Tuesday, December 8, 2015

Project $3 Million - November Results

This portfolio belongs to a 31 year old. I manage it for him.

MONTHLY RESULTS:

1. The dividend income/cash flow for November was $541.69. This would have been a new record if it weren't for the Kraft Heinz special dividend.

2. The dividend income/cash flow year to date is now $5,712.75, an increase of 50.7% year over year.

Companies that raised the dividend in November:

Kraft Heinz ... KHC ... 4.5%
McDonald's ... MCE ... 4.7%
Automatic Data Processing ... ADP ... 8.2%
CDK Global ... CDK ... 12.5%
Beckton, Dickerson and Co. ... BDX ... 10.0%
Sysco ... SYY ... 3.3%

New Purchase:

Bought 10 shares of CVS @ $93.72.
Bought 17 shares of DG @ 68.07.
Bought 17 shares of VFC @ 61.98

Sold 10 shares of LMT @ 214.40 for a 156.76% profit.

This portfolio closed the month at $142,923.18. ... It is down 1.9% from its all-time high of $145,645.36 which was established on October 22, 2015.

In order for this portfolio to be on schedule for the $3 million dollars, the portfolio value at the end of November needed to be $114,261.79. The portfolio is ahead of schedule by 27.5%.
-------------------------------------------------------------------------

ANNUAL COMPARISONS:

November Dividend History:

2011 ... $260.07
2012 ... $331.24 ... up 27.4%
2013 ... $348.54 ... up 5.2%
2014 ... $453.58 ... up 30.1%
2015 ... $541.69 ... up 19.4%
===========================================


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 owner 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. (It is possible that certain market conditions will not trigger a sale though.)

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 this 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 of 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.
==============================================

NOVEMBER DIVIDENDS RECEIVED:

Taxable Account: (All Dividends Reinvested)

General Mills - GIS ........................... $36.71 ... bot 0.641 shares
Deere & Co. - DE ............................. $7.53 .... bot 0.094 shares
Enterprise Products Partners - EPD ... $53.78 ... bot 2.024 units
Dominion Midstream Partners - DM ... $10.66 ... bot 0.348 units
Magellan Midstream Partners - MMP . $67.66 ... bot 1.04 units
Kinder Morgan, Inc - KMI .................. $61.32 ... bot 2.596 shares
Colgate-Palmolive - CL ..................... $20.02 ... bot 0.305 shares
Kraft Heinz - KHC ............................ $53.88 ... bot 0.725 shares
--------------------------------------------------------------------------------
Total Dividends ..... $311.05


Roth Ira: (All Dividends Reinvested)

AT&T - T .....................,. $30.17 ... bot 0.896 shares
Verizon - VZ ................,. $73.45 ... bot 1.585 shares
Lowe's - LOW ..............., $3.94 .... bot 0.054 shares
Master Card . MA .........,. $1.76 .... bot 0.018 shares
Kinder Morgan, Inc ......... $39.22 ... bot 1.66 shares
Procter & Gamble - PG ... $24.83 ... bot 0.328 shares
Realty Income - O .......... $17.55 ... bot 0.362 shares
Welltower, Inc ... HCN ... $39.72 ... bot 0.682 shares
------------------------------------------------------------------------------
Total Dividends ..... $230.64

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

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

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

LMT ..... 34.53 ...... $7,567.59 ... UP 143.64% ... *Lockheed-Martin
MO ..... 118.392 ... $6,819.38 ... UP 143.54% ... *Altria Group

ADP ...... 41.236 ... $3,557.02 ... up 83.59% .... *Automatic Data Processing
AMGN ... 10.052 ... $1,619.38 ... dn 3.60% ......  Amgen, Inc
CDK ...... 13.133 ... $622.64 ... (spun off from ADP) ... *CDK Global
CL ......... 52.999 ... $3,480.97 ... up 58.77% ... *Colgate-Palmolive
CVX ...... 33.943 ... $3,099.67 ... dn 0.47% ...... Chevron, Inc
DE ........ 12.651 ... $1,006.64 ... dn 4.23% ...... Deere & Company
DG ........ 17.00 ..... $1,111.97 ... up 9.00% ...... Dollar General (new position)
DKS ...... 30.084 ... $1,174.18 ... dn 24.27% .... *Dick's Sporting Goods
DM ........ 53.637 ... $1,694.39 ... dn 8.78% ..... *Dominion Midstream Partners
EPD ..... 140.384 ... $3,564.35 ... up 22.87% ... **Enterprise Products Partners
FTR ...... 25.381 .... $126.65 ... (spun off from VZ) ... *Frontier Communications
GIS ....... 84.08 ..... $4,856.46 ... up 54.66% .... *General Mills
HYH ...... 4.00 ...... $127.96 ... (spun off from KMB) ... Halyard Health
JNJ ...... 46.928 .... $4,750.99 ... up 56.62% ..... *Johnson & Johnson
KHC ..... 94.428 .... $6,958.40 ... dn 8.61% ...... *Kraft Heinz Co.
KMB ..... 39.559 .... $4,713.45 ... up 52.21% .... *Kimberly-Clark
KMI ..... 122.833 ... $2,895.17 ... dn 36.59% .... **Kinder Morgan, Inc.
KO ....... 118.32 .... $5,042.80 ... up 60.24% ..... *Coca-Cola
MCD ..... 38.496 ... $4,394.70 ... up 44.15% ..... *McDonald's
MMP ..... 89.776 ... $5,613.69 ... up 99.58% ..... **Magellan Midstream Partners
PEP ...... 35.917 ... $3,597.45 ... up 56.71% ..... *Pepsico
PM ........ 49.336 ... $4,311.47 ... up 12.98% .... *Philip Morris
SO ........ 77.829 ... $3,466.50 ... up 11.72% .... *Southern Company
SYY .... 122.872 ... $5,050.04 ... up 34.71% .... *Sysco
ULTA .... 7.00 ...... $1,169.00 .... up 6.76% ...... Ulta Salon
VFC ..... 17.00 ..... $1,099.90 .... up 4.38% ..... *VF Corporation (new position)
Cash ................... $249.78
-------------------------------------------------------------------------------------------
Account Value ..... $93,742.61

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

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

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

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

BDX ......... 8.036 ... $1,207.41 ... up 6.81% ... *Beckton, Dickerson and Co.
BWLD ...... 7.00 ..... $1,121.68 ... up 4.75% ... Buffalo Wild Wings
CVS ........ 10.00 .... $940.90 ..... up 0.39% .... CVS Health Corp
D ........... 77.091 ... $5,193.62 ... up 38.17% ... *Dominion Resources
GILD ...... 10.081 ... $1,068.18 ... up 2.85% .... Gilead Sciences
HCN ...... 48.829 ... $3,085.50 ... up 11.41% ... *Welltower, Inc
IBM ........ 11.382 ... $1,586.88 ... dn 19.57% ... *International Business Machines
KMI ........ 78.568 ... $1,851.85 ... dn 35.55% ... **Kinder Morgan, Inc
LOW ....... 14.11 .... $1,080.83 ... up 12.42% .... *Lowe's Companies
MA ......... 11.036 ... $1,080.65 ... up 11.91% ... Master Card
NSC ....... 11.082 ... $1,053.45 ... up 3.12% .... *Norfolk Southern
O ............ 92.467 ... $4,588.21 ... up 33.40% .. **Realty Income
PG ......... 37.785 ... $2,837.83 ... up 15.95% ... *Procter & Gamble
ROST .... 28.418 ... $1,478.02 ... up 50.33% ... *Ross Stores
T ........... 65.09 ..... $2,191.58 ... dn 2.79% ..... AT&T
UNP ..... 10.061 .... $844.62 ..... dn 17.63% .... *Union Pacific
VZ ....... 131.583 ... $5,980.45 ... up 17.05% .... *Verizon
XOM ..... 24.348 ... $1,988.26 ... dn 1.67% ...... *Exxon-Mobil
Cash ................... $56.41
--------------------------------------------------------------------------------------------------
Account Value ..... $39,226.33

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

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 their 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 ... 171.4971 ... $6,288.61 ... 63.18%
I Fund .... International ... 149.0469 ... $3,665.63 ... 36.82%
------------------------------------------------------------------------------------------
Account Value ..... $9,954.24

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
DEO .... 07/15 .. $1,257.70 - up 55.22% - Replaced in taxable account with AMGN and DM
KRFT .. 07/15 ... $1,527.64 - up 35.17% - Replaced in taxable account with DKS
LMT .... 11/15 ... $1,990.48 - up 156.76% - Replaced in taxable account with DG and VFC
---------------------------------------------------------------------------------------------------------
Total Cash Gains ... $9,665.91































Friday, November 6, 2015

Project $3 Million - October Results

This portfolio belongs to a 31 year old.

MONTHLY RESULTS:

1. The dividend income/cash flow for October was $263.40.

2. The dividend income/cash flow year to date is now $5,171.42, an increase of 55.0% year over year.

3. The portfolio established a new all-time high on 10/22 at $145,645.36.

Companies that raised the dividend in October:

Kinder Morgan ... KMI ... 4.1% ... up 13.5% year over year
Enterprise Products ... EPD ... 1.3% ... up 5.5% year over year
Magellan Midstream ... MMP ... 4.1% ... up 14.2% year over year
Dominion Midstream ... DM ... 6.3%

This portfolio closed the month at $144,435.77. ... It is down just 0.8% from its all-time high of $145,645.36 which was established earlier this month.

In order for the portfolio to be on schedule for the $3 million dollars, the portfolio value at the end of October needed to be $113,023.75. ... The portfolio is ahead of schedule by 27.8%
--------------------------------------------------------------------------------

ANNUAL COMPARISONS:

October Dividend History:

2011 ... $181.47
2012 ... $225.82
2013 ... $298.52
2014 ... $392.92
2015 ... $263.40 (Lower dividends are due to KRFT and DEO no longer in the portfolio)
============================================

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 owner 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. (It is possible that certain market conditions will not trigger a sale though.)

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 this 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 of 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.
==============================================

OCTOBER DIVIDENDS RECEIVED:

Taxable Account: (All dividends reinvested)

Automatic Data Processing - ADP ..... $20.08 ... bot 0.253 shares
Coca-Cola - KO .................................. $38.73 ... bot 0.962 shares
Kimberly-Clark - KMB ...................... $34.54 ... bot 0.31 shares
Altria Corp - MO ................................ $66.24 ... bot 1.155 shares
Philip Morris - PM .............................. $49.73 ... bot 0.58 shares
Sysco Corp - SYY ............................... $36.60 ... bot 0.878 shares
--------------------------------------------------------------------------------
Total Dividends ..... $245.92


Roth Ira: (All dividends reinvested)

Realty Income - O ..... $17.48 ... bot 0.359 shares
--------------------------------------------------------------------------
Total Dividends ..... $17.48

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

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

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

MO ..... 118.392 ... $7159.16 .... UP 155.68% ... *Altria Corp
LMT .... 44.53 ...... $9,789.03 ... UP 144.38% ... *Lockheed-Martin
MMP ... 88.736 .... $5,662.24 ... UP 106.27% ... **Magellan Midstream Partners

ADP ....... 41.236 ... $3,587.12 ,,, up 85.14% ... Automatic Data Processing
AMGN ... 10.052 ... $1,590.03 ... dn 5.35% ..... Amgen, Inc
CDK ....... 13.133 ... $653.89 ... (spun off from ADP) ... CDK Global
CL .......... 52.694 ... $3,496.25 ... up 60.93% ... *Colgate-Palmolive
CVX ....... 33.943 ... $3,084.74 ... dn 0.95% .... Chevron, Inc
DE .......... 12.557 ... $979.45 ..... dn 6.14% ..... Deere & Company
DKS ....... 30.084 ... $1,340.24 ... dn 13.56% ... Dick's Sporting Goods
DM ......... 53.289 ... $1,745.75 ... dn 5.48% .... Dominion Midstream Partners
EPD ....... 138.36 .... $3,822.89 ... up 34.25% .. **Enterprise Products Partners
FTR ........ 25.381 ... $130.46 ... (spun off from VZ) ... *Frontier Communications
GIS ......... 83.439 ... $4,848.64 ... up 56.24% ... *General Mills
HYH  ...... 4.00 .......$118.72 ... (spun off from KMB) ... Halyard Health
JNJ ......... 46.928 ... $4,741.14 ... up 56.30% ... *Johnson & Johnson
KHC ....... 93.703 ... $7,306.02 ... dn 3.36%  ... *Kraft Heinz Co.
KMB ...... 39.559 ... $4,735.61 ... up 52.93% ... Kimberly-Clark
KMI ...... 120.237 ... $3,288.48 ... dn 26.99% ... **Kinder Morgan, Inc.
KO ........ 118.32 ..... $5,010.85 ... up 68.16% ... *Coca-Cola
MCD ...... 38.496 ... $4,321.18 ... up 41.74% ... *McDonald's
PEP ........ 35.917 ... $3,670.36 ... up 59.80% ... Pepsico
PM ......... 49.336 ... $4,361.30 ... up 14.28% ... *Philip Morris
SO .......... 77.829 ... $3,510.09 ... up 13.13% ... *Southern Company
SYY ..... 122.872 ... $5,068.47 ... up 35.20% ... Sysco
ULTA .... 7.00 ....... $1,217.72 ... up 11,21% ... Ulta Salon
Cash ....................... $9.65
---------------------------------------------------------------------------------
Account Value ..... $95,249.47

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

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

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

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

BDX ........ 8.036 ... $1,145.46 ... up 1.31% ... Beckton, Dickerson and Co.
BWLD .... 7.00 ...... $1,079.89 ... up 0.85% ... Buffalo Wild Wings
D ........... 77.091 ... $5,506.61 ... up 46.49% ... *Dominion Resources
GILD .... 10.081 ... $1,090.06 ... up 4.96% .... Gilead Sciences
HCN ..... 48.147 ... $3,123.30 ... up 14.41% ... Welltower,Inc
IBM ...... 11.382 ... $1,594.39 ... dn 19.19% ... *International Business Machines
KMI ...... 76.908 ... $2,103.43 ... dn 25.78% ... **Kinder Morgan, Inc.
LOW ..... 14.056 ... $1,037.75 ... up 8.39% .... Lowe's Companies
MA ........ 11.018 ... $1,090.67 ... up 13.16% ... Master Card
NSC ...... 11.082 ... $886.89 ...... dn 13.18% ... Norfolk Southern
O ........... 92.105 ... $4,555.51 ... up 33.12% ... **Realty Income
PG ......... 37.457 ... $2,860.97 ... up 18.51% ... *Procter & Gamble
ROST .... 26.418 ... $1,437.38 ... up 46.19% ... *Ross Stores
T ............ 64.194 ... $2,151.14 ... dn 2.68% ..... AT&T
UNP ..... 10.061 .... $808.95 ...... dn 12.34% ... Union Pacific
VZ ....... 129.998 ... $6,094.31 ... up 21.02% ... Verizon
XOM .... 24.348 .... $2,014.56 ... dn 0.37% .... *Exxon-Mobil
Cash ...................... $703.62
-------------------------------------------------------------------------------
Account Value ..... $39,374.72

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

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 their 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 ... 170.3958 ... $6,140.84 ... 62.59%
I Fund .... International ... 147.9703 ... $3,670.74 ... 37.41%
-------------------------------------------------------------------------------------------------------------
Account Value ..... $9,811.58

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
DEO .... 07/15 ..... $1,257.70 - up 55.22% - Replaced in taxable account with AMGN and DM
KRFT .. 07/15 .... $1,527.64 - up 35.17% - Replaced in taxable account with DKS
---------------------------------------------------------------------------------
Total Cash Gains ... $7,675.43


























Wednesday, October 7, 2015

Project $3 Million - September Results

This portfolio belongs to a 31 year old. I manage it for him.

MONTHLY RESULTS:

1. The dividend income/cash flow for September was $365.81 which is a 39.1% increase over September 2014.

2. The dividend/cash flow year to date is now $4,908.02, an increase year over year of 64.0%.

3. The third quarter of 2015 set an all-time record for dividend.cash flow of $2,684.70.

Companies that raised their dividend in September:

Lockheed-Martin ... LMT ... 10.0%
Verizon ... VZ ... 2.7%
Philip Morris ... PM ... 2.0%
Realty Income ... O ... 0.3% ... a 3.8% increase year over year.

Purchased 14 shares of Exxon-Mobil - XOM @ $73.24.

This portfolio closed the month at $135,121.51. It is down 6.2% from its all-time high of $143,982.31 established on May 18,2015.

In order for the portfolio to be on schedule for the $3 million dollars, the portfolio value at the end of September needed to be at $111,785.69. ... The portfolio is ahead of schedule by 20.9%.
----------------------------------------------------------------------------------------------------------

ANNUAL COMPARISONS:

September Dividend History: (Last 5 years)

2011 ... $216.30
2012 ... $223.87 ... up 3.5%
2013 ... $253.52 ... up 13.2%
2014 ... $262.97 ... up 3.7%
2015 ... $390.85 ... up 48.6%

3rd Quarter: (Last 5 years)

2011 ... $583.40
2012 ... $706.33 ..... up 21.1%
2013 ... $857.21 ..... up 21.4%
2014 ... $978.71 ..... up 14.2%
2015 ... $2,709.74 .. up 176.9%
=============================================================

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 owner 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.
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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. (It is possible that certain market conditions will not trigger a sale though.)

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 this 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 of 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.
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SEPTEMBER DIVIDENDS RECEIVED:

Taxable Account: (All dividends reinvested)

Amgen - AMGN ......................... $7.90 ..... bot 0.052 shares
Southern Companies - SO .......... $41.69 .... bot 0.975 shares
Johnson & Johnson - JNJ ........... $34.92 .... bot 0.373 shares
Chevron - CVX .......................... $35.81 .... bot 0.473 shares
McDonald's - MCD .................... $32.44 .... bot 0.33 shares
Lockheed - Martin - LMT .......... $66.30 .... bot 0.328 shares
CDK Global - CDK .................... $1.57 ...... bot 0.033 shares
Pepsico - PEP ............................. $25.04 .... bot 0.268 shares
Dick's Sporting Goods - DKS .... $4.13 ...... bot 0.084 shares
Frontier Comm - FTR  ............... $2.61 ...... bot 0.554 shares
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Total Dividends ..... $252.41


Roth Ira: (All dividends reinvested)

International Business Machines - IBM ... $14.67 ... bot 0.1 shares
Exxon-Mobil - XOM ................................ $7.48 ..... bot 0.103 shares
Norfolk Southern - NSC ........................... $6.49 ..... bot 0.082 shares
Realty Income - O .................................... $17.36 .... bot 0.376 shares
Dominion Resources - D .......................... $49.95 .... bot 0.715 shares
Gilead Sciences - GILD ........................... $4.32 ...... bot 0.044 shares
Union Pacific - UNP ................................ $5.50 ...... bot 0.061 shares
Beckton Dickerson - BDX ....................... $4.80 ...... bot 0.036 shares
Ross Stores - ROST ................................. $3.33 ...... bot 0.069 shares
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Total Dividends ..... $113.40

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

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

MO ..... 117.237 ... $6,377.69 ... UP 133.29% ... *Altria Group
LMT .... 44.53 ...... $9,231.51 ... UP 130.46% ... *Lockheed-Martin

ADP ....... 40.983 .... $3,293.39 ... up 71.76% ... Automatic Data Processing
AMGN ... 10.052 .... $1,390.39 ... dn 17.23% ... Amgen, Inc.
CDK ....... 13.133 ... $627.49 ... (spun off from ADP) ... CDK Global
CL .......... 52.694 .... $3,343.96 ... up 53.92% ... *Colgate-Palmolive
CVX ....... 33.643 .... $2,677.42 ... dn 14.03% ... Chevron, Inc
DE .......... 12.557 .... $929.22 ...... dn 10.96% ... Deere & Company
DKS ........ 30.00 ..... $1,488.30 ... dn 3.76% ..... Dick's Sporting Goods
DM ......... 53.289 .... $1,430.81 ... dn 22.53% ... Dominion Midstream Partners
EPD ....... 138.36 ..... $3,445.16 ... up 20.99% ... **Enterprise Products Partners
FTR ........ 24.827 .... $117.83 ... (spun off from VZ) ... *Frontier Communications
GIS ......... 83.439 .... $4,683.43 ... up 50.91% ... *General Mills
HYH ....... 4.00 ........ $113.76 ... (spun off from KMB) ... Halyard Health
JNJ ......... 46.926 ..... $4,380.73 ... up 44.41% ... *Johnson & Johnson
KHC ...... 93.703 ..... $6,613.56 ... dn 12.52% ... *Kraft Heinz Co.
KMB ..... 39.249 ..... $4,279.71 ... up 39.76% ... Kimberly-Clark
KMI ..... 120.237 .... $3,328.16 ... dn 26.11% ... **Kinder Morgan, Inc.
KO ....... 117.358 .... $4,708.40 ... up 60.09% ... *Coca-Cola
MCD ..... 38.496 ,,,,, $3,783.01 ... up 24.42% ... McDonald's
MMP .... 88.736 ...... $5,333.92 ... up 94.31% ... **Magellan Midstream Partners
PEP ...... 35.649 ...... $3,361.70 ... up 48.06% ... Pepsico
PM ....... 49.756 ...... $3,867.81 ... up 2.70% ..... *Philip Morris
SO ........ 77.829 ...... $3,478.96 ... up 12.12% ... *Southern Company
SYY .... 121.994 ..... $4,754.11 ... up 26.07% ... Sysco
ULTA ... 7.00 ......... $1,094.45 ... up 4.43% ..... Ulta Salon
Cash ........................ $9.65
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Account Value ..... $88,203.65

*Increased the dividend in 2015
**Multiple Increases in 2015

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

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

BDX ........ 8.00 ..... $1,061.28 ... dn 5.72% ...... Beckton, Dickerson and Co.
BWLD .... 7.00 ...... $1,354.01 ... up 26.45% ... Buffalo Wild Wings
D ............ 76.081 ... $3,758.95 ... up 44.34% ... Dominion Resources
GILD ..... 10.081 ... $989.85 ...... dn 4.69% ..... Gilead Sciences
HCN ...... 48.147 ... $3,260.51 ... (company changed names, no data on 9/31)
IBM ....... 11.382 ... $1,650.05 ... dn 16.37% ... *International Business Machines
KMI ....... 76.908 ... $2,128.81 ... dn 24.88% ... **Kinder Morgan, Inc.
LOW ...... 14.056 ... $968.74 ...... up 1.18% ..... Lowe's Companies
MA ......... 11.016 ... $992.94 ...... up 3.02% ..... Master Card
NSC ....... 11.082 ... $846.66 ...... dn 17.12% ... Norfolk Southern
O ............ 91.746 ... $4,347.84 ... up 27.71% ... **Realty Income
PG .......... 37.457 ... $2,694.66 ... up 11.62% ... *Procter & Gamble
ROST ..... 28.194 ... $1,374.08 ... up 40.23% ... *Ross Stores
T ............. 64.194 ... $2,091.44 ... dn 5.38% ..... AT&T
UNP ....... 10.00 ..... $884.10 ...... dn 13.32% .... Union Pacific
VZ ........ 129.998 ... $5,656.21 ... up 12.32% .... Verizon
XOM ...... 24.348 ... $1,810.27 ... dn 10.47% .... *Exxon-Mobil
Cash ....................... $3.62
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Account Value ..... $37,740.75

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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 their 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 ... 169.2304 .... $5,775.07 ... 62.93%
I Fund .. International ... 146.8314 .... $3,402.04 ... 37.11%
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Account Value ..... $9,177.11

Ongoing Contributions:

S Fund ... 60%
I Fund ... 40%
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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
DEO .... 07/15 ..... $1,257.70 - up 55.22% - Replaced in taxable account with AMGN and DM
KRFT .. 07/15 .... $1,527.64 - up 35.17% - Replaced in taxable account with DKS
---------------------------------------------------------------------------------Total Cash Gains ... $7,675.43