The FIRE Fund is my real-life and real-money dividend growth stock portfolio.
I call it that because the portfolio allowed me to reach financial independence and retire early (FIRE) at just 33 years old.
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.
The Fund provides me an opportunity to live a blissful job-free existence that promotes time over money, passions over paychecks, and value over prices.
How and why I’ve saved and invested my way to FIRE at such a young age has been covered in my two best-selling books: The Dividend Mantra Way and 5 Steps To Retire In 5 Years (also available in paperback).
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. These updates are furthermore simply a peek at what the maintaining of a dividend growth stock portfolio post-FIRE looks like, as I’m no longer aggressively buying stocks so that I can achieve FIRE.
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 the ongoing casual investing of fresh capital does add to my passive income, options, and philanthropic firepower.
Moreover, the actual market value of the FIRE Fund (which is constantly oscillating) means very little in the grand scheme of things; 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 1 share of JPMorgan Chase & Co. (JPM) on 7/2/19 for $113.72 per share.
JPMorgan Chase & Co. is an American multinational investment bank and financial services company with assets over $2.5 trillion.
As I’ve noted a few times, my current plan is to continue accumulating shares in this bank.
As long as the valuation remains in this range, I have capital, and competing opportunities aren’t extremely compelling, I’ll keep buying at least one share per month until the position is full.
This purchase added $3.60 in annual dividend income.
I purchased 5 shares of KeyCorp (KEY) on 7/5/19 for $18.10 per share. I purchased another 5 shares on 7/15/19 for $17.56 per share.
KeyCorp is a bank holding company that, through its subsidiaries, provides a range of retail and commercial financial services.
I gave my investment rationale for KeyCorp last month. And I noted that I’d continue to build this position over the near term. This is simply me making good on what I said I’d do.
These purchases added $6.80 in annual dividend income.
I purchased 3 shares of Delta Air Lines, Inc. (DAL) on 7/11/19 for $59.83 per share.
Delta Air Lines, Inc. is a global airline company.
This is a new position for the Fund.
I highlighted this stock as a compelling long-term opportunity for dividend growth investors in the analysis and valuation piece I put together just a few weeks ago. Make sure to check that out.
This company is firing on all cylinders. And the industry as a whole has never been more rational than it is right now. I like this stock. And I plan on buying more soon, assuming the valuation stays in this range.
This purchase added $4.84 in annual dividend income.
I purchased 5 shares of Leggett & Platt, Inc. (LEG) on 7/17/19 for $39.01 per share.
Leggett & Platt, Inc. is a diversified manufacturing company that conceives, designs, and produces a variety of products that can be found in homes and automobiles.
I gave my investment rationale for this company last month. So I won’t go over that again.
As I noted, I see this as more of an ancillary position in the Fund. However, with the position still being so small, I’ll continue to opportunistically add shares over the foreseeable future.
This purchase added $8.00 in annual dividend income.
I purchased 5 shares of The GEO Group, Inc. (GEO) on 7/26/19 for $16.80 per share. I purchased another 5 shares on 7/30/19 for $17.00 per share.
The last time I added to this position was back in March. I noted back then that I had planned to keep this a very small position, as I believe it’s a rather speculative investment (at least relative to my bread and butter).
But the valuation has become ridiculous, so I picked up a small handful of shares. It’s still a very small position – less than 0.3% of the portfolio. And I’ll keep it like that. However, I thought it was opportunistic to snag some shares way down here.
By the way, the company reported a blowout second quarter that included FY 2019 AFFO guidance of $2.69-$2.73 per share. That’s $2.71 at the midpoint, which means the stock is trading hands for a forward P/AFFO ratio of well below 7. I’ll take that, but I would prefer to cap it here.
These purchases added $19.20 in annual dividend income.
SALES
There were no sales since the last update.
DIVIDEND INCREASES
Duke Energy Corp. (DUK) announced a 1.9% increase in its dividend, upping the quarterly dividend from $0.9275 to $0.945. This added $2.10 in annual dividend income.
Fastenal Company (FAST) announced a 2.3% increase in its dividend, upping the quarterly dividend from $0.215 to $0.22. This added $2.00 in annual dividend income.
National Retail Properties, Inc. (NNN) announced a 3% increase in its dividend, upping the quarterly dividend from $0.50 to $0.515. This added $8.70 in annual dividend income.
KeyCorp (KEY) announced an 8.8% increase in its dividend, upping the quarterly dividend from $0.17 to $0.185. This added $1.50 in annual dividend income.
Discover Financial Services (DFS) announced a 10% increase in its dividend, upping the quarterly dividend from $0.40 to $0.44. This added $2.40 in annual dividend income.
American Express Company (AXP) announced a 10.3% increase in its dividend, upping the quarterly dividend from $0.39 to $0.43. This added $3.20 in annual dividend income.
JM Smucker Co. (SJM) announced a 3.5% increase in its dividend, upping the quarterly dividend from $0.85 to $0.88. This added $1.80 in annual dividend income.
Wells Fargo & Co. (WFC) announced a 13.3% increase in its dividend, upping the quarterly dividend from $0.45 to $0.51. This added $21.60 in annual dividend income.
ONEOK, Inc. (OKE) announced a 2.9% increase in its dividend, upping the quarterly dividend from $0.865 to $0.89. This added $10.00 in annual dividend income.
Diageo PLC (DEO) announced a 5.1% increase in its dividend, upping the final dividend from 40.4 pence to 42.47 pence. This added $2.50 in annual dividend income.
Hershey Co. (HSY) announced a 7.1% increase in its dividend, upping the quarterly dividend from $0.722 to $0.773. This added $5.10 in annual dividend income.
Union Pacific Corporation (UNP) announced a 10.2% increase in its dividend, upping the quarterly dividend from $0.88 to $0.97. This added $21.60 in annual dividend income.
Norfolk Southern Corp. (NSC) announced a 9.0% increase in its dividend, upping the quarterly dividend from $0.86 to $0.94. This added $17.60 in annual dividend income.
Dividend Decreases
VF Corp. (VFC) announced a 15.7% decrease in its dividend, lowering the quarterly dividend from $0.51 to $0.43. This subtracted $17.60 in annual dividend income.
FIRE FUND
The FIRE Fund is now valued at $413,833.50. That’s a 0.9% increase from the last reported market value of $410,054.68.
There are 124 companies in the Fund. That’s an increase since last month due to the initiation of a position in Delta Air Lines.
The Fund is now expected to generate a total of $14,171.26 in annual dividend income over the next 12 months. That’s an increase of 0.9%, or $121.26, over the prior update’s annual expectation of $14,050.00.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
CONCLUSION
Another phenomenal month for the Fund.
I’m super pleased with everything that transpired throughout July. Smooth sailing across the board.
It’s earnings season, of course. I pay absolutely no attention to what the stock market is doing or what news outlets are printing for headlines, but I do browse these quarterly reports and see how my businesses are doing.
It appears to me like most companies are doing quite well right now. And that’s coming off of some tough YOY comps.
The beverage majors, PepsiCo, Inc. (PEP) and The Coca-Cola Co. (KO), put out some particularly strong reports, considering where expectations were. I was impressed by the reports from both McDonald’s Corporation (MCD) and Starbucks Corporation (SBUX). Microsoft Corporation (MSFT) turned out an amazing quarter. Delta Air Lines crushed it. Discover Financial Services hit a home run. And L3Harris Technologies, Inc. (LHX) reported a blowout Q4 – the final quarter for Harris Corportation on a standalone basis.
Most other companies printed good numbers. I wouldn’t say that any company disappointed me, although some of the large manufacturers have been seeing some headwinds.
The stock purchases I made in July were all committed with the long term in mind, focusing on industries where there’s value. And I like the way they fit in the Fund. They plug small holes and keep the overall yield level where I want it to be.
The only noteworthy change or update from any of the holdings is the decision by Pfizer Inc. (PFE) to combine its off-patent drug business (known as Upjohn) with Mylan NV (MYL).
The announced dividend raises were, overall, very good. Right about what I’d expect. But the increases from the railroads, being the second raise this year from both, were a welcome surprise.
The “cut” by VF Corp. wasn’t a dividend cut in traditional terms. It was rather a dividend policy adjustment to reflect the recent spin-off of Kontoor Brands, Inc. (KTB). The latter is paying out a sizable dividend of its own. Shareholders who elected to keep the shares in Kontoor Brands are effectively made whole by the combined dividends.
Otherwise, the portfolio’s dividend growth continues to propel my passive income forward.
It doesn’t take much to keep a compounding snowball rolling at an ever-faster speed. It’s getting bigger and faster all by itself, which is an awesome sight to see.
I’ll put that in perspective.
The $82.50 increase in my annual dividend income that came about by way of the organic dividend increases announced by my holdings this past month is analogous to investing ~$2,350 in fresh capital at a 3.5% yield (the average portfolio yield) – except I invested exactly $0 to achieve that increase in passive dividend income.
Not too shabby at all.
The trees in my forest continued to produce ever-more bountiful dividend fruit.
Stock prices go up and down, but dividends are almost always “in the green”. My favorite color.
Looking toward July, it’s business as usual for the Fund.
I’ll aim to invest $500 to $1,000 in fresh capital, which is my monthly target with the Fund now in “maintenance mode” from here on out. The snowball is doing the heavy lifting – err, rolling – now.
I suspect August will look much like July in terms of the stocks I end up buying. I’m currently building up positions in just about everything I bought in July. Since these stocks continue to look like great long-term opportunities to me, I’ll probably continue to allocate capital to a number of names you see above.
Beyond that, I’m sure other opportunities will spring up and interest me. I’m looking forward to sorting through those opportunities and putting some money to work.
What I’m most looking forward to, though, is just enjoying my life and taking maximum advantage of the freedom this dividend income provides me. It’s not something I take lightly. I’m very cognizant of my good fortune. And I’m grateful for it all.
I’m excited to live out another month in the life of my dreams. FIRE is absolutely, without a doubt, worth every ounce of effort and so-called “sacrifice”.
I honestly couldn’t imagine living any other way. Having the freedom to live life totally on my terms is a huge gift. Owning my time is the greatest luxury of all.
Let’s all continue to make our dreams come true!
As always, I’ll publish stock purchases in real-time over at Twitter and Facebook. So make sure to follow me there (where I also share numerous other updates about my life as a dividend expat).
Full disclosure: I’m long all aforementioned stocks except MYL.
How was your month? Are your investments performing to your expectations?
Thanks for reading.
Image courtesy of: imgflip and Warner Bros. Pictures.
P.S. If you’re also aiming to build a dividend growth stock portfolio and the necessary dividend income to become FIRE, make sure to check out some amazing resources that helped me reach financial freedom at 33!
My favorite article every month! Some of those increases were huge!
Rob,
The life of a dividend growth investor. It’s not too bad! 🙂
Hope you had a great July, too.
Best regards.
Hi Jason, it is so great to follow your journey and see the great life it brings you. There is one thing I had a question on… you are great in selecting fine businesses but would you recommend any dividend index fund if one does not have your skills? What is your view on this type of funds? All the best! Marc
Marc,
If I weren’t investing like I do, I’d probably just buy the world. Back when I was first formulating my investment strategy to achieve FIRE, I looked at everything. And when I did the research on funds, I thought the world was an intelligent way to go. If not the world, then I might do the total US market. The S&P 500 would be my third choice.
As for funds that focus on the type of stocks I buy, SCHD is pretty interesting. I personally couldn’t imagine taking on the drawbacks of owning such a thing, but those are some solid holdings.
Cheers!
Hi Jason,
I do have question regarding your answer answer above “drawbacks of owning such a thing” – What are the draw bags in your mind?
In my mind the following:
1. Fund fee. Let’s assume 50 basis points an average.
2. Turnover of stocks. High would appear the most risk.
I can’t think of more drawbacks. Can you clarify for me if you can?
Karl,
I’ve gone over the fund thing so many times over the years, it’s beating a dead horse at this point. Actually, it’s more like a carcass. I don’t even like responding to questions anymore because it devolves into this giant debate and endless back and forth with the pros and cons and minutiae. I couldn’t be less interested in that. I say do your homework and invest your money as you see fit.
Cheers.
You know what you should do? Honestly, you should put an FAQ somewhere on your site with questions that you keep getting asked over and over again. This way you don’t have to keep beating your horse meat AND new readers or people like Karl who may not have seen what you wrote about a particular topic can get the answer they’re looking for. And when someone inevitably does ask one of these questions, just link them to the FAQ and let that be the end of it.
To me, it’s a win-win. Because I can only imagine how nauseating it must be to answer the same question over and over again as if you’re talking to a wall. I also understand what it’s like to be a reader like Karl who asks a simple question in good faith and hasn’t necessarily read every article from the early Dividend Mantra days. An FAQ solves both your problems.
Just a thought.
Sincerely,
ARB–Angry Retail Banker
ARB,
Well, that’s actually what the Getting Started page is for, which is highlighted in every single article I write. I’ve listed all of those resources so that anyone just starting out can educate themselves on all of this. Knowledge is power. If you take the time to read through all of that, you’ll have your answers. I keenly remember including a passage about funds in my first book, for instance.
All that said, I don’t really get a particular set of questions over and over again. It’s pretty much just the fund thing that pops up repeatedly – building your own fund versus paying someone else to build it for you. I used to involve myself in these discussions in good faith. I tried to provide my best answer. But I later realized people weren’t looking for an answer, per se. They wanted the debate. They were looking for banter, using the fund thing as fodder. It reminds me of forum boards I used to frequent back in the early 2000s, where a certain group of topics would come up over and over again. Mods would point these people to the FAQs, but they’d persist with some kind of “Yeah, but…” They didn’t really want an answer. They didn’t want to read through (arguably dense) content and educate themselves. They just wanted the banter. For what purpose, I don’t know. But I never found myself much interested in that.
Cheers.
Jason,
Awesome month. That growth is huge, it feels great getting those raises – we shared a bunch of the same ones. DFS and UNP were awesome!
– Gremlin
Gremlin,
It does feel awesome, doesn’t it? Waking up to a fresh dividend increase is even better than Folgers in your cup. 🙂
Best wishes.
Some really excellent additions and increases. Well done to you Jason.
BHL,
Appreciate it. It was a great month. I really can’t complain.
Hope your July went well for your own portfolio over there. 🙂
Cheers.
Hey Jason,
Nice month as others have mentioned. I too look forward to this particular post each rotation.
How do you maintain your list of future considerations and weed them out, then finally decide on your next purchase each month? (Sometimes I feel overwhelmed with purchase opportunities, and second guess myself). It also seems your income each month seems very stable. Do you actually factor in payout dates when making your choices to smooth out you income? Or did that kind of just happen with having a high number of securities?
Paul,
Thanks. I’m always excited to put the reports together. 🙂
I don’t really have a system for candidates. But I think, usually, opportunities outweigh capital. This was very much the case when I first started. There might be less attractive opportunities now in absolute terms, but it’s kind of the same in relative terms because I now funnel a good chunk of my excess cash flow in other directions. So when you have all of these competing opportunities, you just have to select what you feel is best at that time, considering a number of factors (yield, sector exposure, etc.). I don’t always get it right. But I generally feel pretty good about my choice, looking at all of the information I have in front of me.
As for payout dates, I don’t care about that at all. Anyone who’s going to achieve FIRE is going to be good at budgeting. Anyone who’s good at budgeting will know how to handle surpluses and deficits. It’s moot.
Best regards!
Hey Jason,
Couldn’t agree more about the strong reports recently. I’m seeing a lot of strength across the board from MCD to BEP.UN to CNR. There’s a lot of noise about tariffs and every other problem under the skies, but high quality companies keep producing.
Take care,
Ryan
GRB,
We’re definitely on the same page. Ignore the noise, let great companies do their thing, and collect those growing dividends. 🙂
Best wishes.