This post has been a long time coming. Part of the reason I have waited so long to publish the fact that my individual portfolio has crossed the $100k mark is that i wanted to make sure that I was past this mark permanently. Well, I finally reached that point last week and wanted to share with all of you that I had finally crossed $100k and am staring comfortably at a six figure individual stock portfolio. I wanted to share some thoughts and observations from my journey to $100k with all of you
First, this is most likely going to be the last update about my individual stock portfolio. If you recall, a few months ago I wrote about how my wife and I combined our stock portfolio reporting for 2017. So any milestone or update going forward will reflect our combined portfolio values and not just my individual. Currently, our combined portfolio sits at $158k and hopefully I will be writing about crossing $200k before we know it. But for now, I want to focus on just my inidivdual funds.
Observation #1 – The First $100k Takes Time – I’ve read this on many different websites and it was definitely true for me. The first $100k was a slow and steady process that took well over 3 years for me to complete. My dividend investing journey began in the middle of 2013, over a year before the blog existed, so yeah, I’m not talking about a short time frame here. Why was this the case? I’ll elaborate on this point with my next observation, but starting from $0 meant that the majority of my growth at the beginning came from new funds that were transferred in to my account and not from the power of dividend re-investment. My forward dividend income at the end of 2013 was only $750 and while this amount increased to $1,940 by the end of 2014, the majority of my portfolio growth had to come from outside capital. When you have just graduated college, are paying off student debt, just buy a new car that is a money pit, and are paying for an over-priced apartment that you should have never lived in in the first place, the funds were not as readily available as I had hoped. But once I focused on investing, buying as much stock as possible, and shed some of my old habits, the portfolio really began to take off.
Observation #2 – The Power Of Dividend Investing is REAL – We talk about this all the time on the website and see it every month end when we prepare our dividend income summary of the results of other dividend growth investors. But once that dividend snowball gets rolling, the results begin to magnify and your portfolio market value/dividend income begin to grow at a lot faster. In 2015 and 2016, I re-invested $3,331 and $3,478 in dividends into my portfolio. This means that dividends I received from companies over the last two years accounted for 6.8% of my portfolio’s $100k market value. That is a lot of extra cash that I did not have to invest, right? And guess what? That amount only gets larger and larger as you continue to receive additional shares and dividend increases from these awesome companies. Why do you think I was so eager to continue building my PG and TROW shares over the last few months? Because I want each DRIP from the companies to produce more and more fractional shares so I can let my dividend investing do the work for me.
Observation #3 – Increasing my 401k Contributions Provided a Nice Jolt in 2016 – Following Lanny’s lead in terms of increasing 401k contributions and maximizing his HSA, I increased the amount per paycheck for each account. While I wasn’t as extreme as he was (that’s pretty hard to do quite frankly), automatically adding $500 to my portfolio monthly via 401k contributions was a nice treat. You don’t realize how quickly this adds up until you take a step back and review you portfolio and changes that have occurred over a long period of time. That really stood out to me. It magnifies the impact of crazy stock market runs as well, especially since we have been in an extended bull period for quite some time. This was one of the best changes I made during the year and it took only two or three minutes to do so. I’ll be looking to increase my allocation once again over the next few months as well.
Observation #4- I’m Having The Time of My Life Here – I was trying to think of the best way/least cheesy way to end this article and I don’t really think I was able to achieve that. I don’t know how to say it other than….dividend investing, interacting with all of you, and documenting this journey with one of your best friends makes this achievement that much better. I’ve disclosed with all of you way more about my finances than I do with my family members and I wouldn’t have it any other way. Throughout my first $100k, Lanny and all of you were providing me advice along the way, helping me find new ways to save so I can invest more, and motivating me to keep pushing. I became thirsty and wanted to hit this milestone because of the motivation everyone has provided me. I’ve loved every minute of this and I have found a passion of mine that I didn’t know existed back in 2013. This ride has been a blast.
So there I have it, my four observations about reaching the $100k mark. Now that I have blown past $100k, it is time to keep working and building towards the next milestone. I’m not stopping here and I’m ready to keep pushing myself, Lanny, and all others out there to crush milestones and watch our portfolio market values rise and push us towards financial freedom. After all, isn’t that the name of the game here! Thanks again everyone for your support along the way!
-Bert