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 2 shares of Eastman Chemical Company (EMN) on 5/3/19 for $78.98 per share. I then purchased 1 share on 5/10/19 for $75.57 per share, 1 share on 5/13/19 for $72.63 per share, 1 share on 5/16/19 for $72.27 per share, 1 share on 5/17/19 for $71.44 per share, 1 share on 5/20/19 for $70.87 per share, and another 2 shares on 5/31/19 for $65.31 per share.
Eastman Chemical Company is a global specialty chemical company that manufactures and markets a wide range of advanced materials, chemicals, and fibers which are used in various consumer and industrial products.
This is a new position for the Fund.
I flagged this as a compelling long-term opportunity back in mid-March. The stars aligned for the initiation of a position in the company, which I’m excited about. Super happy to be a shareholder in this fine company.
The business is such that I don’t see it as being a large holding, however. It’s a specialty company, and I see it as more of an ancillary position.
Based on where the valuation is at, and seeing as how there’s still room for more shares, I do see myself adding to this in the near term.
These purchases added $22.32 in annual dividend income.
I purchased 5 shares of Iron Mountain Inc. (IRM) on 5/16/19 for $32.32 per share.
Iron Mountain Inc. operates as the global leader for storage and information management services. Their real estate network stretches 85 million square feet across more than 1,400 facilities. They serve approximately 230,000 customers in 53 countries, including 95% of the Fortune 1000.
I initiated a position in this company back in November, which was the last time I bought shares.
The priced jumped soon after picking up the stock, which I thought brought the stock out of an acceptable valuation range. But the price compressed recently, along with the broader stock market, which made this name attractive once more.
I went over the investment rationale back in November, so I won’t bother repeating that.
However, I did note back then that I saw this as more of a speculative, niche investment. Thus, I consider the position now complete. There are no plans to add to it in the future.
This purchase added $12.22 in annual dividend income.
I purchased 1 share of JPMorgan Chase & Co. (JPM) on 5/16/19 for $112.13 per share.
JPMorgan Chase & Co. is an American multinational investment bank and financial services company with assets over $2.5 trillion.
I noted in last month’s Fund update, which is when I initiated a position in the bank, that I had planned to accumulate shares over the foreseeable future. I’m simply making good on that.
Assuming the valuation stays in this range, and assuming the capital is there, I would like to continue buying.
This purchase added $3.20 in annual dividend income.
There were no sales since the last update.
Main Street Capital Corporation (MAIN) announced a 2.5% increase in its dividend, upping the monthly dividend from $0.20 to $0.205. This added $7.20 in annual dividend income.
Phillips 66 (PSX) announced a 12.5% increase in its dividend, upping the quarterly dividend from $0.80 to $0.90. This added $10.80 in annual dividend income.
Cardinal Health Inc. (CAH) announced a 1.0% increase in its dividend, upping the quarterly dividend from $0.4763 to $0.4811. This added $0.67 in annual dividend income.
Southside Bancshares, Inc. (SBSI) announced a 3.3% increase in its dividend, upping the quarterly dividend from $0.30 to $0.31. This added $3.20 in annual dividend income.
National Grid PLC (NGG) announced a 3.1% increase in its dividend, upping the full-year dividend from 45.93 pence to 47.34 pence. This added $2.70 in annual dividend income.
Chubb Ltd. (CB) announced a 2.7% increase in its dividend, upping the quarterly dividend from $0.73 to $0.75. This added $1.20 in annual dividend income.
The Clorox Co. (CLX) announced a 10.4% increase in its dividend, upping the quarterly dividend from $0.96 to $1.06. This added $12.00 in annual dividend income.
Flowers Foods, Inc. (FLO) announced a 5.6% increase in its dividend, upping the quarterly dividend from $0.18 to $0.19. This added $10.80 in annual dividend income.
There are 121 companies in the Fund. That’s an increase since last month due to the initiation of a position in Eastman Chemical Company and the new spin-off shares in Kontoor Brands, Inc. (KTB) from VF Corp. (VFC).
The Fund is now expected to generate a total of $13,983.85 in annual dividend income over the next 12 months. That’s an increase of 0.7%, or $95.99, over the prior update’s annual expectation of $13,887.86.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
Well, another great month for the Fund.
Sure, it wasn’t the best month ever for dividend increases.
There were some disappointments in there, the biggest of which was the increase that wasn’t announced from Qualcomm, Inc. (QCOM). They were due an increase and elected to keep the dividend unchanged. Better than a cut, certainly. But whenever you expect an increase and it doesn’t come, there’s some disappointment.
But it’s important to keep perspective.
Let’s be honest.
I’m getting pay raises for doing absolutely nothing!
I mean, I can’t be too upset here, even when I don’t get a small present that I thought was coming my way.
Moreover, inflation has kind of lost its meaning/power in my life.
As someone living abroad indefinitely and taking advantage of geographic arbitrage, I don’t experience inflation the same way someone living in America does. Inflation barely exists over here. More importantly, it’s coming off of a very low base, relatively speaking.
So the dividend growth of the Fund isn’t quite as critical as it might be if I were still living in the United States.
Meanwhile, even with dividend growth that fails to meet expectations, my passive income is still growing much faster than the cost of the goods and services I routinely purchase. It’s a wonderful position to be in. And I’m truly grateful for it.
For further perspective, the compounding dividend growth snowball is still rolling at a very impressive rate.
The $48.57 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 $1,387 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.
Back when I first started my journey, it was all I could do to muster up $1,400 in investment capital in a single month.
Now I can do nothing and still effectively enjoy the same outcome as it pertains to passive dividend income – even in slow month.
I’m a very happy dividend growth investor.
And it’s experiencing these results firsthand that continues to motivate me as a writer. I truly feel like I’d be remiss if I didn’t share all of this with the world and show everyone what’s possible. I built the bulk of this fund in only a few short years, all on a very middle-class income from my job at a car dealership.
I’m not showing the money to incite competition or boastfully show off; I want to inspire others out there to march toward FIRE and make their own dreams come true.
To further prove the point, the S&P 500 fell by almost 7% over the course of May – one of the worst May performances in decades. But I didn’t feel a thing. 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 June, 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’ll surely add to my new position in Eastman Chemical this month since the valuation is now even more appealing than when I started building the position. I absolutely love averaging down on a stock as I’m buying it.
Picking up another share of JPMorgan Chase & Co. would be dandy. In that regard, a number of banks and financial services companies look attractive right now.
I’ve noticed that The Home Depot Inc. (HD) has come back down to near my cost basis after a nice run. So that’s becoming compelling once more.
Shipping and logistics companies have taken a beating.
3M Company (MMM), as I recently noted, appears to be notably undervalued. In fact, a number of quality industrial companies look attractive now after recent market volatility.
I also see a lot to like in technology. A number of stocks have come way down recently due to the ongoing trade war between the US and China.
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.
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!