Sunday, December 15, 2013

Goals for 2014

With less than 3 weeks to go in 2013, I want to set new goals for DivGro for 2014.

After having set some challenging goals for 2013, I've reached three of them by October 6 this year. One can argue that perhaps my goals were not quite challenging enough. Nevertheless, I'm happy that I've come this far and that, soon, I'll be celebrating the 1-year anniversary of DivGro!

For 2014, I've set 4 new goals for DivGro:


1. Write at least 72 100 posts.  CHANGED: 11 JULY 2014 

Considering that this is my 75th post, aiming to do at least 72 posts next year wouldn't seem like a stretching goal. However, I'm planning to launch a second blog soon, one in which I'll be using options to magnify dividend income. In that blog, I'm aiming to write at least 36 posts next year. So the total for the two blogs would be 108 posts – certainly a stretching goal! More on the new blog later...

I've updated this goal because I'm not yet ready to launch the new blog, which will probably happen in January 2015...

2. Earn $3,600 in dividend income.

Compared with this year's goal of earning $750 in dividend income, my new goal of earning $3,600 in 2014 will be challenging. Why $3,600?

I can use a formula to calculate the future value of an investment based on periodic, constant payments and a constant interest rate. Let's assume that on January 1, 2014, DivGro starts with a balance of $70,000 and I have a recurring monthly deposit of $2,500 (at the beginning of every month). With a constant interest rate of 4%, the balance of DivGro at the end of 2014 will be $103,510. Subtracting the starting balance ($70,000) and monthly deposits (12 x $2,500 = $30,000) from the ending balance, the accrued interest will be $3,510.

DivGro's current balance is $69,664 and the current yield on cost (YoC) is 4.43%, so two of the assumptions above are OK. The third, namely to make a recurring deposit of $2,500 per month, would require a new commitment. I've updated the About page to reflect this new commitment.

3. Increase projected annual dividend income to $4,800.

Currently, DivGro's projected annual dividend income is $2,865. By investing another $30,000 next year and assuming a YoC of 4%, we can add an additional $1,200. That does not quite bring me to $4,800, so I'm hoping that occasional bonus deposits will make up the difference.

Projected annual dividend income of $4,800 means that DivGro will generate a minimum of $400 per month starting in 2015. Of course, the underlying assumption is that stocks in DivGro would at least maintain their dividend payments going forward.

4. Increase number of holdings to 36, balanced across all 10 sectors.

DivGro currently contains 24 stocks. If I buy a new dividend growth stock every month of next year, I should end with 36 stocks. This month, with a concerted effort, I've managed to diversify DivGro such that there is at least one holding in each of the 10 sectors:



I would like to add at least one additional stock to each of the Consumer Staples, Materials, and Health Care sectors.

Thanks for reading! Do you have stretching goals for 2014? Care to share?

8 comments :

  1. Looking forward to the new blog. Options can be a nice boost. I've been able to add over $1400 in income from options this year alone, and that was with not being all that active since around July.

    I'm still working on what goals I want to hit for 2014, but I'm hoping for some pretty big improvements. I know I'm going to try and focus on adding to exiting positions though rather than add new positions. There's just a few more companies that I'd like to add to but for the most part I'll try and focus on building my current holdings.

    Best of luck in 2014!

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    Replies
    1. Thanks for the wishes – best of luck for you, too!

      I'm excited to begin with my new blog. It will be interesting to see how much I can boost my income with options.

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  2. Very ambitious, I like it! Seems like you had a great year and I really like your purchases this month. I'm off from work today, I think you have inspired me to spell out my goals for 2014.

    ReplyDelete
    Replies
    1. Yes, quite ambitious! One thing I've learned (and confirmed again this year) is to set goals that would challenge. The term BHAGs comes to mind: big, hairy, audacious goals. Introduced by Collins and Porras in a 1994 book "Built to Last: Successful Habits of Visionary Companies", it encourages companies to define visionary goals that are more strategic and emotionally compelling. I believe it can be applied at a personal level, too.

      I'm looking forward to seeing your goals for 2014 -- good luck!

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  3. I like the goals. 2014 will set a strong foundation for your dividend income for years to come. Best of luck to you.

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    Replies
    1. Thanks, FFdividend! I've set some challenging goals. If I reach them all by the end of 2014, I think DivGro would be in a good place for future dividend income generation. I hope you're also thinking about setting challenging goals for 2014! Good luck!

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  4. You've set some challenging goals for yourself. You had a great year and have set yourself up well so you should have no problem hitting your goals.. Keep it up!

    I also look forward to seeing your options trades. I'm a big fan myself and almost matched my dividends paid with options income from a much smaller account.

    ReplyDelete
    Replies
    1. Thanks for the encouragement! I've been following your options trades. I've been trading options for a while now, but not in the way I'm planning to do it next year. I want to sell puts on dividend paying stocks that are above my fair value estimates, banking the premiums and hoping to buy at or below a fair value price. I'm not yet sure if I want to sell calls on stocks I own. We'll see about that.

      Delete

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