Sunday, September 30, 2012

Project $3 Million - September 2012 Resilts


This portfolio belongs to a 27 year old.

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 income in retirement. The income stream will need to continue to grow to stay ahead of inflation. A portfolio of $3 Million with a yield of 4% will accomplish that objective. 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 first on the safety of the dividend, then to focus on the growth of the dividend, and then to focus on total return. The formula to be used to put this strategy into effect is:

HIGH QUALITY + HIGH CURRENT YIELD + HIGH GROWTH OF YIELD = HIGH TOTAL RETURNS.

TACTICS:

To contribute $500 per month to the portfolio, 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 $42,205.42.

The link below shows the compounding effect to be used in achieving 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 will be reinvested back into the companies paying the dividend. New cash will be used to add to positions or create new positions.

Cyclicals and companies whose dividend is taxed at the ordinary rate, will be placed in the ROTH IRA. Speculative companies will be placed in the taxable account in the event they don't work out. That way, you can take a tax write off if in a taxable account. You can't if in a deferred taxable account.

Lower yielding companies with high dividend growth, will be placed in the tax deferred accounts going forward. These will be called the "Collect and Grow" companies. The high dividend growth will not be taxed while in the ROTH and all dividends will be reinvested, adding an additional boost to total return.

STATUS:

 To stay on schedule for the $3 Million, the portfolio balance at the end of 2012 needs to be $74,355.59.

The portfolio balance on September 30, is $84,037.44.

This is a closing month new high and has the portfolio ahead of schedule.
==============================================================

YEAR END PORTFOLIO VALUES:

2009 ... $42,205.42
2010 ... $54,949.87 ... up 30.2%
2011 ... $73,303.61 ... up 33.4%
2012 ... $84,037.44 ... up 14.6% (year to date)
==============================================================

DIVIDEND HISTORY:

Total dividends for September ... $223.87
Total dividends Year To Date ... $2,004.07

THE CHOWDER INDEX:

The Chowder Index is what I use to determine if the portfolio is accomplishing its goals or not. Since the priority is income replacement, and we want that income to grow, we want see where the income for any month is higher than the same month a year ago.

Monthly Results: Year Over Year ...

September 2009 ... $30.43
September 2010 ... $129.18 ... up 324.5%
September 2011 ... $216.30 ... up 67.4%
September 2012 ... $223.87 ... up 3.5%

Quarterly Results: Year Over Year ...

3rd quarter 2009 ... $132.55
3rd quarter 2010 ... $518.24 ... up 210.0%
3rd quarter 2011 ... $583.40 ... up 12.6%
3rd quarter 2012 ... $706.23 ... up 21.1%
==================================================================

SEPTEMBER DIVIDENDS RECEIVED:

TAXABLE ACCOUNT: (Dividends Reinvested)

Southern Company (SO) ............. $21.73 ... bought 0.473 shares
Chevron Oil (CVX) ..................... $20.16 ... bought 0.176 shares
Johnson & Johnson (JNJ) ............ $25.98 ... bought 0.381 shares
McDonald's (MCD) .................... $24.18 ... bought 0.259 shares
BP (BP) ...................................... $29.87 ... bought 0.707 shares
Lockheed Martin (LMT) ............. $34.35 ... (won't hit the account until Monday)
Frontier Communications (FTR) ... $1.96 .... (won't hit the account until Monday)
Pepsico Co. ................................ $17.60 ... (won't hit the account until Monday)
------------------------------------------------------------------------------------
Total ... $175.83

PORTFOLIO HOLDINGS:

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

ABT ... 55.574 ... $3,810.15 ... up 39.46% ...... *Abbott laboratories
ADP ... 38.011 ... $2,229.73 ... up 32.59% ....... Automatic Data Processing
BP ...... 62.928 ... $2,665.63 ... dn <15.66%> .. *BP, plc
CL ...... 24.673 ... $2,645.44 ... up 35.00% ...... *Colgate-Palmolive
CVX ... 22.571 ... $2,630.88 ... up 49.49% ...... *Chevron Corp.
DEO ... 29.082 ... $3,278.41 ... up 65.07% ...... *Diagio, plc
EPD .... 60.209 ... $3,227.20 ... up 40.12% ...... *Enterprise Products partners
FTR .... 19.58 ..... $96.24 ... Shares received in a spinoff from Verizon. ... ~Frontier Comm.
GIS ..... 51.118 ... $2,037.05 ... up 17.66% ...... *General Mills
JNJ ..... 42.973 ... $2,961.27 ... up 11.02% ...... *Johnson & Johnson
KMB .. 25.972 ... $2,227.88 ... up 29.22% ...... *Kimberly-Clark Corp.
KMP .. 34.982 ... $2,886.02 ... up 13.67% ...... *Kinder Morgan Partners
KO ... 107.486 ... $4,076.94 ... up  60.01% ..... *The Coca-Cola Co.
LMT ... 34.345 ... $3,207.14 ... up 16.69% ...... *Lockheed Martin Corp.
MCD .. 34.799 ... $3,192.81 ... up 18.50% ...... *McDonald's Corp.
MMP .. 39.77 ..... $3,478.28 ... up 62.89% ...... *Magellan Midstream Partners
MO .... 101.724 .. $3,396.56 ... up 61.44% ...... *Altria Group
NUE ... 54.622 ... $2,089.84 ... dn <5.63%> .... Nucor Corp.
PEP .... 32.745 ... $2,317.36 ... up 14.46% ...... *Pepsico, Inc.
PM ..... 32.224 ... $2,898.23 ... up 24.94% ...... *Philip Morris International, Inc.
SO ..... 44.814 ... $2,065.48 ... up 24.54% ....... *Southern Company
SYY .. 110.734 .. $3,462.65 ... up 4.55% ......... Sysco Corp.
Cash ................... $1,012.02
==============================================================
Account Value: ..... $61,893.20

* Means increased the dividend in 2012
~ Means decreased the dividend in 2012

ANNOUNCED DIVIDEND INCREASES IN SEPTEMBER:

Enterprise Products (EPD) - up 2.3% for Nov. - up 1.5% for Jan. (5 increases this year)
Lockheed Martin - up 15.0%
McDonald's (MCD) - up 10.0%
Philip Morris (PM) - up 10.4%

No Dividend Decreases.
================================================================

ROTH IRA: (Dividends Reinvested)

Realty Income (O) ............ $11.94 ... bought 0.285 shares
Dominion Resources (D) ... $36.10 ... bought 0.686 shares
----------------------------------------------------------------------------------------
Total ... $48.04

PORTFOLIO HOLDINGS:

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

D ........... 69.117 ... $3,659.05 ... up 12.94% ... *Dominion Resources
HCN ..... 41.604 ... $2,402.21 ... up 4.08% ...... *Health Care REIT, Inc.
O ........... 79.303 ... $3,242.70 ... up 13.76% .... *Realty Income Corp.
PG ......... 34.137 ... $2,149.13 ... up 10.17% .... *Procter & Gamble Co.
VZ ....... 114.029 ... $5,196.30 ... up 21.91% .... *Verizon Communications
Cash ....................... $34.75
================================================================
Account Value: ........ $16.902.76

ANNOUNCED DIVIDEND INCREASES IN SEPTEMBER:

Verizon Communications (VZ) - up 3.0%

No Dividend Decreases.
=================================================================

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

There isn't any company match in this account. Only 5% of income is being contributed. Index Funds and Life Cycle Funds are the only options to choose from.

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

F Fund (Fixed Income) ... 15.9026 ... $264.04 ....... 4.85%
C Fund (S&P 500) ......... 99.6027 ... $1,802.68 .... 34.39%
S Fund (Small Cap) ........ 71.1588 ... $1,683.05 .... 32.11%
I Fund (International) ....... 77.0691 ... $1,501.71 .... 28.65%
---------------------------------------------------------------------------------------
Account Value: ...... $5,241.48

Contribution Allocations:

F Fund ... 10%
C Fund ... 10%
S Fund ... 35%
I Fund ... 45%

Monday, September 3, 2012

Project $3 Million - August 2012 Results

This portfolio belongs to a 27 year old.

PRIMARY OBJECTIVE:

Income replacement. ... The goal is to build an income stream that is ... reliable ... predictable ... and increasing. The income goal is $10,000 per month in retirement. A portfolio of $3 Million with a yield of 4% will accomplish that objective. Hence the title of this portfolio ... Project $3 Million.

STRATEGY:

To contribute $500 per month to the portfolio, 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 $42,205.42.

The link below shows the compounding effect to be used in achieving 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

STATUS:

To stay on schedule for the $3 Million, the portfolio balance at the end of 2012 needs to be $74,355.59.

The portfolio balance on August 31 was $81,842.52. ... A closing end of month high, and the portfolio is ahead of schedule.

YEAR END PORTFOLIO VALUES:

2009 ... $42,205.42
2010 ... $54,949.87 ... up 30.2%
2011 ... $73,303.61 ... up 33.4%
2012 ... $81,215.52 (year to date) ... up 10.8%
========================================================

Total Dividends For August: ... $314.35. A new monthly record.
Total Dividends Year To Date: ... $1,780.20.

Monthly Dividends - Year Over Year:

August 2009 ... $76.97
August 2010 ... $166.60
August 2011 ... $254.24
August 2012 ... $314.35
----------------------------------------------------------------------

AUGUST DIVIDENDS RECEIVED:

TAXABLE ACCOUNT: (Dividends Reinvested)

General Mills (GIS) ..... $16.72 ... bought 0.439 shares
Enterprise Products (EPD) ... $37.76 ... bought 0.745 units
Nucor Steel (NUE) ..... $19.76 ... bought 0.493 shares
Kinder Morgan (KMP) ... $42.40 ... bought 0.512 units
Magellan Midstream (MMP) ... $37.05 ... bought 0.457 units
Abbott Laboratories (ABT) ... $28.13 ... bought 0.424 shares
Colgate-Palmolive (CL) ..... $15.21 ... bought 0.144 shares
---------------------------------------------------------------------
Total $197.03

Coca-Cola (KO) split 2 for 1
-----------------------------------------------------------------

PORTFOLIO HOLDINGS:

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

ABT ...... 55.574 ... $3,642.32 ... up 33.32% ... *Abbott laboratories
ADP ...... 38.011 ... $2,207.68 ... up 31.28% ... Automatic Data Processing
BP ......... 62.221 ... $2,617.02 ... dn <-16.41%> ... *BP, plc
CL ......... 24.673 ... $2,622.99 ... up 33.85% ... *Colgate-Palmolive
CVX ...... 22.395 ... $2,511.82 ... up 44.38% ... *Chevron Corp
DEO ...... 29.082 ... $3,176.34 ... up 59.93% ... *Diagio, plc
EPD ....... 60.209 ... $3,215.16 ... up 39.59% ... *Enterprise Products Partners
FTR ....... 19.58 ..... $90.46 ... Shares received in a spinoff from VZ ... ~Frontier Comm.
GIS ........ 51.118 ... $2,010.47 ... up 16.13% ... *General Mills
JNJ ........ 42.592 ... $2,871.98 ... up 8.73% ... *Johnson & Johnson
KMB ..... 25.972 ... $2,871.98 ... up 25.94% ... *Kimberly-Clark Corp
KMP ..... 34.982 ... $2,895.46 ... up 14.04% ... *Kinder Morgan Partners
KO ...... 107.486 ... $4,019.98 ... up 57.77% ... *The Coca-Cola Company
LMT ...... 34.345 ... $3,130.20 ... up 13.89% ... Lockheed Martin Corp
MCD ..... 34.54 ..... $3,090.98 ... up 15.76% ... McDonald's Corp
MMP ..... 39.77 ..... $3,299.72 ... up 54.52% ... *Magellan Midstream Partners
MO ...... 101.724 ... $3,454.55 ... up 64.20% ... *Altria Group
NUE ...... 54.622 ... $2,056.52 ... dn <-7.13%> ... Nucor Corp
PEP ....... 32.745 ... $2,371.72 ... up 17.14% ... *Pepsico, Inc.
PM ........ 32.224 ... $2,877.60 ... up 24.05% ... Philip Morris International, Inc.
SO ......... 44.341 ... $2,009.98 ... up 22.80% ... *Southern Company
SYY .... 110.734 ... $3,355.24 ... up 1.31% ... Sysco Corp
Cash ...................... $512.02
-----------------------------------------------------
Account Value: ..... $60,211.46

* means increased the dividend in 2012
~ means decreased the dividend in 2012

ANNOUNCED DIVIDEND INCREASES IN AUGUST:

Altria Group (MO) - up 7.3%
Diagio, plc (DEO) - up 1.0% (second dividend increase this year for 8% total)

No announced dividend decreases.
===========================================================

ROTH IRA: (Dividends Reinvested)

Verizon Communications (VZ) ... $56.38 ... bought 1.268 shares
Procter & Gamble (PG) ... $19.03 ... bought 0.284 shares
Realty Income (O) ... $11.51 ... bought 0.276 shares
Health Care REIT (HCN) ... $30.40 ... bought 0.52 shares
---------------------------------------------------------------------------------
Total $117.32

PORTFOLIO HOLDINGS:

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

D .......... 68.431 ... $3,591.26 ... up 12.10% ... *Dominion Resources
HCN .... 41.604 ... $2,431.34 ... up 5.34% ... *Health Care REIT, Inc.
O .......... 79.018 ... $3,329.03 ... up 17.28% ... *Realty Income Corp
PG ........ 34.137 ... $2,293.67 ... up 6.73% ... *Procter & Gamble Co.
VZ ...... 114.029 ... $4,896.41 ... up 14.88% ... Verizon Communications
Cash ..................... $34.75
--------------------------------------------------------------------------------------------
Account Value: ..... $16,576.45

ANNOUNCED DIVIDEND INCREASES IN AUGUST:

Realty Income Corp (O) - up 3.4% (third dividend increase this year for 4.1% total)

No announced dividend decreases.
==============================================================

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

There is no company match in this account. Only 5% of income is being contributed. Index Funds and Life Cycle Funds are the only options to choose from.

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

F Fund (Fixed Income) ... 15.5458 ... $247.97 ........ 4.91%
C Fund (S&P 500) ......... 99.2843 ... $1,751.74 ... 34.65%
S Fund (Small Cap) ........ 70.3030 ... $1,622.12 ... 32.09%
I Fund (International) ...... 75.7069 ... $1,432.78 ... 28.35%
------------------------------------------------------------------------
Account Value: ..... $5,054.61

Contribution Allocations:

F Fund ... 10%
C Fund ... 10%
S Fund ... 35%
I Fund ... 45%