“Road To $1 Million” Investment Portfolio – How it works

Updated 6/08/2024 with instructions for the new type of spreadsheet and strategy.

Welcome to “The Road To $1 Million,” an investment journey designed for long-term wealth accumulation. Initiated in April of 2023, our objective is to navigate a 15-20 year path towards an ambitious milestone: a $1 million investment portfolio, a legacy we’re building for future generations.

Our Strategy: Opportunistic Investments and Dividend Growth

Our approach is rooted in strategic investments based on fundamental fair values rather than a fixed schedule. We aim to maintain a 33/33/33 allocation: 33% in core ETFs, 33% in hedges, and 33% in individual stocks. We focus on companies and ETFs that are growing dividends rapidly, as well as high-yield stocks. Our portfolio spreadsheet includes all the information you need to follow our journey: fair values, percentage dividend growth over the last eight years, current dividend yield, discount to fair values, current shares held, their value, and their weight in the total portfolio.

The discount column is color-coded to highlight stocks at varying levels of discount to fair value: light blue for -10 to -20%, orange for -20 to -30%, green for -30 to -40%, and red for >5% above fair value. Core stocks and ETFs are highlighted in magenta to show their targeted increased weight in the portfolio. The right columns are also color-coded based on the percentage up or down of each stock/ETF.

Tailored for Everyone: From Aspirational Investors to Seasoned Savers

Recognizing the universal appeal of wealth building, we share our portfolio on our website. Whether you’re an eager beginner or an experienced investor, this portfolio offers a starting point for anyone interested in cultivating their wealth. Our portfolio spreadsheet details everything required to embark on this investment journey.

Personalized Investment Journeys

Returns on our website reflect our specific journey starting from April 2023, with around $500 invested weekly. Dividends paid out are deposited as cash in the account and used for the next reinvestment, avoiding automatic DRIP. It’s important to note that varying investment amounts and timelines will yield different outcomes. However, our dynamic allocation model allows you to start your investment journey at any point – be it next week, next month, or even years down the line.

Flexible Investment through Dividend Utilization

Dividends paid out are used as part of the next investment, offering us enhanced flexibility and control. This method allows us to dynamically adjust our investments based on current market conditions and opportunities. As dividends compound over time, their contribution towards the investment target increases, potentially leading to a self-sustaining growth model. For instance, achieving $2000 per month in dividends could meet a $2000 monthly investment target without additional deposits. As the dividend growth continues, it will allow us to either sustain the investment or increase our weekly/monthly allocation over time.

An Evergreen Investment Approach

The beauty of “The Road To $1 Million” lies in its flexibility and adaptability. We curate the best possible allocation for stocks and ETFs based on fair value, dividend yield, and growth potential. This means that no matter when you start, you’re always getting an optimized investment strategy.

The Power of Early Investing

Remember, the sooner you start, the more time your dividends have to compound, potentially catapulting your portfolio’s value well beyond the $1 million mark. This journey is as much about the destination as it is about the journey itself!

Getting Started

Here’s what you need to begin your journey on “The Road To $1 Million”:

Open a Suitable Brokerage Account: Select a brokerage that supports fractional shares trading. We suggest WeBull for those planning to invest > $500, and Robinhood for allocations between $100 to $400. Ensure the broker supports fractional shares in accounts like Roth IRAs or traditional IRAs if you’re considering them for tax advantages.
Deactivate Dividend Reinvestment Plans (DRIP) from your account: In conventional investment strategies, Dividend Reinvestment Plans (DRIPs) are a popular choice for handling dividends. However, “The Road To $1 Million” Portfolio adopts a distinctive approach. Instead of automatically reinvesting dividends back into the market, we receive them as cash in our brokerage accounts. This requires setting up your account to deactivate the automatic DRIP feature.
Determine Your Investment Commitment: Decide on a weekly or monthly investment amount that is feasible for you. Consistency is more important than the amount – it’s the key to wealth accumulation. Choose an amount you’re confident you can commit to regularly, even if it is only $100/month.
Stay Updated with the Latest Fair Values: Always refer to the most recent spreadsheet update before making your investments. We typically update the fair values on weekends, with the “Last Update” date clearly noted at the top of the spreadsheet.
Execute Your Investment Plan: Place your orders every week (or month) according to the latest “Fair Values” and “Trade Updates”. If you want to specifically follow our investments “Trade updates” are published weekly on the bottom left half of the spreadsheet, as well as dividend received month to month and totals. To track your progress and stay motivated, periodically record the dividends received and the overall portfolio return, preferably every three to six months. Watching your wealth and passive income grow can be incredibly rewarding and motivating.
Stay updated with real-time trade alerts and news: Our portfolio strategically includes short-term securities like USFR and hedges, including return-stacked ETFs, bonds, and managed futures, as ‘cash allocations’. We monitor market conditions and deploy these funds when the market drops significantly, maximizing long-term returns. Updates on trades and dividends are published weekly at the bottom left of the spreadsheet.
Focus on Long-Term Goals, Not Short-Term Market Movements: It’s natural for the stock market to have its ups and downs. Avoid getting swayed by short-term market fluctuations or trying to time the market. Remember, occasional declines are part of the investment journey. Your focus should be on the long-term objective of creating significant wealth for yourself and potentially your family.

Check our previous articles regarding the “Road to $1 Million” portfolio for a general overview of the idea behind it: