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Three Year Update
Old 12-05-2012, 02:30 PM   #1
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Three Year Update

Hi all. It's has been about three years since I first introduced myself. I have been lurking every now and then and have decided to recently get more involved. So, here's my update.

I am 38 and my wife is 35 with no children and no plans for any children. Our house has been paid off since early 2007. I was recently downsized from work as an engineer. I am currently looking, but taking my time to be sure it's something I will enjoy. My wife still works full time. We have no payments of any kind. I have tracked all expenses for many years, the last twelve months our expenses averaged $3,200 per month. This has started to come down quite a bit since I have not been working.

As far as assets, we were able invest about 80% of my paycheck and live on the other 20% and my wifes paycheck. I learned to invest and treated it like my job and had good results. Our assets are as follows:

Stocks - $1,000,000+
IRA / 401k- $200,000+
Cash - $30,000
House - $75,000

We are 100% stocks which are (largest to smallest): PM, MO, XOM, TOT, GPOR, ABT, WMT, MRK, PG, E, BMY, PEP, KO, D, LMT, JNJ, FE, CVX. These are about 90% of our holdings. They all pay solid dividends except for GPOR. As a rule, I don't speculate. I broke that rule for GPOR because of the potential in the Utica Shale (FYI I live in Stak County Ohio). It has worked out well by growing into one of our top five holdings. Anyway, our dividends are currently $59,000 per year.

So, as you might notice, our living expenses are covered by our dividends. If necessary, we can cut our expenses further or increase our dividends when ever needed. FI is a great feeling.

Well, that's my update. Thanks for reading.
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Old 12-05-2012, 02:46 PM   #2
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Looks like you're in a sweet position, congrats!

I noticed there are quite a few engineers on here. Is there some reason for that? (I have a degree in ME.)
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Old 12-05-2012, 03:03 PM   #3
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Thank you.

As far as the engineer thing, I think it might be that most of us are analytical thinkers and we are not afraid of dealing with numbers. Which might help us figure out early on that the less you spend, the more you can invest, the sooner you can achieve FI.

Then again, I could be wrong, it has happened before.
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Old 12-05-2012, 03:54 PM   #4
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Wow, congrats! You're way ahead of where DW and I were at that age, and things have turned out peachy for us so far. You probably make many of us here, who seem relatively $ disciplined vs the general population, look like slackers! FI is one of the most liberating accomplishments I can think of, more noteworthy than retirement IMO, from there you have so many good options. Well done!
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Old 12-05-2012, 05:12 PM   #5
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Quote:
Originally Posted by gomo View Post
Thank you.

As far as the engineer thing, I think it might be that most of us are analytical thinkers and we are not afraid of dealing with numbers. Which might help us figure out early on that the less you spend, the more you can invest, the sooner you can achieve FI.
+1
That's my take on it. I like analyzing investments just for fun and now I have plenty of time.
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Old 12-05-2012, 07:30 PM   #6
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... our dividends are currently $59,000 per year.
Thanks for the update and congrats on good achievement!
I am not sure how you calculate dividends. Based on you data you are at =>5% rate. Can you elaborate?
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Old 12-06-2012, 11:09 AM   #7
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Sure. Both MO and PM are far and away our largest holdings(+40%) and we have low costs basis for each. MO below $20 and PM below $50. The $59,000 is projected for the next twelve months. (Acutally it's $59,036 as of today, BMY was nice enough to give us a raise recently.) Our div's the past twelve months was $53,928.

Hope I answered your question.
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Old 12-06-2012, 11:33 AM   #8
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You've done great, are FI and could probably RE if you chose to. The thing I would think about from what you've told us is concentration risk as while you have a fair number of different stocks, it sounds like they are somewhat concentrated so if a couple tickers experienced problems you might take a big hit.
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dividend yield
Old 12-06-2012, 12:05 PM   #9
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dividend yield

Quote:
Originally Posted by gomo View Post
Sure. Both MO and PM are far and away our largest holdings(+40%) and we have low costs basis for each.
So you calculate dividend yield using cost basis - not the current value?
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Old 12-06-2012, 01:46 PM   #10
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So you calculate dividend yield using cost basis - not the current value?
Yes, YOC is the only yield I calculate. The only time I pay attention to the current yield of stocks is for a buy order.
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Old 12-06-2012, 02:46 PM   #11
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So you calculate dividend yield using cost basis - not the current value?
He actually did not calculate his yield - somebody did. But he did mention what the dividend amounts that he is getting and the dividend yield does come out to >5%. Now, if he used YOC, it will be higher. To me anyway, 5% is good - I hope I get that much.
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Old 12-06-2012, 03:35 PM   #12
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You've done great, are FI and could probably RE if you chose to. The thing I would think about from what you've told us is concentration risk as while you have a fair number of different stocks, it sounds like they are somewhat concentrated so if a couple tickers experienced problems you might take a big hit.
Thank you. I agree that we are overweight in consumer staples, energy and some utilities and one industrial (LMT). I don't like tech, they have to reinvent themselves constantly. Industrial companies are too cyclical in nature for me. Most bank stocks are not for me either, but we do have one bank stock (CBKM). It is a very small bank in my area that has started benefiting from the shale money, but we owned it before anybody ever heard of these shale plays. I like to own companies that produce things people use on a daily basis. When one does take a hit, if the fundamentals have not changed, I start to buy in small stages ($500 - $1000) on the way down. It's what has worked for us so far.
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Old 12-06-2012, 09:11 PM   #13
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+1 for the engineers. I am an EE.
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