My Freedom Portfolio is an IRA made up of the rollover balances from my last two employers’ 401k plans. Since I just retired March 1st, I had a particularly good opportunity to buy in near the bottom of the Spring decline in the markets by rolling over my last 401k in early April. That has solidified my personal projections guiding my retirement income.
I purposely chose my IRA to make public because I feel most people have or will experience a similar scenario nearing and in retirement. Transactions inside this portfolio have no tax consequences so some decisions are easier.
The current market value (fluctuates daily with the market) is $547,040.36. There are 17 equity positions in well known, successful businesses. The current yield based on 2020 projected (mostly actual) dividend income is 5.1%. That 5.1% represents over $28 thousand dollars in dividend income I will receive by the end of this year.
All this income was and will continue to be re-invested for the next 5 years at a minimum. I will start tapping into it when I turn 60. By that time I anticipate the income to grow way more than double its current amount. Stick around and watch it grow in real time as I blog about it each month.
Here are current positions along with market values and projected current year dividend income:
Position Mkt Value Annual Dividend 2020
T (AT&T Inc) $59,013.25 $3,467.38
ABBV (Abbie Inc) $47,219.02 $1,536.24
MO (Altria Group Inc.) $45,138.41 $2,104.61
ADM (Archer Daniels Midland) $15,169.74 $435.03
CVX (Chevron Corp) $22,125.10 $1,086.61
CHCT (Community Healthcare Trust) $2,158.89 $78.40
DOW (Dow Inc) $20,287.03 $612.14
EMR (Emerson Electric Co.) $15,719.78 $408.60
XOM (Exxon Mobile Corp) $10,653.70 $915.46
IRM (Iron Mountain Inc REIT) $30,660.74 $1,241.96
JNJ (Johnson & Johnson) $14,994.54 $398.17
LMT (Lockheed Martin Corp) $6,055.60 $158.87
OKE (Oneok Inc) $134,056.77 $9,553.30
PM (Philip Morris Intl) $48,311.07 $2,109.06
O (Realty Income Corp REIT) $15,641.39 $703.83
RDS.B (Royal Dutch Shell) $34,650.00 $1,514.56
SO (Southern Co.) $25,179.41 $1,013.50
Total $547,034.44 $28,109.17
Looking at the Freedom portfolio one quickly notices that 24.5% is represented by one holding OKE (Oneok Inc). I did not intend to overweight this much in one company and may need to think about rebalancing in the future but right now I am confident in this investment. I have huge capital gains on it, I have huge dividend yields and I feel the dividend is safe, so I am letting it ride into retirement.
The other serious weighting is by industry. The freedom portfolio has $201,485.57 in Oil and Gas representing 38.5% of the total.
I spend a lot of time on this portfolio, following the businesses, listening to the community and right now I am comfortable with these decisions. This portfolio is a key to my retirement, and I like it.
Of course, all these numbers fluctuate daily as the market churns with volatility. A patient investor can look past a 30% market drop like we had earlier in the year and watch their investments rise as it recovers. Whether that takes one year or many years, as long as the dividend is paid, I’m happy. My job is to assess the business as events occur as best I can. Not rocket science but does take some diligence that pays off with multi-generational financial independence.
That is all for now. Ill do one of these deep dives once a Quarter or so. Future ones will allow some comparisons by Quarter etc. They will also give readers a good sense of managing a real portfolio and hopefully motivate you to your own dividend success.
Thanks for reading.
