I’ve been investing for more than nine years, using dividend growth investing to achieve FIRE at a very young age.
Exactly how and why I’ve gone about that has been detailed in my two best-selling books: The Dividend Mantra Way and 5 Steps To Retire In 5 Years (also available in paperback).
I poured my heard-earned savings into high-quality businesses that pay reliable and increasing dividends. I bought these stocks at good values, then I just sat on them and collected/reinvested the growing dividends.
My FIRE Fund is the result of that activity. The bulk of that Fund was built in a six-year period, from 2010-2016.
It’s my real-money early retirement stock portfolio.
The Fund generates enough passive income to cover my essential expenses in life, rendering me financially independent.
Haven’t had a job in five years. Don’t anticipate needing one ever again.
I say that because the portfolio is heavily diversified across more than 100 world-class enterprises, and I’m very confident about their future prospects and the growing dividend income this collective group of businesses pays me.
The Fund is like a small forest, with each holding being a tree in that forest. Every tree produces the bountiful dividend fruit that I live off of. In fact, almost every tree is producing more fruit this year than it was last year.
A lot more.
Now, some trees are taller and healthier than others, and some trees produce more fruit than others, but the overall size and breadth of the forest as a whole is a beautiful thing.
I sleep incredibly well at night because of this diversification. Diversification is pretty much the only “free lunch” available to investors.
However, while the Fund is heavily diversified, the top 10 positions make up approximately 25% of the portfolio’s market value.
So these are companies that I’m essentially betting a large percentage of my early retirement and passive income on.
I’ve noticed that mainstream media and people in forum boards like to endlessly debate the hypothetical and theoretical, but I guess I’ve always been more interested in the application of concepts.
This is why I thought it’d be interesting to take some time today to examine some of the real-life largest long-term financial investments I’ve made. After all, this isn’t theory. It’s real money. I actually retired in my early 30s and live off of dividend income.
These are the biggest and tallest “trees” in my forest.
Let’s quickly take a look at my top 10 holdings.
My top 10 holdings can be accessed via my FIRE Fund.
Conclusion
I have well over 100 businesses in the portfolio. Over 100 trees in my “forest”. Having that level of diversification allows me to sleep soundly.
I don’t ever think for even a second that my growing dividend income might not be there for me at some point in the future. There’s no fear or worry whatsoever that I won’t have more “fruit” to live off of next year and every year thereafter. It’s instead highly likely that the forest will have taller trees producing much more fruit for many more years to come.
And while not every company is firing on all cylinders at all times, even a dividend cut or two wouldn’t phase me. Dividends are, after all, almost always “in the green”. Even if/when one tree is slightly withering for a time, the rest of the trees should remain quite lush.
That said, the portfolio does have a certain level of concentration at the top. These 10 largest positions account for almost 1/4 of the portfolio’s total market value.
Even then, though, I feel fantastic about being a bit more heavily exposed to these particular businesses. They’re all blue-chip companies that keep my cash flowing and growing. I suspect that will continue for many more years to come.
Someone is sitting in the shade today because someone planted a tree a long time ago.
-Warren Buffett
These 10 trees are providing me a lot of shade… and bountiful dividend fruit.
Full disclosure: I’m long all aforementioned stocks.
What do you think? Are these 10 solid companies? What are your top 10 holdings?
Thanks for reading.
P.S. If you’re ready to invest in blue-chip companies and become financially independent, check out some awesome resources I personally used on my to becoming financially free at 33!
Hi Jason,
thanks for sharing, very appreciate!
Just sit in the shade of all those dividend and enjoy your expat life!
Cheers from Switzerland.
Aris
Aris,
My pleasure! 🙂
Appreciate the support very much. I need all the shade I can get. It gets very hot here in Thailand.
Best regards.
This is a great list. I have some cash so it is very timely.
I have KO, MCD, NNN, and AFL. I had some PM too, but sold it off last year. Killing your customer base just doesn’t seem like a good business to me. There are plenty of other businesses to invest in.
I’ve been looking at JNJ and hope to pick up a few shares soon.
Thanks!
Joe,
Hey, glad to be a fellow shareholder there with you in some fine companies. 🙂
JNJ doesn’t look too bad here. Not the cheapest stock in the world, but I think it’s one of the highest-quality businesses out there.
Best wishes!
All your top 10 holdings are fantastic dividend growers, and they are in many dividend investors portfolio as well (at least in their wish list 🙂 )
NSC, MCD and UNP had a massive run-up recently.
Very well done. Your journey is amazing Jason!
Arun,
Thanks a lot. Appreciate the kind words!! 🙂
They’re great businesses. The stock prices don’t matter too much to me since I never sell, but I’m pretty confident that all of these “trees” will be producing more “fruit” 10 years from now.
Cheers.
Thanks for the article, Jason. I like your top ten holdings.
My top ten happen to be:
1. MCD at 6.9% of my total portfolio.
2. KO at 6%
3. AMNF at 5.9%
4. DEO at 5.8%
5. V at 5.7%
6. JNJ at 4.8%
7. DIS at 4.6%
8. KMI at 4.6%
9. IBM at 4.5%
10. CVX at 4.1%
So my top 10 holdings make up 52% of my portfolio. I only have about 35-40 positions so am more concentrated than you are.
I must say that I also sleep very well at night with these and the others. It’s still a work in progress and I plan to keep building and shaping this during my entire life but if I were somehow forced to stop now I’m still quite happy with the results attained this far.
Stay well out there and thanks for putting out such a thoughtful article, Jason.
-Mike
Mike,
I definitely wouldn’t be losing any sleep with that rock-solid lineup of businesses! 🙂
I hear you there at the end. We’re on the same page. I also plan to continue investing for a good while longer, albeit at a much slower pace. But I wouldn’t exactly be heartbroken if I were suddenly unable to ever invest another dime. I’m very happy with where the Fund is, although it’s still exciting to think about what it could yet become.
Thanks for sharing!
Cheers.
Hi Jason,
You’ve got a lot of great companies there, including several that I’d like to own but haven’t yet been able to catch at a reasonable valuation (NSC, MCD, UNP, HRS). I’ll keep my eyes peeled and my …
I started investing in dividend growth stocks about five years ago and have since acquired shares in 60 businesses. Here are my top ten, which make up nearly 30% of my portfolio by value:
1. MSFT (4.5%)
2. MKC (3.1%)
3. UL (3.1%)
4. HRL (3.0%)
5. TD (2.9%)
6. JNJ (2.8%)
7. AAPL (2.7%)
8. DIS (2.7%)
9. UNH (2.5%)
10. BDX (2.4%)
Looking at this list, it’s interesting to note that many of these are companies that have had the best stock price performance, not necessarily companies that I set out to buy a lot of in the first place. As such, many also have a fairly low dividend yield now — so these companies make up only about 20% of my total dividend income.
If I list my top ten by dividend income, the list looks very different (only two companies make both lists, TD and UL):
1. T (4.8%)
2. NGG (4.2%)
3. HASI (3.8%)
4. TD (3.7%)
5. WPC (3.5%)
6. MO (3.2%)
7. UL (3.0%)
8. QCOM (2.9%)
9. UPS (2.6%)
10. ABBV (2.5%)
I like to keep track of diversification in my portfolio both by value and by income, to make sure I’m not too much overweight by either metric in any company, industry, or sector.
Congrats on your veritable forest! I’ve got a few more trees to plant, but I look forward to sitting, job-free, in my own patch of shade soon.
Cheers,
John
John,
The admiration is mutual. You’ve got some terrific companies in there that I’ve just not been able to get a slice of for whatever reason(s). Only so much capital and time, I suppose. BDX, in particular, is one I totally whiffed on a number of years ago. Looked at it in the $70s, but it was earlier on in my journey and I was really trying to balance the portfolio’s yield. Oh, well. Can’t win them all. MKC is another one. A phenomenal business.
Awesome stuff. Keep it up. I’m sure that patch of shade is right around the corner. 🙂
Best regards.
J –
Phenomenal list. I have LMT, PG in my top 10 list. I share your MCD, AFL, NSC. JNJ is close to cracking the top 10, based on share price increasing lately. Just a rock solid list.
-Lanny
Lanny,
LMT. One of those that got away from me!
Happy to be a fellow shareholder with you in some of the others, though. May we long be cool in the shade. 🙂
Best wishes.
As others have mentioned, a solid list by any measure. Keep enjoying those fruits and shade!
Keith,
Thanks, bud.
Hope you’re enjoying your fruit in the shade, too! 🙂
Cheers.
Hi Jason,
I agree. If I could only have one position it would be JNJ. But, I am happy that is not enforced upon us. JNJ is my 3rd largest position. V, MA, JNJ, AAPL, and BDX. Not very high yielders, but growth has been good.
Lukaivan,
We’re on the same page. I’m very happy that we don’t have to invest in only one company (or any other number of companies). Having the ability to cast a wide net and build a broad forest is a great thing.
You’ve got some great companies over there. I really let BDX get away from me back in the day. Not a big dividend payer, but it’s a wonderful business.
Thanks for sharing!
Best regards.
Jason, I really enjoy your blog & Just wondering if you’ve considered SLB as a portfolio selection with a decent dividend yield? thanks for sharing your thoughts & wish you a & Oh a smooth transition where you are headed:)
Thanks,
Gerry
Gerry,
Appreciate the readership! 🙂
I’m not a huge fan of the oilfield stuff. I prefer E&P and midstream in the O&G space. The oilfield players just don’t seem to have the right ingredients for reliable and rising dividends.
Best regards.