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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (10086)	10/4/2011 6:10:07 PM
From: Triffin	Respond to of 34328

RE: Project $3 Million Your son will thank you .. If he hasn't already .. Triff ..

To: chowder who wrote (10086)	12/31/2011 6:51:51 PM
From: chowder	1 Recommendation Read Replies (2) \| Respond to of 34328

Project $3 Million ............................. Towards the end of 2008, I decided I would change direction with my Son's (currently age 26) portfolio and go with a Dividend Growth Strategy and reinvest the dividends. The goal is to contribute $500 monthly and earn an 8.25% annual compounded rate of growth. Based on his portfolio value at the end of 2009, he will have accumulated a little over $3 Million by age 65. The link below provides the site I used to determine the objective. The criteria: 40 years of $500 monthly. An interest rate of 8.25% compounded annually. Initial amount $42,205.00 (year end 2009 value of portfolio). planningtips.com Project $3 Million is ahead of schedule. In order to be on target at the end of 2011, he needed to accumulate $62,746.55. Mission accomplished. End of year total was $70,221.20. Dividend income is listed below. Portfolio Value (PV): 2009: $42,205.42 ..... 2010: $54,949.87 ... 2011: $70,221.20. Although the portfolio has some capital gains, capital gains is not the top priority. The top priority is to build an income stream from dividends that is reliable, predictable, and increasing. As long as he does this, I believe capital gains will follow. Dividends: ....... Year 2009 : ..... Year 2010: ..... Year 2011: Qtr 1: ... $108.00 ..... $264.95 ....... $542.81 Qtr 2: ... $102.00 ..... $357.17 ....... $575.40 Qtr 3: ... $132.55 ..... $518.24 ....... $583.40 Qtr 4: ... $341.83 ..... $510.71 ....... $703.63 Yr Tot .. $684.38 ..... $1,651.07 .... $2,405.24 The income stream increased 45.6% over 2010. His holdings are spread among three portfolios. I will list the account, company symbol and number of shares. Taxable Account ... Portfolio Value - $55,742.32 ABT - 54.236 ADP - 37.208 BP - 38.088 CL - 24.229 CVX - 22.034 DEO - 28.774 EPD - 57.962 FTR - 18.025 GIS - 49.90 JNJ - 41.824 KMB - 25.248 KMP - 33.529 KO - 53.033 LMT - 21.306 MCD - 23.193 MMP - 38.397 MO - 97.862 NUE - 53.153 O - 76.174 PEP - 32 PM - 31.36 SO - 43.427 SYY - 68.462 UHT - 63.539 In January, I will sell O and UHT and move the proceeds into his ROTH IRA. I will repurchase O and I haven't decided whether to repurchase UHT or go with HCN. You can't exchange stocks from a taxable to an IRA. You have to sell, pay your capital gains tax, and then repurchase. ROTH IRA ... Portfolio Value - $10,342.94 D - 46.29 FTR - 242.392 PG - 33.291 VZ - 109.934 Of the 27 companies he owns, 26 of them raised the dividend in 2011. Nobody lowered or discontinued a dividend. FTR paid the same dividend in 2011 as in 2010. All dividends are reinvested back into the company that paid them. Thrift Savings Plan (TSP) - Portfolio Value - $4,135.94 He does not get any matches in his TSP, so he's just putting 5% of his income in. Index funds are the only choices. F Fund (Fixed Income) - 4.70% of portfolio value. C Fund (S&P 500 Index) - 36.27% S Fund (Small Cap Index) - 31.39% I Fund (International Index) - 27.64% Since his other portfolios cover the S&P 500 rather well, we adjusted his contributions going forward. The contribution allocation is now as follows: F Fund - 10% C Fund - 10% S Fund - 35% I Fund - 45% Portfolio value target for year end 2012 to stay on track for Project $3 Million is ... $74,355.59.