Wednesday, November 28, 2012

Dividend Update

Although the market has sold off during the month of November, this portfolio has established a new high for dividend income. The amount of dividends paid this month were $331.24.

It's comforting to know that dividends are always positive, and always moving up, regardless of market conditions.

Thursday, November 1, 2012

Project $3 Million - October 2012 Results

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.

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 October 30 is $83,691.78.
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YEAR END PORTFOLIO VALUES:

2009 ... $42,205.42
2010 ... $54,949.87 ... up 30.2%
2011 ... $73,303.61 ... up 33.4%
2012 ... $83,691.78 ... up 14.2% (year to date)
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DIVIDEND HISTORY:

Total dividends for October ... $225.82
Total dividends year to date ... $2,229.89

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 to see where the income for any month is higher than the same month a year ago.

Monthly Results: Year Over Year ...

October 2009 ... $29.77
October 2010 ... $140.28 ... up 371.2%
October 2011 ... $181.47 ... up 29.4%
October 2012 ... $225.82 ... up 24.4%
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OCTOBER DIVIDENDS RECEIVED:

TAXABLE ACCOUNT: (Dividends Reinvested)

Coca-Cola (KO) .............................. $27.41 ... bought 0.716 shares
Automatic Data Processing (ADP) ... $15.02 ... bought 0.256 shares
Kimberly Clark (KMB) ..................... $19.22 ... bought 0.223 shares
Altria (MO) ..................................... $44.76 ... bought 1.359 shares
Philip Morris (PM) ........................... $27.39 ... bought 0.298 shares
Sysco (SYY) .................................. $29.90 ... bought 0.966 shares
Diagio DEO) ................................... $50.11 ... bought 0.439 shares
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Total ... $213.81

PORTFOLIO CHANGES:

MMP ... Split 2 for 1
ABT ... Sold ... 31.7% gain
KRFT ... New Purchase 85 shares
KMP ... Raised Distribution 2.4%
MMP ... Raised Distribution 2.9%


PORTFOLIO HOLDINGS:

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

ADP ..... 38.267 ... $2,211.45 ... up 30.34% ..... Automatic Data Processing
BP ....... 62.928 ... $2,698.98 ... dn <14.61%> .. *BP,plc
CL ........ 24.673 .. $2,589.68 ... up 32.15% ...... *Colgate-Palmolive
CVX ...... 22.571 .. $2,488.24 ... up 41.39% ...... *Chevron Corp.
DEO ..... 29.521 ... $3,372.48 ... up 65.63% ..... *Diagio, plc
EPD ..... 60.209 ... $3,173.62 ... up 37.79% ..... *Enterprise Products Partners
FTR ...... 19.985 ... $94.53 ... Shares received in spinoff from VZ ... ~Frontier Comm.
GIS ....... 76.118 ... $3,050.81 ... up 11.62% ..... *General Mills
JNJ ....... 42.973 ... $3,043.35 ... up 14.09% ...... *Johnson & Johnson  
KMB ..... 26.195 ... $2,185.97 ... up 25.39% ...... *Kimberly-Clark
KMP ..... 34.982 ... $2,926.59 ... up 15.26% ...... *Kinder Morgan Partners
KO ...... 108.202 ... $4,022.95 ... up 56.21% ...... *The Coca-Cola Co.
KRFT .... 85 ......... $3,864.10 ... dn <0.06%> .... Kraft Foods
LMT ...... 34.711 ... $3,251.38 ... up 16.84% ...... *Lockheed Martin Corp.
MCD ..... 34.799 ... $3,020.55 ... up 12.10% ...... *McDonald's Corp.
MMP ..... 79.54 .... $3,454.42 ... up 61.77% ...... *Magellan Midstream Partners
MO ..... 103.083 ... $3,278.04 ... up 52.56% ...... *Altria Group
NUE ..... 54.622 ... $2,191.98 ... dn <1.02%> .... Nucor Corp.
PEP ..... 32.993 ... $2,284.44 ... up 11.86% ....... *Pepsico, Inc.
PM ....... 32.522 ... $2,880.15 ... up 22.71% ....... *Philip Morris International, Inc.
SO ....... 44.814 ... $2,099.09 ... up 26.57% ....... *Southern Company
SYY .... 111.70 .....$3,470.52 ... up 3.85% ......... Sysco Corp.
Cash ................... $47.98
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Account Value ..... $61,701.30    

* Means increased the dividend
~ Means decreased the dividend  

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ROTH IRA: (Dividends Reinvested)

Realty Income (O) ... $12.01 ... bought 0.29 shares

PORTFOLIO HOLDINGS:

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

D ............ 69.117 ... $3,648.00 ... up 12.60% ... *Dominion Resources
HCN ....... 41.604 .... $2,472.53 ... up 7.13% ..... *Health Care REIT, Inc.
O ........... 79.303 .... $3,125.62 ... up 9.20% ..... *Realty Income Corp.
PG ......... 34.137 .... $2,363.65 ... up 9.98% ..... *Procter & Gamble Co.
VZ ......... 114.029 ... $5,090.25 ... up 19.42% ... *Verizon Communnications
Cash ...................... $34.75
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Account Value ... $16,734.79 

No Portfolio Changes

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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) ... 16.2584 ... $260.24 ...... 4.95%
C Fund (S&P 500) ......... 99.9205 ... $1,774.79 ... 33.77%
S Fund (Small Cap) ....... 71.9987 ... $1,680.68 ... 31.98%
I Fund (International) ...... 78.3707 ... $1,539.98 ... 29.30%
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Account Value ..... $5,255.69

Contribution Allocations:

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