• David Frank, 35, wants to be able to live off passive income by his mid-40s.
  • His portfolio is worth around $270,000.
  • Frank told Insider how he invests each month and how his goal progress is looking.

David Frank has one big goal — he wants to be financially free. 

He wants to decide for himself where, how, and if he even needs to work. To achieve this, he invests money in the stock market each month, with the goal of being able to live solely off the dividends. The 35-year-old wants to achieve this by his mid-40s and then perhaps retire early.

Insider is following Frank on his path to financial freedom. Every month, he gives us an update on how his goal is shaping up. He tells us what setbacks he’s encountered or what progress he’s made.

David Frank has worked as a manager at the consulting firm PwC for almost 10 years. He’s married to a doctor. Together with their children, a two-year-old son and a five-year-old daughter, the couple lives in a detached house in a suburb in Cologne, Germany. Frank also runs a blog, Jung in Rente. 

The path to financial freedom — January 2022

Insider: How much is your stock portfolio currently worth?

Frank: “My portfolio is currently worth around $270,000 (€236,000). Of this, almost $122,000 (€107,000) are in 44 individual stocks and $147,000 (€129,000) are in my globally diversified ETF portfolio. In total, this is worth the same as in the previous month. However, my individual stock portfolio has performed significantly better than my index funds.”

I: How much did you get from dividends in January?

“Last month, I was able to collect almost $300 (€260) in dividends. This represents an increase of more than 30% compared to the same period last year.”

I: Last December, you told us you were going to start investing in crypto. Have you started doing that?

Frank: “No, my crypto debut is yet to happen. Although in 2022 I have resolved to regularly invest part of my savings in Bitcoin, Ethereum & Co. I’ll start from this month at the earliest. The prices of most cryptocurrencies are currently looking somewhat more attractive than at the beginning of the year.”

I: How much did you save and how much did you invest in January?

Frank: “My savings rate in January was well below my personal goal of saving an average of 40% of my income. Instead, it may have been just shy of 10%. There were several reasons for this. For one thing, many annual subscription fees — especially for insurance and memberships — are due at the beginning of the year. Secondly, last month we booked and paid for our annual vacation, which is in May. However, these special expenses will be offset over the year.”

“Nevertheless, I was able to put some capital to work. I actually invested over $4,500 (€4,000) in shares. There were also various crowdfunding activities for several solar projects in Ghana and Panama, my initial investment in the luxury goods sector, and further P2P loans.”

I: What stocks did you buy in January?

Frank: “In January, I decided to buy shares in two companies. One is an increase in Encavis, a German operator of solar and wind parks. My investment case here is simple: The Hamburg-based company seems to be predestined to profit from the politically desired and promoted expansion of renewable energies. After all, Encavis is already one of the leading European producers of electricity from renewable energies. I now own 100 shares with a value of $1,700 (€1,500).”

“I have also increased my position in the British consumer goods group Unilever, which I opened in February 2021. The company is currently undergoing a major transformation process in which the portfolio of well-known brands like Knorr, Langnese, Axe, and Rexona, built up over decades, is to be streamlined and thus made more profitable. I have high hopes for the company, especially since it already does a large part of its business in high-growth emerging markets. There are now 43 Unilever shares in my portfolio, worth around $2,300 (€2000).”

“I’ve also bought more shares in North America, Europe, and developing and emerging markets, and invested over $3,400 (€3,000) in several ETFs on the FTSE North America, STOXX Europe 600, and MSCI Emerging Markets.”

I: How hard have you been hit by the current slump in tech stocks?

Frank: “If you deduct the purchases, the overall performance over the month was minus 1.8%. While my ETF portfolio fell by 4.1%, my individual share portfolio actually managed to gain 1.2%. The obvious nervousness in the markets was hardly noticeable in my own portfolio. Only a few tech stocks like PayPal, Block, and Fiverr have lost considerable ground in recent weeks — in some cases even more than 50%. However, these only account for a very small proportion of my assets.”

I: How do you deal with such price drops in the stock market? Are you more worried about your plan to retire early?

Frank: “For me, such stock market phases are no reason to panic at all. The main reason for my composure is the fact that I’m still in the savings phase. This means that every dip in share prices allows me to increase my portfolio further at lower prices, which will definitely pay off in the long term. Instead of panicking and hitting the sell button, I prefer to do the opposite and celebrate every market correction like a birthday and Christmas together.”

I: What is your tip for investors to get through such crises?

Frank: “First of all, realize why you’re on the stock market in the first place. If the answer is hopefully that you want to increase your money in the long term, then you can forget about price drops like the one we’re currently experiencing. Because the statistics show: Anyone who has put their money in the stock market in a broadly diversified way over the last few decades has almost never been left with less money after 10 years. Instead, in the vast majority of cases, you see a healthy return.”

Comments from November 2021

I: How much is your stock portfolio currently worth?

Frank: “My portfolio is currently worth around $260,000 (€227,000) . Of this, almost $113,000 (€100,000) are in 45 individual stocks and $144,000 (€127,000) are in a globally diversified ETF portfolio. This is about the same as the previous month, with the drop in my individual stocks being offset by the better performance of my ETFs.”

I: What are you doing to grow your passive income?

“On my path to early retirement, I’m focusing on regular passive income. To achieve this goal, I try to continuously increase my investments that generate my income. I follow two main investment strategies: Firstly, I invest around $1,140 (€1000) per month in those individual stocks that seem worth buying at the time. Secondly, I let my broadly diversified ETF portfolio grow by €1000 every month. My goal is to earn around $2,850 (€2500) in passive income in the future.”

I: How much were you able to invest in November?

“My savings rate last month was around 50%, which was above my planned savings rate of 40%, as it was in the previous two months. The higher-than-expected savings help me reach my financial goals even faster. That’s because I usually invest most of the savings immediately in assets that work for me. This was also the case last month, when I invested over €2,500 of fresh capital in the stock market.”

I: What individual stocks did you buy or sell in November and why?

“In November, I decided to buy a new stock for the first time in several months. This is the Canadian utility Algonquin Power & Utilities, which specializes in the generation of electricity from renewable sources and its distribution in North America. I bought 100 shares for a total of about $1,390 (€1216) and can now look forward to an initial


dividend yield

of exactly five%.”

“In addition, last month I also made another move in a payment service provider. After I had already increased my position in Visa in October, it was PayPal’s turn in November. Thanks to the correction currently observed on the stock market, I was able to secure two more shares for $430 (€375). I also re-bought in developing and emerging markets and invested over $1,000 (€900) in an ETF on the MSCI Emerging Markets.”

I: What helped you make progress on your savings goals in November?

“After I had already submitted my tax return more than a quarter ago, the tax assessment finally trickled into the house at the end of November. This gave us a refund of around $3,400 (€3000)! I know that many people, especially younger ones, are afraid of filing their first tax return. From my own experience, however, I absolutely advise anyone to invest time in doing this. With good tax software, preparation of your tax return is usually done in just a few hours, even for non-professionals. In my eyes, it could hardly be easier to ‘earn’ a three- or even four-digit amount every year.”

I: Did you learn anything new in November?

“I’m a big fan of so-called crowdfunding, where a number of small investors get together to jointly realize investments that would otherwise not be financially possible on their own. Through this, I’ve already participated in over 50 solar projects around the world in recent years.”

“Now I’ve heard about a new form of crowdinvesting where you can participate in the long-term appreciation of alternative asset classes like rare watches, wine, or whiskey. I find the idea of being able to become a shareholder in such rarities extremely exciting and I’m currently looking into the idea of investing a little ‘play money’ here.”

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