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).
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.
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, freedom, and options.
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 Broadcom Inc. (AVGO) on 11/12/18 for $222.41 per share.
Broadcom Inc. is a leading designer, developer, and supplier of analog and digital semiconductor devices.
I’ve talked quite a bit about this business in recent months. Not much more to say. As previously noted, my current plan is to acquire one share per month for the foreseeable future.
This purchase added $7.00 in annual dividend income.
I purchased 5 shares of British Am Tobacco PLC (ADR) (BTI) on 11/16/18 for $34.80 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 another business I’ve talked about quite extensively recently.
I wasn’t planning on buying any BTI stock in November, but the extreme volatility almost gave me no choice. That added volatility came on the back of news regarding the FDA’s decision to pursue a potential ban on menthol cigarettes. The company’s response to that news can be found here.
I’m already a bit heavy on tobacco on a portfolio-wide basis, so it’s not my preference to buy much more in this industry. But this is still a small position. I might pick up a few more shares if volatility remains elevated.
This purchase added $12.80 in annual dividend income.
I purchased 5 shares of Target Corporation (TGT) on 11/20/18 for $69.31 per share.
Target Corporation is a North American retailer that operates more than 1,800 stores across the US.
This is a new position for the Fund.
This is a business I owned a slice of for many years. I unloaded my position a while back in the mid-$70s because I thought the valuation had become stretched. Now realizing the errs of my previous ways, I plan to slowly reacquire shares in a number of businesses I once owned and sold off for various reasons. This time, I’ll never sell again.
Target is one of those businesses.
With a 10%+ single-day drop after a really solid Q3 2018 report, I felt that this was a great opportunity to do just that.
The company is firing on all cylinders. Comps for Q3 showed 5% YOY growth. Digital sales were up 49%. GAAP and adjusted EPS showed double-digit YOY growth, respectively. There’s a lot to like here.
The stock is now priced below fair value for the first time in a little while. Most basic valuation metrics are below their respective recent historical averages. A 3.7%+ yield on top of more than 50 consecutive years of dividend raises is appealing. That yield, by the way, is 70 basis points higher than its five-year average.
This purchase added $12.80 in annual dividend income.
There were no sales since the last update.
AbbVie Inc. (ABBV) announced an 11.5% increase in its dividend, upping the quarterly dividend from $0.96 to $1.07. This added $17.60 in annual dividend income.
Emerson Electric Co. (EMR) announced a 1.0% increase in its dividend, upping the quarterly dividend from $0.485 to $0.49. This added $1.70 in annual dividend income.
Nike Inc. (NKE) announced a 10% increase in its dividend, upping the quarterly dividend from $0.20 to $0.22. This added $0.40 in annual dividend income.
South Jersey Industries Inc. (SJI) announced a 2.7% increase in its dividend, upping the quarterly dividend from $0.28 to $0.2875. This added $1.50 in annual dividend income.
Hormel Foods Corp. (HRL) announced a 12.0% increase in its dividend, upping the quarterly dividend from $0.1875 to $0.21. This added $1.80 in annual dividend income.
National Grid PLC (ADR) (NGG) announced a 3.8% increase in its interim dividend, upping the interim dividend from 15.49 pence to 16.08 pence. This adds $1.50 in annual dividend income.
Walt Disney Co. (DIS) announced a 4.8% increase in its dividend, upping the semi-annual dividend from $0.84 to $0.88. This adds $3.20 in annual dividend income.
There are 115 companies in the Fund. That’s an increase since the last update due to the initiation of a position in Target.
The Fund is now expected to generate a total of $13,315.84 in annual dividend income over the next 12 months. That’s an increase of $60.30, or 0.5%, over the prior update’s annual expectation of $13,255.54.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
Dividend increases, old buys, and new buys, oh my!
It was another fantastic month for the Fund. The meme that accompanies the article says it all.
This is the last portfolio update for the year of 2018. I feel good with the way it’s finishing up the year.
After a busy October, November was back to normalcy.
I aim to invest between $500 and $1,000 per month in this new, post-FIRE phase of my life. I came in almost perfectly in the middle here, which is great. Anything more than $0 is a blessing. FIRE is in and of itself is enough to get me smilin’ like Leo. Occasionally investing beyond that point is all gravy.
I noted last month that we’re in the bottom of the lineup as it relates to dividend increases. Many of my “big hitters” already came to plate earlier in the year.
Still, a number of high-quality businesses took the bat and knocked the ball around. We’re just running up the score at this point. I’m more than pleased.
The dividend growth snowball continues to roll downhill, regardless of what I do. It’ll almost surely continue to pick up speed and size over time. I simply stay out of its way and go about my life.
For perspective on that, the $27.70 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 ~$790 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.
Looking forward, December will be rather light on the capital deployment front.
December is going to be a very busy and expensive month. I have to pay for a new 12-month visa to stay in Thailand. I also have quarterly estimated self-employment tax to contend with. And I’ve also planned an end-of-year bash in Bangkok. Oh and I are going to eat our way across that city.
So we’ll see what kind of opportunities the market presents. And I’ll compare that to capital availability.
Texas Instruments Incorporated (TXN) is very much on my radar. I’d like to add to my position there. That would be one of my top choices for December, along with Broadcom.
I also wouldn’t mind adding to some smaller positions that have dropped in price since my last purchases. Kraft Heinz Co. (KHC), for example, comes to mind.
Since investing isn’t a huge priority for me these days, though, my focus is largely going to be in other areas of life throughout December.
I’m going to end 2018 with a huge bang, which is incredibly exciting. This is only possible due to the financial freedom the FIRE Fund allows me. Five-figure dividend income sets it all up for me. Cheers to that!
I’m very excited for another month. And I don’t mean that just in terms of buying stocks and collecting dividends; I’m very excited to live this amazing life, go through new experiences, and grow as a person. Every month has millions of seconds – millions of moments – to make the most of your life. Don’t squander those opportunities.
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: 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!