dividend growth investing. It’s not just the yield that matters but also the dividend growth. And there are few companies as primed for outstanding dividend growth as Visa.

    It really comes down to finding that right mix of yield and dividend growth, which will naturally vary from person to person. I have to think about not just the Jason of 2015 but also the Jason of 2050. I need income now, but I also need income looking out 30 years from now. And since I don’t know what kind of growth to expect out of my expenses (because, for instance, I don’t know what inflation will be over the next three or four decades), I need to plan for both income and growth.

    I’ve discussed that a few times now on the site. This is one such article:

    https://www.dividendmantra.com/2014/06/a-multistage-rocket-model-for-a-dividend-growth-stock-portfolio/

    And you can see my analysis of Visa here:

    https://www.dividendmantra.com/2014/07/recent-buy-8/

    Stay in touch!

    Take care.

  65. Jason,
    I have to say this is the first article that on a base level I disagree with. I have a slightly different definition of success as I have goals for my monetary value to significantly pass on but if I didn’t, I see where this could be really appealing. I wouldn’t plan on Obamacare or SS being around forever but…jesh, its an interesting view point but not one I ever expected on your blog…
    I know your articles have been getting more liberal as you’ve started tasting success but I feel like I need to ask; Now that you are in a partnership is someone else writing articles under your name?

  66. JD,

    No problem with disagreeing with an article, but I frankly don’t appreciate you questioning the authenticity of the content. Yeah, I want someone else writing content under my name. Just what a writer dreams of!

    I was going to discuss the rest of your comment, but I’ll just leave it at that. I really have no desire to converse with someone who has no idea what my content or comments read like – if you can’t tell it’s me writing, then you haven’t really been paying attention to anything I’ve been doing. As such, it would be a waste of my time to go any further than that.

    By the way, another reader/dividend growth investor employed this strategy to great success and was able to quit the 9-5 early (which is what the idea is designed to do).

    Take care.

  67. Hi Jason,

    You are right, it is a huge overkill, the aim being that it would increase rapidly each year to eventually allow a consumerist luxury lifestyle! Since i started tracking my monthly expenses and dividend income and growth, then yes this is making me re-evaluate, however it is also giving me a good kick to make sure that I have enough put aside for when i do finally pull the trigger. For me, knowing that I was reliant on the dividends growing, I just wouldnt be comfortable with – but as you say thats each individuals circumstance 🙂
    Cheers
    LR

  68. Jason,

    Way to turn OMYS into a new acronym- OYLS (one year less syndrome)! Sometimes we are so focused on deploying that chunk of cash into more investments that we forget that just holding it outright can make for a nice fund to bridge the last mile until the passive income gets to where we want it to be.

    I will consider to use this one day.

    -Mike

  69. While I am not on the dividend track, I do have plans to use something similar to an auxiliary fund. I have been using the term buffer, but would like a new word:) My plan is real estate focused, but could be used to speed up the FI plan. In my case I will use this buffers at FI as additional monies if my plan fails or life happens. Either way its a great concept to use.

  70. Your well written article demonstrates once again the “secret sauce” of DGI. Growing dividends. What did we do to earn that growth? Nothing. Love it!

  71. This is a pretty interesting idea, but not one I think I’m going to employ. At least not yet. I prefer to have my margin of safety. Plus, the money that’s put in the auxiliary fund could be invested in dividend growth stocks instead, right? It seems like you’d get better results just doing that.

    That said, though, if you think you are “close to being close to the end”, this might not be a bad idea. Some people might have the savings or other assets to retire when their dividends cover, say, 90% of their income. That auxiliary fund might be able to tide them over until then. But you’d want to get to the point where’s you’re only months or a year away. If you have an auxiliary fund large enough to cover the gap in your expenses for, say, ten years (just threw that number out there), then you have enough money into invest in MORE dividend growth stocks or other income assets.

    This is actually a pretty good idea, but I don’t think I’d really start building it up until you’re past the middle point of your dividend journey. If you’re saving even a moderate chunk of your net income, you should have a small gap between your expenses and your dividend income, in which a very small and quick to build auxiliary fund is all you need. Anything bigger than that, and you need to either cut your expenses more or invest more

    I’m not sure if you mentioned that in the article, Jason, but going by your numbers, it seems you were definitely implying that. So we might be on the same page there. And I’m very glad that you mentioned that this is separate from an emergency fund and one should not be mixed up with the other.

    Sincerely,
    ARB–Angry Retail Banker

  72. Great side Jason 🙂 You can do even more, you can use your freedom fund money that way you could win 1 more year. If you need 18.000/year and you earn lets say 12.000/year (only 1000$/month not 1300$) you will need to take 6K from your fund, but if you earn 12.000/year your fund is likely something around 400.000 $. That means it will decrease only to 394.000$ but if you take that 7% dividend increase then your net dividends next year will increase from 12.000 to 12.647 (!) meaning even if you take away small part of your fund dividends will keep on growing and in 7 years you will actualy have it reached your 18.000. Well if taking inflation into account maybe 10 years, but still you dont need to work that 4-5 extra months just for that extra cash fund and you can retire even earlyier. I have made calculations that this works even with 300.000 investmants and 9.000 of annual dividend income starding with -9.000 first year. Were even then dividends will continue to grow (based on 7% increase asumption) and catch up but this time only in 15 years. Breaking point is somewere around 270.000 and 8.000 dividend income where you Jason actualy not very far from 🙂 You can basicly retire in 1-2 yeras not when your 38 😉

  73. Steven,

    You can look at the money in a number of different ways, but it’s essentially that temporary buffer between passive income and expenses, designed to spend down until the passive income exceeds expenses. I think, if used properly, it could definitely speed things along right at the end there. But you’d still want cash set aside for emergencies and/or other issues, which is why I mentioned this was a totally separate concept.

    Thanks for dropping by!

    Cheers.

  74. RTM,

    Well, as long as those dividends continue to grow, one could use this strategy without concern. Of course, if you can’t rely on the dividend growth for the first couple years, then I’m not sure how much faith you’d have looking out 30 or 40 years. 🙂

    Cheers!

  75. ARB,

    I think you might be reading the article incorrectly.

    “This is actually a pretty good idea, but I don’t think I’d really start building it up until you’re past the middle point of your dividend journey.”

    This is a concept I would only recommend once you’re near the finish line. That’s why I specifically used numbers that are based around someone being about 90% of the way there. If you use it too early, you’re going to be sitting on a bunch of cash, which is going to hurt your long-term total return, income, and income growth. At that point, you’d be essentially funding too large a part of your FI with cash, which isn’t recommended. This is just a way to sprint to the finish line once it’s within sight. I basically showed someone who’s about eighteen months out, and this concept shortened that time frame by about a year.

    Best regards.

  76. furidolt,

    I wouldn’t recommend doing that, but that’s just me. That’s essentially spending down capital and reducing the size of your asset base. I’ve discussed why I don’t agree with that ad nauseam at this point, but I suppose every investor has to find what works for them.

    This concept works well for me because it’s a rather small chunk of cash we’re talking about and it’s not very long that you’re exposed to it. You’re not selling down assets, only trying to bridge that gap temporarily. You then get to retire even earlier with all assets intact and growing that income base for you.

    But to each their own. 🙂

    Take care!

  77. Mike,

    Ha! Yes, that’s exactly it. OYLS!! 🙂

    I’m certainly guilty of focusing so heavily on the investing side of things, but I think, once you really wrap your brain around this idea, this makes a lot of sense. I truly believe it could shorten the journey by about a year, depending on your own situation. I wouldn’t recommend going any further out than that because of the additional exposure to cash, but a little cash near the finish line to get you to where you want to be could definitely shorten things down.

    If there was ever anyone guilty of OYLS, it’s me. This is just another way to think outside the box to get things done.

    Best wishes!

  78. Jason, did you receive your TD Bank quarterly dividend today? I am curious about how much foreign tax was withheld from your dividend. My brokerage deducted 25% of the dividend for foreign tax. I suppose I will file my 2015 taxes to get the amount refunded, but, ouch, I thought they only withheld 15%. The upside is my TD stock is up about 7% from where I purchased it.

  79. Great article. Any help I can get… Working the corporate grind is rough, and I appreciate all the shortcuts I can get!

  80. litetimeandmoney,

    I hear that 100%. Early financial independence is already a wonderful hack/shortcut, but I think this concept can shorten the journey just a little bit more. Every little bit helps. 🙂

    Best regards!

  81. DM,

    Nothing wrong with enjoying things that are nice and may cost a lot. Only not at the expense of not being able to afford it or choosing it over freedom. Freedom should be achieved first.

    I am definitely a big fan of using cash flow to achieve freedom! Especially when it grows on a regular basis without you doing too much except watching it grow month in and month out.

  82. SWAN,

    Definitely. Everything has a trade-off, although I tend to find most material things not being worth the trade-off of my time/freedom. 🙂

    I bet there are few bigger fans of passive, growing cash flow than me, but I think this concept of using a small sum of cash (rather than turning it into cash flow) to get to the finish line a little faster is pretty neat. I’m almost certainly going to use it myself to speed things along. I’m currently boosting the overall portfolio yield slightly, and this concept (combined with a few other ideas I have in mind) could shorten the journey somewhat significantly. We’ll see how it goes!

    Thanks for dropping by. Hope all is well.

    Cheers.

  83. This is an interesting proposal. This is another story on closing the retirement gap. I started dividend investing about four years ago after we paid our house off. It was much easier for me to invest with a long term perspective with no debt. At that point we lived on 50% of our combined incomes, investing the other 50%. Today we are living on about 40% of our income, due to salary increases and passive dividend income growth. We could probably live on 30%.

    I ran the numbers on my pension last spring and realized that the dividends we collect and my pension cover 100% of my income. What is interesting, is it did not take long to cover the gap between my pension and 100% of my salary with dividends. Having no debt was the thing that really made this come together. What is freeing, is that I don’t have to go to work for the next 10 years to try and close the 40% gap with 4% annual incremental gains in my pension. I am planning on retiring this next June at age 53 and my wife is going to keep working until she wants to quit (she does not have a pension/she has a 401a). At this point she likes her job. Next year we will have close to the same income we had with both of us working. My new job will be to manage the finances and make sure dinner is on the table every night!

    We are both teachers who have had average incomes. We did not inherit any money. We have put two kids through college. We just have always done a budget and lived below our means. And most important, we have had a plan that works for us.

  84. Brad,

    “We are both teachers who have had average incomes. We did not inherit any money. We have put two kids through college. We just have always done a budget and lived below our means. And most important, we have had a plan that works for us.”

    You nailed it right there. Thanks for sharing that.

    Incredible things are indeed possible for most of us living in a first world country. There’s so much abundance… so many opportunities out there. You don’t need to earn some crazy income. You just need to live below your means and intelligently invest the difference. Most of the rest is just noise. And finding a plan that works for the individual is also key. For some, saving 70% is easy. For others, it’s difficult to go past 40%. But as long as you’re absolutely doing the best you can and you’re on track for the long-term plan, that’s really all you can ask for. Your benchmark should always be your best, not what someone else is or isn’t doing.

    Enjoy the fruits of your labor. 🙂

    Best wishes.

  85. Jason
    I have always done this..kept extra cash above and beyond my emergency fund.
    Yes ,it is not invested and growing.. I always thought of it as an investment in the future. These funds I refer to as my “acorns”
    I have been using these acorns for a couple of years since retirement. I am now ready to tap social security.
    These acorns served me well. I still have some left.
    I always earned too much money as I was wise with a buck and lived below my means

  86. Hi Steve,

    We are living in Switzerland for the last 3 years, before we were expat for 3 years in South Asia.

    Cheers,

    RA50

  87. Amegalo,

    Definitely. I look at my cash the same way. Every free dollar I have after expenses are paid are little acorns I can use to plant that dividend tree, which itself will eventually grow branches that bear dividend fruit. 🙂

    This concept takes that a bit further by saying that the cash you set aside is going to be spent down over a short period of time to cover that gap rather than invested for the long haul, but I think what this shows is that there are a lot of ways to think about cash, saving, investing, and achieving financial independence a little faster. I personally vastly prefer growing cash flow to cash, but I think, when used properly, cash can be really effective all by itself.

    Thanks for dropping by!

    Cheers.

  88. Interesting viewpoint. I do get it, and I also get the whole putting cash to work for you by buying more dividend paying stocks. I think the takeaway is as one commenter put it; the dividend growth. You mentioned it in your previous articles as the “secret sauce” and I couldn’t agree more.

    If one pays off their debts, and lives below their means, one can invest ever increasing amounts of capital every month. Along with the “secret sauce” and time this can develop into a huge financial nut. Ever since you’ve had the section on dividend growth, I’ve examined the growth on my portfolio and I have couple of stinkers… No growth for 8 quarters! Anyways, as long as you have a sizable portfolio, you can take a “breather” from monthly investing and that portfolio should do well by itself via reinvesting the dividends, and the organic dividend growth. It’s like planting a tree. You nurture it and water it when it’s young; and through the passage of time, it now grows on its own and provides you with plenty of shade.

    I have a few more debts to take care of, but my goal is that by the end of next year, I’ll hopefully have 40% of my expenses covered via passive income (via dividends and rentals). At that time, I’m looking to transition into part-time work to get a taste of early retirement. Thanks again for another motivational and thought provoking article.

    j

  89. j,

    Indeed. That’s exactly it. The dividend growth is the secret sauce here. Once you’re 90% or so of the way there, that secret sauce should keep working for you, allowing that dividend income to overtake your expenses in short order even if you stop acquiring assets. The tree will continue to grow with or without you. And so this auxiliary fund concept is just a way to temporarily bridge that gap, knowing that the secret sauce will get you there anyway.

    Some will want to continue working and investing until expenses are covered all the way or more, but this could be a really effective shortcut for those that are sick and tired of the grind. 🙂

    Thanks for stopping by!

    Best regards.

  90. Hello, Jason.
    You just posted another amazing article. I thank you so much. I am in this adventure mostly all by myself; I have a family who adjusts to budget and shares a similar view, but they are afraid of dividend investing, so I keep most of the process to myself. That is why your articles extra-inspire me. And today I am so excited because you just opened my mind and I have been doing numbers and maybe with an auxiliary fund I just started yesterday, if I put 50 euro per month in it, I could start working partime two years earlier (that is to say, in six and a half years), liberating a good portion of my weekly schedule. I am so grateful to you, Jason. Best wishes to you.

  91. I contacted my brokerage. They shot me this e-mail message:

    “The foreign tax withholding on your TD Bank stock is not a Folio fee but rather a TD Bank fee. Please contact TD Bank shareholders services to find out why the fee was 25% and not 15%. Please let us know if you have any additional questions.”

    Hmmm, so they put the blame on TD Bank for the 25% withholding. It is not a lot of money that is being withheld, but this irks me a bit. Probably will have less inclination owning foreign stocks for their dividends based on this, or in the very least through this brokerage.

  92. IW,

    I totally hear you, my friend. I, too, am “alone” in the sense that I’m really the only one saving and investing like I do. Nobody else in my personal life shares the passion/drive/commitment/vision. Fortunately, it’s not necessary. 🙂

    Glad you found value and inspiration in the article. That’s all I try to provide. I’m so confident of this concept that I personally plan to use it for my own journey, and I really think it’ll shorten things down by about a year. Of course, I’ll document that as I go.

    Best of luck over there. Keep chugging along!!

    Cheers.

  93. Mark,

    That’s strange. I’m not sure what to tell you other than to contact TD Bank’s investor relations line directly.

    I have TD shares in two brokerage accounts. Both just charged me the 15%. I’ve never heard of an additional 10% fee on top of that.

    Best of luck!

    Cheers.

  94. I am trying to save 65% of my after tax income lately. Hopefully this goes even higher say 75-80%. If my wife joins in contributing financially, that will be awesome as well!

    Thanks for sharing!

    BSR

  95. BSR,

    Congrats on that savings rate. That’s really impressive!

    I know firsthand how difficult it is to surpass 50% on the regular basis, and every incremental percentage increase past that point can be really tough. A high income helps, but that foundation of living below your means has to be set up correctly first.

    Looks like I’m going to hit a 70% savings rate this year for the first time ever, which I’m excited about. Every day is an opportunity to save and invest, putting that future you in a better position. 🙂

    Keep up the great work!

    Best wishes.

  96. Great article
    Gives me inspiration to continue the dividend journey on my end. Like the numbers in the example. Glad someone else thinks about dividends the same way as me.

  97. Hi Jason,

    You have written a great post, congratulations!

    I just have one doubt: what will happens if when you retire with 1500$/month we start another financial crisis and dividends instead of grow, start to decrease (as in the last crisis for lots of companies)?

    Don’t you think it’s better to have a +X% of dividends per year to cover this kind of things?

    Thanks!

  98. Let me be the first to let you know that Jason doesn´t care about your question or post. The new dividend mantra team treats this blog like a steaming pile of sh*t.

  99. I am not quite sure I have the fortitude or capacity to manage and be a individual stock picker. I realize this may make my yields and growth less than ideal. Also, I constantly read how chasing dividends in a time when interest rates will be rising may be folly and that these funds tend to under perform the overall market. But as a young man of 30, I am rather open to suggestion. I am often told to go after total return and not “yield/income” as well.

    The two funds I am looking at have .10% expense ratios and are VIG which has a 2% yield, but is based on dividend appreciation, and VYM, which is just a bit above a 3% yield after fees. If you had to recommend an elf fund for someone of my particular persuasion, what would you suggest? They both hold solid companies. VYM is newer. Both are rated as 4/5 in terms of risk. Thanks.

  100. The only useful thing remaining on this website is the blogroll. Every time visitors comment negatively they take it off, but there is also zero effort made to put anything new out. Shame on the new owners, way to destroy a once successful site.

  101. And way to sell out Jason F. ! What is the point of building the dividendmantra brand, marketing a dividendmantra book which would have guaranteed a steady stream of income only to sell everything for one big payday. Makes you wonder if this was just a story for the readers or if he really was a regular guy trying to build wealth

  102. You see this all the time. You can be anyone you want to be on the internet. It’s depressing because it ends up really failing a large group of people who have the hope that it’s all real and that we can support such a person. I don’t know what really went on and I don’t think any of us really ever will but there are a few things that are for sure. One, we won’t be seeing Jason again on this blog – he sold it and that’s it. Two, he’s still active on Twitter/Facebook and if you want to follow him there, you can. Three, life assures you that you will need to make your own conclusions and try to grab the best of whatever is presented to you. If he really was a fake, take the good parts of his act and try to make that a reality in your own life instead of dwelling on the fact that he seems to have deceived a very large amount of us.

    Hope for the best but prepare for the worst, right?

    -DM

  103. Does anyone else find it ironic that this post is now at the top of the blog? They should re-title it, ” I sold my blog to create an auxiliary fund”.

  104. PS – Jobo still sucks. He absolutely, positively, 100% continues to suck. He is steadfast in his mission to keep sucking, trolling and taking up space. He’s also long RIG, KMI, and ARMF. Mainly because he sucks and he wants his portfolio to match.

  105. It’s all a game of cups. I just wonder if they’re going to start posting anything new now that things are squared away between the owners and Jason. If this site is to continue working, they’ll need new content or it will turn over. Maybe they’ve made enough off ads to this point though to make up for it.

  106. How dare you, sir!

    I’ll sue you for your slanderous and libellous comments! I refuse to be associated with those stocks that you own. Rather, I am long nsrgy, ko, pm, and others.

  107. I don’t know Jason or care much about him one way or the other. I do find it entertaining seeing the vitriol and hatred towards jason by people who claim to have always hated him anyway. It’s entertaining to troll such folk.

  108. Nobody seems to have considered the fact that Jason could be some type of Internet-based “performance artist.” For all we know, Jason still owns his website but temporarily made it crappy as part of an elaborate joke. Maybe he is sitting naked on his couch reading these comments while playing with himself?

  109. Jason pretty much shot himself in the foot. Write a book that shares the name of your blog, and then watch your blog go down the toilet after you sell it. Just another…flash in the pan!

  110. I’ve decided that I must initiate litigation against this impostor jobo. I can’t abide this dilution of my brand and libelous comments on multiple threads!

    I will vigorously defend my rights in open court and very much look forward to slamming fake jobo with a sizeable judgement, not only to cover my damages but also to sufficiently warn other fake jobos against this pernicuous behaviour.

    I absolutely, steadfastly will not give up in my fight until justice is served. I wil remain resolute agsinst all fake jobos and will emerge victorious!

    Good day!

  111. I’ve decided that I must initiate litigation against this impostor jobo. I can’t abide this dilution of my brand and libelous comments on multiple threads!

    I will vigorously defend my rights in open court and very much look forward to slamming fake jobo with a sizeable judgement, not only to cover my damages but also to sufficiently warn other fake jobos against this pernicuous behaviour.

    I absolutely, steadfastly will not give up in my fight until justice is served. I wil remain resolute agsinst all fake jobos and will emerge victorious!

    Good day!

  112. That post clearly shows that you are an impostor – making empty threats.

    What is the proper venue for your lawsuit? What damages do you have? May I please ask which brand you are protecting?

    I was unable to find comments that fit the definition of libelous.

    Best regards,
    Jobo Hobo

  113. If he sold the website, it means that he was made an offer he couldn’t refuse. His portfolio had taken off and he had a huge fan base so he was bringing in a very steady stream of revenue. A person who has waited for his portfolio to get big over a long series of time without making too many mistakes would be willing to wait for a payout that would be worth his time. If that’s the case, he took a big cash payout on it, could reinvest it, then make more money off further dividends and ultimately recreate the website later with enough people still following him.

    I don’t want to sit here and debate as to whether it was meant for huge gain while throwing everybody else under the bus. I’d rather assume that he did what he did with the best intentions and it simply went astray before he knew what had hit him. I guess we will see when/if he starts a new blog and you and I can choose whether to continue following him on the new one that will ultimately follow this huge mistake.

  114. Shortsightedness. You can’t put a price tag on this fiasco and the damage to his reputation.

    What would have happened if he kept this site? Readership would have probably continued to grow, and he could have monetized it more to create a healthy income stream that would last many years to come. He took his lump sum (which gets fully taxed, btw), and cut and ran.

  115. Nothing change’s the fact that Jason lied to everyone when he announced a “partnership.” At best that was deceptive, because now it is widely accepted that he actually sold the site. And he did. Domain name switched ownership, his goals and income pages were taken down, along with his bio.

    Jason is a master in deceiving people.

  116. He isn’t clever enough to be a master of deception. Master of flaking out and running away is more appropriate.

    Managing the backend of a blog is hard! Personal relationships are hard! I’m going to sell my site, lie to my readers, screw the new owners, ditch my wife, and run away to Thailand! Then I’ll start a new blog about how I’m financially independent and living the good life in a foreign country.

    Everything will magically work out. The backend of blogging will somehow be easy. My readers will never figure out what I did and all come running back to me. My stocks will never cut their dividends. Thai women are cheap and I’m a rich American with my low 6 figure net worth. Thailand will magically become a politically stable first world country. And if everything gets scary or hard, I’ll just run away gain.

  117. Any one of us could potentially be right about this. Only time will tell. His track record with running away is however pretty well proven. He does state on his Facebook that he decided not to go to Thailand though so maybe he’s learned his lesson? Let’s try to believe in the good in people for a change.

  118. Or maybe everyone should realize that he’s playing damage control after people started waking up to his sketchy behavior.

  119. The new owners should make a new post in satire form: Recent Sale: Dividend Mantra(DM)…in it “Jason” can explain how DM’s P/E had grown too high, the yield was falling, and a dividend cut was likely, a cunning sale at just the right tiume all based on market fundamentals and astute reasearch.

  120. I just took my car to the dealer for an oil change, Jason was very nice and took good care of my ‘stang.

  121. What!?!

    Don’t spam us with your filth!

    I absolutely, steadfastly, resolutely, 100% refuse to follow the link! I will not buy your book! Nothing you say or do can induce me to do so!

    God day!

  122. It’s very HARD to escape the allure of money, especially if you don’t have much or didn’t come from much.

    Sounds like Jason got a great deal. Money is more important when you haven’t achieved financial freedom yet.

  123. To make a long story short, as best as I’ve been able to piece things together, it went down like this.

    Jason got tired of blogging because the backend work (website work, comment replies, etc) was too hard. He has another writing job for Daily Trade Alert where he throws up some formulaic dividend stock analysis every week and there are no comments to reply to and no backend issues to deal with. I think this gig pays well too.

    So he sells his site. But he doesn’t want to tell people that he sold his site, so he tells us it’s an exciting new beginning and there will be multiple authors, and he’ll keep writing, and there will be rainbows and unicorns.

    Then he takes the money from the sale and goes on a shopping spree for mostly questionable dividend stocks. Given the boost in his portfolio, most people guess he sold the site for around $50K or so (give or take, I’m not a blog valuation expert).

    About the same time, Jason gets tired of life in general. So instead of staying on with the new owners, he just ditches them and tries to get everyone to think that they’re the bad guys who flaked out on him. The new owners are certainly naive, should have done a lot more due diligence, and should have gotten a contractual agreement to keep Jason writing – but I no longer think that they’re the bad guys.

    Then Jason starts dropping all these messages on Twitter and Facebook about how he is going to move to Thailand, start a new blog, and talk about how magical financial independence is. The only catch is he’s going to ditch his wife and her kid to do it.

    Keep in mind, Jason flaking out and running away isn’t unprecedented. He moved to FL with no job, family, or anything other than the promise of better weather and a lower cost of living. He quit his regular job with only the hope that his writing would pay the bills. He ditched his wife (then girlfriend) once before to move back to MI only to come running back to FL after a few weeks. Maybe because he was still in love with her, or maybe because he had a spat with his family. Both? I can’t tell based on the posts.

    Three days before his flight to Thailand, he changes his mind and says he’s staying with his wife (although no one can find a record of a marriage certificate) in FL and still going to make some kind of a new site. Meanwhile this place continues along on it’s path to irrelevance and eventual oblivion.

  124. So Jason was thinking of leaving his wife who is 20+ years older to move to Thailand? I’m surprised he hasn’t already tired of being married to a woman pushing 60. Why did he marry her in the first place?

  125. I agree Sam. When you don’t have anything $75K-$100K seems like a lot of money when in reality it isn’t even a years salary.

  126. How dare you say this when you are, in fact, the impostor!
    Again, how dare you!

    Good day to you, sir!

  127. How dare you impersonate me and make these libelous and slanderous comments!

    How dare you!

    I’ll fight for my rights, defending them vigorously in a court of law! You will be hearing from my lawyers in the near term.

    Good day to you!

  128. Why is that mean? He is just frugal. Living in the U.S. with an old wife might be cheaper than living in Thailand and using a lot of money on thai pussy 🙂

  129. Aside from all the childish comments coming from Jobo and his surrogates, the fact remains that there is no record of Jason getting married in Sarasota county records. Look it up either via his last name or Claudia’s (Bowen).

    This probably explains why he was tempted to cut and run to Thailand without any concern for his so-called “marriage.”

    It also illustrates how flaky his character is, and why people need to call into question how exactly this website has crashed and burned in such a short period of time. If he lied about his marriage, then he’s probably lying about what happened between him and the purchasers of this website.

  130. Slander – oral defamation
    Libel – written deformation.

    I find it impossible that comments on this forum are made orally.

    Specific damages must be proven.
    Additionally the comments must pass certain tests to even be considered deformatory, but your imaginary counsel probably already told you so.

    This assumes Jobo lives in the USA. Each state has different law/code. If Jobo were to live in Canada or Europe different standards apply.

    May I know in which country and/or state you’d like to sue Jobo?

    Sincerely,
    Jobo

  131. meh, not going to divulge my location, though you might guess it based on the spellings of certain words.

    How dare you, sir!

  132. Really, though, why are you so militant in trying to dig up info and prove something that doesn’t matter. Who cares?
    It would appear that the one with the character issue is you. I urge you to look in the mirror and reflect on your childish behaviour! Spend some time working on yourself and master your rage and negative emotions! Step outside and acquaint yourself with nature!

    I’m starting to think bart is either a bitter Dividend Mantra or else Jason in disguise, trolling his old site!

  133. What!?!

    How dare you, sir!

    I find your comments to be BOTH libelous and slanderous, despite what the amateur lawyers are saying.

    I won’t stand for this – I will fight for my rights and defend my brand vigorously in a court of law!

    God day to you!

  134. How dare you sir!

    You have besmirched my good name!
    Both libelous and slanderous at once!

    Good day!

  135. In case anyone didn’t see it in the other post, here’s Jason’s latest tweet:

    –“My brokerage account has around $225 more today than it had yesterday. Dividends love me and I love them. Happy Valentine’s Day to me. :)”

    What a narcissistic loser. Instead of wishing Happy Valentine’s to his so-called “wife,” he wishes it to himself.

    Just goes to show that Jason only cares about his money and no one else.

    Cut and run baby!

  136. Or perhaps he wished her happy Valentine’s Day in person rather than over Twitter. Or maybe not. Who cares? You’re a sad, sad individual.

    Furthermore, I refuse to read any more of your posts. I simply won’t do it and I won’t be back here. I cannot be induced to change my mind.
    I absolutely, 100%, steadfastly refuse to be involved with your nonsense for even a second more. I urge all others to follow my lead!

    Good day!

  137. You’ve said that a million times already. You have told us you were leaving and then you end up back here. Very flaky behavior, and reminds me of someone else we know. Oh yeah, maybe you’re just one and the same…

  138. Good for you. I, the real Jobo, most certainly do not!
    Your libellous and slanderous comments will result in legal action being taken against you.

    Good day!

  139. How dare you sir! I suspect there are at least 3 different impostor Jobos. When in fact I am the only real Jobo around.

  140. Diversity is America’s greatest weakness. Whites of European descent have allowed our own race, culture and way of life to be infected with diversity in both here and in Europe. Our very existence is at stake here, along with all of white (western) civilization. We have the right to exist in our own homelands, without fear of being race-replaced by outsiders who cannot and will not assimilate into our way of life. I cherish the diversity of our planet and when I look to explore those cultures, I visit their home on the globe. That is very different from wanting my culture and way of life changed by others.

    End all non-white immigration to the United States and Europe before it is too late! In the states, this country was founded entirely by Anglo colonists who invented the nation we live in. Every signature on our founding documents is from a white male. The second continental congress of 1790 declared “free white persons of good character” would be the only people allowed to be citizens here. That immigration policy stayed in place until 1965, when globalist Ted Kennedy’s so called Immigration Act allowed the non-white world to come. Kennedy said the new policy “would not change the ethnic or racial make up of this country.” He lied. He set in motion a series of events that will only take 80 years for whites to become a minority in our own country, now only 27 years from now. California is already minority white. What does this get us? We lose our culture, our political power, our nation and our race. We are shamed by non-whites who are displacing us.

    You cannot have a first world population without first world people. Hordes of Mexicans everywhere, Haitians in S. Florida, Somilians in Minnesota, Muslims in Detroit, Puerto Ricans in NY and Orlando, Asians in the Pacific NW. These people coming here don’t make them first worlders. In Europe, Sweden will become majority Muslim in just 15 years. There are now more mosques in the South of France then Catholic churches. The most common birth name in London and many other major cities is Mohammad. This is madness. They are reducing our society to their second or third world level. White genocide must be stopped now! Think about it as a race realist, a white nationalist, an alt-righter. American Renaissance is a good place to get involved.

  141. Can we just lock the comments and put a bullet in this site already? It’s dead. All that’s left are spam comments, and a strange troll battle between Jobo and everyone else. Jason isn’t coming back He’s too cowardly to step out of his safe-space and admit he screwed up. And anyone with half a brain isn’t going to submit an article because the commenters would eat them alive.

  142. After all the pumping he did for stocks like KMI, POT and BBL, he decided to sell down some of his stakes according to his latest twitter post. His main reason? He’s worried about upcoming dividend cuts!

  143. Hey guys, here’s what happened. Yes, I did sell the site, and I took all the money from the sale and escaped with my newest soulmate, Jobo, to Chiang Mai in Thailand. Jobo has been a very obedient and loyal partner of mine. Claudia, on the other hand, dumped me for another guy she met by the pool who claims to have a 7-figure retirement portfolio.

    I’m willing to bet it was that jerk rich rabbit that stole Claudia from me, but who cares. Jobo is a much cheaper companion, and that’s all that matters for me.

    Meanwhile, I’m counting my tens of dollars of dividends, while my portfolio is presently down tens of thousands of dollars. But what do I care? I can’t buy bread or a pack of gum with net worth. It’s dividends baby, cash money hitting my account. Who cares if KMI is down 75%.

    Love,

    Jason

  144. Looks like even his investing focus has collapsed. He was never terribly insightful in his analyses, but he was consistent and conservative in his buys. He had a strategy (regularly buying blue chip chip dividend payers) and he executed it like clockwork. That was respectable in my book. Now his investing style seems to be degrading into that of a yield chasing schmuck. But it looks like the Daily Trade Alert people are still happy to have Jason writing for them even if he’s falling away from his original mantra.

  145. Wow, I haven’t been on this site in over a month, I assumed the new owners would have posted something by now.. Would have been cool to be a fly on the wall during the conversations between the new ownership and Jason as the site got wrecked. There is a blog post idea guys, give us all the juicy details.

  146. Seriously, this has gotten lame. Not you Jobo1, 2, 3 … or your minions, but the new site owners. Seriously, sell this site to someone who knows how to capitalize on the traffic stream before it disappears. Just looking at Alexa, this domain rank is in a serious nosedive going down in flames.

  147. When is Jason going to post to let us know about sex life? We all want to know whether he’s staying with his much-older woman or whether he has decided to move to Thailand and turn gay. Also, how are his balls and ass doing? Let us know, buddy!

  148. How dare you place your spam here!

    How dare you, sir!

    I refuse to go to your site! I absolutely, steadfastly, 100% will not click on that link. I will remain resolute in my opposition to this and I certainly hope others will follow my lead!

    Good day!

  149. What!?!

    How dare you besmirch my good name in this way! You’ll be receiving a summons to appear in a court of law to answer for your libelous and slanderous comments! I must protect my brand at all costs and will continue to do so!

  150. Please provide us with the case number once you filed the complaint. It’ll be as easy as finding marriage licenses.

  151. Why would I provide the criminal with my case number. Absolute nonsense!

    It’s clear I’m the real Jobo due to the richly detailed nature of my comments, the nuance, the texture! I suspect I’ll start my own blog shortly, where my musings will garner a significant level of interest.

    In the meantime, I will not return to Dividend Mantra. I simply will not be back. I won’t read any further comments, I will not click on any ads (not that I ever have), I will not allow the new owners to make so much as another cent from activities!

    I will remain steadfast in my decision to stay away and I cannot be induced to change my mind by any method. Goodbye to you all for good. Please do not beg me to come back, as I clearly will not.

    Good day!

  152. So I met Dustin Diamond at a bar, he was asking me if I knew where he could buy an 8 ball of coke. I told him I could probably hook him up if we went back to my place. We got home and I offered him a nice stiff drink, which he slammed down. I called up a guy that I fuck sometimes and told him that Dustin Diamond needed an 8 ball of coke. He dropped it off, while Dustin downed a few more drinks. During that whole time Dustin and I got to talking about chess and his comedy, I really think we hit it off. He asked me if I would have a problem if he smoked some in my house. I said it was cool. He took out a little cloth bag that had a glass pipe that looked just like a penis. He kind off smiled when he saw that I noticed the penis pipe. He lit up and smoked and offered me some. I refused so he smoked more. After a while he sat by me and started to make out with me. He shoved his tongue down my throat and began to stroke my now fully erect cock. He took my pants off and began to suck my off. He got naked and put his ass up to my mouth and I gave him a Russian trombone. I made him cum all over the floor, than I put my cock deep inside his ass and pounded him like I’ve never pounded before. He let out a whimper like a little puppy as I slowly took my cock out and penetrated deeper. We fucked all night long until he started having trouble getting hard, so he said he needed more coke. He dumped some on my cock and began to snort it off, than licked off the rest. He slammed down some tequila and began rimming me. I asked him to hold on and I went into the bathroom and changed into my Screech outfit. When I went back out he instantly got hard and began pounding me to the point that shit leaked out of my ass. He got on the floor and asked me to let my juices flow on his stomache. I took a big runny shit all over his stomach, than I started to let it drip on his face and goatee. He stroked his dick until he came, while he also fingered his ass. The whole room smelled of coke, cum and shit – it turns me on just thinking about it. We stayed up all night and in the morning we took a shower together. He left and told me he would call me next time he was in town. I’m sure he says that to all the guys, but even if he doesn’t return, at least we had that one beautiful night of homo erotic pleasure that gets me hard and dripping every time I think of it.

  153. It appears that some Jobos seem to have a split personality.

    “In the meantime, I will not return to Dividend Mantra.”

  154. Clearly no mods in place and no automatic filtering. It’s one thing to allow good old-fashioned trolling but this is kinda sick.

    Due to this filth, I refuse to return to the site! I will not be back! I simply cannot be convinced to return, under and pretext! Good day and Goodbye!

  155. “Due to this filth, I refuse to return to the site! I will not be back!” -Jobo

    Yet Jobo is back. The above statement is as believable as your imaginary lawsuits.

  156. Is this it? The new owners aren’t going to post anything new? Couldn’t they at least add a post once a month to discuss which of Jason’s holdings paid dividends or went up or down in value?

  157. Unbelievable. I’m starting to think I’ll have to take legal action against all Jobo impostors to avoid dilution of my brand.

  158. I doubt that would be very helpful at this point. It’s funny how they took off dates from the posts and removed links directly to comments…as though that will somehow make people believe there’s actually new content and it isn’t just a bunch of garbage and then my excellent posts as well.

  159. It has been months now without any new posts and it doesn’t seem like things are going to change here. Hence forth, the site should be re-branded as “Jobo Talk” where you can find all things Jobo (Jobo 1, 2, 3, 4…).

  160. It has been told, a great flood shall come to wipe all imposter Jobo’s from the Mantra. Be forewarned and take heed, the time to repent is nigh.

  161. Jobo 24:39 – And they were unaware until the flood came and swept them all away, so will be the coming of the Son of Jobo.

  162. My reign will last for 1000 years and I will call it the 1000 year Reich! Do not laugh at me, I’ve had this dream since lunch!

  163. Jobo 9:7 – God said to Jobo: “And you Jobo, be ye fruitful, and multiply; bring forth Jobos abundantly in the earth, and multiply Jobos therein.”

  164. A summons is on the way. How dare you impersonate me!

    I will have my revenge in the courts!

    Good day!

  165. No! How dare both of you!

    I am the one and only true Jobo. I guess it was inevitable that scores of Jobos would follow in my footsteps, as my posting style is probably amongst the best any forum has ever seen!

    Good day!

  166. Does Jason have a lot of free time ever since he sold his website? If so, I would like him to meet me in the men’s room at the I-95 highway rest stop in Jacksonville, FL. I will be in the 3rd bathroom stall at 10:45pm on Friday, February 26th. I will be sure to rip a loud fart right at 10:45pm so that you know it is me. Then knock three times and I’ll let you in so that we can suck each other off and tongue each other’s anuses. Get back to me soon!

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