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 3M Co. (MMM) on 2/4/20 for $157.34 per share.
3M Co. is a diversified global manufacturing conglomerate.
I recently put together an analysis and valuation piece on 3M, which goes over why I think it’s so appealing right now.
The company is going through a rough patch. No doubt about it. But if there’s any business that deserves the benefit of the doubt, its 3M with its rich business legacy and 60+ consecutive years of dividend increases.
If the stock stays in the bargain bin, I might add more shares in March.
This purchase added $5.76 in annual dividend income.
I purchased 1 share of Discover Financial Services (DFS) on 2/7/20 for $75.12 per share. I purchased another 1 share on 2/18/20 for $75.50 per share. Then I purchased another 1 share on 2/19/20 for $74.92 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 wrote up a piece in December detailing why this stock looks like such a fantastic long-term investment.
It’s such a high-quality business. And I’m very glad to have had the opportunity to add to my stake here. These purchases took the investment up to 25 shares, which I’m comfortable with in terms of this position against my overall exposure to banks and payment services. I’m not sure if I’ll push it higher, but the valuation is making it difficult to pass up.
These purchases added $5.28 in annual dividend income.
I purchased 1 share of Cisco Systems, Inc. (CSCO) on 2/13/20 for $46.98 per share. I purchased another 1 share on 2/14/20 for $46.75 per share. Then I purchased 1 more share on 2/18/20 for $46.49 per share. I purchased another 1 share on 2/19/20 for $46.31 per share. I purchased 1 share on 2/26/20 for $43.23 per share. Finally, I purchased 1 share on 3/2/20 for $39.38 per share.
Cisco Systems, Inc. is the world’s leading designer, manufacturer, and supplier of data networking equipment and software.
I wrote an analysis and valuation piece on Cisco Systems very recently, explaining why I think it’s a worthy long-term investment at the current time. Make sure to check that out.
This is actually one of my smaller holdings in tech. I’d like to push it even higher, depending on capital and competing opportunities. I think the valuation is attractive. And that valuation got more attractive as February wore on.
These purchases added $8.64 in annual dividend income.
I purchased 1 share of Exxon Mobil Corporation (XOM) on 2/14/20 for $60.85 per share. I purchased another 1 share on 2/18/20 for $59.79 per share. Then I purchased another 1 share on 2/20/20 for $60.25 per share. I purchased another 1 share on 2/24/20 for $57.03 per share. Finally, I purchased 1 share on 2/26/20 for $54.71 per share.
Exxon Mobil Corporation is an integrated energy company engaged in the exploration for, and production of, crude oil and natural gas, the manufacturing of petroleum products, and the transportation of oil, natural gas, and petroleum products.
I last picked up shares in the oil supermajor late last year, going over my rationale in December’s portfolio update.
The big change that occurred between then and now is that the stock has gone from slightly undervalued to materially so, in my view. The price of oil certainly fluctuates, but Exxon Mobil’s dividend doesn’t. The only direction the dividend goes in is up – as it’s done for almost four straight decades now.
I’m not super excited about the idea of boosting my exposure to O&G, since I think the very long-term prospects (looking out past my lifetime) are dim (and rightfully so), but I thought Exxon Mobil’s stock at ~$60 was too compelling to pass up. I view this position as now complete. There are no plans to add to it in the future.
These purchases added $17.40 in annual dividend income.
I purchased 2 shares of STORE Capital Corp. (STOR) on 2/20/20 for $37.28 per share. I purchased another 1 share on 2/26/20 for $37.13 per share. Then I purchased 1 share on 2/28/20 for $31.41 per share.
STORE Capital Corp. is an internally managed net-lease real estate investment trust that acquires, invests in, and manages single tenant operational real estate.
This is one of my favorite REITs. They execute at such a high level. I should have bought a lot more at $23/share, when I was first building an investment in the company. Hindsight is always 20/20.
However, even at this much higher price, it still looks like a fine long-term investment.
They just reported a strong FY 2019, with 8.2% YOY AFFO/share growth and an occupancy rate of 99.5%. With the stock recently pulling back sharply from ~$40, I saw that as an opportunity to add to my position for the first time in almost two years.
It’s going for less than 16 times AFFO/share after the late-month rout, which isn’t bad at all in this environment. A lot of high-quality REITs are still defying gravity. This is arguably one of the best buys in the entire net-lease space. If the stock stays in this valuation range, I’ll look to add to my position.
These purchases added $5.60 in annual dividend income.
I purchased 1 share of Delta Air Lines, Inc. (DAL) on 2/21/20 for $57.28 per share. I also purchased 1 share on 2/26/20 for $51.35 per share and another 1 share on 2/26/20 for $50.36 per share. Then I purchased 1 share on 2/28/20 for $46.80 per share. Finally, I purchased 1 share on 3/2/20 for $44.42 per share.
Delta Air Lines, Inc. is a global airline company.
I’ve spent a number of months slowly acquiring shares in this airline, building a small position.
I’ve discussed its long-term prospects and valuation almost ad nauseam, so I won’t bother to rehash that. What’s really changed of late is fear over reduced travel demand (due to COVID-19), which sent airline stocks falling out of the sky (pardon the pun). This stock is now trading hands for a P/E ratio well below 7, which is nuts.
The position is nearing completion, however. Even though the business is run phenomenally well, and even though the stock is insanely cheap, I view the airline industry as simply too cyclical to invest heavily in. I’ll look to finish this position off soon.
These purchases added $8.05 in annual dividend income.
SALES
There were no sales since the last update.
DIVIDEND INCREASES
BP PLC (BP) announced a 2.4% increase in its dividend, upping the quarterly dividend from $0.615 to $0.63. This added $6.60 in annual dividend income.
3M Co. (MMM) announced a 2.0% increase in its dividend, upping the quarterly dividend from $1.44 to $1.47. This added $1.56 in annual dividend income.
Aflac Incorporated (AFL) announced a 3.7% increase in its dividend, upping the quarterly dividend from $0.27 to $0.28. This added $7.20 in annual dividend income.
Gilead Sciences, Inc. (GILD) announced a 7.9% increase in its dividend, upping the quarterly dividend from $0.63 to $0.68. This added $4.80 in annual dividend income.
Novo Nordisk A/S (NVO) announced a 2.5% increase in its dividend, upping the full-year dividend from DKK 8.15 to DKK 8.35. This added $0.90 in annual dividend income.
Cisco Systems, Inc. (CSCO) announced a 2.9% increase in its dividend, upping the quarterly dividend from $0.35 to $0.36. This added $2.24 in annual dividend income.
NorthWestern Corp. (NWE) announced a 4.3% increase in its dividend, upping the quarterly dividend from $0.57 to $0.60. This added $3.00 in annual dividend income.
PepsiCo, Inc. (PEP) announced a 7.1% increase in its dividend, upping the quarterly dividend from $0.955 to $1.0225. This added $20.79 in annual dividend income.
Nestle SA (NSRGY) announced a 10.2% increase in its dividend, upping the annual dividend from CHF 2.45 to CHF 2.70. This added $5.11 in annual dividend income.
United Parcel Service, Inc. (UPS) announced a 5.2% increase in its dividend, upping the quarterly dividend from $0.96 to $1.01. This added $5.00 in annual dividend income.
PPL Corp. (PPL) announced a 0.6% increase in its dividend, upping the quarterly dividend from $0.4125 to $0.4150. This added $0.40 in annual dividend income.
Genuine Parts Company (GPC) announced a 3.6% increase in its dividend, upping the quarterly dividend from $0.7625 to $0.79. This added $0.55 in annual dividend income.
Service Corporation International (SCI) announced a 5.6% increase in its dividend, upping the quarterly dividend from $0.18 to $0.19. This added $0.80 in annual dividend income.
The Coca-Cola Co. (KO) announced a 2.5% increase in its dividend, upping the quarterly dividend from $0.40 to $0.41. This added $5.60 in annual dividend income.
Linde PLC (LIN) announced a 10.1% increase in its dividend, upping the quarterly dividend from $0.875 to $0.963. This added $3.52 in annual dividend income.
EPR Properties (EPR) announced a 2.0% increase in its dividend, upping the monthly dividend from $0.375 to $0.3825. This added $3.60 in annual dividend income.
The Home Depot Inc. (HD) announced a 10.3% increase in its dividend, upping the quarterly dividend from $1.36 to $1.50. This added $0.56 in annual dividend income.
TJX Companies Inc. (TJX) announced a 13.0% increase in its dividend, upping the quarterly dividend from $0.23 to $0.26. This added $1.20 in annual dividend income.
Toronto-Dominion Bank (TD) announced a 6.8% increase in its dividend, upping the quarterly dividend from CAD 0.74 to CAD 0.79. This added $8.99 in annual dividend income.
Digital Realty Trust, Inc. (DLR) announced a 3.7% increase in its dividend, upping the quarterly dividend from $1.08 to $1.12. This added $7.20 in annual dividend income.
Albemarle Corporation (ALB) announced a 4.8% increase in its dividend, upping the quarterly dividend from $0.3675 to $0.385. This added $2.45 in annual dividend income.
L3Harris Technologies, Inc. (LHX) announced a 13.3% increase in its dividend, upping the quarterly dividend from $0.75 to $0.85. This added $16.00 in annual dividend income.
FIRE FUND
The FIRE Fund is now valued at $414,010.99. That’s a 5.7% decrease from the last reported market value of $438,832.16.
There are 127 positions in the Fund. That’s unchanged from last month.
The Fund is now expected to generate a total of $14,942.21 in annual dividend income over the next 12 months. That’s an increase of 1.1%, or $167.16, over the prior update’s annual expectation of $14,775.05.
A fantastic tool for tracking your portfolio, progress, and performance is Personal Capital.
CONCLUSION
Another amazing month for the Fund. The number I keep my eye on – expected annual dividend income – continues to rise like clockwork.
The last week of February saw the US stock market wobble quite a bit after COVID-19 became more widespread outside of mainland China. But I’m with Warren Buffett on this one. There’s no reaction necessary from long-term investors, other than to perhaps be more excited to buy stocks at cheaper prices (if you’re still accumulating assets).
Earnings season came and went without too many surprises. Most of the companies in the Fund are steadily plodding along as they sell more products and/or more services, to more people, at higher prices.
Successful long-term investing is very boring when done correctly. It’s like watching paint dry.
However, February was actually pretty exciting.
It was a record-breaking month!
There were 22 dividend increases announced by Fund holdings since the last update. That’s a new all-time record for the Fund, breaking the previous record of 21 dividend increases announced between Fund updates.
The last week of February was historically volatile in terms of stock prices, but this proves once again why it’s so fantastic to be a long-term dividend growth investor.
Stock prices go up, down, and all around, but the dividends tend to only go up. My lifestyle is funded by the growing dividend income the Fund generates, not stock prices. The tangible cash flow grows month in and month out. So my life continues to get easier on a pure economical level, regardless of market volatility. It’s truly a pleasurable way to invest and keep your mind focused on what matters.
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 $108.07 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 $3,087 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 a snowball snowballing. It’s amazing.
I don’t think there were many months in my entire life in which I invested more than $3,000, even back when I was actively chasing FIRE. That’s a lot of money to save and invest, especially for a guy who never had a high-paying job.
Yet I’m now seeing the same result as if I had invested that much money, even without lifting a finger.
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 March, 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 think March will look a lot like February did. I’ll probably be investing in a lot of the same stocks. However, I’ll be thrilled to buy those same stocks at lower prices. I do love a good bargain. Seeing quality merchandise marked down puts a smile on my face.
I have already allocated some of March’s capital, which partially explains why this period was so busy. Thus, the next Fund update might have less buys to report on.
One stock that I didn’t get around to buying in February is Cracker Barrel Old Country Store, Inc. (CBRL). I should rectify that in March.
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!
We made similar kind of stock purchases in last few week of feb.I added MMM,DFS,CSCO,WRK
desi,
Sounds like we’re on the same page. 🙂
Cheers!
Dividend income and dividend increases are the remarkable things these volatile markets. Our income keeps moving upward regardless of market fluctuations. By the way, I received 19 dividend increases last month, and my fund down 7.8% in one week.
FJ,
Congrats on 19 increases. Gotta love that tangible cash flow increasing like clockwork. That makes it so easy to ignore the stock market volatility. 🙂
Best regards.
Congrats Jason on a great month and an impressive year of dividends coming up.
Really enjoyed reading your last link to resources you’ve used to get you to where you are!
All the best,
J
J,
Thanks so much. I can only hope the transparency and real-life results are inspirational. This stuff is possible for everyone, and it’s too good to keep to myself. 🙂
Best wishes.
Dear Jason,
PepsiCo announced a 3% (not: 7.1%) increase:
PURCHASE, N.Y., Feb. 10, 2020 /PRNewswire/ — The Board of Directors of PepsiCo, Inc. (NASDAQ: PEP) today declared a quarterly dividend of $0.955 per share of PepsiCo common stock, a 3 percent increase versus the comparable year-earlier period. Today’s action is consistent with PepsiCo’s previously announced increase in its annualized dividend to $3.82 per share from $3.71 per share, which began with the June 2019 payment. This dividend is payable on March 31, 2020 to shareholders of record at the close of business on March 6, 2020. PepsiCo has paid consecutive quarterly cash dividends since 1965, and 2019 marked the company’s 47th consecutive annual dividend increase.
Mike,
That’s the old dividend rate. The new dividend rate, which is shown above, was announced with the most recent 10-Q.
Cheers.
At recent prices, and with its robust annual raises, TD is a fantastic DGI stock. Seems too good to be true. Same with HD, although its yield isn’t nearly as high. Long both HD and TD
In fact, stocks ending in “D” can make a great portfolio: APD, GILD, HD, TD are all fine investments.
And how did I forget D and GD? Put them in the “Ends with D Portfolio” too!
DL,
Maybe I need to figure out how to add a “D” to the end of my name. 🙂
Best regards.
Congrats on the impressive month. 22 dividends increases is quite impressive. My portfolio was down near the same percentage, but the dividend and dividend increases are more important to me.
Look forward to your dividend income report.
IP,
It’s all about the growing cash flow. My lifestyle gets economically easier every single month. I’m very happy. 🙂
I never sell stocks, so the market value is more or less irrelevant to me. It’s just a psychological thing, where most people feel better when stock prices are higher (even if that works against them in reality).
Best wishes.
What a fantastic month Jason. Congrats! The dividend increases were great. I got 19 myself. BTW, I like how you consolidate the whole month of investing into one post. I still break mine up into income, increases, and buys.
Chickenwizard,
Sounds like we both had an awesome February. That’s good stuff! 🙂
Excited to see where things land in March. February tends to be a high mark as it relates to dividend raises for the Fund, but every month is good when you’re a dividend growth investor.
Best regards.
Jason,
So many good prices all of a sudden, a great time to take advantage. It is a very exciting time to be an investor! Stay safe over there too – getting sick is never fun… I do some respiratory protection stuff for work and I know that people think they’re being safe by wearing masks – but they do little in terms of actual protection because of personal habits.
– Gremlin
DG,
The cheaper prices certainly makes things more interesting, but it’s always a great time to be a dividend growth investor. 🙂
Yeah, I don’t wear a mask. I’d be more concerned about, say, driving a car and dying from a car accident than dying from COVID-19. But people fear what’s new instead of what’s already dangerous and staring at them in the face. I exercise, don’t smoke, limit food portions, don’t drive, etc. Living a healthy, low-risk lifestyle is far more sensible than fearing a virus with a very low mortality rate.
Best regards.
Thanks for the update Jason! Always good to see a fellow investor shopping at the bargain sale!
Banks and insurers are starting to look really great. It seems fears of interest rates being ‘lower for longer’ are really pushing the stock prices down.
WFC in the banks is looking particularly cheap as is PRU in the insurer/investment side. May have to add some more JPM as well.
Thoughts on banks and insurers now? I imagine you have full positions in a lot of them which is why you’re not scooping up.
Guy,
Yeah, I think banks look really good here. Banks, airlines, and oil companies seem to be particularly cheap. I took a bit of a break on banks after about, oh, September or so after being pretty busy in that area. That’s because bank stocks went on a run. After a very recent pullback, exacerbated by the rate cut, they look appealing once again. I actually added to one of my bank holdings very recently, as I noted on social media. And I’ve already submitted my UDGSOW article for this Sunday, which discusses a bank.
And I think it’s important to note that Discover Financial is a bank.
Cheers!
Looking good as alway, Jason. My portfolio is down over $20,000 and I couldn’t be happier. Taking time to REALLY average down on a couple companies. Exxon Mobil keeps hovering in and out of the $40s, and I was stoked to buy it at $60 not too long ago. Gonna be even more stoked now.
Sincerely,
ARB–Angry Retail Banker
ARB,
A lot of sales out there on high-quality merchandise. It’s really exciting stuff. I’m not investing much anymore, so it’s nice to see a smaller amount of capital go that much further (because it’s buying more shares at cheaper prices). I’m a happy camper. 🙂
Exxon Mobil is one of those exceptions, though, only because the lower valuation is largely due to what will almost certainly be deteriorating fundamentals. I prefer cheaper prices on the back of intact fundamentals, but I still like the long-term odds there.
Best regards.
That’s the great thing about dividend investing, even though your portfolio dropped 5.7%, your forward dividend income went up 1.1%. Great job. And love the bargain hunting. Will be doing some bargain hunting tomorrow.
Chad,
Yeah, that which actually covers my expenses is up. My lifestyle continues to get economically easier every single month. I couldn’t be more pleased. 🙂
If you have to sell stocks, this kind of market correction is a nightmare. But if you’re accumulating stocks, it’s a gift. Really depends on where you’re at on the spectrum.
Have fun shopping!
Cheers.
Jason, I think that I can speak for others when I say we appreciate the straight-forward, transparent nature of the Monthly FIRE updates. Easy to follow, all of the relevant information, no fluff; and somewhat actionable to a degree, as certain companies are “highlighted” if one wanted to add to their portfolio as well.
Speaking of actionable, every one in a while, I’ll look through all of Jason’s positions and see if any of them that I had previously missed out on were experiencing a correction where as I could have a “second chance” to get at the price he did.
There are obviously many of those this week. I just grabbed SBUX, 3M, CSCO, and might get some others…
Best wishes to everyone; I believe that the “Quality Dividend Crowd” is probably best positioned for this rough ride we’re in…
Andy,
Appreciate the kind words, support, and readership! 🙂
Yeah, I think dividend growth investors are perfectly positioned to ride out – and even profit from – the volatility. Those who are selling stocks for their living expenses or otherwise reliant on stock prices are in much worse shape. Although I’m long past the days of investing to achieve FIRE, I still enjoy bargain hunting as much as the next guy.
Best regards.