Saturday, August 2, 2014

Project $3 Million - July Results

This portfolio belongs to a 29 year old. I manage it for him.

MONTHLY RESULTS:

1. On July 14, the portfolio established an all-time high at $126,125.44.
2. Year to date income is up 23.3% over year to date 2013.
... Income earned through 7/31/14 was $2279.14.
... Income earned through 7/31/13 was $1848.57.

Companies that raised their dividend in July: (All companies listed below have had multiple raises this year.)

Kinder Morgan Partners - KMP ... 0.7% ........ up 5.3% year over year
Enterprise Products Partners - EPD ... 1.4% ... up 5.9% year over year
Kinder Morgan Inc. - KMI ... 2.4% ............... up 7.5% year over year
Magellan Midstream Partners - MMP ... 4.5% .. up 20.2% year over year

So far in 2014 there have been 18 companies that were expected to raise their dividend by the end of July and all 18 have done so.

New Purchase: ... Bot 28 shares of T at $36.4399 in Roth.
--------------------------------------------------------------------------

STATUS:

This portfolio has a dual objective, total return plus income replacement.

Total Return - To stay on schedule for the $3 Million, the total return number for the end of July 2014 is supposed to be $94,941.71. ... The actual result is $121,803.16. ... This portfolio is ahead of schedule. It is up 28.3% over its expected return.

Dividend Income - To stay on schedule for the $10,000 per month in dividends, the average monthly income for the end of July 2014 is supposed to be $316.47. ... The actual result is $325.59. ... The portfolio is ahead of of its income goal by 2.9%.

The portfolio is 3.4% off from its all-time high.
===============================================================

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 objective also includes having the income stream continue to grow above the inflation rate and we count on dividend growth to accomplish this.

We look for the monthly income rate to double every 4 to 5 years.

A portfolio of $3 Million in value with a yield of 4% will accomplish the $10,000 per month in 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 the safety of the dividend, then on the growth of the dividend, and then on the total return (capital appreciation plus dividend growth).

The formula to be used to put this strategy into effect is what I call "The Success Formula That Never Fails."

High Quality + High Current 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 breakdown is $5,500 annually to the Roth 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 to be 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.
========================================================

DIVIDEND HISTORY:

July Dividend History: (Last 5 years)

2010 ... $222.46
2011 ... $112.86
2012 ... $168.11
2013 ... $265.19
2014 ... $314.80 ... up 18.7%

Year to date July over July: (Last 5 years)

2010 ... $844.58
2011 ... $1231.07
2012 ... $1465.85
2013 ... $1848.57 ... up 26.1%
2014 ... $2279.14 ... up 23.3%
=======================================================

JULY DIVIDENDS RECEIVED:

Taxable Account: (Dividends Reinvested)

Coca-Cola - KO ............................. $34.45 ... bot 0.815 shares
Automatic Data Processing - ADP ... $19.09 ... bot 0.239 shares
Kimberly-Clark - KMB ................... $31.71 ... bot 0.284 shares
Altria Group - MO .......................... $53.41 ... bot 1.238 shares
Philip Morris - PM .......................... $43.19 ... bot 0.502 shares
Kraft Foods - KRFT ...................... $47.26 ... bot 0.812 shares
Sysco Corp - SYY ......................... $34.03 ... bot 0.928 shares
----------------------------------------------------
Total ............ $263.14

Roth Ira: (Dividends Reinvested)

Altria Group - MO ... $35.85 ... bot 0.831 shares
Realty Income - O ... $15.81 ... bot 0.349 shares
-----------------------------------------
Total .......... $51.66

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

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

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

ADP ...... 40.002 ... $3,252.56 ... up 78.61% ... Automatic Data Processing
CL ......... 51.287 ... $3,251.60 ... up 56.55% ... *Colgate-Palmolive
CVX ...... 32.175 ... $4,158.30 ... up 41.49% ... *Chevron Corp
DE ......... 12.138 ... $1,033.07 ... up 2.63% ..... *Deere & Company
DEO ...... 30.569 ... $3,675.01 ... up 69.77% ... Diagio plc
EPD ....... 65.297 ... $4,871.16 ... up 87.30% ... **Enterprise Products Partners
FTR ....... 23.249 ... $152.58 ... Received-spinoff from VZ - Frontier Comm.
GIS ........ 80.271 ... $4,025.59 ... up 37.33% ... *General Mills
JNJ ........ 45.281 ... $4,532.18 ... up 58.02% ... *Johnson & Johnson
KMB ..... 38.038 ... $3,951.01 ... up 34.86% ... *Kimberly-Clark
KMP ..... 39.147 ... $3,171.69 ... up 10.17% ... **Kinder Morgan Partners
KO ...... 113.773 ... $4,470.14 ... up 59.94% ... *Coca-Cola
KRFT .... 90.828 ... $4,867.02 ... up 16.39% ... Kraft Foods
LMT ...... 48.71 ..... $8,133.11 ... up 94.50% ... Lockheed-Martin
MCD ..... 36.824 ... $3,482.08 ... up 20.45% ... McDonald's
MMP .... 85.006 ... $6,816.63 .. UP 178.68% .. **Magellan Midstream Partners
MO ..... 112.50 ..... $4,567.50 ... up 82.99% ... Altria Group
PEP ...... 34.664 ... $3,053.90 ... up 40.27% .... *Pepsico
PM ....... 46.444 ... $3,808.87 ... up 6.48% ...... Philip Morris
SO ........ 73.316 ... $3,173.85 ... up 9.32% ...... *Southern Company
SYY .... 118.257 ... $4,220.59 ... up 18.23% ... Sysco Corp
Cash ...................... $74.12
---------------------------------------------------------------------------
Account Value .... $82,742.23

*Increased dividend in 2014
** Multiple dividend increases in 2014
====================================================

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

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

D ............ 73.751 ... $4,988.52 ... up 41.60% ... *Dominion Resources
HCN ...... 45.406 ... $2,889.18 ... up 13.71% ... *Healthcare REIT
IBM ........ 5.055 .... $968.89 ...... up 3.59% ..... *International Business Machines
KMI ...... 72.638 ... $2,613.52 ... dn 1.89% ..... **Kinder Morgan, Inc.
MO ....... 75.528 ... $3,066.44 ... up 13.50% ... Altria Group
O ........... 86.818 ... $3,737.51 ... up 17.84% ... **Realty Income
PG ......... 36.008 ... $2,784.14 ... up 21.31% ... *Procter & Gamble
ROST .... 14.042 ... $904.30 ..... dn 6.55% ..... *Ross Stores (new position)
T ............ 60.413 ... $2,150.10 ... up 3.40% ..... AT&T (new position)
VZ ....... 122.997 ... $6,201.51 ... up 32.16% ... Verizon
Cash ...................... $18.70
----------------------------------------------------------------------------------
Account Value ..... $30,322.81

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

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

There aren't any matching funds from the employer. They provide a pension after 20 years instead. 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) ..... 153.8056 ... $5,259.29 ... 60.19%
I Fund (International) ... 132.1028 ... $3,478.83 ... 39.81%

Contributions going forward:

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, July 14, 2014

Adding to T

In the next day or two I will be adding to our position in T. An initial purchase was made in T back in March and nearly all of the fundamentals are still in place, and actually improving. The number of analysts calling T a buy has increased since March and T is now expected to start growing the dividend more than it has been previously.

An analysis of T can be found on this blog if you scroll back to March.

Saturday, July 5, 2014

Project $3 Million - June Results

This portfolio belongs to a 29 year old. I manage it for him.

MONTHLY RESULTS:

June was another good month!

1. The portfolio once again closed at an all-time monthly high of $125,025.55.
2. The portfolio established a new quarterly dividend income record at $1032.56.
3. Year to date dividend income is up 24.1% over year to date 2013.
... Income earned through 6/30/13 was $1,583.38.
... Income earned through 6/30/13 was $1,964.34.

Companies that raised their dividend in June:

Realty Income - (O) ... up 0.2% The second increase this year.

So far in 2014 there have been 18 companies that were expected to have raised their dividend by the end of June and all 18 have done so. ... The average dividend increase for all 18 companies is 7.0%.
-------------------------------------------------------------------------------------------------

STATUS:

This portfolio has a dual objective, total return plus income replacement.

Total Return - To stay on schedule for the $3 Million, the total return number for the end of June 2014 is supposed to be $93,801.39. ... The actual result is $125,025.55. ... This portfolio is ahead of schedule, it is up 33.3% over its expected return.

Dividend Income - To stay on schedule for the $10,000 per month in dividends, the average monthly income for the end of June 2014 is supposed to be $312.67. ... The actual result is $327.39. ... The portfolio is ahead of its income goal by 4.7%.
===================================================================

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 objective also includes having the income stream continue to grow above the inflation rate and we count on dividend growth to accomplish this.

A portfolio of $3 Million in value with a yield of 4% will accomplish the $10,000 per month in 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 the safety of the dividend, then on the growth of the dividend, and then on the total return (capital appreciation plus dividend growth).

The formula to be used to put this strategy into effect is what I call "The Success Formula That Never Fails."

High Quality + High Current 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 breakdown is $5,000 annually into a Roth Ira and $1,000 annually into a 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 to be on schedule for $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.
=================================================================

DIVIDEND HISTORY:

June Dividend History: (Last 5 years)

2010 ... $116.91
2011 ... $196.28
2012 ... $213.51
2013 ... $243.16
2014 ... $290.24  ... up 19.4%

Second Quarter Dividend History: (Last 5 years)

2010 ... $357.17
2011 ... $575.40
2012 ... $676.54
2013 ... $803.51
2014 ... $1,032.56 ... up 28.5%
==================================================================

JUNE DIVIDENDS RECEIVED:

Taxable Account: (Dividend Reinvested)

Southern Company - SO ..... $38.03 ... bot 0.874 shares
Chevron Corp. - CVX ........ $34.14 ... bot 0.273 shares
Johnson & Johnson - JNJ .... $31.48 ... bot 0.305 shares
McDonald's - MCD ............ $29.59 ... bot 0.292 shares
Lockheed-Martin - LMT ..... $64.26 ... bot 0.397 shares
Pepsico - PEP ..................... $22.54 ... bot 0.253 shares
Frontier Comm. - FTR ........ $2.29 ..... bot 0.393 shares
---------------------------------------
Total ............................. $222.33

Roth Ira: (Dividends Reinvested)

International Bus. Mach. - IBM ... $5.53 .... bot 0.03 shares - (ha!)
Realty Income - O ...................... $15.71 ... bot 0.358 shares
Dominion Resources - D ............. $43.87 ... bot 0.628 shares
Ross Stores - ROST ................... $2.80 ..... bot 0.042 shares
------------------------------------------------------
Total ........................ $67.91

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

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

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

ADP ...... 39.763 ... $3,152.41 ... up 74.95% ... Automatic Data Processing
CL ........ 51.287 ... $3,496.75 ... up 68.35% ... *Colgate-Palmolive
CVX ..... 32.175 ... $4,200.45 ... up 42.92% ... *Chevron Corp
DE ........ 12.138 ... $1,099.10 ... up 9.19% ..... *Deere & Company
DEO ..... 30.569 ... $3,890.52 ... up 79.72% ... Diagio plc
EPD ...... 65.297 ... $5,112.10 ... up 96.56% ... **Enterprise Products Partners
FTR ...... 22.856 ... $133.48 ... Received-spinoff from VZ - Frontier Comm
GIS ....... 80.271 ... $4,217.44 ... up 43.87% ... *General Mills
JNJ ....... 45.281 ... $4,737.30 ... up 65.17% ... *Johnson & Johnson
KMB .... 37.754 ... $4,199.00 ... up 44.89% ... *Kimberly-Clark
KMP .... 39.147 ... $3,218.27 ... up 11.79% ... **Kinder Morgan Partners
KO ..... 112.958 ... $4,784.90 ... up 73.34% ... *Coca-Cola
KRFT ... 90.016 ... $5,396.46 ... up 30.52% ... Kraft Foods
LMT ..... 48.71 ..... $7,829.16 ... up 87.23% ... Lockheed-Martin
MCD .... 36.824 ... $3,709.65 ... up 28.32% ... McDonald's
MMP ... 85.006 .. $7,143.90 .. UP 192.06% ... **Magellan Midstream Partners
MO .... 111.262 .... $4,666.33 ... up 91.04% ... Altria Group
PEP ..... 34.411 .... $3,074.28 ... up 42.69% ... *Pesico
PM ...... 45.942 .... $3,074.28 ... up 9.61% ..... Philip Morris
SO ...... 73.316 .... $3,327.08 ... up 14.60% ... *Southern Company
SYY ... 117.329 ... $4,393.97 ... up 24.27% ... Sysco Corp  
Cash ..................... $74.20
-------------------------------------------------------------------------------
Account Value ..... $85,730.11

*Increased Dividend in 2014
** Multiple dividend increases in 2014
=========================================================

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

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

D .......... 73.751 ... $5,274.67 ... up 49.72% ... *Dominion Resources
HCN .... 45.406 ... $2,845.59 ... up 12.00% ... *Healthcare REIT
IBM ...... 5.055 .... $916.32 .....  dn 2.03% ..... *International Business Machines
KMI .... 72.638 ... $2,633.85 ... dn 1.12% ..... *Kinder Morgan, Inc
MO ..... 74.697 .... $3,132.79 ... up 17.52% ... Altria Group
O ......... 86.469 ... $3,840.95 ... up 21.71% ... **Realty Income
PG ....... 36.008 ... $2,829.87 ... up 23.31% ... *Procter & Gamble
ROST .. 14.000 ... $925.87 ...... dn 4.05% ..... *Ross Stores (new position)
T .......... 32.413 ... $1,146.12 ... up 8.21% ..... AT&T
VZ ..... 122.997 ... $6,018.24 ... up 28.25% ... Verizon
Cash .................... $749.01
-------------------------------------------------------------------------------------
Account Value .... $30,313.25

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

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

There aren't any matching funds from the employer. They provide a pension after 20 years instead. 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) ..... 152.6925 ... $5,460.50 ... 60.79%
I Fund (International) ... 131.1197 ... $3,521.69 ... 39.21%

Contributions going forward:

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, June 1, 2014

Project $3 Million - May Results

This portfolio belongs to a 29 year old. I manage it for him.

MONTHLY HIGHLIGHTS:

May was another good month!

1. The portfolio closed at yet another all-time high of $122,730.39.
2. The portfolio established a new monthly dividend income record of $391.43.
3. Year to date dividend income is up 24.9% over year to date 2013.
... Income earned through 5/31/13 was $1,340.22.
... Income earned through 5/31/14 is $1,674.10.

Companies that raised their dividend in May:

Deere & Company ... up 17.6%

So far in 2014, there have been 18 companies that were expected to have raised the dividend by the end of May and all 18 have done so. ... The average dividend increase for all 18 companies is 7.0%.
---------------------------------------------------------------------------------------------

STATUS:

This portfolio has a dual objective, total return plus income replacement.

Total Return - To stay on schedule for the $3 Million, the total return number for the end of May 2014 is supposed to be $92,661.06. ... The actual result is $122,730.39. ... This portfolio is ahead of schedule, it is up 32.5% over its expected return.

Dividend Income - To stay on schedule for the $10,000 per month in dividends, the average monthly income for the end of May 2014 is supposed to be $308.87. ... The actual result is $324.82. ... The portfolio is ahead of the income goal by 5.2%.
=================================================================

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 be additional income.

The objective also includes having the income stream continue to grow above the inflation rate and we count on dividend growth to accomplish this.

A portfolio of $3 Million in value with a yield of 4% will accomplish the $10,000 per month in 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 the safety of the dividend, then to focus on the growth of the dividend, and then to focus on the total return (capital appreciation plus dividend growth).

The formula to be used to put this strategy into effect is what I call, "The Success Formula That Never Fails."

High Quality + High Current 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, 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 link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years to achieve 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.
==========================================================

DIVIDEND HISTORY:

May Dividend History: (Last 5 years)

2010 ... $127.62
2011 ... $245.41
2012 ... $304.09
2013 ... $326.48
2014 ... $391.43

The May dividends have a 5 year compounded annual growth rate of 32.85%.
=========================================================

MAY DIVIDENDS RECEIVED:

Taxable Account: (Dividend Reinvested)

General Mills - GIS .............................. $32.66 ... bot 0.618 shares
Deere & Company - DE ...................... $6.19 ..... bot 0.066 shares
Enterprise Products Partners - EPD ...... $45.89 ... bot 0.657 units
Kinder Morgan Partners - KMP ........... $53.06 ... bot 0.695 units
Magellan Midstream Partners - MMP ... $51.67 ... bot 0.65 units
Colgate-Palmolive - CL ........................ $18.36 ... bot 0.275 shares

Roth Ira: (Dividends Reinvested)

Verizon - VZ ....................... $64.46 ... bot 1.371 shares
Procter & Gamble - PG ....... $22.99 ... bot 0.287 shares
Realty Income - O ............... $15.65 ... bot 0.359 shares
Kinder Morgan Inc. - KMI .. $30.13 ... bot 0.905 shares
Healthcare REIT - HCN ...... $35.65 ... bot 0.566 shares
AT&T - T ........................... $14.72 ... bot 0.413 shares
==========================================================

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

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

ADP ...... 39.763 ... $3,168.32 ... up 75.83% ... Automatic Data Processing
CL ......... 51.287 ... $3,508.03 ... up 68.90% ... *Colgate-Palmolive
CVX ...... 31.902 ... $3,917.25 ... up 34.85% ... *Chevron Corp
DE ......... 12.138 ... $1,106.62 ... up 9.94% ..... *Deere & Company
DEO ...... 30.569 ... $3,936.98 ... up 81.87% ... Diageo, plc
EPD ....... 65.297 ... $4,885.52 ... up 87.85% ... **Enterprise Products Partners
FTR ....... 22.856 ... $132.34 ... Received-spinoff from VZ - Frontier Comm.
GIS ........ 80.271 ... $4,409.29 ... up 50.42% ... *General Mills
JNJ ........ 44.976 ... $4,563.26 ... up 60.87% ... *Johnson & Johnson
KMB ..... 37.754 ... $4,241.66 ... up 46.36% ... *Kimberly-Clark
KMP ..... 39.147 ... $2,977.13 ... up 3.41% ..... **Kinder Morgan Partners
KO ...... 112.958 ... $4,621.11 ... up 67.41% ... *Coca-Cola
KRFT .... 90.016 ... $5,352.35 ... up 29.45% .... Kraft Foods
LMT ...... 48.313 ... $7,906.42 ... up 92.02% .... Lockheed-Martin
MCD ..... 36.532 ... $3,705.44 ... up 29.50% .... McDonald's
MMP ..... 85.006 ... $6,960.29 .. UP 184.55% .. **Magellan Midstream Partners
MO ..... 111.262 .... $4,624.05 ... up 89.31% .... Altria Group
PEP ....... 34.411 .... $3,039.52 ... up 41.07% .... *Pepsico
PM ........ 45.942 .... $4,067.70 ... up 15.11% .... Philip Morris
SO ........ 72.442 ..... $3,171.51 ... up 10.69% ... *Southern Company
SYY .... 117.329 .... $4,403.36 ... up 24.53% .... Sysco Corp
Cash ....................... $74.12
-----------------------------------------------------------------------------------
Account Value .......  $84,772.28

* Increased the dividend in 2014
** Multiple dividend increases in 2014
=======================================================

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

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

D .......... 73.123 ... $5,042.56 ... up 44.93% ... *Dominion Resources
HCN .... 45.406 ... $2,871.02 ... up 13.00% ... *Healthcare REIT
IBM ..... 5.025 ..... $926.41 ...... dn 0.37% ..... *International Business Machines
KMI .... 72.638 ... $2,425.38 ... dn 8.95% ...... *Kinder Morgan, Inc.
MO ......74.697 ... $3,104.41 ... up 16.46% .... Altria Group
O ......... 86.111 ... $3,728.61 ... up 18.74% .... *Realty Income
PG ....... 36.008 ... $2,909.09 ... up 26.76% .... *Procter & Gamble
ROST ... 14 ......... $958.30 ...... dn 0.68% ...... *Ross Stores, Inc. (new position)
T .......... 32.413 ... $1,149.69 ... up 8.55% ...... AT&T
VZ ..... 122.997 ... $6,144.93 ... up 30.95% ..... Verizon
Cash .................... $49.01
------------------------------------------------------------------------------------
Account Value ..... $29,309.40

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

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

There aren't any matching funds from the employer. They provide a pension after 20 years instead. Therefore, absent any matching funds, 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

S Fund (Small Cap) ....... 151.5249 ... $5,188.06 ... 59.99%
I Fund (International) ..... 130.1197 ... $3,460.65 ... 40.01%

Contributions going forward:

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, May 12, 2014

New Purchase - ROST

A check was placed in the mail today and should arrive at the brokerage firm for posting by Thursday. At that time, the new purchase is going to be ROST.
Going into 2014 we established some company goals we wanted to achieve with the funds going into the Roth Ira. The portfolio is already established with a series of core positions and we wanted to expand on the core positions.
It was our goal to add a technology and financial company, as well as a railroad and a couple of speculative positions where the yields would be below our normal acceptance criteria, but hopefully we wanted to offset that with high dividend growth and capital gain appreciation.
We wanted to purchase these companies with a discount to fair value. We wanted a 10% discount, 15% would be even better. We decided that we would confirm the double digit discount with at least two firms.
If we were unable to find a high quality company selling at a discount, we would simply add to one of the core positions at fair value.
The first thing I look for in a company is its financial strength rating. If a company doesn't pass this criteria, I go no further with my due diligence, regardless of how sexy the story sounds.
I look for companies that rate a 1 or 2 for safety by Value Line, or a BBB+ credit rating by Morningstar, or a B+ quality rating by S&P Capital IQ.
S&P gives ROST a credit rating of A- and an A+ rating for quality. ROST qualifies for purchase once the valuations and company fundamentals line up.
When I look to purchase a company, I'm looking for a dividend and dividend growth. Normally I look for an initial yield that is 50% above the yield for the S&P 500. I use SPY to determine the yield for that Index.
The current yield for SPY is 1.85% and when you multiply that by 50% I get a yield of 2.78%. That would be my minimum yield under current market conditions unless I was looking to speculate. I am considering ROST a speculation play due to it's low yield which means I must count more on capital appreciation over dividend income in the near term.
Since I am looking to speculate, I expect higher earnings rates than I would with my blue chip core positions. My minimum earnings growth expectations for growth and spec companies is 10%.
My minimum requirement for estimated earnings on a growth or spec company is 10% as well.
During my research, of the 50 plus companies I have on my watch list, ROST was the only company that qualified with a 10% discount to fair value by both Morningstar and S&P Capital IQ, and had 10% estimated earnings growth rate.
In looking at price discounts a few companies came close. It came down to four companies. ROST, MA, TGT and BAX.
Here are the price discounts as of May 9.
ROST ... S&P says ROST is undervalued by 13.6%. M* says ROST is undervalued by 15.7%.
MA ... S&P says MA is undervalued by 10.3%. M* says MA is undervalued by 9.3%. ... This was close enough to a double-double to consider for purchase.
TGT ... S&P says TGT is undervalued by 7.7%. M* says TGT is undervalued by 12.7%. ... TGT was close, but not close enough for consideration at this time in this portfolio.
BAX ... S&P says BAX is undervalued by 8.8%. M* says BAX is undervalued by 10.6%. Again, this one was close enough to consider but I decided to pass as BAX is expected to spinoff a part of their business and I want to wait until the dust settles on that one.
So it came down to ROST and MA for this portfolio.
In looking at estimated earnings growth, ROST is expected to grow earnings at a rate of 12.2%. MA is expected to grow earnings at a rate of 17.7%. Both companies passed the double digit earnings growth criteria.
One aspect that is important to me when investing other people's money, is that I want to get their position off to a fast start. If I can select companies that are expected to beat the market over the next six to twelve months, it provides them with the confidence to hold during market corrections. I try to provide them with a little peace of mind if I can.
With this in mind, I look for undervalued companies that look to have upside price momentum. I look for companies that most analysts can agree on that the company in question is expected to outperform in the near term.
In order to determine who qualifies under this criteria, I turn to Fidelity and a rating service they call Starmine. This system rates the accuracy of the firms participating in the system. Fidelity assigns each covered company with an Equity Summary Score.
The Equity Summary Score is an accuracy-weighted sentiment derived from the ratings of independent research providers on Fidelity.com. It uses the past relative accuracy of the providers in determining the emphasis placed on any individual opinion.
These scores range from 0 which is Very Bearish to 10 which is Very Bullish. Anything above a 7.0 is a Buy.
ROST carries an ESS rating of 8.4 Buy. ... MA carries an ESS rating of 8.1 Buy. ... Both companies are expected to outperform the market over the next six to twelve months.
In looking at earnings, I want a company to have increased earnings in at least 7 of the last 10 years. ROST has raised earnings in 9 of the last 10, which also includes the years of the Great Recession.
MA hasn't been trading for 10 years but they have increased earnings in 7 of the 7 years they have been trading.
In looking at revenues, ROST has an impressive record of revenue growth. Over the last 10 years they have a 15.11 CAGR of revenue.
MA has a 7 year record of 9.77% CAGR for revenue growth.
It's at this point that ROST is edging ahead and the rest of this analysis applies to ROST.
I don't know how to accurately read a balance sheet or income statement so I have to outsource that task. I use Jefferson Research to help me with this.
Here are their findings:
Earnings Quality ... Strongest
Cash Flow Quality ... Strongest
Operating Efficiency ... Strong
Balance Sheet ... Strong
Valuation ... Least Risk
I was impressed with the fundamentals here.
Return on Equity has been rising each year for the last 5 years.
2008 ... 27.8%
2009 ... 31.1%
2010 ... 41.1%
2011 ... 44.6%
2012 ... 46.5%
2013 ... 48.3%
ROST had a couple of years where cash flows were declining, but they are rising again. Over the last 10 years the cash flow per share has a 24.36% CAGR. This is what helps support the dividend growth.
McLean Capital Research says that ROST is not only growing ROE, but it is also growing what they call economic profit. They say ROST is creating shareholder value.
According to McLean, cash flows from operations are 1.2 times that of operating income. Cash Flows from Operations have grown another 4.3% year over year. This company is generating significant amounts of free cash flow and is clearly self-funding, which brings us to the yield and dividend growth.
The current yield is just 1.2% which means I need significant dividend growth to offset the low current yield.
ROST has grown the dividend for 20 consecutive years according to the CCC list put out by David Fish. What I find impressive is not only the high CAGR of the dividend, but the consistency of that high growth over all time frames.
1 year ... 21.4%
3 year ... 28.6%
5 year ... 29.0%
10 year ... 27.9%
In summation, I was looking for a growth company whose estimated earnings were predicted at 10% or more, with a high quality company that was selling at a 10% or more discount to fair value. The company had to pay a dividend and had to have exceptional dividend growth, and a record of paying a high dividend growth rate over many years.
Additionally, not only was valuation important, but the timing of the purchase was of importance as well.
From November of 2013 to the current date, the price for ROST has been declining. While price has been declining, On Balance Volume has been rising. This is known in the technical world as a bullish divergence. Volume usually confirms price direction. It's not this time.
This is an indication that Institutional Investors are accumulating shares of ROST on small price pull backs.
When you look at the following chart, note how price has fallen since November, but the indicator below the volume chart has been rising.
This is very good news from a timing standpoint. In my opinion, value and timing are on the same page together.
On Thursday of this week, when the funds hit the account, I will be purchasing ROST.
http://stockcharts.com/h-sc/ui?s=ROST&p=W&st=2013-05-13&en=2014-05-09&id=p24022913754

Saturday, May 3, 2014

Project $3 Million - April Results

This portfolio belongs to a 29 year old. I manage it for him.

MONTHLY HIGHLIGHTS:

April was another good month.

1. The portfolio closed at yet another all-time high of $119,964.24.
2. The portfolio established a new monthly dividend income record at $350.84.
3. Year to date dividend income is up 26.5% over year to date 2013.
... Income earned through 4/30/13 was $1,013.74.
... Income earned through 4/30/14 is $1,282.67.

Companies that raised their dividend in April:

International Business Machines - IBM ... up 15.8%
Procter & Gamble - PG ......................... up 7.0%
Chevron Corp. - CVX ........................... up 7.0%
Johnson & Johnson - JNJ ....................... up 6.1%
Magellan Midstream Partners - MMP ..... up 4.7% second increase this year
Southern Company - SO ........................ up 3.4%
Kinder Morgan Inc. - KMI ..................... up 2.4%
Kinder Morgan Partners - KMP ............. up 1.5% second increase this year
Enterprise Products Partners - EPD ........ up 1.4% second increase this year
-----------------------------------------------------------------------------------------

STATUS:

This portfolio has a dual objective, total return plus income replacement.

Total Return - To stay on schedule for the $3 Million, the total return number for ending April 2014 is supposed to be $91,520.74. The actual result is $119,964.24. The portfolio is ahead of schedule by 31.1%.

Dividend Income - To stay on schedule for the $10,000 per month in dividends, the average monthly income for ending April 2014 is supposed to be $305.07. The actual average monthly dividend in 2014 is $320.67. The portfolio is ahead of schedule by 5.1%.
===============================================================

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 be additional income.

The objective also includes having the income stream continue to grow above the inflation rate and we count on dividend growth to accomplish this.

A portfolio of $3 Million in value with a yield of 4% will accomplish the $10,000 per month in 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 the safety of the dividend, then to focus on the growth of the dividend, and then to focus on the total return (capital appreciation plus dividend growth).

The formula to be used to put this strategy into effect is what I call, "The Success Formula That Never Fails."

High Quality + High Current 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, 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 link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years to achieve 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.
===============================================================

DIVIDEND HISTORY:

April Dividend History: (Last 5 years)

2010 ... $112.64
2011 ... $133.71
2012 ... $158.94
2013 ... $233.87
2014 ... $350.89

The April dividends have a 5 year compounded annual growth rate of 25.52%.
=================================================================

APRIL DIVIDENDS RECEIVED:

Taxable Account (Dividends Reinvested)

Coca-Cola - KO ............................. $34.18 ... bot 0.89 shares
Automatic Data Processing - ADP ... $18.97 ... bot 0.245 shares
Kimberly-Clark - KMB ................... $31.47 ... bot 0.287 shares
Altria Corp - MO ............................ $52.73 ... bot 1.399 shares
Diageo, plc - DEO ........................... $39.29 ... bot 0.316 shares
Philip Morris - PM .......................... $42.71 ... bot 0.506 shares
Kraft Foods - KRFT ...................... $46.83 ... bot 0.822 shares
Sysco Corp - SYY ......................... $33.76 ... bot 0.927 shares

Roth Ira: (Dividends Reinvested)

Altria Group - MO ......................... $35.40 ... bot 0.939 shares
Realty Income - O .......................... $15.55 ... bot 0.366 shares
==================================================================

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

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

ADP ...... 39.763 ... $3,099.92 ... up 72.04% ... Automatic Data Processing
CL ......... 51.012 ... $3,433.11 ... up 66.76% ... *Colgate-Palmolive
CVX ...... 31.902 ... $4,004.34 ... up 37.85% ... *Chevron Corp
DE ......... 12.072 ... $3,753.26 ... up 12.63% ... Deere & Company
DEO ...... 30.569 ... $3,753.26 ... up 73.38% ... Diageo, plc
EPD ....... 64.64 ..... $4,727.12 ... up 85.02% ... **Enterprise Products Partners
FTR ....... 22.856 ... $135.99 ... Received-spinoff from VZ- Frontier Comm.
GIS ........ 79.653 ... $4,223.20 ... up 45.69% ... *General Mills
JNJ ........ 44.976 ... $4,555.62 ... up 60.60% ... *Johnson & Johnson
KMB ..... 37.754 ... $4,237.89 ... up 46.23% ... *Kimberly-Clark
KMP ..... 38.452 ... $2,898.51 ... up 2.57% ..... **Kinder Morgan Partners
KO ...... 112.958 ... $4,607.56 ... up 66.92% ... *Coca-Cola
KRFT .... 90.016 ... $5,118.31 ... up 23.79% ... Kraft Foods
LMT ...... 48.313 ... $7,930.10 ... up 92.60% ... Lockheed-Martin
MCD ..... 36.532 ... $3,703.61 ... up 29.44% ... McDonald's
MO ..... 111.262 ... $4,462.72 ... up 82.70% ... Altria Group
PEP ....... 34.411 ... $2,955.56 ... up 37.18% ... *Pepsico
PM ........ 45.942 ... $3,924.83 ... up 11.06% ... Philip Morris
SO ......... 72.442 ... $3,320.02 ... up 15.88% ... *Southern Company
SYY .... 117.329 ... $4,274.30 ... up 20.89% ... Sysco Corp
Cash ...................... $74.12
------------------------------------------------------------------------------------
Account Value ...... $82,826.94

*Increased the dividend in 2014
** Multiple dividend increases in 2014
===========================================================

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

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

D ......... 73.123 ... $5,304.34 ... up 52.46% ... *Dominion Resources
HCN ... 44.84 ..... $2,828.96 ... up 12.92% ... *Healthcare REIT
IBM .... 5.025 ..... $987.26 ...... up 6.18% ...... *International Business Machines
KMI ... 71.733 .. $2,342.80 .. dn <11.04%> ... *Kinder Morgan Inc.
MO .... 74.697 ... $2,996.10 ... up 12.39% ..... Altria Group
O ........ 85.752 ... $3,725.92 ... up 19.25% ..... *Realty Income
PG ...... 35.721 ... $2,948.77 ... up 29.79% ..... *Procter & Gamble
T ......... 32.00 ..... $1,142.40 ... up 9.38% ....... AT&T (new position)
VZ .... 121.626 ... $5,683.58 ... up 22.81% ..... Verizon
Cash ................... $723.87
------------------------------------------------------------------------------------
Account Value .... $28,684.00

*Increased the dividend in 2014
================================================================

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

There aren't any matching funds from the employer. They provide a pension after 20 years instead. Therefore, absent any matching funds, 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

C Fund (S&P 500) ..... 107.7257 ... $2,638.58 ... 31.21%
S Fund (Small Cap) ..... 94.0579 .... $3,172.33 ... 37.53%
I Fund (International) ... 101.0598 .. $2,642.39 .... 31.26%

A change has been made in this account and will be reflected in the May results. This portfolio will only hold the S and I funds going forward. The C Fund has been divided between the S and I. There will no longer be any money being contributed to the C Fund. Since the taxable account and Roth Ira hold companies held in the S&P 500, I didn't need the duplication in the TSP as well.

Contributions going forward:

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 7, 2014

Project $3 Million - March Results

This portfolio belongs to a 29 year old. I manage it for him

MONTHLY HIGHLIGHTS:

March was another good month.

1. The portfolio closed at an all-time high of $115,618.87.
2. March dividend income, year over year ... up 10.6%
3. First quarter dividend income, year over year ... up 19.5%

Companies that raised the dividend in March:

General Mills - GIS ......... up 7.9%
Colgate-Palmolive - CL .. up 5.9%
Realty Income - O .......... up 0.2%
-------------------------------------------------------------------------

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 be additional income.

The objective also includes having the income stream continue to grow above the inflation rate.

A portfolio of $3 Million in value with a yield of 4% will accomplish the $10,000 per month in 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 the safety of the dividend, then to focus on the growth of the dividend, and then to focus on the total return (capital appreciation plus dividend growth).

The formula to be used to put this strategy into effect is what I call, "The Success Formula That Never Fails."

High Quality + High Current 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, 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 link below shows the compounding effect and where the portfolio needs to be at the end of each of those 40 years to achieve 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.
--------------------------------------------------------------------------------------

STATUS:

To stay on schedule for the $3 Million, in the time allotted, according to the link above, the balance at the end of year 2014 needs to be $100,643.33.

This portfolio is ahead of schedule! ... The current portfolio value is $115, 619.87.
----------------------------------------------------------------------------------------

DIVIDEND HISTORY:

March Dividend History: (Last 5 years)

2010 ... $85.79
2011 ... $194.47
2012 ... $184.45
2013 ... $249.36
2014 ... $275.91 ... up 10.6%

First Quarter Dividend History: (Last 5 years)

2010 ... $264.95
2011 ... $542.81
2012 ... $621.20
2013 ... $779.87 ... up 25.5%
2014 ... $931.78 ... up 19.5%
========================================================

 MARCH DIVIDENDS RECEIVED:

Taxable Account (Dividends Reinvested)

Southern Company - SO ..... $36.32 ... bot 0.869 shares
Chevron Corp - CVX ......... $31.63 ... bot 0.276 shares
Johnson & Johnson - JNJ .... $29.48 ... bot 0.316 shares
McDonald's - MCD ............ $29.35 ... bot 0.302 shares
Lockheed-Martin - LMT ..... $63.74 ... bot 0.391 shares
Frontier Comm. - FTR ......... $2.25 .... bot 0.402 shares
Pepsico - PEP ..................... $19.40 ... bot 0.234 shares
========================================================

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

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

ADP ...... 39.518 ... $3,053.16 ... up 71.25% ... Automatic Data Processing
CL ....... . 51.012 ... $3,309.15 ... up 60.74% ... *Colgate-Palmolive
CVX ...... 31.902 ... $3,793.47 ... up 30.59 ...... Chevron Corp
DE ......... 12.072 ... $1,096.14 ... up 9.57% ..... Deere & Company
DEO ...... 30.253 ... $3,769.22 ... up 77.36% ... Diagio, plc
EPD ....... 64.64 ..... $4,483.43 ... up 75.48% ... *Enterprise Products Partners
FTR ....... 22.454 ... $128.10 ... Received-spinoff from VZ - Frontier Comm.
GIS ........ 79.653 ... $4,127.62 ... up 42.40% ... *General Mills
JNJ ........ 44.976 ... $4,417.99 ... up 55.75% ... Johnson & Johnson
KMB ..... 37.467 ... $4,130.74 ... up 44.10% ... *Kimberly-Clark
KMP ..... 38.452 ... $2,843.53 ... up 0.63% ..... *Kinder Morgan Partners
KO ...... 112.068 ... $4,332.55 ... up 58.92% ... *Coca-Cola
KRFT .... 89.194 ... $5,003.78 ... up 22.41% .... Kraft Foods
LMT ...... 48.313 ... $7,886.61 ... up 91.54% .... Lockheed-Martin
MCD ..... 36.532 ... $3,581.23 ... up 25.16% .... McDonald's
MMP ..... 84.356 ... $5,882.99 .. UP 145.70% .. *Magellan Midstream Partners
MO ...... 109.863 ... $4,112.17 ... up 72.06% .... Altria Corp
PEP ....... 34.177 ... $2,853.78 ... up 33.66% .... *Pepsico
PM ........ 45.436 ... $3,719.85 ... up 6.55% ...... Philip Morris
SO ........ 72.442 ... $3,183.10 ... up 11.10% .... Southern Company
SYY .... 116.402 ... $4,205.60 ... up 20.09% ... Sysco Corp
Cash ...................... $74.12
--------------------------------------------------------------------------------
Account Value ...... $79,988.33

*Increased Dividend in 2014
======================================================

ROTH IRA: (Dividends Reinvested)

March Dividends:

International Business Machines - IBM ... $4.75 ..... bot 0.025 shares
Realty Income - O ................................. $15.49 ... bot 0.368 shares
Dominion Resources - D ........................ $43.50 ... bot 0.616 shares
-----------------------------------------------------------------------------

PORTFOLIO HOLDINGS:

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

D ......... 73.123 ... $5,191.00 ... up 49.20% ..... *Dominion Resources
HCN ... 44.84 ..... $2,672.46 ... up 6.68% ....... *Healthcare REIT
IBM ..... 5.025 .... $967.26 ...... up 4.03% ....... International Business Machines
KMI .... 71.733 .. $2,330.61 .. dn  <11.51%> .. Kinder Morgan, Inc
MO ..... 73.758 ... $2,760.76 ... up 4.96% ........ Altria Corp
O ........ 85.386 ... $3,488.87 ... up 12.22% ...... *Realty Income
PG ...... 35.721 ... $2,879.11 ... up 26.72% ...... Procter & Gamble
T ......... 32.00 ..... $1,122.24 ... up 7.45% ........ AT&T (new position)
VZ .... 121.626 ... $5,785.75 ... up 25.01% ...... Verizon
Cash ................... $23.87
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Account Value ... $27,221.94

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

There aren't any matching funds from the employer. They provide a pension after 20 years instead. Therefore, absent any matching funds, 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

C Fund (S&P 500) ..... 107.1829 ... $2,605.78 ... 30.99%
S Fund (Small Cap) ..... 93.3937 .... $3,229.68 ... 38.41%
I Fund (International) ... 99.9023 .... $2,573.14 ... 30.60%
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Account Value ...... $8,408.60

Contribution Allocations:

C Fund ... 20%
S Fund ... 35%
I Fund ... 45%
========================================================

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