Monday, July 6, 2015

Project $3 Million - June Results

This portfolio belongs to a 30 year old. I manage it for him.

MONTHLY RESULTS:

1. The portfolio generated $338.47 in monthly dividend income/cash flows and was a 13.9% increase year over year.

2. The first 2 quarters of 2015 saw dividend income/cash flows in the amount of $2,223.32, a 13.2% increase over the first 2 quarters of 2014.

Companies that raised their dividend in June:

Realty Income - O ... 0.3% It was the second increase this year.

Ross Stores - ROST split 2 for 1

This portfolio closed the month at $137,443.35. It is down 4.5% from its all-time high of $143,982.31 established on May 18.

In order to be on schedule for the $3 million dollars, the portfolio value at the end of June needed to be $108,071.57. ... This portfolio is ahead of schedule by 27.2%.
------------------------------------------------------------------------------------

ANNUAL COMPARISONS:

June Dividend History: (Last 5 years)

2011 ... $196.28
2012 ... $213.51 ... up 8.8%
2013 ... $243.16 ... up 18.8%
2014 ... $290.24 ... up 19.4%
2015  ... $338.47 ... up 12.8%

Second Quarter Dividend History:

2011 ... $575.40
2012 ... $676.54 ... up 17.6%
2013 ... $803.51 ... up 18.8%
2014 ... $1032.56 ... up 28.5%
2015 ... $1164.96 ... up 12.8%
------------------------------------------------------------------------------------

PRIMARY OBJECTIVE:

Income Replacement!

Escape velocity is the speed that an object needs to be traveling to break free of the planet's gravitational pull and leave it without further propulsion.

This portfolio is looking for the point where the income being generated can allow the holder of this portfolio to escape the gravitational pull of the work force and leave it without needing further income from a job, or worrying about needing favorable market conditions to sell assets to generate cash to live on.

The objective is to start building an income stream now to replace the income earned from job employment. The goal is to achieve $10,000 per month in retirement from dividends alone and not have to sell any of the underlying assets.

Income from pensions and Social Security will provide additional income.

The goal is to have the dividend/cash flow stream grow at a rate above inflation and this is expected to be achieved with companies that grow their dividends annually, regardless of market conditions.

A portfolio of $3 million dollars in value with a yield of 4% will accomplish the $10,000 per month in dividend income. Hence the title of this portfolio ... Project $3 Million.
======================================================

MISSION STATEMENT:

To earn an income stream that is reliable, predictable and increasing.
========================================================

STRATEGY:

To focus on companies with high financial strength ratings and provide safe and growing dividends that are not considered to be at risk during ongoing market conditions.

Capital appreciation and capital preservation are secondary to dividend growth. Total return is expected to be the long-term result as long as the companies in the portfolio are of high quality, pay a decent yield and continue to grow the dividend.

The formula to be followed to assure this strategy enjoys long-term success is what I refer to as "The Success Formula That Never Fails."

High Quality + High Yield + High Growth of Yield = High Total Return.

I explain how to use the formula here:

http://seekingalpha.com/instablog/728729-chowder/2360292-the-chowder-rule

========================================================

TACTICS:

To contribute $500 per month to the portfolio, plus 5% of income (no match) to the Thrift Savings Plan (TSP), look to earn 8.25% annually, compounded over 40 years, to age 65. The beginning portfolio value at the time of establishing these goals was $42,204.42.

The cash contribution breakdown is to put $5,500 annually into the Roth Ira and $500 annually into the taxable account.

The link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years in order to stay on schedule for the $3 million dollars.

http://www.planningtips.com/cgi-bin/savings.pl?amt=42205.00&dep=500&cmp=annually&int=8.25&yrs=40&Calculate.x=50&Calculate.y=12

All dividends are currently being reinvested back into the companies paying the dividend. Monthly cash contributions will be used to add to existing positions or create new ones.
==========================================================

JUNE DIVIDENDS RECEIVED:

Taxable Account: (Dividend Reinvested)

Southern Company - SO ....... $41.17 ... bot 0.967 shares
Johnson & Johnson - JNJ ...... $34.65 ... bot 0.349 shares
Chevron Corp - CVX ............ $35.44 ... bot 0.349 shares
McDonald's - MCD ............... $32.15 ... bot 0.34 shares
Lockheed - Martin - LMT ..... $74.70 ... bot 0.399 shares
CDK Global - CDK ............... $1.57 ..... bot 0.029 shares
Frontier Comm - FTR ........... $2.55 ...... bot 0.515 shares
Pepsico - PEP ........................ $24.86 .... bot 0.264 shares
---------------------------------------------------------------------------------------
Total Dividends ..... $247.09

Roth Ira: (Dividend Reinvested)

International Business Machines - IBM ... $14.55 ... bot 0.086 shares
Exxon- Mobil - XOM ............................... $7.42 ..... bot 0.087 shares
Realty Income - O .................................... $17.11 ... bot 0.378 shares
Dominion Resources - D .......................... $48.98 ... bot 0.725 shares
Ross Stores - ROST .................................. $3.32 ..... bot 0.067 shares
--------------------------------------------------------------------------------------
Total Dividends ..... $91.38

=====================================================

TAXABLE ACCOUNT - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

MMP ... 87.824 ... $6,444.53 ... UP 140.46% ... **Magellan Midstream Partners
MO .... 116.063 ... $5,676.64 ... UP 112.33% ... Altria Group
LMT ... 44.202 .... $8,217.15 ... UP 108.59% ... Lockheed- Martin

ADP .... 40.735 ... $3,268.17 ... up 72.24% ... Automatic Data Processing
CDK .... 13.071 ... $705.57 ... (spun off from ADP) ... CDK Global
CL ....... 52.40 ..... $3,427.48 ... up 59.23% ... *Colgate-Palmolive
CVX .... 33.47 ..... $3,228.85 ... up 4.88% ..... Chevron Corp
DE ....... 12.477 ... $1,210.89 ... up 16.87% ... Deere & Company
DEO .... 31.48 ..... $2,267.57 ... up 61.09% ... Diagio, plc
EPD ... 136.356 ... $4,075.68 ... up 45.78% ... **Enterprise Products Partners
FTR .... 24.312 .... $120.34 ... (spun off from VZ) ... Frontier Communications
GIS ..... 82.823 .... $4,614.90 ... up 50.47% ... *General Mills
HYH ... 4.00 ........ $162.00 ... (spun off from KMB) ... Halyard Health
JNJ ...... 46.555 ... $4,537.25 ... up 51.32% ... *Johnson & Johnson
KMB ... 38.931 ... $4,125.52 ... up 36.25% ... Kimberly- Clark
KMI .. 116.556 ... $4,551.36 ... up 2.37% ..... **Kinder Morgan, Inc.
KO .... 116.384 ... $4,565.74 ... up 57.30% ... *Coca-Cola
KRFT .. 93.069 ... $7,923.89 ... up 82.87% ... Kraft Foods
MCD ... 38.166 ... $3,628.44 ... up 20.30% ... McDonald's
PEP ..... 35.385 ... $3,302.84 ... up 47.08% ... Pepsico
PM ...... 48.171 ... $3,861.87 ... up 3.87% ..... Philip Morris
SO ....... 76.854 ... $3,220.18 ... up 5.20% .... *Southern Company
SYY .. 120.979 ... $4,367.34 ... up 18.61% ... Sysco
ULTA ... 7.00 ..... $1,081.15 ... dn 1.26% ... Ulta Salon (new position)
Cash .................... $23.95
---------------------------------------------------------------------------------------------
Account Value ..... $89,994.69

*Increased the dividend/distribution in 2015
** Multiple increases in 2015

======================================================

ROTH IRA - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

BDX ....... 8.00 .... $1,133.20 ... up 0.67% ..... Becton, Dickerson and Co. (new position)
BWLD ... 7.00 .... $1,096.83  ... up 2.43% .... Buffalo Wild Wings (new position)
D ..........75.376 ... $5,107.56 ... up 37.68% ... Dominion Resources
GILD .. 10.037 ... $1,175.13 ... up 13.62% ... Gilead Sciences
HCN ... 47.561 ... $3,121.43 ... up 16.01% ... Healthcare REIT
IBM .... 11.282 ... $1,835.13 ... dn 6.29% ... *International Business Machines
KMI .... 75.832 ... $2,911.19 ... up 4.09% ... **Kinder Morgan, Inc.
MA ..... 11.00 ..... $1,028.28 ... up 6.86% ... Master Card
NSC .... 11.00 ..... $960.96 ..... dn 5.33% ,,,. Norfolk Southern (new position)
O ......... 90.646 ... $4,023.78 ... up 20.02% ... **Realty Income
PG ...... 37.13 ...... $2,905.05 ... up 21.58% ... *Procter & Gamble
ROST .. 28.282 ... $1,374.79 ... up 40.78% ... *Ross Stores
T .......... 63.335 ... $2,249.66 ... up 3.16% .... AT&T
UNP .... 10.00 ..... $953.70 ...... dn 6.50% ... Union Pacific (new position)
VZ .... 128.489 ... $5,988.87 ... up 20.62% ... Verizon
XOM ... 10.245 ... $852.38 ..... dn 13.64% ... *Exxon - Mobil
Cash .................... $702.45
-----------------------------------------------------------------------------------
Account Value ..... $37,420.09

==================================================

THRIFT SAVINGS PLAN (TSP) - Federal Version of the 401K

There are no matching funds from the employer (military). They provide a pension for life after 20 years of service at 50% of their salary at the time of retirement. They provide 75% of your salary for life after 30 years of service.

Only 5% of income is going into the TSP. This amounts to $64 per month currently.

Index Funds and Life Cycle Funds are the only options to choose from.

Fund ..... Tracking Index ..... Shares ..... Value ..... Percentage of Portfolio

S Fund .... Small Cap ..... 165.9653 ... $6,322.96 ... 63.05%
I Fund ... International ... 143.6451 ... $3,705.61 ... 36.95%
-----------------------------------------------------------------------------------
Account Value ..... $10,028.67

Ongoing Contributions:

S Fund ... 60%
I Fund ... 40%
===================================================


SOLD POSITIONS - REALIZED GAINS/LOSSES:

Company ... Date ... Gain/Loss ... Reason/Result

BMY ... 11/09 ... $1,001.21 - up 25.85% - Froze dividend, bot VZ and JNJ

KMR ... 02/11 ... $504.94 - up 27.09% - Replaced in taxable account with KMP
O ........ 03/11 .... $639.63 - up 34.55% - sold @35.42 bot back @34.43 don't recall why
ZTR .... 04/11 .... <$55.58> - dn <10.09%> - Cut losses, bot SYY
VZ ...... 05/11 ... $618.16 - up 30.15% - Moved to Roth and added to existing position
CLX ... 06/11 ... $25.25 - up 1.57% - Concerned with debt, replaced with KMB
VFC ... 10/11 ... $897.99 - up 53.07% - Yield dropped below 2%, bot PEP

O ....... 01/12 ... $79.73 - up 3.01% - Moved to Roth
UHT .. 01/12 ... $233.60 - up 10.32% - Wanted to spread tenant risk, bot HCN
FTR ... 03/12 .. <$1,095.08> - dn <49.90%> - Dividend cut, cash to Roth, bot COP
ABT ... 11/12 .. $872.46 - up 31.38% - Company split, took profits, bot KRFT
BP ..... 12/12 ... <$554.03> - dn <17.23%> - Took loss, cash to Roth, bot COP
NUE .. 12/12 .. $164.61 - up 7.33% - Slow dividend growth, cash to Roth, added to COP

COP ... 04/13 ... <$2.46> - dn <0.10%> - Froze dividend, bot MO

LMT ... 06/15 ... $650.10 - up 136.53% - Replaced in taxable account with ULTA
MO .... 06/15 ... $909.56 - up 32.13% - Replaced in Roth with BDX, BWLD, NSC and UNP
-----------------------------------------------------------------------------------------------------------------------------------
Total Cash Gains ... $4,890.09


































Monday, June 1, 2015

Project $3 Million - May Results

This portfolio belongs to a 30 year old. I manage it for him.

MONTHLY RESULTS:

1. This portfolio reached an all-time high on May 18 at $143,982.31.
2. The monthly dividend income/cash flows of $440.21 was a 12.5% increase year over year.
3. The year to date income/cash flows of $1,884.85 is an increase of 12.6% year over year.

Companies that raised their dividend in May:

None.

This portfolio closed the month at $140,991.58. It is down 2.1% from its all-time high.

In order to be on schedule for the $3 million, the portfolio value for the end of May needed to be $106,833.53. ... This portfolio is ahead of schedule by 32.0%
--------------------------------------------------------------------------------------------------

ANNUAL COMPARISONS:

May Dividend History: (Last 5 years)

2011 ... $245.41
2012 ... $304.09 up 23.9%
2013 ... $326.48 up 7.4%
2014 ... $391.43 up 19.9%
2015 ,,, $440.21 up 12.5%
========================================================

PRIMARY OBJECTIVE:

Income Replacement!

Escape velocity is the speed that an object needs to be traveling to break free of the planet's gravitational pull and leave it without further propulsion.

This portfolio is looking for the point where the income being generated can allow the holder of this portfolio to escape the gravitational pull of the work force and leave it without needing further income from a job, or worrying about needing favorable market conditions to sell assets to generate cash to live on.

The objective is to start building that income stream now to replace the income earned from job related employment. The goal is to achieve $10,000 per month in retirement from dividends alone and not have to sell any of the underlying assets.

Income from pensions and Social Security will provide additional income.

The goal is to have the dividend/cash flow stream grow at a rate above inflation and this is expected to be achieved with companies that grow their dividends annually, regardless of market conditions.

A portfolio of $3 million in value with a yield of 4% will accomplish the $10,000 per month in dividend income. Hence the title of this portfolio ... Project $3 Million.
===========================================================

MISSION STATEMENT:

To earn an income stream that is reliable, predictable and increasing.
===========================================================

STRATEGY:

To focus on companies with high financial strength ratings and provide safe and growing dividends that are not considered to be at risk during ongoing market conditions.

Capital appreciation and capital preservation are secondary to dividend growth. Total return is expected to be the long-term result as long as the companies in the portfolio are of high quality, pay a decent yield and continue to grow the dividend.

The formula to be followed to assure this strategy enjoys long-term success is what I refer to as "The Success Formula That Never Fails."

High Quality + High Current Yield + High Growth of Yield = High Total Return.

I explain how to use the formula here:

http://seekingalpha.com/instablog/728729-chowder/2360292-the-chowder-rule

==========================================================

TACTICS:

To contribute $500 per month to the portfolio, plus 5% of income (no match) to the Thrift Savings Plan (TSP), look to earn 8.25% annually, compounded over 40 years, to age 65. The beginning portfolio value at the time of establishing these goals was $42,204.42.

The cash contribution breakdown is to put $5,500 annually into the Roth Ira and $500 annually into the taxable account.

The link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years in order to stay on schedule for the $3 million.

http://www.planningtips.com/cgi-bin/savings.pl?amt=42205.00&dep=500&cmp=annually&int=8.25&yrs=40&Calculate.x=50&Calculate.y=12

All dividends are currently being reinvested back into the companies paying the dividend. Monthly cash contributions will be used to add to existing positions or create new ones.
==========================================================

MAY DIVIDENDS RECEIVED:

Taxable Account: (Dividends Reinvested)

Deere & Company - DE .......... $7.44 ..... bot 0.082 shares
General Mills - GIS ................. $36.16 ... bot 0.648 shares
Enterprise Products - EPD ....... $50.55 ... bot 1.561 units
Magellan Midstream - MMP ... $62.47 ... bot 0.753 units
Colgate-Palmolive - CL ........... $19.80 ... bot 0.288 shares
Kinder Morgan - KMI ............. $56.28 ... bot 1.315 shares
----------------------------------------------------------------------------------------
Total Dividends ..... $232.70

Roth Ira: (Dividends Reinvested)

Verizon - VZ ..................... $69.91 ... bot 1.385 shares
AT&T - T .......................... $29.37 ... bot 0.848 shares
Realty Income - O ............. $17.04 ... bot 0.358 shares
Procter & Gamble - PG ..... $24.41 ... bot 0.302 shares
Kinder Morgan - KMI ....... $36.00 ... bot 0.841 shares
Healthcare REIT - HCN .... $38.78 ... bot 0.555 shares
--------------------------------------------------------------------------------------
Total Dividends ..... $207.51

=======================================================

TAXABLE ACCOUNT - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

MMP ... 87.824 ... $7,001.33 ... UP 161.24% ... **Magellan Midstream Partners
MO .... 116.063 ... $5,942.43 ... UP 122.27% ... Altria Group
LMT ... 49.803 .... $9,372.92 ... UP 113.31% ... Lockheed-Martin

ADP .... 40.735 ... $3,483.25 ... up 83.58% ... Automatic Data Processing
CDK .... 13.071 ... $696.55 ... (spun off from ADP) ... CDK Global
CL ....... 52.40 ..... $3,499.80 ... up 62.59% ... *Colgate-Palmolive
CVX .... 33.121 ... $3,411.46 ... up 12.10% ... Chevron Corp
DE ....... 12.477 ... $1,168.85 ... up 12.81% ... Deere & Company
DEO .... 31.48 ..... $3,493.02 ... up 54.04% ... Diagio, plc
EPD .. 136.356 ... $4,420.66 ... up 58.12% ... **Enterprise Products Partners
FTR ..... 24.312 ... $125.21 ... (spun off from VZ) ... Frontier Communications
GIS ..... 82.823 ... $4,650.51 ... up 51.63% ... *General Mills
HYH ... 4.00 ....... $165.68 ... (spun off from KMB) ... Halyard Health
JNJ ...... 46.206 ... $4,627.07 ... up 56.11% ... *Johnson & Johnson
KMB ... 38.931 ... $4,238.03 ... up 39.97% ... Kimberly-Clark
KMI .. 118.556 ... $4,918.89 ... up 10.63% ... **Kinder Morgan, Inc
KO .... 116.384 ... $4,767.09 ... up 64.23% ... *Coca-Cola
KRFT .. 93.069 ... $7,859.68 ... up 81.39% ... Kraft Foods
MCD ... 37.826 ... $3,628.65 ... up 21.60% ... McDonald's
PEP ..... 35.385 ... $3,412.18 ... up 51.95% ... Pepsico
PM ...... 48.171 ... $4,001.56 ... up 7.62% ..... Philip Morris
SO ....... 75.887 ... $3,315.50 ... up 9.79% .... *Southern Company
SYY .. 120.979 ... $4,495.58 ... up 22.30% ... Sysco Corp
Cash .................... $2.62
------------------------------------------------------------------------------------
Account Value ..... $92,698.51

*Increased the dividend/distribution in 2015
**Multiple increases in 2015

========================================================

ROTH IRA - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

D .......... 75.651 ... $5,334.91 ... up 45.74% ... Dominion Resources
GILD ... 10.00 ..... $1,122.70 ... up 9.01% ..... Gilead Sciences (new position)
HCN .... 47.651 ... $3,341.64 ... up 24.19% ... Healthcare REIT
IBM ..... 11.196 ... $1,899.40 .. <dn 2.28%> .. *International Business Machines
KMI ..... 75.832 ... $3,146.27 ... up 12.50% ... **Kinder Morgan, Inc.
MA ...... 11.00 ..... $1.014.66 ... up 5.49% ..... Master Card (new position)
MO ...... 77.92 ..... $3,989.50 ... up 41.44% ... Altria Group
O ......... 90.268 ... $4,113.51 ... up 23.32% ... **Realty Income
PG ....... 37.13 ..... $2,910.62 ... up 21.81% ... *Procter & Gamble
ROST .. 14.141 ... $1,367.01 ... up 39.98% ... *Ross Stores
T .......... 63.335 ... $2,187.59 ... up 0.32% ..... AT&T
VZ ..... 128.489 ... $6,352.50 ... up 27.95% ... Verizon
XOM ... 10.158 ... $865.46 .... <dn 11.85%> .. *Exxon-Mobil
Cash .................... $533.73
----------------------------------------------------------------------------------------
Account Value ..... $38,179.70

===================================================

THRIFT SAVINGS PLAN (TSP) - Federal Version of the 401K

There are no matching funds from the employer (military). They provide a pension for life after 20 years of service at 50% of their salary at the time of retirement. They provide 75% of your salary for life after 30 years of service.

Only 5% of income is going into the TSP. This amounts to $64 per month currently.

Index Funds and Life Cycle Funds are the only options to choose from.

Fund ... Tracking Index ..... Shares ..... Value ..... Percentage of Portfolio

S Fund ... Small Cap ...... 164.9161 ...$6,327.85 ... 62.57%
I Fund ... International ... 142.6333 ...$3,785.52 ... 37.43%
----------------------------------------------------------------------------
Account Value ..... $10,113.37

Ongoing Contributions:

S Fund ... 60%
I Fund ... 40%
===============================================

SOLD POSITIONS - REALIZED GAINS/LOSSES:

Company ... Date ... Gain/Loss ... Reason/Result

BMY ... 11/09 ... $1,001.21 - up 25.85% - Froze dividend, bot VZ and JNJ

KMR ... 02/11 ... $504.94 - up 27.09% - Replaced in taxable account with KMP
O ........ 03/11 .... $639.63 - up 34.55% - sold @35.42 bot back @34.43 don't recall why
ZTR .... 04/11 .... <$55.58> - dn <10.09%> - Cut losses, bot SYY
VZ ...... 05/11 ... $618.16 - up 30.15% - Moved to Roth and added to existing position
CLX ... 06/11 ... $25.25 - up 1.57% - Concerned with debt, replaced with KMB
VFC ... 10/11 ... $897.99 - up 53.07% - Yield dropped below 2%, bot PEP

O ....... 01/12 ... $79.73 - up 3.01% - Moved to Roth
UHT .. 01/12 ... $233.60 - up 10.32% - Wanted to spread tenant risk, bot HCN
FTR ... 03/12 .. <$1,095.08> - dn <49.90%> - Dividend cut, cash to Roth, bot COP
ABT ... 11/12 .. $872.46 - up 31.38% - Company split, took profits, bot KRFT
BP ..... 12/12 ... <$554.03> - dn <17.23%> - Took loss, cash to Roth, bot COP
NUE .. 12/12 .. $164.61 - up 7.33% - Slow dividend growth, cash to Roth, added to COP

COP ... 04/13 ... <$2.46> - dn <0.10%> - Froze dividend, bot MO
------------------------------------------------------------------------------
Total Cash Gains ... $3,330.43






























Tuesday, May 5, 2015

Project $3 Million - April Results

This portfolio belongs to a 30 year old. I manage it for him.

MONTHLY RESULTS:

1. This portfolio reached an all-time high on April 16 at $142,758.09.
2. The monthly dividend income/cash flows of $386.28 was a 10.1% increase year over year.
3. The year to date income/cash flows of $1,444.64 was an increase of 12.6% year over year.

Companies that increased their dividend in April:

Intern'l Bus. Machines - IBM ... 18.2%
Johnson & Johnson - JNJ ........ 7.1%
Kinder Morgan, Inc - KMI ... ...6.6% - (second increase - up 14.3% year over year)
Exxon-Mobil - XOM ............... 5.8%
Magellan Midstream - MMP ... 3.2% - (second increase - up 17.1% year over year)
Procter & Gamble - PG ........... 3.0%
Southern Company - SO ......... 3.0%
Enterprise Products - EPD ...... 1.4% - (second increase - up 5.6% year over year)

This portfolio closed the month at $141,188.51. It is down 1.1% from its all-time high.

In order to be on schedule for the $3 million, the portfolio value for the end of April needed to be $105,595.49. ... This portfolio is ahead of schedule by 33.7%.
--------------------------------------------------------------------------------------

ANNUAL COMPARISONS:

April Dividend History: (Last 5 years)

2011 ... $133.71
2012 ... $158.94 up 18.9%
2013 ... $233.87 up 47.1%
2014 ... $350.89 up 50.0%
2015 ... $386.28 up 10.1%
=================================================

PRIMARY OBJECTIVE:

Income Replacement!

The objective is to start building an income stream now to replace the income that will be earned throughout the working years. The goal is to achieve $10,000 per month in retirement from dividends alone and not have to sell any of the underlying assets.

Income from pensions and Social Security will provide additional income.

The goal is to have the dividend/cash flow stream grow at a rate above inflation and this is expected to be achieved with companies that grow their dividends annually, regardless of market conditions.

A portfolio of $3 million in value with a yield of 4% will accomplish the $10,000 per month in dividend income. Hence the title of this portfolio. ... Project $3 Million.
====================================================

MISSION STATEMENT:

To earn an income stream that is reliable, predictable and increasing.
===================================================

STRATEGY:

To focus on companies with high financial strength ratings and provide safe and growing dividends that are not considered to be at risk during ongoing market conditions.

Capital appreciation and capital preservation are secondary to dividend growth. Total return is expected to be the long-term result as long as the companies in the portfolio are of high quality, pay a decent yield and continue to grow the dividend.

The formula to be followed to assure this strategy enjoys long-term success is what I refer to as "The Success Formula That Never Fails."

High Quality + High Current Yield + High Growth of Yield = High Total Return.

I explain how to use the formula here:

http://seekingalpha.com/instablog/728729-chowder/2360292-the-chowder-rule

================================================

TACTICS:

To contribute $500 per month to the portfolio, plus 5% of income (no match) to the Thrift Savings Plan (TSP), look to earn 8.25% annually, compounded over 40 years, to age 65. The beginning portfolio value at the time of establishing these goals was $42,204.42.

The cash contribution breakdown is to put $5,500 annually into the Roth Ira and $500 annually into the taxable account.

The link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years in order to stay on schedule for the $3 million.

http://www.planningtips.com/cgi-bin/savings.pl?amt=42205.00&dep=500&cmp=annually&int=8.25&yrs=40&Calculate.x=50&Calculate.y=12

All dividends are currently being reinvested back into the companies paying the dividend. Monthly cash contributions will be used to add to existing positions or create new ones.
=====================================================

APRIL DIVIDENDS RECEIVED:

Taxable Account: (Dividends Reinvested)

Automatic Data Processing - ADP ... $19.85 ... bot 0.231 shares
Coca-Cola - KO ................................ $38.10 ... bot 0.938 shares
Kimberly-Clark - KMB .................... $33.98 ... bot 0.315 shares
Diagio, plc - DEO ............................. $39.75 ... bot 0.349 shares
Philip Morris - PM ............................ $47.56 ... bot 0.614 shares
Altria, Corp - MO ............................. $59.76 ... bot 1.149 shares
Sysco Corp - SYY ............................ $36.01 ... bot 0.95 shares
Kraft Foods - KRFT ......................... $50.86 ... bot 0.59 shares
----------------------------------------------------------------------------------
Total Dividends ..... $325.87


Roth Ira: (Dividends Reinvested)

Ross Stores - ROST ... $3.32  ..... bot 0.032 shares
Altria Corp - MO ....... $40.12 .... bot 0.772 shares
Realty Income - O ..... $16.97 .... bot 0.343 shares
--------------------------------------------------------------------------------
Total Dividends ..... $60.41

============================================

TAXABLE ACCOUNT - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

MMP ... 87.071 ... $7,270.43 ... UP 177.75% ... **Magellan Midstream Partners
MO .... 116.063 ... $5,808.95 ... UP 117.28% ... Altria, Corp
LMT ... 49.803 .... $9,293.24 ... UP 111.49% ... Lockheed-Martin

ADP ..... 40.735 ... $3,443.74 ... up 81.50% ... Automatic Data Processing
CDK ..... 13.071 ... $626.36 ... (spun off from ADP) ... CDK Global
CL ........ 52.112 ... $3,506.10 ... up 64.39% ... *Colgate-Palmolive
CVX .... 33.121 ... $3,678.42 ... up 20.87% ... Chevron Corp
DE ....... 12.395 ... $1,122.00 ... up 9.08% .... Deere & Company
DEO .... 31.48 ..... $3,494.91 ... up 54.13% ... Diagio, plc
EPD ... 134.795 ... $4,616.73 ... up 68.18% ... **Enterprise Products Partners
FTR ..... 24.312 ... $166.78 ... (spun off from VZ) ... *Frontier Communications
GIS ...... 82.175 ... $4,547.56 ... up 50.04% ... *General Mills
HYH .... 4.00 ....... $193.92 ... (spun off from KMB) ... Halyard Health
JNJ ...... 46.206 ... $4,583.64 ... up 54.65% ... *Johnson & Johnson
KMB ... 38.931 ... $4,270.34 ... up 41.04% ... Kimberly-Clark
KMI ... 117.241 ... $5,035.50 ... up 14.71% ... **Kinder Morgan, Inc
KO ..... 116.384 ... $4,720.54 ... up 62.63% ... *Coca-Cola
KRFT .. 93.069 ... $7,887.60 ... up 82.03% ... Kraft Foods
MCD ... 37.826 ... $3,652.10 ... up 22.38% ... McDonald's
PEP ..... 35.385 ... $3,365.82 ... up 49.88% ... Pepsico
PM ...... 48.171 ... $4,020.83 ... up 8.14% .... Philip Morris
SO ....... 75.887 ... $3,019.96 ... up 11.32% ... *Southern Company
SYY  .. 120.979 .. $4,479.85 ... up 21.87% ... Sysco Corp
Cash .................... $2.62
-------------------------------------------------------------------------
Account Value ..... $93,149.76

*Increased the dividend/distribution in 2015
**Multiple increases in 2015

================================================

ROTH IRA - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

D .......... 75.651 ... $5,422.66 ... up 48.14% ... Dominion Resources
GILD ... 10.00 ..... $1,005.19 .. <dn 2.41%> .. Gilead Sciences, Inc - (new position)
HCN .... 47.006 ... $3,385.37 ... up 27.66% ... Healthcare REIT
IBM ..... 11.196 ... $1,917.76 .. <dn 1.34%> .. *International Business Machines
KMI .... 74.991 .... $3,220.86 ... up 16.67% ... **Kinder Morgan, Inc
MA ..... 11.00 ...... $992.31 ...... up 3.15% ..... Master Card - (new position)
MO ..... 77.92 ...... $3,899.90 ... up 38.26% ... Altria Group
O ......... 89.91 ..... $4,223.07 ... up 27.26% ... **Realty Income
PG ...... 36.828 .... $2,928.19 ... up 23.81% ... *Procter & Gamble
ROST .. 14.141 ... $1,398.26 ... up 43.18% ... *Ross Stores
T ......... 62.487 .... $2,164.55 ... up 0.61% .... AT&T
VZ .... 127.104 .... $6,411.13 ... up 30.97% ... Verizon
XOM ... 10.158 ... $887.50 ..... <dn 9.61%> .. *Exxon-Mobil
Cash .................... $233.73
---------------------------------------------------------------------------------
Account Value .... $38,090.41

==================================================

THRIFT SAVINGS PLAN (TSP) - Federal Version of the 401K

There aren't any matching funds from the employer (military). They provide a pension for life after 20 years of service at 50% of their salary at the time of retirement of 20 years. They provide 75% of your salary for life after 30 years of service.

Only 5% of income is going into the TSP. This amounts to $64 per month currently.

Index Funds and Life Cycle Funds are the only options to choose from.

Fund ... Tracking Index ..... Shares ..... Value ..... Percentage of Portfolio

S Fund ... Small Cap ...... 163.8555 ... $6,173.78 ... 62.06%
I Fund ... International ... 141.6213 ... $3,774.56 ... 37.94%
--------------------------------------------------------------------------
Account Value ..... $9,948.34

Ongoing Contributions:

S Fund ... 60%
I Fund ... 40%
======================================================

SOLD POSITIONS - REALIZED GAINS/LOSSES:

Company ... Date ... Gain/Loss ... Reason/Result

BMY ... 11/09 ... $1,001.21 - up 25.85% - Froze dividend, bot VZ and JNJ

KMR ... 02/11 ... $504.94 - up 27.09% - Replaced in taxable account with KMP
O ........ 03/11 .... $639.63 - up 34.55% - sold @35.42 bot back @34.43 don't recall why
ZTR .... 04/11 .... <$55.58> - dn <10.09%> - Cut losses, bot SYY
VZ ...... 05/11 ... $618.16 - up 30.15% - Moved to Roth and added to existing position
CLX ... 06/11 ... $25.25 - up 1.57% - Concerned with debt, replaced with KMB
VFC ... 10/11 ... $897.99 - up 53.07% - Yield dropped below 2%, bot PEP

O ....... 01/12 ... $79.73 - up 3.01% - Moved to Roth
UHT .. 01/12 ... $233.60 - up 10.32% - Wanted to spread tenant risk, bot HCN
FTR ... 03/12 .. <$1,095.08> - dn <49.90%> - Dividend cut, cash to Roth, bot COP
ABT ... 11/12 .. $872.46 - up 31.38% - Company split, took profits, bot KRFT
BP ..... 12/12 ... <$554.03> - dn <17.23%> - Took loss, cash to Roth, bot COP
NUE .. 12/12 .. $164.61 - up 7.33% - Slow dividend growth, cash to Roth, added to COP

COP ... 04/13 ... <$2.46> - dn <0.10%> - Froze dividend, bot MO
------------------------------------------------------------------------------
Total Cash Gains ... $3,330.43



























Monday, April 6, 2015

Project $3 Million - March Results

This portfolio belongs to a 30 year old. I manage it for him.

MONTHLY HIGHLIGHTS:

1. This portfolio reached an all-time high on March 30 at $141,144.38.
2. The monthly dividend income/cash flows of $326.99 was an 18.5% increase year over year.
3. The quarterly dividend income/cash flows of $1058.36 was an increase of 13.6% year over year.

Companies that raised the dividend in March:

Realty Income - O ..... 0.3%
General Mills - GIS ... 7.3%

This portfolio closed the month at $140,195.55. It is 0.7% off of it's all-time high.

In order to be on schedule for the $3 million, the portfolio value for the end of March needed to be $104,357.45. ... This portfolio is ahead of schedule by 34.3%.
-----------------------------------------------------------------------------------------

ANNUAL COMPARISONS:

March Dividend History: (last 5 years)

2011 ... $194.47
2012 ... $184.45
2013 ... $249.36 up 25.5%
2014 ... $275.91 up 10.6%
2015 ... $326.99 up 13.2%

First Quarter History: (last 5 years)

2011 ... $542.81
2012 ... $621.20
2013 ... $779.87 up 25.5%
2014 ... $931.78 up 19.5%
2015 ... $1058.36 up 13.6%
==================================================

PRIMARY OBJECTIVE:

Income Replacement!

The objective is to start building an income stream now to replace the income that will be earned throughout the working years. The goal is to achieve $10,000 per month in retirement from dividends alone and not have to sell any of the underlying assets.

Income from pensions and Social Security will provide additional income.

The goal is to have the dividend income/cash flow stream grow at a rate above inflation and this is expected to be achieved with companies that grow their dividends annually, regardless of market conditions.

A portfolio of $3 million in value with a yield of 4% will accomplish the $10,000 per month in dividend income. Hence the title of this portfolio ... Project $3 Million.
==================================================

MISSION STATEMENT:

To earn an income stream that is reliable, predictable and increasing.
=================================================

STRATEGY:

To focus on companies with high financial strength ratings and provide safe and growing dividends that are not considered to be at risk during ongoing market conditions.

Capital appreciation and capital preservation are secondary to dividend growth. Total return is expected to be the long-term result as long as the companies in the portfolio are of high quality, pay a decent yield and continue to grow the dividend.

The formula to be followed to assure this strategy enjoys long-term success is what I refer to as "The Success Formula That Never Fails."

High Quality + High Current Yield + High Growth of Yield = High Total Return.

I explain how to use the formula here:

http://seekingalpha.com/instablog/728729-chowder/2360292-the-chowder-rule

=================================================

TACTICS:

To contribute $500 per month to the portfolio, plus 5% of income (no match) to the Thrift Savings Plan (TSP), look to earn 8.25% annually, compounded over 40 years, to age 65. The beginning portfolio value at the time of establishing these goals was $42,204.42.

The cash contribution breakdown is to put $5,500 annually into the Roth Ira and $500 annually into the taxable account.

The link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years in order to stay on schedule for the $3 million.

http://www.planningtips.com/cgi-bin/savings.pl?amt=42205.00&dep=500&cmp=annually&int=8.25&yrs=40&Calculate.x=50&Calculate.y=12

All dividends are currently being reinvested back into the companies paying the dividend. Monthly cash contributions will be used to add to existing positions or create new ones.
================================================

MARCH DIVIDENDS RECEIVED:

Taxable Account: (Dividends Reinvested)

Southern Company - SO ..... $39.37 ... bot 0.89 shares
Chevron - CVX ................... $35.08 ... bot 0.34 shares
Johnson & Johnson - JNJ .... $32.12 ... bot 0.325 shares
McDonald's - MCD ............. $31.87 ... bot 0.33 shares
Lockheed-Martin - LMT ..... $74.16 ... bot 0.361 shares
CDK Global - CDK ............. $1.56 ..... bot 0.033 shares
Frontier Comm. - FTR ......... $2.52 ..... bot 0.346 shares
Pepsico - PEP ...................... $23.02 .... bot 0.242 shares
--------------------------------------------------------------------------------
Total Dividends ..... $239.07


Roth Ira: (Dividends Reinvested)

International Business Machines - IBM ... $12.23 ... bot 0.078 shares
Exxon-Mobil - XOM ................................ $6.95 ..... bot 0.082 shares
Realty Income - O .................................... $16.87 .... bot 0.333 shares
Dominion Resources - D .......................... $48.55 ... bot 0.671 shares
Ross Stores -ROST ................................... $3.32 ..... bot 0.032 shares
---------------------------------------------------------------------------------
Total Dividends ..... $87.92

================================================

TAXABLE ACCOUNT - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/loss ... Company

MMP ..... 87.071 ... $6,679.22 ..... UP 155.17% ... *Magellan Midstream Partners
LMT ...... 49.803 ... $10,108.02 ... UP 130.04% ... Lockheed-Martin
MO ...... 114.914 ... $5,748.00 ..... UP 119.92% ... Altria Group

ADP ...... 40.504 ... $3,468.76 ... up 84.75% ... Automatic Data Processing
CDK ...... 13.071 ... $611.20 ... (spun off from ADP) ... CDK Global
CL ......... 52.112 ... $3,613.45 ... up 69.42% ... *Colgate Palmolive
CVX ...... 33.121 ... $3,477.04 ... up 14.26% ... Chevron Corp
DE ......... 12.395 ... $1,086.92 ... up 5.67% ..... Deere & Company
DEO ...... 31.131 ... $3,442.15 ... up 54.41% ... Diagio, plc
EPD ..... 134.795 ... $4,438.80 ... up 61.69% ... *Enterprise Products Partners
FTR ....... 23.966 ... $168.96 ... (spun off from VZ) ... *Frontier Communications
GIS ........ 82.175 ... $4,651.10 ... up 53.46% ... *General Mills
HYH ...... 4.00 ....... $196.80 ... (spun off from KMB) ... Halyard Health
JNJ ........ 46.206 .... $4,648.32 ... up 56.83% ... Johnson & Johnson
KMB ..... 38.616 .... $4,136.16 ... up 38.15% ... Kimberly-Clark
KMI ..... 117.241 ... $4,931.16 ... up 12.33% ... *Kinder Morgan, Inc.
KO ....... 115.446 ... $4,681.34 ... up 63.43% ... *Coca-Cola
KRFT .... 92.479 ... $8.056.31 ... up 88.14% .... Kraft Foods
MCD ..... 37.826 ... $3,685.77 ... up 23.51% ... McDonald's
PEP ....... 35.143 ... $3,360.37 ... up 51.19% ... Pepsico
PM ........ 47.557 ... $3,582.47 ... <dn 2.40%> ... Philip Morris
SO ......... 75.887 ... $3,360.28 ... up 11.27% ... Southern Company
SYY .... 120.029 ... $4,528.69 ... up 28.58% ... Sysco Corp
Cash ...................... $2.62
---------------------------------------------------------------------------
Account Value ..... $92,663.90

*Increased the dividend/distribution in 2015.
** Multiple increases in 2015

=============================================

ROTH IRA - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

D .......... 75.651 ... $5,361.39 ... up 46.67% ...... Dominion Resources
GILD ... 10.00 ..... $981.30 ...... <dn 4.72%> ... Gilead Sciences, Inc. ... (new position)
HCN .... 47.006 ... $3,636.38 ... up 37.13% ...... Healthcare REIT
IBM ..... 11.196 ... $1,796.96 ... <dn 7.55%> ... International Business Machines
KMI ..... 74.991 ... $3,154.12 ... up 14.25% .... *Kinder Morgan, Inc.
MO ...... 77.148 ... $3,858.94 ... up 38.78% ..... Altria Group
O ......... 89.567 ... $4,621.66 ... up 39.98% ..... **Realty Income
PG ....... 36.828 ... $3,017.69 ... up 27.59% ..... Procter & Gamble
ROST .. 14.109 ... $1,486.52 ... up 52.74% ..... *Ross Stores
T .......... 62.487 ... $2,040.20 ... <dn 5.17%> ... AT&T
VZ ..... 127.104 ... $6,181.07 ... up 26.27% ..... Verizon
XOM ... 10.158 ... $863.43 ... <dn 12.06%> ... Exxon-Mobil
Cash .................... 705.77
---------------------------------------------------------------------------------
Account Value ..... $37,705.43

=================================================

THRIFT SAVINGS PLAN (TSP) - Federal Version of the 401K

There aren't any matching funds from the employer (military). They provide a pension for life after 20 years of service at 50% of their salary at the time of retirement of 20 years. They provide 75% at the end of 30 years.

Only 5% of income is going into the TSP. This amounts to $64 per month currently.

Index Funds and Life Cycle Funds are the only options to choose from.

Fund ... Tracking Index ..... Shares ..... Value .... Percentage of Portfolio

S Fund ... (Small Cap) ...... 162.8016 ... $6,227.42 ... 63.38%
I Fund ... (International) ... 140.58.18 .. $3,598.80 ... 36.62%
-------------------------------------------------------------------------------
Account Value ..... $9,826.22

Ongoing Contributions:

S Fund ... 60%
I Fund ... 40%
===================================================

SOLD POSITIONS - REALIZED GAINS/LOSSES:

Company ... Date ... Gain/Loss ... Reason/Result

BMY ... 11/09 ... $1,001.21 - up 25.85% - Froze dividend, bot VZ and JNJ

KMR ... 02/11 ... $504.94 - up 27.09% - Replaced in taxable account with KMP
O ........ 03/11 .... $639.63 - up 34.55% - sold @35.42 bot back @34.43 don't recall why
ZTR .... 04/11 .... <$55.58> - dn <10.09%> - Cut losses, bot SYY
VZ ...... 05/11 ... $618.16 - up 30.15% - Moved to Roth and added to existing position
CLX ... 06/11 ... $25.25 - up 1.57% - Concerned with debt, replaced with KMB
VFC ... 10/11 ... $897.99 - up 53.07% - Yield dropped below 2%, bot PEP

O ....... 01/12 ... $79.73 - up 3.01% - Moved to Roth
UHT .. 01/12 ... $233.60 - up 10.32% - Wanted to spread tenant risk, bot HCN
FTR ... 03/12 .. <$1,095.08> - dn <49.90%> - Dividend cut, cash to Roth, bot COP
ABT ... 11/12 .. $872.46 - up 31.38% - Company split, took profits, bot KRFT
BP ..... 12/12 ... <$554.03> - dn <17.23%> - Took loss, cash to Roth, bot COP
NUE .. 12/12 .. $164.61 - up 7.33% - Slow dividend growth, cash to Roth, added to COP

COP ... 04/13 ... <$2.46> - dn <0.10%> - Froze dividend, bot MO
------------------------------------------------------------------------------
Total Cash Gains ... $3,330.43































Tuesday, March 3, 2015

Project $3 Million - February Results

This portfolio belongs to a 30 year old. I manage it for him.

MONTHLY HIGHLIGHTS:

1. This portfolio reached an all-time high on February 25 at $140,959.29.
2. The monthly dividend income of $431.15 was an 18.7% increase year over year.
3. The year to date dividend income for 2015 is an 11.5% increase over year to date 2014.

Companies that raised the dividend in February:

Ross Stores - ROST ........ 17.5%
Coca-Cola - KO ............... 8.2%
Colgate-Palmolive - CL ... 5.6%
Kimberly-Clark - KMB ... 4.8%
Realty Income - O ........... 3.0% (Actually raised in January and I missed it)

This portfolio closed the month at $140,600.08. It is 0.2% off of it's all-time high.

In order to be on schedule for the $3 million, the portfolio value for the end of February 2015 needed to be $103,119.41. ... This portfolio is ahead of schedule by 36.3%.

Bought 10 shares of GILD @102.9882 in the Roth Ira.
-------------------------------------------------------------------------------------

ANNUAL COMPARISONS:

February Dividend History: (last 5 years)

2011 ... $246.16
2012 ... $294.07 up 19.5%
2013 ... $317.80 up 8.1%
2014 ... $363.19 up 14.3%
2015 ... $431.15 up 18.7%
=================================================

PRIMARY OBJECTIVE:

Income Replacement!

The objective is to start earning an income stream now to replace the income that will be earned throughout the working years. The goal is to achieve $10,000 per month in retirement from dividends alone and not have to touch the principal.

Income from pensions and Social Security will provide additional income.

The goal is to have the dividend income stream grow at a rate above inflation and this is expected to be achieved with companies that grow their dividends annually.

A portfolio of $3 million in value with a yield of 4% will accomplish the $10,000 per month in dividend income. Hence the title of this portfolio ... Project $3 Million.
===================================================

MISSION STATEMENT:

To earn an income stream that is reliable, predictable and increasing.
==================================================

STRATEGY:

To focus on companies with high financial strength ratings and provide safe and growing dividends that are not considered to be at risk during ongoing market conditions.

Capital appreciation and capital preservation are secondary to dividend growth. Total return is expected to be the long-term result as long as the companies in the portfolio are of high quality, pay a decent yield and continue to grow the dividend.

The formula to be followed to assure this strategy enjoys long-term success is what I refer to as "The Success Formula That Never Fails."

High Quality +High Current Yield + High Growth of Yield = High Total Return

I explain how to use the formula here:

http://seekingalpha.com/instablog/728729-chowder/2360292-the-chowder-rule

=================================================

TACTICS:

To contribute $500 per month to the portfolio, plus 5% of income (no match) to the Thrift Savings Plan (TSP), look to earn 8.25% annually, compounded over 40 years, to age 65. The beginning portfolio value at the time of establishing these goals was $42,204.42.

The cash contribution breakdown is to put $5,500 annually into the Roth Ira and $500 annually into the taxable account.

The link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years in order to stay on schedule for the $3 million.

http://www.planningtips.com/cgi-bin/savings.pl?amt=42205.00&dep=500&cmp=annually&int=8.25&yrs=40&Calculate.x=50&Calculate.y=12

All dividends are currently being reinvested back into the companies paying the dividend. Monthly cash contributions will be used to add to existing positions or create new ones.
===================================================

FEBRUARY DIVIDENDS RECEIVED:

Taxable Account (Dividends Reinvested)

General Mills - GIS ................................. $33.43 ... bot 0.631 shares
Deere & Company - DE .......................... $7.39 ..... bot 0.084 shares
Enterprise Products Partners - EPD ........ $49.32 ... bot 1.493 units
Magellan Midstream Partners - MMP .... $59.99 ... bot 0.748 units
Colgate-Palmolive - CL .......................... $18.66 ... bot 0.266 shares
Kinder Morgan, Inc. - KMI .................... $52.20 ... bot 1.241 shares
-----------------------------------------------------------------------------------
Total Dividends ...... $220.99


Roth Ira: (Dividends Reinvested)

Verizon - VZ ......................... $69.11 ... bot 1.446 shares
AT&T - T .............................. $28.97 ... bot 0.848 shares
Realty Income - O ................. $16.80 ... bot 0.323 shares
Procter & Gamble - PG ......... $23.53 ... bot 0.274 shares
Kinder Morgan, Inc. - KMI ... $33.39 ... bot 0.794 shares
Healthcare REIT - HCN ........ $38.36 ... bot 0.504 shares
--------------------------------------------------------------------------------
Total Dividends ..... $210.16

===============================================

TAXABLE ACCOUNT - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

MMP ..... 87.071 ... $7,157.24 ... UP 173.43% ... *Magellan Midstream Partners
MO ...... 114.914 ... $6,468.51 ... UP 147.48% ... Altria Group
LMT ..... 49.442 .... $9,890.87 ... UP 128.96% ... Lockheed-Martin

ADP ..... 40.504 .... $3,598.38 ... up 91.65% .... Automatic Data Processing
CDK .... 13.038 ..... $610.57 ... (spun off from ADP) ... CDK Global
CL ........ 52.112 .... $3,690.57 ... up 73.04% ... *Colgate-Palmolive
CVX .... 32.781 .... $3,497.08 ... up 16.25% .... Chevron Corp
DE ....... 12.395 .... $1,122.99 ... up 9.17% ...... Deere & Company
DEO .... 31.131 .... $3,699.92 ... up 66.08% .... Diageo, plc
EPD ... 134.795 .... $4,494.07 ... up 63.71% .... *Enterprise Products Partners
FTR ..... 23.966 .... $191.25 ... (spun off from VZ) ... *Frontier Communications
GIS ...... 82.175 .... $4,420.19 ... up 45.84% .... General Mills
HYH .... 4.00 ........ $184.16 ... (spun off from KMB) ... Halyard Health
JNJ ...... 45.881 .... $4,703.26 ... up 60.42% ..... Johnson & Johnson
KMB ... 38.616 .... $4,234.63 ... up 41.44% ..... Kimberly-Clark
KMI ... 117.241 .... $4,808.05 ... up 9.53% ...... *Kinder Morgan, Inc
KO ..... 115.446 .... $4,998.81 ... up 74.51% .... *Coca-Cola
KRFT .. 92.479. ... $5,924.20 ... up 38.35% ..... Kraft Foods
MCD ... 37.496 .... $3,708.35 ... up 25.61% ..... McDonald's
PEP ..... 35.143 .... $3,478.45 ... up 56.50% ..... Pepsico
PM ...... 47.557 .... $3,945.33 ... up 7.49% ....... Philip Morris
SO ....... 74.997 .... $3,434.11 ... up 15.22% ..... Southern Company
SYY ... 120.029 ... $4,679.93 ... up 28.58% ..... Sysco Corp
Cash ..................... $2.62
----------------------------------------------------------------------------------
Account Value .... $92,943.55

*Increased the dividend/distribution in 2015

===================================================

ROTH IRA - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

D ............ 74.98 .... $5,405.31 ... up 49.65% ... Dominion Resources
GILD ..... 10.00 .... $1,035.30 ... up 0.53% ......*Gilead Sciences, Inc... (new position)
HCN ...... 47.006 .. $3,624.63 ... up 36.68% ... Healthcare REIT
IBM ....... 11.118 .. $1,800.45 ... <dn 6.78%> ..... International Business Machines
KMI ....... 74.991 .. $3,075.38 ... up 11.40% ... *Kinder Morgan, Inc
MO ........ 77.148 .. $4,342.66 ... up 56.18% ... Altria Group
O ........... 89.234 .. $4,467.05 ... up 36.00% ... *Realty Income
PG ......... 36.828 .. $3,135.17 ... up 32.56% ... Procter & Gamble
ROST .... 14.109 .. $1,492.67 ... up 53.39% ... *Ross Stores
T ............ 62.487 .. $2,159.55 ... up 0.38% .... AT&T
VZ ....... 127.104 .. $6,285.29 ... up 28.40% ... Verizon
XOM .... 10.076 ... $892.13 ......< dn 8.49%> .... Exxon-Mobil
Cash ..................... $205.77
--------------------------------------------------------------------------------------
Account Value .... $37,921.57

=====================================================

THRIFT SAVINGS PLAN (TSP) - Federal Version of the 401K

There aren't any matching funds from the employer (military). They provide a pension for life after 20 years of service at 50% of their salary at the time of retirement. Only 5% of income is going into the TSP. This amounts to $64 per month.

Index Funds and Life Cycle Funds are the only options to choose from.

Fund ... Tracking Index ..... Shares ..... Value ..... Percentage of Portfolio

S Fund ... (Small Cap) ...... 161.7405 ... $6,110.83 ... 62.77%
I Fund ... (International) ... 139.5416 ... $3,624.13 ... 37.23%
---------------------------------------------------------------------------
Account Value ..... $9,734.96

Ongoing Contributions:

S Fund ... 60%
I Fund ... 40%
=======================================================


SOLD POSITIONS - REALIZED GAINS/LOSSES:

Company ... Date ... Gain/Loss ... Reason/Result

BMY ... 11/09 ... $1,001.21 - up 25.85% - Froze dividend, bot VZ and JNJ

KMR ... 02/11 ... $504.94 - up 27.09% - Replaced in taxable account with KMP
O ........ 03/11 .... $639.63 - up 34.55% - sold @35.42 bot back @34.43 don't recall why
ZTR .... 04/11 .... <$55.58> - dn <10.09%> - Cut losses, bot SYY
VZ ...... 05/11 ... $618.16 - up 30.15% - Moved to Roth and added to existing position
CLX ... 06/11 ... $25.25 - up 1.57% - Concerned with debt, replaced with KMB
VFC ... 10/11 ... $897.99 - up 53.07% - Yield dropped below 2%, bot PEP

O ....... 01/12 ... $79.73 - up 3.01% - Moved to Roth
UHT .. 01/12 ... $233.60 - up 10.32% - Wanted to spread tenant risk, bot HCN
FTR ... 03/12 .. <$1,095.08> - dn <49.90%> - Dividend cut, cash to Roth, bot COP
ABT ... 11/12 .. $872.46 - up 31.38% - Company split, took profits, bot KRFT
BP ..... 12/12 ... <$554.03> - dn <17.23%> - Took loss, cash to Roth, bot COP
NUE .. 12/12 .. $164.61 - up 7.33% - Slow dividend growth, cash to Roth, added to COP

COP ... 04/13 ... <$2.46> - dn <0.10%> - Froze dividend, bot MO
------------------------------------------------------------------------------
Total Cash Gains ... $3,330.43

































Sunday, February 15, 2015

New Purchase - GILD

There are quite a few companies to choose from this month and since funds are limited, I have to do the best I can with what I have.

I'm trying to use a little more balance between growth and defensive core positions going forward as the Project $3 Million portfolio is already well established defensively.

When looking at core positions, I consider those the typical buy and hold companies that you rarely watch and hope to hold for decades. Since I don't wish to sell core holdings, I'm not as concerned about share price. I'm more concerned with the safety of the dividend and the growth of that dividend as that income flow is supposed to sustain us in retirement.

With this in mind, I am willing to pay fair value for a core position and will even pay up to a 5% premium if necessary. Companies meeting this requirement today are:

JNJ who Morningstar says is selling at fair value and S&P Capital IQ says it is selling at a 2.6% discount to fair value. It easily qualifies for purchase.

SO is finally selling at fair value and confirmed by both M* and S&P. If anyone is looking for utility exposure, and is looking to make it a core position, SO qualifies for purchase from a valuation standpoint.

PM is selling at a 7.9% discount to fair value according to M* and is selling at a 2.0% premium according to S&P. It qualifies valuation wise for a core position if one is willing to accept them as core.

All of the above would qualify for both a young folk and old folk portfolio.

If I'm looking for a supporting role player, and that means I may at some point sell some shares, then I need a discount to fair value because share price is now part of the equation and I want a margin of safety. I look for double digit discounts by both M* and S&P.

IBM is selling at an 18.1% discount to fair value according to M* and S&P says the discount is 32.3%. If one is willing to own IBM with the idea that they will eventually start showing rising revenues again, these discounts are compelling enough to take out a speculative position. Project $3 Million has already taken out a position in IBM and we will hold what we have for now instead of adding more.

I would suggest this is better suited for a young folk portfolio but wouldn't see anything wrong if it was purchased in an old folk portfolio.

BAX is selling at a 16.2% discount to fair value by M* and S&P says the discount is 2.4%. This could fit in either type portfolios but they are spinning off part of the business later this year and I'm going to wait for the split because the position will be too small to get the benefit of the split shares.

EMR is selling at a 15.0% discount to fair value according to M* and S&P says it is selling at fair value. I need a little more discount before owning EMR and I hope to one day. The cyclical nature of the business may be better suited for the young folk portfolio, but that's up to each of us to decide for ourselves.

GE is near the top of the list for consideration in both young and old folk portfolios. It is my second choice this month. M* says the discount is 16.1% and S&P says the discount is 7.5%. I would prefer a double digit discount by both rating agencies but this is close enough for consideration.

AXP made the list for the first time. M* says the discount to fair value is 4.8% and S&P says it is 26.9%. That's a steep discount and if it made the final two, I would have looked into it a little more to understand why.

ABBV made this list as well with a 5.5% discount to fair value by M* and a 42.6% discount to fair value by S&P. Just two weeks ago S&P said the discount was 25.0%. They have raised fair value and issued a Buy rating. ABBV was the latest purchase in my personal portfolio.

This portfolio, Project $3 Million buys in small increments, $1,000 at a time due to the structure of the monthly cash contributions, and I would have considered ABBV if it weren't for my choice in GILD.

Project $3 Million only has JNJ for exposure in the health care industry and I wanted to increase that. I also want to maintain the high quality ratings that I expect from companies and GILD certainly qualifies there with a credit rating of A+ according to M* and S&P gives it an A- which is investment grade.

Value Line gives them a 3 for safety and I usually require a 1 or 2, but VL also gives GILD an A for Financial Strength. So, I'll ignore the 3 and assign GILD a speculative role to begin with. It will have to earn supporting or core status through its performance.

GILD has initiated a dividend program and is generating so much cash flow they have to do something with the money so here's an opportunity to get in on the ground floor of what I hope can be a long-time dividend grower. If not, we'll adjust, hence the speculation rating within the portfolio. I'll sell a spec play in a heartbeat if necessary.

Others will have to do their due diligence, I'm only addressing valuations here and M* says GILD is selling at a 10.6% discount to fair value. S&P says it is selling at an 86.6% discount to fair value and just issued a Strong Buy rating. That discount seems harsh to me but Value Line assigns it a relative PE of 0.59 and a rating of 1.00 would be fair value. VL thinks GILD is deep value as well. In any event, a 10% discount would have been enough for me and all 3 sources think it's at least that much.

So, on Tuesday, when the cash is posted to the account, GILD will be the next purchase and I think it is probably better suited for the young folk portfolio but again, if one can take the volatility that comes with biotech, then I see nothing wrong in an old folk portfolio. I'm sticking with ABBV for me though and GILD for Project $3 Million.
















Monday, February 2, 2015

Project $3 Million - January Results

This portfolio belongs to a 30 year old. I manage it for him.

MONTHLY HIGHLIGHTS:

1. This portfolio reached an all-time high on January 2015 at $140,073.14.
2. The monthly dividend income of $300.22 was 2.6% above January 2014.

Companies that raised their dividend in January:

Enterprise Products Partners - EPD ... 1.4%
Frontier Communications - FTR ... 5.0%
Kinder Morgan, Inc. - KMI ... 2.3%
Magellan Midstream Partners - MMP ... 4.1%

This portfolio closed the month at $136,185.93. It is 2.8% off its all-time high. In order to be on schedule for the $3 million, the portfolio value at the end of January 2015 needed to be $101,881.37. ... This portfolio is ahead of schedule by 33.7%.
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ANNUAL COMPARISONS:

January Dividend History: (last 5 years)

2011 ... $102.18
2012 ... $142.68
2013 ... $212.71
2014 ... $292.68
2015 ... $300.22
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PRIMARY OBJECTIVE:

Income Replacement!

The objective is to start earning an income stream now to replace the income that will be earned throughout the working years. The goal is to achieve $10,000 per month in retirement from dividends alone and not have to touch the principle.

Income from pensions and Social Security will provide additional income.

The goal is to have the dividend income stream grow at a rate above inflation and this is expected to be achieved with companies that grow their dividends annually.

A portfolio of $3 million in value with a yield of 4% will accomplish the $10,000 per month in dividend income. Hence the title of this portfolio ... Project $3 Million.
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MISSION STATEMENT:

To earn an income stream that is reliable, predictable and increasing.
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STRATEGY:

To focus on companies with high financial strength ratings and provide safe and growing dividends that are not considered to be at risk during ongoing market conditions.

Capital appreciation and capital preservation are secondary to dividend growth. Total return is expected to be the long-term result as long as the companies in the portfolio are of high quality, pay a decent yield and continue to grow the dividend.

The formula to be followed to assure this strategy enjoys long-term success is what I refer to as "The Success Formula That Never Fails."

High Quality + High Current Yield + High Growth of Yield = High Total Return.

I explain how to use that formula here:

http://seekingalpha.com/instablog/728729-chowder/2360292-the-chowder-rule

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TACTICS:

To contribute $500 per month to the portfolio, plus 5% of income (no match) to the Thrift Savings Plan (TSP), look to earn 8.25% annually, compounded over 40 years, to age 65. The beginning portfolio value at the time of establishing these goals was $42,204.42.

The cash contribution breakdown is to put $5,500 annually into the Roth Ira and $500 annually into the taxable account.

The link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years in order to stay on schedule for the $3 million.

http://www.planningtips.com/cgi-bin/savings.pl?amt=42205.00&dep=500&cmp=annually&int=8.25&yrs=40&Calculate.x=50&Calculate.y=12

All dividends are currently being reinvested back into the companies paying the dividend. Monthly cash contributions will be used to add to existing positions or create new ones.
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JANUARY DIVIDENDS RECEIVED:

Taxable Account: (Dividends Reinvested)

Automatic Data Processing - ADP ... $19.73 ... bot 0.236 shares
Kimberly-Clark - KMB .................... $32.20 ... bot 0.282 shares
Altria - MO ....................................... $59.15 ... bot 1.159 shares
Philip Morris - PM ........................... $46.99 ... bot 0.566 shares
Kraft Foods - KRFT ......................... $50.44 ... bot 0.769 shares
Sysco Corp - SYY ............................ $35.75 ... bot 0.873 shares
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Total Dividends ...... $244.26


Roth Ira: (Dividends Reinvested)

Realty Income - O ... $16.25 ... bot 0.31 shares
Altria - MO .............. $39.71 ... bot 0.778 shares
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Total Dividends .... $55.96

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TAXABLE ACCOUNT - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

MMP ..... 86.323 ... $6,691.76 ... UP 161.64% ... *Magellan Midstream Partners
MO ...... 114.914 ... $6,101.93 ... UP 133.46% ... Altria Group
LMT ..... 49.442 .... $9,313.39 ... UP 115.59% ... Lockheed-Martin

ADP ..... 40.504 .... $3,342.80 ... up 78.04% ... Automatic Data Processing
CDK ..... 13.038 .... $588.80 ... (spun off from ADP) ... CDK, Global
CL ........ 51.846 .... $3,500.64 ... up 65.59% ... Colgate-Palmolive
CVX ..... 32.781 .... $3,361.04 ... up 11.73% ... Chevron Corp
DE ........ 12.311 .... $1,048.77 ... up 2.70% ..... Deere & Company
DEO ..... 31.131 .... $3,677.51 ... up 65.07% ... Diageo, plc
EPD .... 133.302 .... $4,590.92 ... up 70.29% ... *Enterprise Products Partners
FTR ...... 23.966 .... $160.93 ... (spun off from VZ) ... *Frontier Communications
GIS ....... 81.544 .... $4,279.43 ... up 42.77% ... General Mills
HYH ..... 4.00 ........ $178.28 ... (spun off from KMB) ... Halyard Health
JNJ ........ 45.881 .... $4,594.52 ... up 56.71% ... Johnson & Johnson
KMB ..... 38.616 .... $4,168.98 ... up 39.25% ... Kimberly-Clark
KMI ..... 116.00 ..... $4,761.80 ... up 9.78% ..... *Kinder Morgan, Inc.
KO .......115.446 .... $4,752.91 ... up 65.92% ... Coca-Cola
KRFT ... 92.479 .... $6,044.43 ... up 41.15% .... Kraft Foods
MCD .... 37.496 .... $3,466.13 .... up 17.41% ... McDonald's
PEP ...... 35.143 .... $3,295.71 .... up 48.28% ... Pepsico
PM ....... 47.557 .... $3,815.97 .... up 3.96% ..... Philip Morris
SO ........ 74.997 .... $3,803.85 .... up 27.62% ... Southern Company
SYY .... 120.029 ... $4,701.54 .... up 29.17% ... Sysco Corp
Cash ...................... $2.62
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Account Value ..... $90,244.65

*Increased the dividend in 2015

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ROTH IRA - PORTFOLIO HOLDINGS: ($4,000 equals a full position)

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

D ............ 74.98 .... $5,765.21 ... up 59.61% ... Dominion Resources
HCN ...... 46.502 ... $3,810.84 ... up 45.81% ... Healthcare REIT
IBM ....... 11.118 ... $1,704.50 ... dn 11.75% ... International Business Machines
KMI ....... 74.197 ... $3,045.79 ... up 11.68% ... *Kinder Morgan, Inc.
MO ........ 77.148 ... $4,096.56 ... up 47.33% ... Altria
O ............ 88.911 ... $4,828.76 ... up 47.76% ... Realty Income
PG .......... 36.544 ... $3,081.14 ... up 31.59% ... Procter & Gamble
ROST ..... 14.109 ... $1,293.94 ... up 32.95% ... Ross Stores
T ............ 61.639 .... $2,029.16 ... dn 4.39% ..... AT&T
VZ ........ 125.658 ... $5,743.83 ... up 19.02% ... Verizon
XOM ..... 10.076 .... $880.84 ...... dn 9.65% ..... Exxon-Mobil
Cash ....................... $545.64
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Account Value ..... $36,826.19

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THRIFT SAVINGS PLAN (TSP) - Federal version of the 401K

There aren't any matching funds from the employer (military). They provide a pension after 20 years at 50% of the current salary at the time of retirement. Therefore, absent any matching funds, only 5% of income is being contributed. This amounts to $64 per month.

Index Funds and Life Cycle Funds are the only options to choose from.

Fund ... Tracking Index ..... Shares ..... Value ..... Percentage of Portfolio

S Fund ... (Small Cap) ..... 160.6169 ... $5,722.04 ... 62.78%
I Fund .. (International) ... 138.4483 ... $3,393.05 ... 37.22%
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Account Value ....... $9,115.09

Ongoing Contributions:

S Fund ... 60%
I Fund .... 40%
=====================================================


SOLD POSITIONS - REALIZED GAINS/LOSSES:

Company ... Date ... Gain/Loss ... Reason/Result

BMY ... 11/09 ... $1,001.21 - up 25.85% - Froze dividend, bot VZ and JNJ

KMR ... 02/11 ... $504.94 - up 27.09% - Replaced in taxable account with KMP
O ........ 03/11 .... $639.63 - up 34.55% - sold @35.42 bot back @34.43 don't recall why
ZTR .... 04/11 .... <$55.58> - dn <10.09%> - Cut losses, bot SYY
VZ ...... 05/11 ... $618.16 - up 30.15% - Moved to Roth and added to existing position
CLX ... 06/11 ... $25.25 - up 1.57% - Concerned with debt, replaced with KMB
VFC ... 10/11 ... $897.99 - up 53.07% - Yield dropped below 2%, bot PEP

O ....... 01/12 ... $79.73 - up 3.01% - Moved to Roth
UHT .. 01/12 ... $233.60 - up 10.32% - Wanted to spread tenant risk, bot HCN
FTR ... 03/12 .. <$1,095.08> - dn <49.90%> - Dividend cut, cash to Roth, bot COP
ABT ... 11/12 .. $872.46 - up 31.38% - Company split, took profits, bot KRFT
BP ..... 12/12 ... <$554.03> - dn <17.23%> - Took loss, cash to Roth, bot COP
NUE .. 12/12 .. $164.61 - up 7.33% - Slow dividend growth, cash to Roth, added to COP

COP ... 04/13 ... <$2.46> - dn <0.10%> - Froze dividend, bot MO
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Total Cash Gains ... $3,330.43