With March gone the time has come once again to take a quick look at my portfolio and its performance over the past few weeks. The size of my portfolio and the dividends it generates, determine my progress towards financial freedom. Because your net worth directly influences your freedom and flexibility, it should come as no surprise that I like to keep close tabs on my net worth growth.
Apart from a minor stock market dip in Otober, my financial independence fund enjoyed a strong upward momentum the past few months, mainly due to the stock market’s performance and the Euro’s almost Icarian drop. For that I am more than grateful.
However, none of that would have mattered if I hadn’t saved a large percentage of my paycheck every single month. A rapidly growing portfolio should therefore be viewed as a testimony to how patient and diligent saving can and will make you a millionaire yet.
While the past few months showed bigger increases than my monthly paycheck, March and early April blew every single previous month out of the watter. A gargantuan €5,028 jump firmly pushed my nest egg above the €60,000 threshold for the very first time. The large majority of that growth came from a one-time insurance bonus, with the stock market’s relentless march upward and my March savings putting in some legwork too.
As a result, the tail of the graph above is starting to show exponential tendencies. At this rate I won’t just blow past my goal of €70,000 by the end of the year, I’ll simply nuke the thing to bits. This is one of the reasons why I’d rather compare portfolio performance to my own goals rather than an index – at least this way you know if you’re making good progress.
An 8.57% increase is massive, there’s simply no denying that. Even more impressive than that number are the amount of financially free hours I’ve stashed away. When you earn €12 an hour after taxes like I do, that’s almost 420 hours of work-free capital in the bank. That’s 55 days less at the office to become financially independent. Compound interest at its finest!
As usual, you’ll find a detailed description of my portfolio below. I list my dividend growth stocks and highlight important changes to them before moving on to my three exchange-traded funds and some cash holdings. Foreign securities were converted to Euros using the last-known exchange rate.
Dividend growth stocks
Quantitative Easing remains the European Central Bank’s biggest policy push to date and it continues to show in my own portfolio. On the one hand there’s the strongly inflated non-domestic stocks, while on the other my European holdings have experienced a strong capital gain too. All of this should come as no surprise as the ECB continues to buy Euro government bonds in bulk.
That’s why the list below is greener than a Welsh meadow. However, Royal Dutch Shell (AMS:RDSB) is still trading below my cost basis, even after adding more capital, while newcomer Home Invest Belgium (EBR:HOMI) experienced a slight decrease too. Overall though, performance has been excellent.
Emboldened by these results I continue to add as much capital as possible to high-quality dividend paying companies. Together with REIT Home Invest Belgium, the world’s largest insurer Münchener Rückversicherungs-Gesellschaft (ETR:MUV2) now forms a firm financials cornerstone to my portfolio with both stocks yielding a little under 4%.
The cost basis for each position includes the price of the shares, a 0.27% stock market tax and brokerage fees.
|Ticker||Company||Shares||Cost basis||Mkt. value||Gain|
|BLT||BHP Billiton plc||48||928.94||943.72||+1.59%|
|DE||Deere & Company||7||452.61||582.90||+28.79%|
|HOME||Home Invest Belgium||15||1,396.25||1,386.00||-0.73%|
|JNJ||Johnson & Johnson||6||473.79||570.75||+20.47%|
|PG||Procter & Gamble||9||575.36||710.36||+23.46%|
|RB||Reckitt Benckiser plc||10||630.34||844.46||+33.97%|
|ROG||Roche Holding AG||5||1,233.71||1,344.89||+9.01%|
|RDSB||Royal Dutch Shell||60||1,745.65||1,734.00||-0.67%|
|KO||The Coca Cola Company||17||540.05||654.56||+21.20%|
|VZ||Verizon Communications Inc.||20||785.07||927.87||+18.19%|
I’ve said it before and I’ll say it again, the ETFs below have been doing exactly what they were designed to do. By tracking the MSCI World, emerging markets and Europe indices rigorously, these exchange-traded funds have experienced enormous growth in the past ten months. If you’re a new investor looking for a long-term set-it and forget-it approach, I can’t recommend index funds enough.
|Ticker||ETF||Cost basis||Mkt. value||Gain|
|IWDA||iShares Core MSCI World||4,982.96||6,625.80||+32.97%|
|IEMA||iShares MSCI Emerging Markets||1,214.59||1,568.16||+29.11%|
|IMAE||iShares MSCI Europe||3,561.94||4,330.48||+17.75%|
Next to the stock market’s upward bursts, this category remains relatively stable. As usual I added another €77.5 towards the yearly maximum of €930 in my personal pension fund, while my emergency fund and savings accounts remained untouched. Because of the aforementioned insurance bonus I no longer enjoy the 3.15% guaranteed interest rate on the savings account, however.
|Name||Cost basis||Current value||Gain|
|Pension fund||1,182.50||1,328.41||+10.98% and 30% tax break|
Living frugally, saving as much as possible, and investing those savings remains the holy trifecta of financial independence. Without putting in much effort myself, my net worth continues to make big strides forward, as this update clearly shows. It’s incredible to see how fast you can get a snowball rolling as long as you remain focussed and stick to your strategy.
Of course, the time frame we’re talking about here is relatively short. I only joined the financial freedom community a little under ten months ago, so it’ll be interesting to see how things progress into the future. Dividend growth investing, my favourite strategy to become financially independent, is no get-rich-quick scheme, but rather a long-term approach.
That’s why I don’t want to overstate the importance of these updates – things can turn around in the blink of an eye. Building and maintaining a passive income stream remains my primary goal, so that’s where I’ll continue to focus my attention, irrespective of what the underlying value of my portfolio does in the mean time.
Thank you for reading and for your support.