Thursday, May 5, 2016

2016 Goals

So I'm obviously late in setting 2016 goals. I don't know what to say about that other than my goals below will probably explain why the delay happened. 2015 was an epic year. 2016 is going to be even better in many ways, but nothing compares to becoming a dad. Enough drama, here are the goals:

1) Earn $30k of dividends in 2016: Whoah. I earned just under $16k last year. I was set to earn just over $19k in 2016 based on my 1/1/16 portfolio. What gives!? Well, in prior updates, I've been excluding my retirement account dividend income. These accounts earned about $2k last year and are set for about $3k this year. But that's with S&P 500 index funds at a ~2% yield. If I can get the yield up to ~4%, which is about where my main account is, that means an extra $6k of dividend income from retirement accounts gets added to my starting point of $19k - for a total of $25k. Meaning now I just need to invest enough to earn $5k of additional dividends this year.

2) Have my portfolio set to earn $40k of dividends in 2017: Another whoah! Even adding the optimization needed to get retirement accounts up to a ~4% yield, I have work to do here. Starting 2016 at $22k of expected income (including retirement accounts), plus optimization of $3k by getting the yield from ~2% to 4% in those accounts, I will need to invest enough to add $15k of dividend income. At a 4% yield, that's $375k! To be fair, my buy list has a yield of just over 5% and my goal is to get the portfolio yield up to 4.5%. This might sound high for folks who invest in KO, PG, JNJ and the like at ~3%, but add a healthy dose of utilities and REITS and 4.5% is pretty achievable.

3) Get monthly spending down to target of $3,500: My Budget page is my target budget for retirement. It's not my current spending, which is closer to $5,000-5,500/month. We spend a lot for convenience right now. And daycare is $1,200/month. And work-related expenses. Remove a few of these items and we can hit the target.

4) Quit my job: This is going to be the hardest. I suffer from the One More Year Syndrome. Very much so. I wrote that article three years ago. I was planning to quit my job back then, but got a great arrangement worked out. But the 2 hours each way commute is killing me. Especially as a dad. And seeing enough dividend income to nearly cover all expenses is truly life-changing. The hard part now is giving up a great paying job, where I'm an established and integral part of a growing, successful business. I just crave the freedom and time with my family. But I fear the unknown. One more year of work will make it all better...The back and forth on quitting my job is driving my wife nuts. She needs closure either way. And she plans to work at least through the end of the year, so we won't need the dividend income this year. What am I waiting for?

5) Be a better Dad and Husband: I've been doing my best, no doubt. I'd objectively say that I'm a great dad today. I want to be better. I haven't been the best husband lately. I've been stressed and tired and take out frustrations on my wife. I'm scared to quit my job even though we'll have enough income to cover expenses and then some while she's still working and I'm building the dividend income up.

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