I like setting challenging but doable goals. Such goals demand extra effort and focus. They require commitment, patience, and constant monitoring. Sometimes, when progress is not sufficient, they require a course correction.It is not beneficial to set goals that are easily achievable. Such goals are uninspiring and won't deliver a special sense of accomplishment. On the other hand, it doesn't make sense to set goals that are impossible to achieve.
In this article, I'm presenting my goals for 2022.
Before presenting my 2022 goals, let me state some assumptions and commitments.
To determine achievable yet challenging goals, let's first look at what I can expect to invest in 2022.
I'm not going to add new capital on a recurring basis in 2022. Instead, I'll add bonus deposits occasionally, options income as it is generated, and income from writing for Seeking Alpha and TheStreet.
1. Increase projected annual dividend income to $45,000
Investing $78,000 at an average initial YoC of 3.6% should add about $2,800 to DivGro's PADI. Given a dividend growth rate of 7%, my current PADI of $39,327 should grow to about $42,080 by the end of next year. So DivGro's PADI should grow to about $44,880 by the end of next year. (D, E)
Given DivGro's current PADI of $39,327, a rounded-up goal of $45,000 would represent an increase of about 14.4%.
2. Earn $43,200 in dividend income.
My 2021 dividend income totaled $37,716, which easily topped my goal of collecting $33,000. Applying a 14.4% increase (as with PADI above), a dividend income of $43,147 should be achievable. (A)
A rounded-up goal of $43,200 would represent an increase of 14.5% over 2021's total of $37,716.
3. Collect $12,000 in options income.
For 2022, I lowered my options income goal to $12,000 after having failed in 2020 and 2021 to achieve the more ambitious goal of $24,000. Options income remains tricky and largely depends on market conditions and volatility. (C)
Assumptions and Commitments
Before presenting my 2022 goals, let me state some assumptions and commitments.
- A: Reinvest dividends, on average at least $3,500 per month (at least $42,000 in 2021)
DivGro's projected annual dividend income (PADI) now stands at $39,327, which equates to a projected monthly income of about $3,277. Given that dividends will increase throughout the year, I think averaging $3,500 per month in 2021 is doable.
- B: Deposit income from writing for Seeking Alpha TheStreet (goal is $12,000 in 2022)
Seeking Alpha changed its compensation scheme in November 2020 and it remains hard to reliably generate income this way. Fortunately, I've been able to somewhat increase my followers on Seeking Alpha and I now also write for TheStreet.
- C: Retain and invest options income (goal is $12,000 for 2022)
I failed to achieve my options income goal of collecting $24,000 in 2020 and in 2021, so I'm setting a more modest goal for 2022. Options income depends largely on volatility and what the market allows me to do, so we'll see how it goes!
- D: Assume initial yield on cost (YoC) averaging 3.6%
In 2022, I want to favor investments with yields averaging at least 3.6%. This represents an increase of 9.1% over my 2021 target to average an initial YoC of 3.3%. I'll continue to increase this target over the next few years as I approach retirement.
- E: Assume an annual dividend growth rate of 7.0%
I'm not changing this assumption even though I'm not sure if I actually achieved this dividend growth rate in 2021. The COVID-19 pandemic negatively impacted dividend increases in 2020 and 2021, and we're not out of the woods yet!
2022 Goals
To determine achievable yet challenging goals, let's first look at what I can expect to invest in 2022.
I'm not going to add new capital on a recurring basis in 2022. Instead, I'll add bonus deposits occasionally, options income as it is generated, and income from writing for Seeking Alpha and TheStreet.
Let's assume bonus deposits totaling $12,000, options income of $12,000, and writing income of about $12,000 in 2022, for a total of $36.000 of fresh capital in 2022. (B, C)
Adding dividends totaling $42,000 means I should expect to have about $78,000 available for new investments next year. (A)
Investing $78,000 at an average initial YoC of 3.6% should add about $2,800 to DivGro's PADI. Given a dividend growth rate of 7%, my current PADI of $39,327 should grow to about $42,080 by the end of next year. So DivGro's PADI should grow to about $44,880 by the end of next year. (D, E)
Given DivGro's current PADI of $39,327, a rounded-up goal of $45,000 would represent an increase of about 14.4%.
2. Earn $43,200 in dividend income.
My 2021 dividend income totaled $37,716, which easily topped my goal of collecting $33,000. Applying a 14.4% increase (as with PADI above), a dividend income of $43,147 should be achievable. (A)
A rounded-up goal of $43,200 would represent an increase of 14.5% over 2021's total of $37,716.
3. Collect $12,000 in options income.
For 2022, I lowered my options income goal to $12,000 after having failed in 2020 and 2021 to achieve the more ambitious goal of $24,000. Options income remains tricky and largely depends on market conditions and volatility. (C)
In hoping for a solid improvement in 2022!
4. Write 18 stock analysis articles.
In 2022, I'm hoping to write 18 primary ticker/stock analysis articles. I'll be tracking this goal rather than the income I receive for writing articles for Seeking Alpha and TheStreet. Nevertheless, I'm still counting on being able to deposit $12,000 from writing articles for investment purposes. (B)
In 2022, I'm hoping to write 18 primary ticker/stock analysis articles. I'll be tracking this goal rather than the income I receive for writing articles for Seeking Alpha and TheStreet. Nevertheless, I'm still counting on being able to deposit $12,000 from writing articles for investment purposes. (B)
Concluding Remarks
I have one additional goal for 2022, a binary goal that I can either achieve or fail to achieve. It is a 2021 goal I failed to achieve, so let's try again in 2022!
Move DivGro to Another Platform.
You have nice and inspiring goals!!!! Thank you for Sharing!
ReplyDeleteThanks! I hope to achieve them all this year!
DeleteKeep up the great work. If you do move I will be following. This is the best recurring column on SA in my opinion.
ReplyDeleteThanks for your feedback, Ryan! I appreciate it!
DeleteI just came to this Blog after reading your SA "2021 Annual Review Of DivGro" article on this fine Saturday morning!
ReplyDeleteImpressive is an understatement!!
I have always wanted to something similar, but afraid to venture into the financial world! I am getting into my mid-40s age now, but hopefully a bit more wiser. Your approach to DIVGRO has me enthused with the thought of how I can align my investment thesis for generating long-term reliable income stream.
We all have to start somewhere, and so I thought I would learn your early thoughts when you were venturing into DIVGRO approach. Would reading this blogpost from 2013 give a good idea?
Thank you for publicly sharing all information you went through that can be a real gem for someone like me!
Thanks for your note, Bhaskar Reddy -- I appreciate your kind words.
DeleteDividend Growth Investing is as much a process as it is a strategy. It's a process of building and learning. I started with $12,000 and added $1,000 per month for 12 months, after that upping my monthly contribution significantly.
Some of my early investments were mistakes, such as chasing yield. I learned from those mistakes, of course, and happily. I preferred learning on the job,
so to speak, rather than testing the waters with a play portfolio.
If you read earlier material on my blog, perhaps you'll recognize some of these mistakes and learn from them. But it is just as important to develop your own approach to dividend growth investing and be OK with making your own mistakes along the way. That's the best way to learn, I believe.
All the best to you on this journey! If you stick to it, I assure you that you won't regret it!