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.
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.
There were no sales since the last update.
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.
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.
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.
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!
Full disclosure: I’m long all aforementioned stocks except MYL.
How was your month? Are your investments performing to your expectations?
Thanks for reading.
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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!