Johnson & Johnson (NYSE:JNJ) closed above $100 today – $100.18 to be exact. As I own 100 shares, this means my current investment in Johnson & Johnson is worth $10,018.00. Although, my cost basis is significantly lower – at $6,478.24.
This is a bit of a milestone for me, since I’ve never had so much invested with one company before. For perspective, this is almost twice as much money as I paid for my used 2006 Toyota Corolla.
And although I don’t really emphasize the value of my portfolio at any time since the passive dividend income is what will ultimately buy me my financial independence, I won’t dismiss the fact that having five figures invested in one company is somewhat psychologically satisfying. And while I’d prefer the value of my Freedom Fund to actually decline, or at least stay stable, in any given time period so that I can purchase high-quality stocks for less money, if it’s a rising tide that I’m investing in then so be it – my boat will get lifted with the rest.
- Warning! GuruFocus has detected 4 Warning Signs with JNJ. Click here to check it out.
- JNJ 15-Year Financial Data
- The intrinsic value of JNJ
- Peter Lynch Chart of JNJ
But I think what’s particularly exciting about this event is that when I was first starting out as a young investor with very little knowledge of what I was doing, I had run into multiple articles and quotes where writers and other investors would point to what an investment of $10,000 in a blue chip company, say, 10 or 20 years ago would look like today.
Let’s take a look at Johnson & Johnson specifically, since I now actually have this much invested in the company today.
If you had invested $10,000 in Johnson & Johnson 20 years ago you’d have…drumroll, please…an investment now worth $144,475.88. That’s a total return of 1,347.36%. This is assuming $9,982.00 invested on April 22, 1994 which would have garnered you 248 original shares. Those 248 original shares have now turned into 1,444 shares, including stock splits and assuming dividend reinvestment along the way.
I don’t often go through calculations like this on Dividend Mantra because I don’t believe in picking out a couple of huge winners and backtesting them to prove some future theory that may or may not come true. This blog is instead about taking theory to reality – where the rubber meets the road, if you will. As such, I track current dividend income and transactions as they occur. However, it’s still just plain fun every once in a while to look at eye-popping numbers like what JNJ has been able to post over the last 20 years! Really incredible stuff.
I don’t know if JNJ is going to produce results like this over the next 20 years, and frankly it doesn’t matter to me. If they can grow dividends by 6-10% per year like clockwork then that’s all I really need to succeed and reach my goals.
However, what this post should really be about is the power of persistence and pennies. I didn’t invest $10,000 in Johnson & Johnson just this morning. No, this investment was accumulated over the last four years. You can see that my cost basis is significantly below the current value, and that’s because I painstakingly invested in Johnson & Johnson over the years. I purchased 20 shares in June 2010, 16 shares in January 2011, and 17 shares in February 2011 – all transactions that went through before this blog went live on the internet. Since I’ve been blogging, I purchased 17 shares in March 2011 and 30 shares in January 2013.
You can see that this five figure investment wasn’t made in one swoop. It took patience, persistence, and perseverance. It took time. And it took willpower and a belief in what I was doing. And I still believe in what I’m doing to this day.
Castles aren’t built overnight. They’re built one brick at a time. As such, my freedom castle will be built one investment at a time. However, it’s days like this when I see that the bricks are definitely stacking up in my favor. Stick with your strategy, work hard, stay persistent, and you’ll also see a castle sprout up in front of you.
Full Disclosure: Long JNJ
How about you? Hit any major milestones lately?
Thanks for reading.