The time has come to update my net worth and portfolio once again. As a dividend growth investor the absolute value of my assets is subordinate to the fresh cash that they throw off each month, but seeing my net worth grow month after month is fun nonetheless. I think it’s fair to say that everyone loves seeing an upward-trending graph when money is concerned, unless you’re in debt.
I am incredibly fortunate that my progress the past few months has been nothing but stellar. That upward-trending graph I was talking about shows signs of exponential growth, which means the power of compounding interest is already working in my favour. On top of that, an increasing numbers of dividends are rolling into my accounts each month, thus providing me with more cash to pour into the stock market. February’s passive income, for example, increased my savings rate by 1%.
Even with the high income tax that I’m subject to in Belgium and a pretty heavy withholding tax of at least 25% on all my dividend payments, you’ll be surprised to hear that my net worth jumped with another massive €2,606 this month. That’s about 30% more than my job’s monthly salary.
As a result, I thought it appropriate to write a post on why taxes don’t bother me too much and that I actually enjoy paying them. Although the article turned out to be quite controversial, as the heated and in-depth debate in the comment section shows, I still stand by what I said. Not only do you get to contribute to society through taxes, but when Mr. Taxman takes a bigger cut in absolute terms it simply means you made more money – and what’s wrong with that?
March’s growth spurt of 4.44% marks another month in which my portfolio, in tandem with my savings rate, managed to build over 200 hours of work-free capital. That’s 25 days my future self won’t have to spend at the office making €12 an hour after taxes. Simply amazing!
Below you can find my portfolio as usual. It’s made up of individual dividend growth stocks where most of my investing focus lies for the time being, of exchange-traded index funds, and of safer investment vehicles and a small pension fund. Foreign stocks were converted into Euros using the last-known exchange rate.
Dividend growth stocks
With the European Central bank launching its Quantative Easing programme this month, it comes as no surprise that my dividend growth portfolio shot up in value again considering that most of my dividend stocks are located in the United States, the UK, and Switzerland. When the Euro tumbles, my international stocks show an inversely correlated movement.
That’s why you’ll see a lot of green in the list below. The only two stocks trading below my purchase price are oil tycoons Royal Dutch Shell (AMS:RDSB) and Total SA (EPA:FP). The fact that they’re the only two of my holdings denominated in Euros is completely incidental as the European stock markets outperformed themselves the past month.
Now that I have a Euro Dividend All-Stars list at my disposal, I’m going to put more cash to work in European companies over the coming weeks. I wanted to purchase more EU equities sooner, but my analysis of Swiss pharmy company Hoffmann-La Roche (VTX:ROG) made me decide otherwise last month. That’s why you’ll find five shares of the Roche Holding listed below.
The cost basis for each position includes the price of the shares, a 0.25% stock market tax and brokerage fees.
|Ticker||Company||Shares||Cost basis||Mkt. value||Gain|
|BLT||BHP Billiton plc||48||928.94||951.02||+2.38%|
|DE||Deere & Company||7||452.61||596.80||+31.86%|
|JNJ||Johnson & Johnson||6||473.79||567.10||+19.70%|
|PG||Procter & Gamble||9||575.36||701.63||+21.95%|
|RB||Reckitt Benckiser plc||10||630.34||811.19||+28.69%|
|ROG||Roche Holding AG||5||1,233.71||1,252.23||+1.50%|
|RDSB||Royal Dutch Shell||20||585.25||565.40||-3.39%|
|KO||The Coca Cola Company||17||540.05||646.38||+19.69%|
|VZ||Verizon Communications Inc.||20||785.07||930.60||+18.54%|
Index funds and their stock market-based counterparts exchange-traded funds have just one job: to track a certain index and keep up with its performance. They require a set-it-and-forget-it approach that many new investors prefer over active investing choices. Just like with my individual stocks, my ETFs have gained quite a lot again due to the ECB’s QE, as you can see.
|Ticker||ETF||Cost basis||Mkt. value||Gain|
|IWDA||iShares Core MSCI World||4,982.96||6,416.82||+22.35%|
|IEMA||iShares MSCI Emerging Markets||1,214.59||1,412.64||+14.02%|
|IMAE||iShares MSCI Europe||3,561.94||4,142.16||+14.01%|
There’s not much to say here. Like every other month I invested another €77.5 towards my personal pension fund that allows a contribution of up to €930 for 2015. My savings account and the emergency fund remain unchanged from last net worth update.
|Name||Cost basis||Current value||Gain|
|Pension fund||1,105.00||1,243.39||+11.13% and 30% tax break|
|Savings account||N/A||18,159.03||+3.15% guaranteed yearly|
At the moment the annual gain of my portfolio comes out at a little over €9,000 already. That’s insane considering the year has just started! When I first set my 2015 goals I expected to reach a total net worth of €70,000 by the end of the year. In over two months I’m almost halfway in building the necessary extra €20,000 to make that goal. The financial markets make me look like a hot shot investor even though it’s pure luck.
You won’t hear me complain though. If the major stock indices don’t decline over the coming months I will crush this year’s goal of €70,000 in net worth. While that’s great, it doesn’t help my future dividend income all that much. More expensive stocks means I buy them at a compressed yield, lowering my future income as a result. That’s why it’s important to keep my savings rate up to make every dividend stock purchase as meaningful and large as possible.
Thank you for reading! Be sure to let me know how your portfolio and assets are performing.