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My Grand Daughter Turns 7 And A Half.  A Progress Report For A $1M (Make That $2M+) Portfolio At Age 66

Summary

In 2014 two months after I retired I started gifting stock to my family each month. Portfolio value breaks $20,000.

My goal was to average gifting at minimum of $100 per month to each person. That would be $5,800 through August 2019.

All dividends are reinvested.

Higher yield stocks often substantially under perform.  Many of her high yield stocks were sold in December 2018.  More we sold in early 2019.

On target for more than $1,000,000 portfolio at age 66.  The target will be raised to $2M.

I suddenly retired in 2014. In the second month (October 2014) I started gifting a minimum of $100 of stock to each person in my family. At this point my goal was to have her account balance be at least $5,800. My grand daughter's account value after 58 months is $20,929.

I gifted a variety of stocks to her, usually one share at a time. Poor performing high yield stocks were sold in December of 2018 and again in early 2019. I wrote several SA Blogs on them to capture the information.  Last blog:

https://seekingalpha.com/instablog/697765-as10675/5312982-grand-daughters-long-road-wealth-progress-report-1m-make-2m-portfolio-age-66

PORTFOLIO BALANCE OVER TIME

Exported the data right from her account.

Balances Over Time - (10/01/2014 - 07/31/2019)
Month Beginning Balance Market Change Dividends & Interest Fees Deposits Withdrawals Ending Balance
Oct-14 $252.52 $2.61 $0.46 $0.00 $0.00 $0.00 $255.59
Nov-14 $255.59 $32.26 $0.93 $0.00 $138.63 $0.00 $427.41
Dec-14 $427.41 ($11.09) $1.91 ($0.03) $0.00 $0.00 $418.20
Total dividends 2014 $3.30
Month Beginning Balance Market Change Dividends & Interest Fees Deposits Withdrawals Ending Balance
Jan-15 $418.20 ($4.71) $1.70 $0.00 $87.94 $0.00 $503.13
Feb-15 $503.13 $18.09 $1.10 $0.00 $117.10 $0.00 $639.42
Mar-15 $639.42 ($10.28) $2.02 $0.00 $100.00 $0.00 $731.16
Apr-15 $731.16 ($3.87) $2.60 ($0.03) $0.00 $0.00 $729.86
May-15 $729.86 ($2.81) $1.44 ($0.01) $55.66 $0.00 $784.14
Jun-15 $784.14 ($13.70) $3.24 $0.00 $122.27 $0.00 $895.95
Jul-15 $895.95 $37.84 $2.09 $0.00 $113.80 $0.00 $1,049.68
Aug-15 $1,049.68 ($70.12) $1.15 $0.00 $0.00 $0.00 $980.71
Sep-15 $980.71 ($9.98) $4.36 $0.00 $514.89 $0.00 $1,489.98
Oct-15 $1,489.98 $69.45 $3.69 ($0.02) $28.01 $0.00 $1,591.11
Nov-15 $1,591.11 ($12.97) $2.37 $0.00 $126.91 $0.00 $1,707.42
Dec-15 $1,707.42 $22.68 $9.41 ($0.05) $265.96 $0.00 $2,005.42
Total dividends 2015 $35.17 Dividend Growth 965.8%
Month Beginning Balance Market Change Dividends & Interest Fees Deposits Withdrawals Ending Balance
Feb-16 $1,995.45 ($6.91) $3.10 ($0.01) $87.95 $0.00 $2,079.58
Mar-16 $2,079.58 $103.74 $6.92 $0.00 $117.15 $0.00 $2,307.39
Apr-16 $2,307.39 ($13.90) $7.70 $0.00 $87.85 $0.00 $2,389.04
May-16 $2,389.04 ($6.99) $3.63 ($0.01) $1,034.56 $0.00 $3,420.23
Jun-16 $3,420.23 $95.44 $14.51 ($0.04) $85.91 $0.00 $3,616.05
Jul-16 $3,616.05 $31.08 $8.62 $0.00 $86.79 $0.00 $3,742.54
Aug-16 $3,742.54 ($25.93) $5.36 ($0.01) $379.90 $0.00 $4,101.86
Sep-16 $4,101.86 ($98.06) $15.91 $0.00 $1,191.55 $0.00 $5,211.26
Oct-16 $5,211.26 ($48.23) $10.69 $0.00 $0.00 $0.00 $5,173.72
Nov-16 $5,173.72 $4.21 $9.99 $0.00 $0.00 $0.00 $5,187.92
Dec-16 $5,187.92 $122.66 $23.73 ($0.11) $0.00 $0.00 $5,334.20
Total dividends 2016 $110.16 Dividend Growth 213.2%
Month Beginning Balance Market Change Dividends & Interest Fees Deposits Withdrawals Ending Balance
Jan-17 $5,334.20 ($14.56) $12.07 $0.00 $279.26 $0.00 $5,610.97
Feb-17 $5,610.97 $171.78 $12.13 ($0.04) $154.61 $0.00 $5,949.45
Mar-17 $5,949.45 ($21.59) $20.36 $0.00 $127.90 $0.00 $6,076.12
Apr-17 $6,076.12 $104.99 $15.84 $0.00 $193.50 $0.00 $6,390.45
May-17 $6,390.45 $144.66 $12.36 ($0.01) $212.40 $0.00 $6,759.86
Jun-17 $6,759.86 ($115.53) $24.95 $0.00 $136.09 $0.00 $6,805.37
Jul-17 $6,805.37 $46.83 $17.30 ($0.04) $0.00 $0.00 $6,869.46
Aug-17 $6,869.46 ($7.06) $13.73 ($0.06) $284.80 $0.00 $7,160.87
Sep-17 $7,160.87 $30.20 $26.28 $0.00 $349.67 $0.00 $7,567.02
Oct-17 $7,567.02 $40.49 $19.80 ($0.03) $60.85 $0.00 $7,688.13
Nov-17 $7,688.13 $265.05 $13.55 $0.00 $458.63 $0.00 $8,425.36
Dec-17 $8,425.36 $109.37 $46.61 ($0.05) $183.46 $0.00 $8,764.75
Total dividends 2017 $234.98 Dividend Growth 113.3%
Month Beginning Balance Market Change Dividends & Interest Fees Deposits Withdrawals Ending Balance
Jan-18 $8,764.75 $115.81 $13.23 $0.00 $237.41 $0.00 $9,131.20
Feb-18 $9,131.20 ($630.53) $18.65 ($0.04) $0.00 $0.00 $8,519.28
Mar-18 $8,519.28 ($119.71) $26.56 $0.00 $180.48 $0.00 $8,606.61
Apr-18 $8,606.61 ($12.89) $26.05 $0.00 $954.76 $0.00 $9,574.53
May-18 $9,574.53 ($104.32) $23.68 ($0.04) $161.14 $0.00 $9,654.99
Jun-18 $9,654.99 $125.78 $40.06 $0.00 $392.35 $0.00 $10,213.18
Jul-18 $10,213.18 $332.53 $24.79 ($0.05) $0.00 $0.00 $10,570.45
Aug-18 $10,570.45 $93.53 $26.41 ($0.04) $1,415.92 $0.00 $12,106.27
Sep-18 $12,106.27 $70.42 $46.62 $0.00 $479.74 $0.00 $12,703.05
Oct-18 $12,703.05 $5.85 $25.49 $0.00 $484.93 $0.00 $13,219.32
Nov-18 $13,219.32 ($6.40) $31.19 ($0.02) $307.47 $0.00 $13,551.56
Dec-18 $13,551.56 ($1,141.77) $66.50 $0.00 $813.82 $0.00 $13,290.11
Total dividends 2017 $369.23 Dividend Growth 57.1%
Jan-19 $13,290.11 $770.27 $32.80 ($0.05) $218.60 $0.00 $14,311.73
Feb-19 $14,311.73 $413.06 $31.66 ($0.02) $397.97 $0.00 $15,154.40
Mar-19 $15,154.40 $477.75 $64.10 $0.00 $443.79 $0.00 $16,140.04
Apr-19 $16,140.04 $286.98 $28.01 ($0.08) $479.25 $0.00 $16,934.20
May-19 $16,934.20 ($834.37) $24.07 ($0.03) $910.10 $0.00 $17,033.97
Jun-19 $17,033.97 $1,171.32 $74.12 ($0.28) $1,432.63 $0.00 $19,711.76
Jul-19 $19,711.76 $515.88 $25.46 $0.00 $477.15 $0.00 $20,730.25

How about those year to year dividend growth rates of 965%, 213%, 113% and 57%!  This is why when someone talks of dividend growth rate it has to be taken with much salt, lime and Tequila.

PORTFOLIO COMPOSITION - 31 POSITIONS

Exported data from her account.

Symbol Description Quantity Last Price Current Value Total Gain/Loss Dollar Total Gain/Loss Percent Cost Basis Total
CASH Cash 42.41 $1.00 $42.41 n/a n/a n/a
AAPL APPLE INC 3.036 $196.63 $596.96 $43.40 7.84% $553.57
ABT ABBOTT  14.017 $84.18 $1,179.88 $650.21 122.76% $529.67
AFL AFLAC INC  4.185 $51.53 $215.65 $107.56 99.51% $108.09
AVNS AVANOS MED  3 $37.59 $112.77 $48.59 75.71% $64.18
BABA ALIBABA  10 $157.61 $1,576.10 $783.01 98.73% $793.09
DRE DUKE REALTY  18.509 32.39 $599.50 $398.43 198.14% $201.08
EADSY AIRBUS  15 $33.85 $507.75 ($19.85) -3.76% $527.60
FB FACEBOOK INC- 8 $184.66 $1,477.28 $564.24 61.80% $913.04
HRL HORMEL  4.131 $40.63 $167.84 $36.42 27.71% $131.42
KO COCA COLA CO 10.38 $52.20 $541.83 $249.03 85.05% $292.81
LK LUCKIN COFFEE 26 $22.69 $590.03 $94.25 19.01% $495.78
MA MASTERCARD  4.011 $263.77 $1,057.98 $614.75 138.70% $443.23
MCD MCDONALDS  11.676 $213.49 $2,492.70 $1,424.46 133.35% $1,068.25
MDLZ MONDELEZ 24.734 $52.60 $1,301.00 $753.21 137.50% $547.80
MO ALTRIA GROUP  17.222 $46.17 $795.13 $441.13 124.61% $354.01
MSFT MICROSOFT  3.139 $134.17 $421.15 $265.92 171.30% $155.24
PEP PEPSICO INC 4.304 $126.15 $542.94 $109.60 25.29% $433.35
PFE PFIZER INC 6.622 $36.93 $244.51 $80.37 48.96% $164.15
PG PROCTER AND GAMBLE 6.478 $114.42 $741.21 $221.48 42.61% $519.73
PYPL PAYPAL HLDGS  4 $104.89 $419.56 $148.96 55.05% $270.60
ROST ROSS STORES  3.046 $102.60 $312.51 $101.13 47.84% $211.39
SBUX STARBUCKS 3.198 $95.22 $304.51 $170.68 127.54% $133.83
SQ SQUARE INC CL 11 $64.21 $706.31 $172.37 32.28% $533.94
TCEHY TENCENT  20 $42.72 $854.40 ($54.22) -5.97% $908.62
TGT TARGET CORP  5.571 $82.31 $458.54 $138.57 43.31% $319.98
UNH UNITEDHEALTH  3 $245.41 $736.23 ($8.39) -1.13% $744.62
V VISA INC COM  2.041 $171.52 $350.06 $213.64 156.61% $136.42
VZ VERIZON  8.962 $54.81 $491.20 $78.35 18.98% $412.86
WBA WALGREENS  2.159 $51.07 $110.26 $36.69 49.87% $73.57
WFC WELLS FARGO  8.711 $46.09 $401.48 $124.81 45.11% $276.68
WMT WALMART INC  5.414 $107.02 $579.40 $282.34 95.04% $297.07
Total $20,929.08

The portfolio will be 5 years old in October.  Growing at rate over $4,000 per year.

TOP 10 POSITIONS BY WEIGHT

Symbol Description Current Value
MCD MCDONALDS CORP $2,492.70
BABA ALIBABA GROUP $1,576.10
FB FACEBOOK INC-CLASS A $1,477.28
MDLZ MONDELEZ $1,301.00
ABT ABBOTT LABORATORIES $1,179.88
MA MASTERCARD INC CL A $1,057.98
TCEHY TENCENT HLDGS LTD UNSPON AD $854.40
MO ALTRIA GROUP INC $795.13
PG PROCTER AND GAMBLE $741.21
UNH UNITEDHEALTH GROUP $736.23

Looking now to the future, if no other contributions are made to this account, What would be the approximate value of this portfolio be when she retires at age 66?

For growth I used a conservative 8.1% annually compounded and the table below shows the results.

ESTIMATED PORTFOLIO VALUE AT RETIREMENT WITH NO NEW FUNDS ADDED

Dropped her time frame down to 58 years, six months prior to her 8th birthday.

Base amount: $20,929.00

Interest Rate: 8.1% (yearly)

Effective Annual Rate: 8.35%

Calculation period: 58 years (58.5 years to age 66)

Year Year Interest Total Interest Balance
1 $1,747.44 $1,747.44 $22,676.44
2 $1,893.34 $3,640.78 $24,569.78
3 $2,051.42 $5,692.21 $26,621.21
4 $2,222.70 $7,914.91 $28,843.91
5 $2,408.29 $10,323.20 $31,252.20
6 $2,609.36 $12,932.56 $33,861.56
7 $2,827.23 $15,759.79 $36,688.79
8 $3,063.28 $18,823.07 $39,752.07
9 $3,319.05 $22,142.12 $43,071.12
10 $3,596.17 $25,738.29 $46,667.29
11 $3,896.43 $29,634.72 $50,563.72
12 $4,221.76 $33,856.48 $54,785.48
13 $4,574.25 $38,430.72 $59,359.72
14 $4,956.17 $43,386.89 $64,315.89
15 $5,369.98 $48,756.86 $69,685.86
16 $5,818.33 $54,575.20 $75,504.20
17 $6,304.13 $60,879.33 $81,808.33
18 $6,830.48 $67,709.81 $88,638.81
19 $7,400.79 $75,110.60 $96,039.60
20 $8,018.71 $83,129.31 $104,058.31
21 $8,688.22 $91,817.53 $112,746.53
22 $9,413.63 $101,231.16 $122,160.16
23 $10,199.61 $111,430.77 $132,359.77
24 $11,051.21 $122,481.98 $143,410.98
25 $11,973.92 $134,455.90 $155,384.90
26 $12,973.67 $147,429.57 $168,358.57
27 $14,056.89 $161,486.46 $182,415.46
28 $15,230.55 $176,717.02 $197,646.02
29 $16,502.21 $193,219.22 $214,148.22
30 $17,880.04 $211,099.26 $232,028.26
31 $19,372.91 $230,472.18 $251,401.18
32 $20,990.43 $251,462.61 $272,391.61
33 $22,743.00 $274,205.60 $295,134.60
34 $24,641.90 $298,847.50 $319,776.50
35 $26,699.34 $325,546.84 $346,475.84
36 $28,928.57 $354,475.41 $375,404.41
37 $31,343.93 $385,819.34 $406,748.34
38 $33,960.95 $419,780.29 $440,709.29
39 $36,796.47 $456,576.76 $477,505.76
40 $39,868.75 $496,445.51 $517,374.51
41 $43,197.54 $539,643.05 $560,572.05
42 $46,804.27 $586,447.32 $607,376.32
43 $50,712.13 $637,159.45 $658,088.45
44 $54,946.28 $692,105.73 $713,034.73
45 $59,533.95 $751,639.68 $772,568.68
46 $64,504.66 $816,144.34 $837,073.34
47 $69,890.40 $886,034.74 $906,963.74
48 $75,725.81 $961,760.55 $982,689.55
49 $82,048.44 $1,043,809.00 $1,064,738.00
50 $88,898.98 $1,132,707.97 $1,153,636.97
51 $96,321.49 $1,229,029.46 $1,249,958.46
52 $104,363.73 $1,333,393.19 $1,354,322.19
53 $113,077.45 $1,446,470.64 $1,467,399.64
54 $122,518.71 $1,568,989.35 $1,589,918.35
55 $132,748.26 $1,701,737.61 $1,722,666.61
56 $143,831.91 $1,845,569.52 $1,866,498.52
57 $155,840.98 $2,001,410.50 $2,022,339.50
58 $168,852.72 $2,170,263.22 $2,191,192.22

High probability that $1M portfolio value will be achieved.  $2M or even $3M outcome is very likely.


ASSET ALLOCATION

Domestic Stock 83%

Foreign Stock 17%

Bonds 0%

More foreign diversification than many portfolios. 

STOCK STYLE

Value Blend Growth Total
Large 20 32 45 96
Medium 0 3 0 3
Small 0 0 1 1
Total 20 35 46

As far as stock style goes the portfolio is large capitalization not unlike many dividend investors.  Not much style diversification.

SECTOR ALLOCATION

Sector Percentage of the Portfolio
Technology 20%
Consumer Defensive 25%
Health Care 11%
Consumer Cyclical 25%
Industrials 2%
Financial Services 12%
Utilities 0%
Energy 0%
Real Estate 3%
Communications Services 2%
Materials 0%
100%

Typical slower growing sectors have little invested in them.

Disclosure: I am/we are long all stocks listed.