Road to $1,000,000 portfolio (series) - Part 1
In this new blog series, which I’ll call “Road to $1,000,000”, I will be constructing a portfolio that is more aggressive but still mainly grounded in dividend aristocrats. At the beginning of last year, I set out to run a $77,000 experiment where I only invested in dividend aristocrat stocks. After some consideration, I will be reusing that same account in order to build up a $1,000,000 portfolio alongside the rest of you! To help me get there quicker, I have also decided to double my weekly contributions from $1,000 to $2,000. The rest of this post will be focusing on what is in my new portfolio, how long I think it’ll take until this portfolio to grow to be $1,000,000, and some exciting news on where I’m at on my road to FIRE. I promise there is no April Fools joke in here. Are you ready? Standby.
FIRE update
As of 3/31/2021, I am +$971,748.90 ahead of schedule! This means that I’ve surpassed my FIRE number! I’ve actually surpassed my FIRE number several months ago, but I didn’t think it would last, so I didn’t report on it. However, one very smart reader has reversed engineered my numbers and guessed it--so here I am.
According to my net worth tracker on Mint.com, I’ve accumulated over $1.6M during the last 12 months. And to top things off, one of my previous startups recently raised its Series E funding to put them at a $1.6 billion valuation. Since my stocks in this company are illiquid, and they could go up or down anytime, I’m not considering that in my net worth calculations. All in all, I couldn’t complain about how the stock market has treated me recently--and I’m frickin’ ecstatic!
You’re probably wondering, “what’s next?” I think that deserves a post on its own, so stay tuned. I’m currently on paternity (2nd round) and will be posting more often. Let’s get back to the Road to $1,000,000.
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M1Finance Portfolio Performance Summary
What’s new in my portfolio?
I’ve added a handful of new positions and held on to all of the old ones. Specifically, I’ve added Abbvie, Aflac, TRowe Price, General Dynamics, Illinois Tool Works, Clorox, and...ARKK! Essentially, I added 6 new dividend champions and a very speculative, high-growth mutual fund (ARKK). And sure enough, the only position in red is ARKK (-21%). However, I’m still beating the overall stock market by over 2.3% (44.41% vs 42.09%)--so I’m feeling pretty good.
How long until this portfolio will be worth $1,000,000?
I estimated that it will be another 6 years until this portfolio will reach $1,000,000. I used the following assumptions: 8% appreciation, 2% dividends re-invested, and $2k per week contributions. Many people have said that my assumptions for the stock market returns are unrealistic and that they should be near 4-5%. However, with all the central banks around the world printing money and leaving interest rates at 0%, I wouldn’t be surprised if the stock market appreciated even more than 8%--allowing us to hit $1,000,000 even faster. Only time will tell who is right. Regardless, it’s better to be invested, than not.
Right now, the biggest risk for this portfolio not hitting $1M in 6 years is when I officially retire FIRE and stop contributing altogether...but we will figure it out when we get there.
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