The FIRE Fund is my real-life and real-money dividend growth stock portfolio. I call it the FIRE Fund because the portfolio allows me FI/RE (financial independence/retired early).
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 5 shares of British Am Tobacco PLC (ADR) (BTI) on 6/7/18 for $48.77 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.
I shared my rationale for buying shares in this business back in April, so I won’t get back into that.
There might be some room for a few more shares in the near term, but I’m getting pretty comfortable with this position size relative to my holdings in tobacco, as well as as the portfolio as a whole.
This purchase added $12.80 in annual dividend income.
I purchased 5 shares of Hershey Co. (HSY) on 6/14/18 for $91.79 per share.
Hershey Co. manufactures and markets a range of chocolate, confectionery, and snack products.
This one is just a no-brainer for me. I love dominant brands, simple business models, attractive valuations, and big and growing dividends.
The valuation appears to be pretty compelling on this high-quality dividend growth stock.
If the stock stays down in the low $90s (or lower), I’m interested in accumulating.
This purchase added $13.12 in annual dividend income.
I purchased 5 shares of Starbucks Corporation (SBUX) on 6/20/18 for $51.99 per share. I purchased another 5 shares on 6/29/18 for $48.73 per share.
Starbucks Corporation is the world’s leading retailer of high-quality, specialty coffee products. These products are sold in more than 28,000 stores across 76 different markets, in addition to multi-channel retail.
Another no-brainer. Another dominant brand with a simple business model. The valuation is attractive, the dividend has finally become sizable, and they’re growing that dividend as aggressive as ever.
I believe the stock is significantly undervalued right now. And the position is still relatively small. As such, I’ll aim to acquire more shares in the near term, assuming the price stays in this range and capital is available.
These purchases added $14.40 in annual dividend income.
I purchased 5 shares of General Mills, Inc. (GIS) on 7/2/18 for $43.62 per share.
General Mills, Inc. manufactures and markets a number of global branded food products.
My rationale for this one was explained in May’s update, so go ahead and check that out if you’re interested in this stock and why I bought it.
The only thing I’ll add is that this position is now filled out. I don’t have any plans to buy any more shares in this specific business. It’s basically a full position now, roughly at 1% of the portfolio.
This purchase added $9.80 in annual dividend income.
There were no sales since the previous Fund update.
Philip Morris International Inc. (PM) announced a 6.5% increase in its dividend, upping the quarterly dividend from $1.07 to $1.14. This added $28.00 in annual dividend income.
W.P. Carey Inc. (WPC) announced a 0.5% increase in its dividend, upping the quarterly dividend from $1.015 to $1.02. This added $1.50 in annual dividend income.
Starbucks Corporation (SBUX) announced a 20% increase in its dividend, upping the quarterly dividend from $0.30 to $0.36. This added $7.20 in annual dividend income.
Realty Income Corp. (O) announced a 0.2% increase in its dividend, upping the monthly dividend from $0.2195 to $0.22. This added $0.57 in annual dividend income.
Discover Financial Services (DFS) announced a 14.3% increase in its dividend, upping the quarterly dividend from $0.35 to $0.40. This added $2.00 in annual dividend income.
Wells Fargo & Co. (WFC) announced a 10.3% increase in its dividend, upping the quarterly dividend from $0.39 to $0.43. This added $14.40 in annual dividend income.
American Express Company (AXP) announced a 11.4% increase in its dividend, upping the quarterly dividend from $0.35 to $0.39. This added $3.20 in annual dividend income.
Medtronic PLC (MDT) announced a 8.7% increase in its dividend, upping the quarterly dividend from $0.46 to $0.50. This added $5.92 to my annual dividend income.
There are 110 companies in the Fund. This is unchanged since the last update.
The Fund is now expected to generate a total of $12,760.85 in annual dividend income over the next 12 months. That’s an increase of $108.46, or 0.8%, over the prior update’s annual expectation.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
A bit of a busy month for me. This was one of the heavier months I’ve had in a while when looking at the total amount of fresh capital invested. Of course, this update includes part of July, too. I was surprised by the ~10% drop in Starbucks stock in one day, which is what prompted me to conclude the month of June by adding to my position there.
Nothing surprising about my stock purchases, though.
I added to my exposure to businesses across tobacco, chocolate, food, and coffee. This is stuff people have been consuming for a very long time, and I find it likely consumption will continue well into the future.
Love to keep it simple. I can’t think of business models that get much simpler.
The dividend raises this past month were fantastic, especially since two of them (SBUX and PM) were surprises in the sense that they were both announced one quarter earlier than usual. Both were arguably larger than expected, too.
More money coming in faster is how to accelerate that snowball.
My snowball got a nice boost this month by way of the $62.79 increase in my dividend income that came about totally organically, via those dividend raises by wonderful businesses I’m a partner in.
Looking at that number another way (the only way, really), it would have required me to invest $1,794 of fresh capital at a 3.5% yield (my approximate portfolio yield) in order to realize the same growth in my annual dividend income – except I didn’t even lift a single finger to accomplish that feat.
That’s how dividend growth investing works, folks. The organic dividend growth, via dividend raises, is the “secret sauce” in this strategy.
And it sure tastes good!
Looking at July, I wouldn’t mind buying more SBUX and HSY.
Averaging down on Papa John’s International Inc. (PZZA) would be pretty interesting for me, too.
Some of the pharmacy names and healthcare distributors also look pretty appealing right now. Many healthcare companies in general are on my radar.
And a number of financials (including some listed above) are looking much better after stress test passes and subsequent big dividend increases.
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: Sira Anamwong at FreeDigitalPhotos.net.
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!