The FIRE Fund is my 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 essential 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, lifestyle options, and long-term 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 Fund’s growing dividend income that actually unlocks financial independence 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 Delta Air Lines, Inc. (DAL) on 1/3/20 for $57.43 per share. I purchased another 1 share on 1/27/20 for $55.99 per share.
Delta Air Lines, Inc. is a global airline company.
I’ve spent a number of months slowly acquiring shares in this company. I’m nearing the end of that buying spree, though, as the position is just about complete.
I wrote up an article not too long ago on why I think the stock is a compelling long-term investment.
I still believe it’s one of the better deals in the market, and I’m glad to have had the opportunity to add to my stake.
These purchases added $3.22 in annual dividend income.
I purchased 1 share of Discover Financial Services (DFS) on 1/3/20 for $83.89 per share. I purchased another 1 share on 1/6/20 for $82.18 per share. Finally, I purchased 2 shares on 1/24/20 for $77.50 per share.
Discover Financial Services is a direct banking and payment services company that offers a variety of direct loan products and credit cards.
I added to my stake in Discover Financial Services for the first time in a long time last month. And I noted then that I’d like to buy more shares in January. Well, that’s exactly what I did.
I put together a full analysis and valuation on this company in December, so make sure to check that out.
This position still has some room. It’s quite small relative to my holdings in American Express Company (AXP) and Visa Inc. (V). With the shellacking the stock took after a very solid quarterly report, I view it as materially undervalued and plan to accumulate more shares in February.
These purchases added $7.04 in annual dividend income.
I purchased 1 share of Broadcom Inc. (AVGO) on 1/15/20 for $303.65 per share.
Broadcom Inc. is a leading designer, developer, and supplier of analog and digital semiconductor devices.
This is the first time I’ve picked up shares in Broadcom since December 2018. After a pullback from ~$330/share in December 2019, which occurred after a spectacular Q4 report, the stock looks compelling.
I recently put together an analysis and valuation on the stock, which details why it looks compelling.
This position is still relatively small. I wouldn’t mind more opportunities in the future to add to my stake.
This purchase added $13.00 in annual dividend income.
I purchased 1 share of Cracker Barrel Old Country Store, Inc. (CBRL) on 1/21/20 for $157.14 per share.
Cracker Barrel Old Country, Inc. is an American chain of old country restaurants that come attached with themed stores. The company also owns a non-controlling stake in Punch Bowl Social, an experiential chain of concept restaurants that offer various entertainment options.
I went over my rationale regarding this investment in last month’s portfolio update, so I won’t rehash that.
I’ll just quickly note that I have more room for this stock. And I’ll aim to opportunistically buy more over the coming months.
This purchase added $5.20 in annual dividend income.
There were no sales since the last update.
Bank OZK (OZK) announced a 4% increase in its dividend, upping the quarterly dividend from $0.25 to $0.26. This added $1.20 in annual dividend income.
Stag Industrial Inc. (STAG) announced a 0.7% increase in its dividend, upping the monthly dividend from $0.1192 to $0.12. This added $1.06 in annual dividend income.
Realty Income Corp. (O) announced a 2.2% increase in its dividend, upping the monthly dividend from $0.2275 to $0.2325. This added $5.70 in annual dividend income.
ONEOK, Inc. (OKE) announced a 2.2% increase in its dividend, upping the quarterly dividend from $0.915 to $0.935. This added $8.00 in annual dividend income.
Fastenal Company (FAST) announced a 13.6% increase in its dividend, upping the quarterly dividend from $0.22 to $0.25. This added $12.00 in annual dividend income.
Kimberly-Clark Corp. (KMB) announced a 3.9% increase in its dividend, upping the quarterly dividend from $1.03 to $1.07. This added $3.20 in annual dividend income.
Air Products & Chemicals, Inc. (APD) announced a 15.5% increase in its dividend, upping the quarterly dividend from $1.16 to $1.34. This added $14.40 in annual dividend income.
Dominion Resources, Inc. (D) announced a 2.5% increase in its dividend, upping the quarterly dividend from $0.9175 to $0.94. This added $2.70 in annual dividend income.
Tanger Factory Outlet Centers Inc. (SKT) announced a 0.7% increase in its dividend, upping the quarterly dividend from $0.355 to $0.3575. This added $0.50 in annual dividend income.
Chevron Corporation (CVX) announced an 8.4% increase in its dividend, upping the quarterly dividend from $1.19 to $1.29. This added $8.00 in annual dividend income.
Diageo PLC (DEO) announced a 5.0% increase in its interim dividend, upping the interim dividend from 26.1 pence to 27.41 pence. This added $1.75 in annual dividend income.
Polaris Industries Inc. (PII) announced a 1.6% increase in its dividend, upping the quarterly dividend from $0.61 to $0.62. This added $0.80 in annual dividend income.
CenterPoint Energy, Inc. (CNP) announced a 0.9% increase in its dividend, upping the quarterly dividend from $0.2875 to $0.29. This added $0.90 in annual dividend income.
There are 127 positions in the Fund. That’s unchanged from last month.
The Fund is now expected to generate a total of $14,775.05 in annual dividend income over the next 12 months. That’s an increase of 0.6%, or $94.42, over the prior update’s annual expectation of $14,680.63.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
What a great start to 2020.
We’re hot and heavy into another earnings season.
Most companies in the Fund that have reported earnings have put out some really healthy numbers. Microsoft Corporation (MSFT) and Apple Inc. (AAPL) come to mind as having particularly impressive quarters, while 3M Co. (MMM) came in a bit soft. Some of the energy names also disappointed. Overall, though, I’ve been pleased.
Not much in the way of major news items.
One interesting development was the announcement that Ginni Rometty is stepping down as CEO of International Business Machines Corp. (IBM), with Arvind Krishna to take over the reins in April. Rometty has been roundly criticized for her handling of many aspects of the business, so I view this as a breath of fresh air.
I’m happy with the purchases I made. The novel coronavirus outbreak definitely rocked the boat throughout much of January, creating even better opportunities after I deployed capital, but these are all quality businesses that I plan to own for the rest of my life.
That quality is partly evidenced by the growing dividends these companies are paying out.
Speaking of which, 13 different companies in the Fund announced dividend increases since the last update.
13 pay raises. For doing zero minutes of work. That’s the kind of work/reward ratio I can get behind!
Most of these dividend increases were more or less in line within expectations, keeping things moving along very nicely.
The compounding dividend snowball is gaining size and speed, even while I go about my life and do as I please.
I’ll put that in perspective.
The $60.21 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 $1,720 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.
That’s organic dividend growth compounding away. And it’s amazing.
Many people struggle to come up with $1,700 to invest in a single month. I know I sure used to, especially back when I first started investing in early 2010. If the choice is between paying rent and buying stocks, it’s not a choice. I’m extremely fortunate to be in this kind of position nowadays. It’s not lost on me.
Dividend growth investing is the gift that keeps on giving. Except the gifts get bigger every time you receive another one.
The trees in my forest continue 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 February, 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 imagine February will look like a lot like January. Many of the same names will likely show up again as purchases. I find all of the above stocks appealing both in terms of quality and valuation, and the Fund has room for more of all of them.
I’m very much looking forward to putting a little capital to work in high-quality dividend growth stocks.
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 on social media (where I also share numerous other updates about my life as an early retiree living abroad).
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!