Setting Small Investment Goals…

Just a FYI for potential readers: My next several posts will probably be financial related. Hopefully this doesn’t “bore” you too much! 😉

Like many people, I have long term goals for myself from a career, financial, and personal perspective. These goals are 5,10, and sometimes 10+ years in the future. One of my long term goals is being able to a taxable (non-retirement) investment portfolio that generates at least $2,500/month in income. This equates to a portfolio that annually generates $30,000 each year. Having a portfolio that generates $30,000 per year sounds like a steep mountain to climb unless you break it into smaller more achievable goals.

I wanted to share a few thoughts and strategies about breaking things into smaller goals that have worked for me as I go about this journey to generate at least $2,500 in investment income per month…

It is really hard when you first start buying stock realizing that the stock you just purchase may only pay you a paltry $3.80 per quarter or ~$13.00 per year. That can be down right demoralizing to even think about! So instead of thinking about the longer term amount, when I bough that first position, I looked at things from the perspective of if I had enough dividends to buy a new share of stock in the company I was buying. This did two things for me:

It made the goal more realistic and achievable
It made me focus on the short term while inching along towards the longer term objective

I was talking with a co-worker a few weeks ago about where I’m at towards my long term goal and told this person that year 0 to year 3 are probably the hardest years to go through when it comes to this investment goal. I say this because it’s difficult to see any progress being made especially when the investments I’m making may only be buying partial shares of stock in the very beginning. It’s also challenging because for most stock investments the benefits to ownership are not realized immediately and you have to be in it for the long haul through both the ups and downs that the market could go through.

I would estimate that I’m somewhere between the middle of year 0 and the end of year 1 in terms of establishing a dividend investment portfolio, having a good number of high quality investments, and starting to see the benefits of dividend re-investments and dividend raises. Right now, I have 5 positions which I consider to be a full positions and am working on building a 6th full position. I define a full position as an investment where reinvested dividends will buy at least 1 full share of stock per quarter.

The 6 positions that I have now generates an estimated $1,400 per year in investment income. (Note: My $1,400 number is actually conservative because I own a couple ETFs where distributions can be uneven and aren’t as predictable as companies who pay dividends.) While the $1,400 number is still really low compared to the $30,000 per year that I want, I am going to use to set a small goal. My small goal for the rest of the year is to get my forward estimated annual dividend income to $2,000 per year.

In my mind, $2,000 is a more attainable goal to aim for this year. Even if I don’t achieve that goal by the end of year, the number is more attainable and realistic than looking at it against the overall number. This also helps me with planning. Right now, I am working on establishing my 6th full position and after that I will build a 7th full position. My plan is once I have my 7th full position is to circle back and buy an additional 10% in my existing 6 positions. Then I will establish positions 8, 9, and 10 and then recycle to other existing positions to add 10% again.

Over the coming days, weeks, months, and years, I will continue writing about this journey to $30,000 in investment income. I hope you will like hearing about my journey!

If there’s anything I would like to end with, it’d be this: Establishing smaller goals to achieve bigger ones is something that can be applied to anything whether its weight loss, paying off debt, buying a home, or investing. Celebrating the small wins also makes it much easier to continue marching down the path of obtaining that bigger goal.

Getting Back to the Basics…

Yowzers! This was bound to happen…finally I am circling back to my “long, lost, and almost forgotten” blog/site. A lot has changed and gone on…

First off, this site used to be hosted by hostgator and I had to pay for the privilege of being hosted. The web hosting renewed every May from 2009 – 2016. This year, I decided that I wasn’t going to continue the hosting by hostgator and I decided to just go with the free option offered by WordPress.com. I never really monetized the website and more used it as a journal/place to express ideas and thoughts. Therefore, I decided the free options were good enough for me and my purposes. This has led to saving me $140/year. 🙂

You now might be asking what my plans for the site are going forward? Really, I have no idea how often I will post. I am in a different place and mindset than when I first setup this site and domain. Back then, I was in the midst of planning a trip around the world. Now, I’m working on planning a wedding, paying off a house, occasionally traveling, and saving money and investing. My thoughts are to turn this site into more of an online journal and journey for people to follow/comment on etc.

Recently, I’ve been investing in the market and have made this to be a new habit. My goal is to someday be able to cover my monthly expenses with dividend/investment income. So far I have 5 positions that purchase at least 1 new share of each stock every quarter. I’m working on my 6th position now. It’s definitely a work in progress, but it’s been fun seeing it get off the ground! I’m sure there will be at least a few more posts regarding investments/opportunities for investments.

Some major changes for me….

Since my world trip ended in Sept 2012, I’m on my 4th employer. Sometimes, I’ve left by choice and better opportunities and other times, I’ve decided to leave because of re-organizations/title changes/changes in responsibilities. I’m happy with my current employer, boss, and team so I’m hoping for a little stability in employers the next 2-4 years. It’s almost been a year since I’ve been with my current employer.

I’m also getting married in September of this year! Woohoo! That will be another great and exciting change. I’m marrying a Minnesota girl who is a pre-school teacher and has a love of helping others. She also shares my love of travel, trying new restaurants, canoeing, being outdoors, being practical/planning, and being frugal. We’re only a few months away from getting married and nearly everything is all done for the wedding! 😉

Going along with getting married, I bought a house in late February 2016! Of course with a house, comes new expenses and new things one has to buy. It’s been an interesting process and expect to see some posts related to the house as well.

Finally, although my travels have slowed down, there is still a deep love of travel, how travel can change a person, and what people can learn from traveling. I’m looking forward to my and my fiance’s 2 week road trip in late July/Early August. We’ll be road tripping from Minneapolis to Portland, OR stopping at a few national parks along the way. It’s going to be about a 4,700 mile trip and should be fun to disconnect from work for awhile.

Well I suppose that’s all for now. I hope to maybe get my site header back and get going again on this site with new posts from time to time.

Tim

From Nomadic Matt – “Don’t Have (Travel) Regrets

I saw and shared this on my google reader, but for those who don’t use google reader, I wanted to get this link out there and share it. Matt talks about his regret of not studying abroad in college. One of the reasons he cites is fear of “missing” things going on at home. Years later he still regrets not spending a semester abroad in another country, even though he has been traveling almost non-stop since 2006! He comes to the conclusion that when you return home from your time abroad that things pick up right where you left off.

One of the other things Matt indirectly brings up is the idea of having regrets. I think the quote by Mark Twain sums it up best for me:

“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”

Don’t wait until later to do something you want to do. Make your best efforts to pursue those goals now.

I know several people going back to school right now. I hope that they consider spending a semester abroad as part of their graduate studies.

Don’t Have (Travel) Regrets | Nomadic Matt’s Travel Site.

Upgrading my Trek 7.5 FX…

After two weeks of owning my beloved 7.5 fx, I decided to upgrade a few of the components. As you can see from the photos this included the pedals and adding handle bar extenders. I also added a saddle pack which could hold a spare inner tube and some gloves which will keep my hands warm on those cooler days. Included in the pedal upgrade was also obtaining a pair of biking shoes that clip into the pedals. I don’t have the specific links but upgrading the pedals to a clip in design will improve efficiency by 20-25%.

I took the bike out for a quick 17 mile spin to test out my upgrades. I admit it took a little bit to get used to clipping in and out of the pedals. I am still getting used to clipping in quickly. Also, during one of my stops, I somewhat forgot I was clipped in and just about fell over in the bike. I was lucky in that as I was falling over I was able to somehow clip out and catch myself. I guess this will just take some practice.

I am hoping with the exception of one or two additional pieces of bike clothing that I am done upgrading for awhile. I think I’ve gotten the upgrades that make the most sense for right now. I do plan on upgrading the bike computer I have at the end of the summer. I’m not decided on specifics regarding that upgrade, but am leaning towards something with GPS.

I am going to set my distance goal to ride 1500 miles by the end of September. So far I have done about 200 miles. It’d be great if I hit 2000 miles but I think 1500 is a good goal to shoot for right now. If you are you have route suggestions or just want to sound off about your bike, feel free to leave a comment. I am still enjoying my trek 7.5 fx.

Link of the Day: What Can Travel Teach You About The American Dream?

I saw this article on BraveNewTraveler.com. I think the concept of the “American Dream” is slowly changing for some younger people here in the States. However, for the majority of people (even I would argue the majority of young people age 22-35) the concept of owning a house, having 2.5 kids, and marrying a lawyer/doctor is still the basic idea of the “American Dream”.

My challenge to you is to think outside this concept. Think about the things you keep saying I’ll wait to do when I am retired or think about those things that you keep thinking would be “nice” to do but for some reason always get reprioritized.

Once you do this, maybe you will see your idea of the “American Dream” is not the same as what others have in mind.

What Can Travel Teach You About The American Dream?.

Seize the day and Pursue your Goals

Today, I received the unfortunate news that a friend and former colleague of mine at PwC died suddenly this past weekend. I admit that this friend was not one of my closer friends, but when I worked at the firm, I would talk to this person nearly every day and even after I left the firm in January 2009, I still occassionally kept in contact. My friend was only 5 years older than me. The news of this tragic event of someone 33 years old unexpectedly passing away gave me a moment to pause and reflect about things that matter.

To put it in perspective, this person never had the chance to “enjoy” their retirment savings or even most of their frequent flyer and hotel points. This person never had the opportunity not to experience what it was like to not have to work 5 days a week for 40+ hours at a time. Most importantly, this person never had the chance to pursue their goals and dreams to the fullest extent possible.

Putting this event in perspective, I had a few thoughts. Our culture is one that encourages people to work for 40-45 years and then retire and live out the rest of their lives. I have already decided that I don’t want to wait until retirement to do certain things. I have come to the realization that the activities that I am willing and want to do now as a 28 year old could be very different than what I am willing to do at 65. This is why I am doing my best to pursue my goals today instead of waiting until after I am retired to see, explore, and experience difference parts of the world….and I’m willing to do what it takes now to pursue those goals.

If you have certain goals, aspirations, and dreams, I encourage you to seize the day and immediately pursue them. Even if it is one small step at a time. At least you will be trying to get there. You never know when your time on this earth will be up.

Good luck in the pursuit of your goals.

My Trek 7.5 Fx – Purchasing my newest toy!

No, this toy is not an iPod, iPhone, X-BOX, PlayStation3, Wii, laptop, or anything to do with computers and games at all! My newest toy is the Trek 7.5 FX Fitness Hybrid bike. A fitness hybrid bike has the wheels and speed of a road bike, but the flat handle bars of a mountain bike. It is slightly slower than a road bike, but faster compared to the mountain and hybrid comfort bikes.

Last year towards the end of 2008, I began thinking about purchasing a road bike and potentially doing enough riding and running to compete in a duathlon. Well that thought came and went and I didn’t end up purchasing the bike.

In the beginning of 2009, I began training for what I thought was going to be my second marathon. During the past 2 months, I have been working some health issues regarding my jaw. These issues have affected the quality of sleep and nutrition for my body. Unfortunately, I don’t believe I am nowhere close to being ready to complete a marathon. Coming to the realization that I won’t be ready for the full marathon hasn’t been easy. However, after talking to a few friends, each of them have suggested not doing the marathon if I am not completely 100% ready. I completely agree with that advice. I will discuss in a different post why I am not competing in the marathon this year.

So I saw this as a perfect opportunity to buy a bike and do some other fitness activity for the summer. I will still run (I am getting ready for a half-marathon at the end of May), but I want to be able to enjoy the runs of 5-6 miles instead of dreading them.

One added benefit of now having a fitness bike is the ability to see different parts of the cities that I have’nt seen in the 4+ years I have been up here. I’m certainly looking forward to a summer of running and bike riding!

Busy Busy Busy

I just wanted to write a quick update on the last two weeks or so. So far, I have survived the first 2 weeks of my job. It is quite interesting. I am enjoying being in corporate america for once. Things are alot slower paced. Sometimes that is a good thing and other times I wish the pace would pick up.

I have survived the first week of my marathon training. I did runs of 3, 5, and 8 miles. The training program I am using is from runnersworld and is 16 weeks long. Since the race isn’t for 20 weeks, I plan on doing the first 4 weeks of running and then starting over on the training program. This will help me get my mileage up and in the right mindset.

Another change that I’ve done with my running is that I have started to listen to music. For the 3.5 years that I’ve been running, I can count on my hand the number of times that I ran with an MP3 player and earphones. So this has been a nice change for me – although I still feel there are benefits to running without any sort of music/distraction.

Also – a quick update on my chinese language classes…So far its been going very well. The language is pretty difficult to master because of the different tones, the many meanings of words, and the fact that a direct english translation isn’t always possible. With this in mind, I am enjoying the class and just need to put a little more effort into listening to the audio a little earlier than 30-40 mins before class 🙂

Finally, I am going to share more articles that I stumble on in my google reader or the random ones that my friends send me. I apologize for the lack of article posting!

More to come this week…I’d like to write a more indepth post on my chinese classes especially the cultural aspects I am learning and also do a posting about my trip to India.

Have a great evening.

Major Announcement 1

Today, I announced my departure from my current employer, a large accounting/consulting firm. Included with this posting you will find the text of my farewell email. I’m really excited to be starting with my new employer, but will also miss the people I’ve worked with for the past 4+ years. Reactions were mixed with people happy for the opportunity that I have and sad to see me leave. I am really glad I got the opportunities and experiences that I did. It really was the people at the firm that made all the difference for me.

Note: Slight edits were made to protect the identity of my former and future employer.

Friends,
After 4+ years of being with the firm, I am announcing that my last day will be January 9th, 2009. I will be taking an opportunity with healthcare company in their information risk management group. I’m looking forward to this new opportunity and the challenges that it will present.

The decision to leave the firm was not easy to make. I think the things that made it hard for me to leave the firm are the people that I worked with and the experiences that I gained. I have had the privilege of working with so many smart people that are willing to share knowledge and help me develop. Thank you for letting me learn from you over the past 4 years.

My personal contact information is:

email: removed
mobile: removed

Good luck in the pursuit of your goals and please stay in touch.

Sincerely,

Tim Morrison

Tim’s Adventures

Tim's travels, photography, musings and life adventures journal

Tag: goals