It’s that time of year again. No, I’m not talking about my annual haircut but something much more important! The obligatory 2017 goals post! The internet cheers its excitement! So without further ado, let’s get straight to it!
Review of my 2016 goals
Here’s what I wanted to achieve last year.
G1.1 Earn total dividend income > 2.0 times my monthly living expenses (Passed!)
My monthly living expenses are $3,900 per Budget 4.5 making the 2016 target $7,800.
The 2016 dividend results came in at $8,698! That’s $900 over the target and almost beats my original target of 2.2 times income for 2017. We have a winner!
G1.2 Emergency Fund >= 10 times my monthly living expenses. (Passed!)
The Emergency fund target is ten times $3,900 or $39,000.
The Big Picture
The 2016 targets were all about making a step towards the bigger goal of Financial Independence. The Original Plan projected reaching FI by age 65. Here’s the chart from my Goals page, updated with the latest results.
The red line is my achieved income and I’m pulling ahead of the black line (The Original Plan) which is awesome. But there’s still a long way to go.
Thoughts on setting goals
Like any responsible blogger, I started out with some internet research to try to find some good Goals as a basis. I spent quite a bit of time on this, I wanted to be thorough and finally came up with not just one, but twenty, as shown below.
Still, this wasn’t exactly what I had in mind. The goals don’t even meet the SMART criteria. Apparently my search skills are about as good as my football skills. Time to put the search engine aside and wing it instead of binging it.
There are plenty of articles about goals and goal-setting, so I’ll skip all that. It’s important not to confuse goals (what you want to accomplish) with plans (how you’ll accomplish it). A goal needs a plan and a measure of success and that’s about it.
Plans should be flexible though, as you’ll encounter obstacles in reaching your goal. It’s better to change the plan instead of changing the goal.
Now, in all honesty, I have mixed feelings about yearly goals. The time-frame is very short and I think there needs to be a longer-term vision of where you want to be. Yet at the same time, I want to live more in the Now than the Future, so I don’t want to be too obsessed about goals.
My compromise is to define three general ‘themes’ that my yearly goals are a step towards. And, after much editing, I’ve reduced the original six goals I was going to list, down to only four.
So here are my major themes or life goals as I know them today in 2017.
I want to become
- Financially independent.
- More awesome.
- More charitable.
There’s no priority and I’m not putting any particular timeline on these. I don’t even know now to quantify being more awesome. But each of my yearly goal needs to move the needle on one of those three themes.
Finally, he gets to the point! Here are my 2017 goals grouped into each of the three themes above.
1. Be Financially Independent
“I want to be Financially Independent so that I have freedom in how I spend my time.”
I’ve defined one goal to advance this theme this year. Initially I was going to add some more about reaching my target asset allocation but I decided they weren’t important enough since I do that anyway.
G1.1 Earn total dividend income > 2.5 times my monthly living expenses.
My monthly living expenses are $3,970 per Budget 17.0, making a new yearly target of $9,925. The metric is based on actual paid income, rather than future projected dividends.
I think it’s probably better to write this goal as ‘invest x amount of money” and let the investing strategy determine the income. Income targets can force investing in ever higher yielding stocks to beat the goal, for example.
In my case, I arrived at this target based on how much money I expect to invest this year. I’m already ahead of The Original Plan which calls for 2.2 times income for 2017, so I’ll be able to reach FI before age 65 on my current trajectory.
How I’ll Make It Happen
$9,925 means an additional $1,227 compared to the income received in 2016.
I plan to invest a total of about $35,000 this year. But since the money won’t be all invested at once, I won’t get the full 3%. I’ll use a lower percentage of 1.6% on that total for the year. Which is about $570.
I’m also going to be adding the $39,000 of my former Emergency Fund into my Income Fund. This will be held in a lower income bond fund. Assuming an average 2.75% yield for the year plus incremental deposits, that adds another $800, bringing the total up to $1,370.
But my Income Fund no longer contains the higher interest Long-Term Bond Fund (VWESX). I’ll lose $10,000 worth of 4% interest or $400 taking me back down to $970.
Finally, I’m assuming an average 3% increase in dividend income, which based on 2016 totals suggests an organic increase of about $250. I should be back up to about $1,220 of higher dividend income in 2017.
2) Be more awesome!
“I want to like myself and be more confident.”
This theme is all about trying to improve and liking myself as a person. I have a totally low opinion of myself. We’re talking Mariana Trench levels low.
G2.1 Acquire more knowledge
I originally titled this goal as “read twelve books” until I realized that was the plan, not the goal.
I’ve read a few books last year but not very many. When I do read, it’s usually tacky novels for entertainment than for enlightenment. But I want to learn more this year. Not, the most challenging goal but it’s a start.
How I’ll Make It Happen
I will read one book related to personal development, investing and/or finance, each month and apply any learnings to my life.
G2.2 Expand my writing
This year I want to increase my blog’s readership and try to reach 10,000 views in a month.
How I’ll Make It happen
I will put more “life” into DividendLife by writing more interesting / varied posts. This puts me outside my comfort zone as I don’t think I’m particularly good at writing and I always feel safe with posting “just another monthly summary”.
I will spend more time learning from other blogs in the community as well as making (hopefully helpful & supportive!) comments.
3) Be more charitable
“I’ve been very fortunate in my life and want to give something back.”
I have a long-term goal of starting a Donor Advised Fund. This requires a $5,000 initial contribution to set up and it works kind of like a trust fund. Charitable contributions are made to your fund, and the fund makes the payments to charities you select. There are options for the fund to outlive you, if you so choose.
G3.1 Establish a Charity Fund
This year I want to save $1,000 towards a future contribution.
How I’ll Make It happen
I will fund this account with all online income from my blog throughout the year.
I will contribute the remainder from my Savings since I’m not likely to earn that much with online income.
2016 was a good year and I accomplished the limited goals that I set myself. I’ve tried to expand my goals this year. In setting financial Goals I avoid defining goals that promotes risky or bad investment decisions. For personal growth goals, I’ve picked things that I can measure and work towards.
Do you set goals? What was your biggest accomplishment last year?
Quote of the Day
If your only goal is to become rich, you will never achieve it.