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
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...
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?