Okay, guys. After taking a rather lengthy break from regularly updating the portfolio, I’m finally once again excited to put these monthly updates together.
I was conserving and managing resources over the last couple years in order to focus on high-level concepts that discussed important, holistic aspects of financial freedom. I really had to get some of these ideas out of my head.
In addition, I’ve always been moderately concerned about burning myself out on writing, which is another reason why I’ve mixed things up over the years.
The end result of that is that I’m just as (if not more) excited about writing in 2018 as I was in 2011.
And that’s led me to get back to doing these regular updates.
The FIRE Fund is my real-life and real-money dividend growth stock portfolio. I call it the FIRE Fund because the portfolio allows me FI/RE (financial independence/retired early).
This six-figure collection of some of the best businesses in the world is generating the five-figure and growing passive dividend income I need to sustain myself in life and cover my personal basic expenses. It provides me an opportunity to live a blissful job-free existence that promotes time over money, passions over paychecks, and value over prices.
I’ll below go over any and all transactions from the preceding month, covering any buys and/or sells that occurred since the last update. You’ll see exact transactions (including dates and prices). And I’ll quickly discuss some of the rationale behind each respective transaction.
Keep in mind, however, that these monthly updates are just snapshots in time. Moreover, the actual market value of the FIRE Fund (which is constantly oscillating) means very little in the grand scheme of things, as it’s the dividend income the Fund generates that actually unlocks financial freedom for me.
To that point, I’ll also go over any dividend increases that were announced since the last update, as well as how that affects the Fund’s expected annual dividend income over the next 12 months.
Purchases
I purchased 2 shares of British American Tobacco PLC (BTI) on 3/5/18 for $58.63 per share. I then picked up another 5 shares on 3/14/18 for $58.73 per share.
British American Tobacco PLC is a global consumer goods company that provides tobacco and nicotine products to adult consumers worldwide. They’re one of world’s largest such companies.
This is a position that I never actually initiated on my own. Rather, I was given stock in the company after British American Tobacco acquired Reynolds American Inc. in 2017.
That acquisition added Newport (among other products) to an already venerable portfolio of traditional cigarette brands. And the company has been aggressively moving into potentially reduced-risk products through brands like glo, vype, and vuse (that aggressiveness shown by the aforementioned acquisition).
I was content to leave the small position as it was – until the stock dropped rather considerably over the last few months, at which point I thought the valuation became compelling enough to buy a bit more. A number of basic valuation metrics for the stock are well below their respective recent historical averages, which has subsequently pushed the yield up to a very appealing 4.7%+.
Their products are addictive, with immense pricing power. And the ongoing move to e-cigarettes and other potentially reduced-risk products should be an avenue for long-term growth in this industry. But regulation (especially in regard to their menthol products) is a huge risk.
It’s a high-yielding stock with solid dividend growth. Plus, the stock may be slightly more attractive to some US investors after it recently moved to quarterly dividend payments.
It’s still a relatively small position in the Fund, so I may add some more over the next few months. The stock price notably dropped quickly and sharply below what I purchased these additional shares for, only to just as quickly and sharply rebound. Unfortunate timing, but I’m happy with the valuation I bought in at. Still, though, I’d look forward to another drop like that in the near term.
This purchase added $19.32 in annual dividend income.
I purchased 3 shares of National Grid PLC (NGG) on 3/9/18 for $54.70 per share.
National Grid PLC is a large utility company that focuses on transmission and distribution of electricity and gas in the UK and the US.
This transaction rounded my position up to an even 30 shares in National Grid. I originally purchased 30 shares, but the company announced a share consolidation in 2017 that replaced every 12 shares with 11 shares; they also paid out a large one-time dividend as part of that process which was initiated as part of their Gas Distribution sale.
National Grid, like most utilities, has seen its stock price drop rather precipitously over the last six or so months. For perspective, the stock was in the mid-$60s as recently as September. Fine by me, as it provided me what I saw as the first chance to add to the position in quite a while.
A utility is a ubiquitous, necessary, and monopolistic business model. That’s offset by regulation, a constant need to invest, and geographic limitations. Overall, though, I have a place in the portfolio for utilities due to the big and reliable dividends they typically offer.
The valuation for this stock looks good across the board. There’s nothing that would indicate this stock is even close to pricey right now. If anything, it’s downright cheap.
National Grid isn’t blowing anyone’s doors off with its business growth, but the stock yields a comfortable and sustainable 5.3%+. The dividend should continue to grow in line with UK RPI inflation, which is in the low single digits (similar to most other utilities that offer a yield in this range).
However, that growth doesn’t always translate over into increased income in USD, due to currency exchange rates. This is similar to BTI – both companies/stocks are regularly increasing their respective dividends, but the streaks don’t readily pop up due to currency exchange fluctuations.
This purchase added $8.73 in annual dividend income.
I purchased 5 shares of Enbridge Inc. (ENB) on 3/16/18 for $31.69 per share.
Enbridge Inc. is an energy distribution and transportation company that owns and operates crude and natural gas pipelines across the United States and Canada.
After merging with Spectra Energy Corp. in 2017, Enbridge has become one of the largest energy infrastructure companies in North America.
One of the biggest tobacco companies in the world. A massive intercontinental utility. And now one of the biggest energy infrastructure companies on this side of the planet.
Notice a trend?
Enbridge has become silly cheap, in my opinion. Take your pick of any valuation metric – the odds are pretty good that it will be substantially below its five-year average. And that’s before they had Spectra.
While Enbridge, like any pipeline company, has risks, those seem to be more than priced in here.
The stock is now yielding an incredible 6.5%+ on healthy ACFFO. And that’s with Enbridge forecasting 10% annual dividend growth through 2020 (they’ve already made good on that in 2018 with the Q1 2018 dividend coming in at 10% higher than the Q4 2017 dividend).
They’ve increased their dividend for 22 consecutive years now. There doesn’t appear to be any reason why that won’t continue for the foreseeable future.
This purchase added $10.40 in annual dividend income.
Sales
There were no sales since the previous Fund update.
Dividend Increases
There were a number of dividend increases that were announced since the last Fund update on March 2, 2018.
General Dynamics Corporation (GD) announced a 10.7% increase in its dividend, upping the quarterly dividend from $0.84 to $0.93. This added $7.20 in annual dividend income.
Colgate-Palmolive Company (CL) announced a 5% increase in its dividend, upping the quarterly dividend from $0.40 to $0.42. This added $4.00 in annual dividend income.
Qualcomm, Inc. (QCOM) announced a 8.8% increase in its dividend, upping the quarterly dividend from $0.57 to $0.62. This added $12.00 in annual dividend income.
Armanino Foods of Distinction Inc. (AMNF) announced a 12.5% increase in its dividend, upping the quarterly dividend from $0.02 to $0.0225. This added $13.50 in annual divided income.
Realty Income Corp. (O) announced a 0.2% increase in its dividend, upping the monthly dividend from $0.219 to $0.2195. This added $0.57 in annual dividend income.
Williams-Sonoma, Inc. (WSM) announced a 10.3% increase in its dividend, upping the quarterly dividend from $0.39 to $0.43. This added $4.00 in annual dividend income.
Raytheon Company (RTN) announced a 8.8% increase in its dividend, upping the quarterly dividend from $0.7975 to $0.8675. This added $7.00 in annual dividend income.
FIRE Fund
The FIRE Fund is now valued at $350,105.02. That’s an increase of 0.5% over the last reported market value of $348,506.57.
There are 110 companies in the Fund. This is unchanged since the last update.
The Fund is now expected to generate a total of $12,419.51 in annual dividend income over the next 12 months. That’s an increase of 0.8% over the prior update’s annual expectation.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
Conclusion
Everything is humming along. The market goes up and down, but market volatility doesn’t matter much to a dividend growth investor living off of dividend income.
I’m extremely pleased with this collection of world-class businesses. Most are operating as anticipated.
Expected annual dividend income is up nicely, which only adds to my freedom, flexibility, and options in life. I couldn’t be happier.
For perspective, the $48.27 increase in annual expected dividend income that came about completely organically, via dividend increases, is the same as investing $1,379 in fresh capital at a 3.5% yield (the approximate yield of the portfolio as a whole) – except I didn’t invest a dime to lay claim to that extra passive income.
It’s old money making new money. That’s a dividend growth snowball in action.
Looking forward, I anticipate being about as busy in April as I was in March. That is to say, I’ll likely invest a few hundred dollars or so in high-quality dividend growth stocks trading at attractive valuations.
Aggressively buying stocks is no longer a major priority for me. Stock purchasing is now more or less a function of the pure enjoyment of investing as a hobby and passion (rather than a function of becoming financially independent as fast as possible).
But I continue to enjoy building up the Fund and adding pieces as I go. It’s great fun. And I know that most of the wealth it eventually builds for me will be eventually given away, which just adds to the pleasure.
There appears to be some solid value in select REITs, utilities, energy companies, and even some consumer goods companies in the food space. Also, I wouldn’t mind buying more British American Tobacco PLC, as noted.
All in all, I’m looking forward to April. And I hope you are, too!
Full disclosure: I’m long all aforementioned stocks.
How was your month? Are your investments performing to your expectations?
Thanks for reading.
Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net.
P.S. If you’re also aiming to become FIRE, make sure to check out some amazing resources that helped me become financially free at 33.
Nice summary Jason. I have been thinking about adding to ENB. Have you done a stock review on it recently? There has been so much downward momentum in that industry recently, I have been holding back. Tom
Tom,
The last time I wrote up ENB was in September. Seeing as we’re into April now, it’s probably due for another look. 🙂
Cheers.
Nice! Ive missed articles where you show how much companiies you own have just raised dividends and how much it increases your annual income.
Always motivating to read 🙂
Thanks!
DS,
Thanks so much!
I maybe got a little tired of writing these updates after so many years of it. But I found myself missing them recently. I was finally excited about writing them regularly again
Looking forward to putting out these monthly updates (portfolio, dividend income, expenses) for the foreseeable future. 🙂
Best regards.
Wow! I need to look into AMNF! Do you think the raise was due to the tax cut or increase sales?
Mike,
The only thing (as far as I know) holding back AMNF recently regarding the dividend growth was the expansion they have going on. That’s ending now. Plus, they’ve been doing incredibly well.
For reference, I covered AMNF last year as an opportunity:
https://www.mrfreeat33.com/three-appealing-small-cap-dividend-growth-stocks/
It’s more expensive now, but I think it’s a gem.
Best wishes!
Hey Jason enjoyed the update on the portfolio. Its really good to see you doing so good with more dividends from this dividend grow portfolio. I have read whats on twitter account and I have to say it looks like you are having a great time. I have share your story and articles with many of my friends to get them to start investing so they to can live the life that they really want. Dividend investing really can make a person life better along with not buying things that don’t add any real value to your life.
Cheers to you and the life you have chosen.
Michael
Michael,
Thank you. Really appreciate the support! 🙂
Yeah, it really comes down to value. I guess I take that idea to the extreme, but it doesn’t make much sense to me to allocate many (or any) resources toward aspects of one’s life that don’t add the most value. Of course, the key is realizing what adds value (and what doesn’t) in the first place. And that seems to trip a lot of people up.
Wish you and yours the best as you seek out more value and happiness!
Cheers.
I always liked reading the FIRE fund update. It’s looking good.
AMNF looks interesting. I’ll put them on my watch list. Thanks for sharing.
Joe,
AMNF is a gem of a business. Pretty much every quarter is better than the last. Really flies under the radar. 🙂
Thanks for dropping by!
Best regards.
Thanks for the update Mr. Fieber, I think we only have one dividend fund from Vanguard and that’s it. I’ve been telling my husband we should look into it but it seems like something we do closer to FIRE because it takes more managing (?)
Lily,
A lot of different ways to invest. The long-term data backs up the superiority of high-quality dividend payers and growers, but that doesn’t mean DGI is the best strategy for everyone. One should invest in a way that makes the most sense for them and their goals.
That said, there’s nothing magical about a fund (index, mutual, etc.). It’s just a collection of businesses/stocks that someone else is buying/managing for you. But it is really great to see how far the fees for them have dropped, especially with some of the larger index funds.
Cheers!
Love the chill, open ended advice, thank you!! (Usually I know when somethings bad depending on how hard someone is trying to sell me that idea, hah!)
How much of your cost of living is covered the FIRE-fund? And how much is your side income?
Thomas,
I’ll be going over expenses from March soon. Probably next week. The last time I discussed that was late last year.
I’m spending ~$900/month on my own basic personal expenses. That’s rent, food, transportation, etc. I also pay for some things for a significant other. Other passive income, like e-book royalties, cover any excess.
There will be extraordinary spending, like travel, occasionally, too. I make active income via writing, which easily covers any of that.
I broke that dynamic (active income versus passive income) down here:
https://www.mrfreeat33.com/how-my-active-income-complements-my-passive-income-and-vice-versa/
Cheers.
Long time follower here! I love these types of posts including the summary of divi hikes! Thanks so much
Michele,
Really glad to hear that. Happy to know you enjoyed it! 🙂
I’m excited to get back to numbers-based updates like these. Keep an eye out for a dividend income update, which will be followed by an expense update.
Best wishes!
I like these portfolio updates as well. Just curious, are you going to do a post on where you’re getting your income from right now? Are you dipping into your portfolio or are your writing gigs / side business paying your bills?
Mysticaltyger,
I announced that on social media recently, about going back to doing regular financial updates (for as long as I enjoy it).
So I’ll be publishing a dividend income update soon. And an expense update from March. Both will be live within the next week or so.
If I were “dipping into my portfolio” you’d see net sales.
Cheers.
Ok, I thought maybe you were taking the dividends but not spending all of them and just investing what you didn’t spend.
Mysticaltyger,
Passive income covers my basic personal expenses in life. Active income (which is writing) allows for continued investing, philanthropy, etc:
https://www.mrfreeat33.com/how-my-active-income-complements-my-passive-income-and-vice-versa/
Cheers!
Hi Jason great to see you adding some shares to the FIRE fund 🙂 Its really good to show that even a few shares make a difference to your income. I am actually going to make an addition to my own soon. I have always invested through direct investment plans, I started in the 1980’s before the internet and when a brokered stock trade was $50 !!! You read it right folks don’t complain about a $5.00 trade LOL. Any way I will be opening up a new account with Schwab I will call my Pyramid fund were the dividends from one stock will be used to build positions in other companies ( thus the new shares will be free, as in no money needed on my part )
Its great to come here and see others with the same investing interests THANKS SO MUCH for all your time and sharing of info. As I’ve said before I’m proof you can teach an old dog new tricks, I’m having fun with my investments again.
Bob,
That’s great to hear. Glad you’re enjoying your investing activities. 🙂
Investing should be fun. I couldn’t imagine not liking it. But if I hated it or something, I’d be doing something very different. Of course, I’d be a totally different guy living in a totally different universe, so that leads down a rabbit hole.
I’ve noted those high commission fees a number of times through my UDGSOW series. It’s so easy/cheap to invest now, there’s almost no excuse not to.
Best wishes!
Jason –
Love the passion, always. Best part about above, as others have mentioned, are the dividend increases. Just the pure amount of capital it would take, that you now don’t have to deploy, to generate that income is incredible. That, my friend, is the beauty of being a dividend investor! Congrats JF.
-Lanny
Lanny,
Absolutely. 🙂
I’m “investing” something like $2,000 per month – without investing a dime. That’s a snowball in action. It’s old money making new money. I simply get out of its way and let it do what it does best!
Cheers.
Jason,
I am glad you are posting these updates! It seems a little ridiculous to be talking about a $13/year raise. That’s until you see how those small increases turn into a massive snow ball. Congrats on your success.
Any ideas on why ENB would do a 12/11 reverse split? Seems like a terrible waste of money to generate a lot of meaningless paperwork. This makes me question managements priorities and therefore question the stock itself. Any thoughts on the motivation of the reverse split?
Thanks,
Roger
Roger,
Thanks so much!
Those little increases absolutely add up. In pretty dramatic fashion, no less. My journey is proof of that. 🙂
It was National Grid, not Enbridge, that initiated that split. You can read about it on their IR site, if you’re really interested. There are more details than I can go over in a sentence or two here.
Best regards!
Hey mate,
How are you able to trade in small 1-2 and 3-5 share lots? Here our min brokerage for local still is like $30 so would it next to impossible to do frequent,small trades
Geoffrey,
I don’t pay any commission fees. I use Charles Schwab:
https://www.mrfreeat33.com/why-i-moved-most-of-my-assets-from-scottrade-to-charles-schwab-and-why-you-may-want-to-do-the-same/
Cheers!
I really enjoyed this article Jason, I have 3 more of your articles in my reading list – I can’t keep up ha, ha. This particular article helps keep me io the right track as I can see it working and growing. You should be extremely proud!! Thank you for helping me wether or not you realise it 🙂
Gerard,
Appreciate that. Glad I could help and inspire. That’s my entire aim with everything I do. 🙂
Plan to continue updating the finances for the foreseeable future, much like I did during a five-year stretch back when.
Best wishes!
Jason,
Just want to say that I enjoy reading your FIRE fund updates like from the old DM days. Although, we only invest in individual NY Muni bonds to generate tax free income to cover 1.35 times our expenses, I enjoy reading your analysis to learn why you pick certain stocks.
Adam
Adam,
Thanks for the support. Really appreciate it! 🙂
I’m definitely enjoying writing the updates again. Just finished writing the dividend income update earlier this afternoon. Felt great to put all of that together. I guess I needed a lengthy break away from it.
Hope all is well!
Cheers.
Congrats on the purchases. Also, it’s always nice to see companies you own increase their dividends over time. That’s because you’re making money without having to do anything for it other than investing in the company in the first place. Glad you decided to make these more of a regular updates. Looking forward to follow your progress along the way.
DP,
Old money making new money. I’m not terribly good at many things in life, but I’m really good at getting out of money’s way and letting it do its thing. 🙂
Thanks for dropping by!
Best regards.
Jason,
Glad to see the updates are back, and it’s amazing to see the progress made over the years. I remember the early days of Dividend Mantra when you were reporting $40-something dollars in monthly income. To be past the $12,000 mark is amazing!
You got your BTI shares because you owned Reynolds, but I also remember you owning LO as well. Didn’t Reynolds buy them to get the Newport brand years ago? That would mean you got even MORE shares of BTI! Unless I’m remembering things wrong, of course.
Glad to see your FIRE for these updates was renewed. As much as I enjoyed the more holistic articles, I’ve always felt (and I’ve said it before) that your dividend/portfolio updates provided the most value. That’s because they were quantifiable proof that financial freedom was possible.
Sincerely,
ARB–Angry Retail Banker
ARB,
I remember those days, too. Sometimes fondly. Sometimes not. It was fun to have the vision and execute and everything, but life is a hell of a lot easier these days. Haha!
You’re not remembering things incorrectly. However, those deals were partly cash and partly shares. The original LO investment has obviously turned out to be fantastic when you trace it all the way back. But each deal meant there was some “cashing out” (not really on my part) of the shares. For example, I didn’t like the idea of buying more BTI (with the cash part of the sale) after the Reynolds transaction went through, so the cash went elsewhere. I finally came back around to that stock after the valuation became more appealing.
Thanks for all the support. I’m happy to get back to posting these updates. I feel just as excited about doing them today as I was back in 2011, which I didn’t think would be the case at all. It’s even more interesting, in my view, to discuss the numbers in combination with geo arb. Really fun stuff.
Hope all is well!
Best regards.
“The Fund is now expected to generate a total of $12,419.51 in annual dividend income over the next 12 months. ”
Congratulations! “Four figures” a month of passive income is very impressive.
My personal average dividend income is $806.44/month, and my goal is to catch Jason Fieber! 🙂
But here’s what highlights the power of the dividend snowball: I reinvest all dividends, and $1200/month of new capital from my take home pay. And it will take several years to catch you, even if you don’t invest another penny in that time!
DL,
That snowball effect is really incredible. It’s like the portfolio is investing something like $25k/year – all by itself. Of course, your own portfolio is doing the same thing on your behalf, even if the number is a bit smaller (only for now, but that’s quickly changing). 🙂
I’m no longer investing thousands of dollars per month, so I’m sure you’ll catch up to me sooner rather than later. The key, though, is getting to the spot you want to be, as fast as possible. I know a lot of other people out there are earning way more in passive income than I am, but they might also be beholden to a life/lifestyle that’s not totally of their choosing. To go from nothing to financially independent in six years, at 33 years old, is something I’ll forever be proud of. The rest, from here, is just gravy.
Best wishes!
“To go from nothing to financially independent in six years, at 33 years old, is something I’ll forever be proud of.”
You should be! That is a heck of an accomplishment, AND an inspiration to hundreds or even thousands of readers.
DL,
Thank you very much. Really appreciate it. 🙂
Being able to inspire others via sharing the ups and downs of my own journey is a real privilege. And it’s something I take very seriously.
Hope all is well with your own journey!
Cheers.
Hi Jason,
I have followed your blog for a few years now. As a dividend growth investor myself, I have made apple by far my largest holding over the last few years. They have consistently raised dividends 10%, very low payout ratio, and a boatload of money ready to be deployed (perhaps in 3 weeks). Buffet has recently backed up the truck on it. Are you not interested in increasing your position by more then 1% of your portfolio?
Thanks,
Scott
Scott,
Yeah, great question.
I’m pretty happy with Apple. It’s a full position. I don’t see it as an oversized position (i.e., more than 1%), but I think it’s a great long-term investment here (which is why I continue to hold). Very excited to see the new dynamic as they enter into a new era with capital allocation.
Cheers!