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.
PURCHASES
I purchased 1 share of Cracker Barrel Old Country Store, Inc. (CBRL) on 12/3/19 for $153.34 per share. I purchased another 1 share on 12/12/19 for $153.08 per share. Then I purchased another 1 share on 12/16/19 for $153.73 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.
This is a new position for the Fund.
I first looked at this business a few years ago. The stock was priced similarly to where it’s at now, but the valuation was higher and the yield was lower. However, the company has grown its earnings and dividend nicely in the years since, while the stock price has basically languished (due, perhaps, to prior overvaluation). This has created a more favorable valuation and yield currently, and I used that as an opportunity to finally add the stock to the Fund.
The fundamentals across the board are great.
EPS has almost tripled over the last decade, net margin is in the high-single-digit range, and the balance sheet is solid.
As a dividend growth investor, the dividend growth track record is obviously of great importance to me.
Well, the company has increased its dividend for 17 consecutive years, which speaks volumes. And the payout ratio remains moderate, leaving plenty of room for future dividend raises.
The ~3.4% yield is very attractive in this market, which is before factoring in the sizable special dividends the company has been paying since 2015. Assuming 2020 is similar to 2019, the forward yield is actually sitting at well over 5%.
I applaud some of the recent moves they’ve made, including the equity investment in Punch Bowl Social. One thing that kind of held me back regarding this business model is the distinct focus on an older demographic. But with Punch Bowl Social, which is a hip urban concept, the company has broadened its base and now appeals to a younger demographic. On the other hand, one does wonder how complementary PBS is to the core Cracker Barrel business.
With most basic valuation metrics at or below their respective recent historical averages, in an otherwise expensive market, I like this stock and plan to opportunistically add to it.
These purchases added $15.60 in annual dividend income.
I purchased 1 share of Delta Air Lines, Inc. (DAL) on 12/3/19 for $54.94 per share.
Delta Air Lines, Inc. is a global airline company.
I’ve spent the last few months slowly acquiring shares in this airline. This transaction represented a continuation of that theme.
I recently wrote up a lengthy piece describing why it’s so appealing right now, so make sure to check that out.
This will end up as a relatively minor position in the Fund. That’s simply because of the business model. But I’m not done with it yet, so I’ll aim to continue buying more throughout early 2020.
This purchase added $1.61 in annual dividend income.
I purchased 1 share of Discover Financial Services (DFS) on 12/5/19 for $82.50 per share. I purchased another 1 share on 12/23/19 for $85.95 per share. Then I purchased another 1 share on 12/31/19 for $84.85 per share.
Discover Financial Services is a direct banking and payment services company that offers a variety of direct loan products and credit cards.
This is the first time I’ve added to this stake in more than a year. Since I initiated my position in 2017, Discover Financial Services has basically gone gangbusters. The business is performing at an extremely high level.
Even with that high level of business performance, the stock looks attractively valued. In my view, the valuation has not kept pace with the business. Make sure to check out my full analysis and valuation on this stock, which was published in early December.
I would like to buy even more in January. And I plan to do so.
These purchases added $5.28 in annual dividend income.
I purchased 1 share of Cisco Systems, Inc. (CSCO) on 12/10/19 for $43.89 per share.
Cisco Systems, Inc. is the world’s leading designer, manufacturer, and supplier of data networking equipment and software.
They have a dominant position in routers and switches, positioning them to take advantage of the increasing move toward the Internet of Things as people, government, and businesses continue to rely more on the digital space for everyday activities.
This is the first time I’ve added to this position in more than two years. The stock has advanced about 40% in price since the last time I bought it, but it’s also way off of its 52-week high of over $58/share. After a post-earnings decline (on the back of a disappointing report) that seemed overdone to me, I feel like it’s once again a good time to buy this stock.
Cisco Systems is shaping up to be a dividend growth stalwart.
The company has already increased its dividend for nine consecutive years. I think that’s just the start of what they’re ultimately capable of.
With a well-covered 3%+ yield and a five-year dividend growth rate of 14.5%, this offers me the one-two combination of yield and growth that I typically look for.
The company has compounded its EPS at an annual rate of almost 8% over the last decade in a fairly secular manner. They sport a rock-solid balance sheet. And profitability is fantastic.
I don’t think the stock is a steal here. But with a P/E ratio under 18 and a yield that’s slightly higher than its five-year average, it’s a quality business trading for a fair (or better) price.
This purchase added $1.40 in annual dividend income.
I purchased 1 share of Simon Property Group Inc. (SPG) on 12/11/19 for $145.51 per share. I purchased another 1 share on 12/18/19 for $144.41 per share.
Simon Property Group Inc. is a self-managed real estate investment trust that owns, develops, and manages a real estate portfolio that’s primarily focused on regional malls.
I talked quite a bit about this holding in the last FIRE Fund update, so I won’t rehash that.
This valuation is pretty attractive, in my view. I’m happy to have the opportunity to add to my stake.
However, as I noted before, I planned all along on keeping this a very small position. I’ll probably cap it here. It’s fundamentally a high-quality business, no doubt, but there are some qualitative concerns regarding viability over the long run.
These purchases added $16.80 in annual dividend income.
SALES
There were no sales since the last update.
DIVIDEND INCREASES
WEC Energy Group Inc. (WEC) announced a 7.2% increase in its dividend, upping the quarterly dividend from $0.59 to $0.6325. This added $4.25 in annual dividend income.
C.H. Robinson Worldwide, Inc. (CHRW) announced a 2.0% increase in its dividend, upping the quarterly dividend from $0.50 to $0.51. This added $1.00 in annual dividend income.
Eastman Chemical Company (EMN) announced a 6.5% increase in its dividend, upping the quarterly dividend from $0.62 to $0.66. This added $2.40 in annual dividend income.
Enbridge Inc. (ENB) announced a 9.8% increase in its dividend, upping the quarterly dividend from C$0.738 to C$0.81. This added $19.58 in annual dividend income.
Realty Income Corp. (O) announced a 0.2% increase in its dividend, upping the monthly dividend from $0.227 to $0.2275. This added $0.57 in annual dividend income.
Amgen, Inc. (AMGN) announced a 10.3% increase in its dividend, upping the quarterly dividend from $1.45 to $1.60. This added $6.00 in annual dividend income.
Broadcom Inc. (AVGO) announced a 22.6% increase in its dividend, upping the quarterly dividend from $2.65 to $3.25. This added $9.60 in annual dividend income.
Abbott Laboratories (ABT) announced a 12.5% increase in its dividend, upping the quarterly dividend from $0.32 to $0.36. This added $5.60 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.
AT&T Inc. (T) announced a 2.0% increase in its dividend, upping the quarterly dividend from $0.51 to $0.52. This added $8.00 in annual dividend income.
Pfizer Inc. (PFE) announced a 5.6% increase in its dividend, upping the quarterly dividend from $0.36 to $0.38. This added $4.80 in annual dividend income.
W.P. Carey Inc. (WPC) announced a 0.2% increase in its dividend, upping the quarterly dividend from $1.036 to $1.038. This added $0.64 in annual dividend income.
FIRE FUND
The FIRE Fund is now valued at $438,363.16. That’s a 2.7% increase from the last reported market value of $426,827.96.
There are 127 companies in the Fund. That’s an increase from last month due to the initiation of a position in Cracker Barrel Old Country Store.
The Fund is now expected to generate a total of $14,680.63 in annual dividend income over the next 12 months. That’s an increase of 0.8%, or $116.45, over the prior update’s annual expectation of $14,564.18.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
CONCLUSION
What an awesome way to finish out 2019. The Fund closed the year with a bang for sure. I love it.
I added to some older legacy positions that were due for boosting. Both Cisco Systems and Discover Financial Services are well-run businesses moving in the right direction, but their respective stocks have been more or less left behind by the market in recent months. When opportunity knocks, you open the door with a fistful of cash.
I can’t recall any major specific news events from any of the Fund’s holdings. Other than macroeconomic stuff, which isn’t ever really on my radar, December was fairly quiet on the corporate front.
However, that quietness wasn’t present in the one area where I like noise.
I’m talking about dividend increases.
12 different Fund holdings announced dividend increases since the last update.
I was mostly pleased.
C.H. Robinson Worldwide disappointed a little bit, but that was made up for by a whopper of a dividend raise by Broadcom.
The rest of the dividend increases were more or less within my expectations.
When 12 different companies raise their dividends, that tends to move the needle in a noticeable way.
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 $65.14 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 $1,861 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.
Back in early 2010, when I first started investing, I could not come up with $1,800 in a single month to invest. It just wasn’t possible. I was making barely $40,000/year at my day job. And I was still trying to get my life (and savings) right-sized while I embraced frugality and minimalism.
Yet I’m now in a position where the Fund provides the same net result as if I had invested that kind of money, even though I don’t have to lift a finger.
Snowball rolling is one of those things that starts off really difficult. But it gets easier and easier over time. It’s now practically effortless.
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 January, 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’m excited to start a new year with new opportunities in a new city. I find myself in Kuala Lumpur, partially due to some of the recent visa changes in Thailand. I’ll be exploring my new surroundings as much as, or more than, I’ll be exploring stocks to add to the Fund.
Truth be told, though, January will in all likelihood look a lot like December in terms of where I’ll be most active with stock purchases.
Cracker Barrel Old Country Store, in particular, is a stock that I plan on buying more of.
I also still have some room for more Delta Air Lines, although I’ll probably cap that position off here pretty soon.
I’d like to be more busy than I have been in both financials and the tech space. Perhaps January will offer me better looks in those areas.
Beyond that, I’m sure other ideas will spring up and interest me. I’m looking forward to sorting through those opportunities and putting a little bit of 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 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!
Jason,
Way to crush the end of 2019. Keep it rolling in 2020!
– Gremlin
DG,
Thanks so much!
Looking forward to all that 2020 has to offer. The best is yet ahead for all of us, I’m sure. 🙂
Let’s get after it.
Best regards.
I like the CBRL purchase. Recently I’ve noticed many of the restaurants are trading at pretty reasonable valuations, I’ve looked at CBRL, CAKE, and DRI and personally I added CAKE, but all are solid here at these levels.
Peter,
Sounds like we’re on the same page. 🙂
Best wishes.
Happy new year Jason! Good to see you are still crushing it with the FIRE fund! That’s a lot of dividend increases.
I had a great 2019 as well on the FIRE portfolio front. My taxable account FIRE portfolio is worth $479,435.35. I’m invested entirely in two ETFs, VYM and VYMI. Roughly, 45.45% in VYM and 55.55% in VYMI. Dividend income came out to $17,479.20 with div growth of around 7% for VYM and 10% for VYMI for the year.
I have the “advantage” of still working full time. So, a lot of my growth is still coming from excess w-2 income, but I was also very pleased with the dividend growth. My goal for 2020 is to get dividend income up to $19,000.
I’ve been following your adventures in Malaysia. Hope it gets better. On the bright side, you can mark it off the list and you’ll be moving on from there before you know it. There is one youtuber I follow, “Remote Darren”, that really likes Malaysia. He works remotely doing IT work and is from Scotland I think. Maybe he can point out some fun things to do, or maybe his videos will be useful. Here is his channel:
https://www.youtube.com/user/explorelist/videos
P.S. I don’t know if I ever told you this. While reading your blog you coined a phrase that I really like, i.e. “dividend expat”. I checked and nobody had reserved that domain name. So I snapped up dividendexpat.com. If I ever end up traveling I plan to use it as a journal of my adventures and upload pictures and such. If I do that, I will mention that I first heard that phrase from your web site. I’ve seen that term popup some since then, but you were the first one to use it that I know of. Its a perfect term for the strategy that you have been using IMHO (geographic arbitrage combined with expating off of passive dividend income).
jh,
Really neat. That’s cool that you snapped that up. “Dividend Expat” was originally the title of this blog. But I decided against it. I wasn’t 100% sure about living abroad back then. And there’s nothing to say that I’ll be an expat for the rest of my life. More importantly, though, I felt limited in terms of the content I could write over at Dividend Mantra. When Dividend Mantra went the other way on me, and I later left, I actually felt relieved. I was finally free in so many ways. And so I decided to start a new site that would be free of expectations and labels like that. In my mind, being “Mr. Free” was about way more than being financially free. It was about being free of expectations, conformity, obligations, or even borders. I knew that “Dividend Expat” would limit me to content largely about, well, dividends and expat life. I didn’t want to wall myself in like that.
I actually came across one of Darren’s videos when I was doing research on Kuala Lumpur. I did many hours of research on this place. Really did a deep dive. But I feel misled. So many people, like Darren, talk glowingly of the place. Experiences are subjective, of course. But there are way too many objective problems with this place. I just don’t get it. If Darren and the rest like it here, I’m happy for them. Frankly, I wish more people would come here instead of Thailand. Less competition for resources in Thailand. However, I do wonder how much of the positive content is about agendas and brand building. Everyone these days is trying to “toe the line” in order to avoid offending anyone and keep their brands shiny and prosperous. I think that leads to a lot of the “fake news” that’s going around. People want to show how everything is amazing on Instagram. But real life isn’t Instagram.
I’m just glad my stay in Kuala Lumpur is very temporary. SE Asia is mostly amazing. But KL isn’t.
Thanks for dropping by!
Cheers.
Hi Jason, nice to see you are starting to slowly buy more aggressively again. It makes it more interesting and your numbers are always encouraging. I did pretty good this past 2019 as well. I’m hopeful for 2020 again, even though this bull market is already on a very long stretch. Either way we win, in a bear market we buy our great companies at a discount. Take care my friend; Omar
Omar,
Thanks a lot!
Yeah, December was slightly higher than usual in terms of deployed capital. But I believe the average for all of 2019 was still under $1,000/month, which is right in line with my goal. I’ll probably start to slowly curtail this even further at some point in the future. It was never my goal to endlessly hoard pieces of paper I’ll never use.
Looking forward to 2020 very much. I think the best is yet ahead. Every year alive is a gift. We have to make the most of it. 🙂
Best regards.
Wow, what a way to finish the year Jason. Those are some impressive numbers when you’ve deployed capital and the dividend increases. What a happy new year it would have been for you! Keep up the great Jason.
Caleb.
Caleb,
Thank you very much. Appreciate the support. 🙂
It was a wonderful 2019. Both in terms of the Fund and life in general. If 2020 is half as good as 2019 was, I’ll be very happy.
Hope your year is off to an amazing start!
Best wishes.
Hello Jason, as always it is neat to cruise on by and read your latest updates on both your journey in SE Asia and updates on the portfolio. Seems to be a bummer that you had to leave Thailand, but you always seem to do a pretty good job of making lemonade when life hands you lemons. Best of luck on your new adventures!
PIV,
Thank you. 🙂
I always try to see the bright side. It’s so much more fun in life if you can remain optimistic and positive on things. I would have preferred to continue on as things were in Thailand, but many things that are outside of my control are happening right now. Oh and I will continue to respond in the most appropriate way possible, after considering all of our options. I’m confident that it’ll all work out for the best.
Malaysia is definitely not my cup of tea. But that’s okay. I’m a curious guy. I was a little bit curious about Kuala Lumpur. Now I know what it’s like. That curiosity has been satisfied.
Another year is upon us. Let’s make the best of it!
Cheers.
Hi Jason,
I just wanted to take this opportunity to thank you. I’ve been investing for years, but always chased the next biggest thing. This inevitably led to me buying at the top of bitcoin, Chinese tech stocks, and (earlier this year) SaaS growth stocks. That means that while everyone had great investing gains this year, I actually lost quite a bit of money. I was always changing investing styles to find the right “formula,” trading constantly, and it really cost me. Not just financially, but in peace of mind and the stress of constantly checking my growth stocks and feeling a knot in my stomach as they were free falling. I’m 50 years old so it’s not like I have decades to ride out that swings, anyway.
About 3-4 months ago I commented on here about how I was getting killed by my SaaS stocks, and you questioned my strategy and talked some sense into me. I went back and re-read both your books, and a light bulb went on in my head.
Over the last several months I have been slowly converting my SaaS portfolio into dividend growth stocks, and the conversion is at about 85% now. I just calculated up my projected dividend payments for 2020, and they should be over $10,000, with an average yield of 4% or so. My portfolio now has over 40 quality dividend growth names like JNJ MMM CAT ENB TD SPG WFC AVGO, etc. I feel so much more peace of mind and less stress, being invested in good companies that are paying me income. I just wanted to thank you so much for your influence on my investing life.
Tim
Tim,
Wow. That’s an amazing turnaround. Good stuff. Happy and excited for you! 🙂
Just make sure you’re fully committed to the long term. If you see a 10% or 20% drop, simply look at that as an opportunity to load up on high-quality stocks at cheaper prices. Short-term volatility is a long-term opportunity.
Glad I could have a positive impact on you. To know that I’ve helped and inspired a few people out there, is what makes it all worth it for me.
Happy to be a fellow shareholder in some world-class businesses.
Best wishes!
Thank you, Jason. Great advice!
Another amazing month Jason!
Reading about your journey to create this fund motivated me to start my own fund for passive income over 4 years ago.
Started off $2 in monthly passive income to now around $430 / month.
I can attest to the fact that everything you say about the power of compounding is very true. Just need to stay patient and consistent with investing 🙂
DG Tech,
That’s fantastic. Really amazing progress. And it only accelerates from here. Just imagine where you’ll be in another five years! 🙂
Thanks for the support.
Best regards.
Thank you, Jason, for writing about Cracker Barrel. My Dad and I used to eat breakfast there about once a month, in his later years. The last good memory I have of him at a restaurant is Cracker Barrel. My only memories more recent than that are of baseball games. He passed away in November 2017.
He was a damn fine dividend growth investor, and would have approved of your investment in the company, I’m sure.
DL,
Sorry to hear of the loss. You have some nice memories to hold on to. 🙂
If you don’t already have any, it might be worth it to have a share (or more) of Cracker Barrel. I’m not particularly sentimental, and investing isn’t about emotions, but it might be nice to carry those shares with you for the rest of your life. Besides, I do think it could be a great long-term investment. That’s a win-win.
Best regards.