2019 Goals :: Dividend Portfolio

With the turn of the calendar, it is a popular time to reflect back on goals from the prior year while shifting focus to the goals for the year ahead.

The data nerd in me geeks out at the end of the year as I update all of my spreadsheets for the coming year, shift the prior year’s paper records (which are dwindling with each year as more and more is electronic) to my main filing cabinet, and organize all of my notes for what I want to accomplish.

That process includes defining my personal goals, our family goals, and of course our financial goals–which now includes goals specifically related to my dividend portfolio as well as our overall journey towards financial independence.

Preface to 2019 Goals

Before diving into the goals for 2019, I thought that I would explain a couple of house-keeping items.

• With last year being what I consider to be my introduction to dividend investing, I had consolidated all sources of dividends (e.g. brokerage account, IRA, 401(k)) into one lump sum. As of this year I will now break those down separately for both my goals and the monthly dividend income reports.

• The spreadsheet on my dividend portfolio page will continue to list all individual holdings on one spreadsheet, however the funds in my 401(k) will be maintained separately. I have setup unique portfolios within my Simply Safe Dividends account where each of my accounts will be tracked.

• For some of the financial goals, I will share things in terms of percentages rather than specific numbers. While I disclose all the details on the DGI stocks that I am holding, specifics on things like net worth will be held a little closer to the vest for now.

• Lastly, while my 2018 goals included some blog-related goals, I have decided not to include any of those for 2019. My rationale for that was because I started this blog for fun to be a chronicle of my journey and I felt that defining goals for page views or social media followers was beginning to make this feel more “business-ey” (and that was why I left blogging years ago).

Alright, with that now out of the way, it is time to dig into the goals for the year ahead.

2019 Dividend and FIRE Goals

Before going into the details on each goal, here is a summary of what I plan to accomplish in 2019:

• Brokerage: Build PADI to $6,500
• Rollover IRA: Build PADI to $4,300
• Retirement: Produce $21,500 in Income Distributions
• Collect $4,500 in Dividends from Brokerage Account
• Increase Net Worth by 20%
• Increase Safe Withdrawal Rate Income by 30%

For those that only want the Cliff Notes version, you can go ahead and skip to the bottom as now I will share more details and a little behind my thought process for each of these goals.

At the conclusion of 2018, my brokerage account was forecast to produce $3,884 in projected annual dividend income (PADI).

Through continued monthly contributions of new capital along with reinvested dividends and dividend raises, I am targeting an increase of $2,616 in PADI by the end of 2019.

Over the last few months of 2018, I was averaging around $200/month in additional PADI from the three legs of the dividend tripod. However, that included results from the REITs in my Rollover IRA as I was tracking everything together. This will definitely be an aggressive goal but I believe in shooting for the stars.

The Rollover IRA was where I established my REIT holdings as part of my pension rollover and this account ended the year with a forecast to produce $1,844 in PADI.

Normally I would not be too aggressive on a goal for this account, as I am unable to add additional funds and therefore would not expect much growth.

However, when I decided what to do with my old 401(k), there was one fund that I planned to move into the Rollover IRA and invest into DGI stocks. At times I can be a procrastinator, and therefore I haven’t executed that final step yet.

In 2019, I will sell that last remaining fund and transfer that into my Rollover IRA. With those funds, I am expecting to produce approximately $2,450 in PADI that would bring me up to $4,294 in this account. The remaining $206 will hopefully result from reinvested dividends and dividend raises.

For this goal on the funds in my core retirement accounts, I have labeled this as income distributions because some of the funds distribute dividends and capital gains while others do only one of the two. There are also some funds that don’t produce any distributions.

The reason that I am not separating them out here is because within Fidelity, when I review my transaction history, they simply record the distribution as a dividend regardless of whether it was a dividend or capital gain distribution.

When you drill down into the fund prospectus, they provide detail of the amount that was a dividend versus a capital gain distribution.

As I am a fan of keeping things simple, I am going to track them as one combined amount and my goal is to produce $21,500 in distributions in the coming year.

While the previous goals were about building the projected annual dividend income, this goal will cover how much I am wanting to actually collect in dividend payments.

For this goal, I am limiting this to my brokerage account only.

As mentioned earlier, based on the forecast of PADI, I should collect $3,884 if there were no changes. Therefore, I expect to collect an additional $616 in dividends based on new capital increasing dividend payments in later quarters as well as dividend raises and DRIPs.

My gut is telling me that I might be a little too conservative with this goal, so this may end up being a candidate for a reset.

While not specific to DGI and my dividend portfolio, every year since at least 2006 (years prior to that were in a notebook not my spreadsheet) I have been tracking my net worth and setting an annual goal.

In 2018, I had set a goal of increasing my net worth by 30% and things were looking good through September when I was tracking to a 26% increase. Unfortunately the fourth quarter of the year was not kind from a market perspective, and the year concluded with slightly more than a 14% increase to my net worth.

As I expect that we may see a turbulent, or possibly sideways, market in the new year, I have reduced my net worth goal to an increase of 20% for the year.

Initially, I had set the goal at 15% but I felt that was too conservative–as even if the markets are declining, I will be continuing to save and invest new capital and therefore I am optimistic that I can reach this goal.

As a note on net worth, we do not track any possessions such as vehicles, jewelry, etc. and only include a flat value for our home that is approximately 30% below our last appraisal. Our only liability is our mortgage.

The other non-DGI goal that I will share here is what I call my Safe Withdrawal Rate Income.

For those interested in FIRE (Financial Independence / Retire Early) you will likely be familiar with the 4% Safe Withdrawal Rate. As part of my net worth spreadsheet and FIRE Tracker, I calculate how much income I would be able to produce on a monthly basis if I stopped working that month.

I’ve seen some people track this slightly differently as a percentage towards their Financial Independence goal.

Ultimately, it is quite similar, but I’ve opted to track it this way as our FIRE, or fatFIRE, goal has some flexibility depending on how luxurious we may want to be.

Last year we had a goal to increase our SWR Income by 30% and similar to our net worth we were up to a 32.25% increase by September. Over the last quarter, we saw that decline to a 17.98% increase by the time the year ended. I’ve decided to keep this goal steady at 30% for the new year and give it another shot.

Wrapping Up

For those that read through the detail, thank you for taking the time–and for those that only read the Cliff Notes summary, you don’t know what you missed! 😉

When I set my goals for 2018, I was shooting in the dark a little as I didn’t have much of any experience with dividend growth investing and was building a new portfolio. I’ve now done a bit more analysis of what I believe is possible–and then I’ve pushed it a little farther in most cases–and am hopeful that these goals are reflective of that.

I’m shooting for a combined total of $32,500 across all accounts, including my note above about retirement distributions. My main focus though is on the brokerage account as the other accounts have more hoops to jump through to access those funds in early retirement.

But the fact that this time last year I wasn’t even thinking about dividends, and now I am here is pretty damn exciting!

What do you think of these goals?

Let me know if you have any questions or think I fell off my rocker somewhere, and of course I’d love to hear about your goals too!