My Goals For 2013

I’m a big fan of having goals. Goals give you something to shoot for; they’re a target so that you can track your progress. Putting goals down on paper, and then showing them to the world does a couple things. First, by actually typing these goals up I realize them in a physical form. If the goals only exist in my head they’re easy to forget. Second, by showing them to the world I obviously want to save face and do my best to reach the goals as my pride is on the line.

My goals for 2013 are not going to be as aggressive as I had planned to make them just a few weeks ago. Over the last couple of weeks some events have transpired at work that has me questioning the viability of my future employment with this particular employer. Due to this uncertainty I am going to be a bit conservative with some of the goals I’m laying out below. I hope things clear up quickly and continue to hum along, in which case I’ll be able to continue skyrocketing towards financial independence.

I’m listing the goals below in order of personal importance, and in which order my focus is going to concentrate.

Goal #1 – To receive $3,500 in dividends during the year of 2013

This is actually still quite aggressive. I was actually originally going to shoot for $4,000, but I’ve since adjusted that number due to the fact that I’m going to be conserving capital over the next couple months and investing less regularly due to uncertainty on the employment front. As this issue clears, my ability to reach this goal will increase. At any rate, I’ll be extremely excited if I can reach or exceed this goal. Receiving a full $3,500 in income in one year that I don’t have to work for would be simply fantastic. Reaching this goal would mean I’d be averaging $291.66 per month in dividends. Sweet! That would cover my monthly food budget in its entirety and then some. I could eat for free for the rest of my life!!!

Goal #2 – To save 60% of my net income earned in 2013, averaged monthly

It’s funny. I guess I need to re-align my definition of “conservative”. This will also be rather difficult for me, as I hit savings rates of 59.3% in 2011 and 56.6% in 2012. But if I’m not aiming high, then why bother? I think this goal can be achieved through the increase in dividend income, while simultaneously watching unnecessary expenditures throughout the year. This will require diligence on my part, which I certainly do not lack. We’ll see how it goes! I’m going to give it a great shot.

Goal #3 – To weigh 185 pounds or less by the end of 2013

Fully doable as long as I maintain focus on my exercise routine and don’t go crazy on the food. I don’t eat much, as can be seen in any of my monthly food budgets. However, the food I do eat isn’t good for me. I happen to be like Warren Buffett, unfortunately, and enjoy cheeseburgers and Cherry Coke. What can I say? I’ve always been able to maintain pretty good fitness by my intense workout routine, but lately have been slipping in that regard. Time to get back on track!

Goal #4 – To diversify my wealth

This goal is a bit open ended, and I don’t even know if I’d call it a “goal”…but decided to throw it up here anyway. Most of my worldly wealth (about 90% or so) is tied up in my dividend stock portfolio. As my portfolio continues to grow and becomes an even larger portion of my wealth I continuously think about the need to diversify my assets. While I’m extremely bullish on stocks long-term and favorably view all my equity stakes in the companies I hold, I do also believe in diversification. However, diversification “at all costs” is just as bad, or worse, than no diversification. So one has to be careful and diversify only when it makes sense, and as always when the valuation is correct. Right now interest rates preclude bonds for me, so I’m not looking at fixed income yet. I’ll obviously be increasing my cash position due to my employment concerns, so short-term this will diversify me into cash. However, I think cash is one of the worst assets over the long haul due to inflation eating away at its purchasing power. Real estate, due to low interest rates, may be in the mix here. I’ll keep everyone updated. This is a bit of a “wild card” goal. It’s not as defined and tangible as I like goals to be, but it is something I want to keep an eye on.

I’ll be updating my goals page to reflect the new goals, as well as the results from 2012.

What are your goals? 

Thanks for reading.

Photo Credit: Stuart Miles

Comments

    • says

      Headed Home,

      That’s the sweet, sweet power of passive income. It all of the sudden puts the worry of how to pay for expenses in the rear view mirror. It feels good to know that no matter what happens to me in life I won’t starve.

      Hope all is well!

      Best regards.

  1. says

    Great Goals.

    You will absolutely hit your dividend goal of $3500.

    As per your goal of 185 is that a BMI (Body Mass Index) of below 25?

    Also, should you be in a situation where you will not be working, do you think you will life off dividends temporarily?

    • says

      $25k Dividends,

      Thanks for stopping by. I sure hope you’re right on hitting the dividend income goal. That’s the most important of all. I want to keep that on track.

      My BMI would be 27.5 based on that weight. I think the BMI can be misleading if you have an athletic/muscular build, which I do. The most important thing is that I look and feel good. I know how I look and feel at 185, and it’s a hell of a lot better than how I look/feel now. I was about 182 when I first moved to Florida and I (not to toot my own horn) looked great. I want to get back to that. I’ve gotten lazy.

      I wouldn’t hesitate to live off dividends if it came down to buying food and paying rent. However, I think between the cash buffer I always keep, my open line of credit and the amount of cash I can save in a short period of time I would be okay if I was fired for at least 5-6 months before I had to dip into dividends. Besides I’d also likely be collecting some type of unemployment insurance.

      Hope 2013 treats you well with the dividend income!

      Best wishes.

  2. says

    Nice goals, DM. It will be great if you reach $3,500 in dividends this year. I love your line about eating free for the rest of your life. The best part is, it’s true — and at some point in the future, dividends will cover all your expenses.

    Regarding your fourth goal, I haven’t given much thought to diversifying my assets. Stocks are #1 for me and will likely continue to be. I am also not a fan of fixed income right now. As for real estate, I am not at a stage in my life where it would be feasible for me to get involved in it; however, I am open to the idea of investing in REITs.

    Best wishes on meeting your goals this year!

    • says

      DGM,

      I’m certainly hoping I can hit the $3,500 mark. I have no doubt that if things were a little more status quo I’d have no problem exceeding that mark and even perhaps approaching $4k. But, life is always interesting and has a way of surprising us.

      I’m with you on fixed income. There is nothing attractive there for me, even when looking at short duration funds. I continue to really like equities at this point, even with the recent run. REITs might also be something I look into. I’ve been a lifelong renter, and to be honest really enjoy it. I have no desire to be a homeowner, but have thought about owning my own property simply as a way to diversify my assets/wealth. It’s something I wanted to get down “on paper” so that I continue to monitor how I feel about it. In the meantime I’m somewhat forced in the short-term to diversify my wealth into cash – one of my least favorite asset classes.

      Best wishes on meeting your goals as well. It sounds like 2013 is off to a great start for you already!

      Take care.

  3. says

    With the progress you’ve already made you could probably pay your current bills with a minimum wage job and your current dividend income stream. At least until you find higher paying work so you can continue supercharging your portfolio.

    My point is that you’ve already bought yourself a lifeline of sorts with your past efforts. Try to not sweat too much with stresses concerning your current employer. Believe me I know all about the “golden handcuffs” but in the end sometimes you have to say goodbye. I’m reaching that point myself and if need be I’ll do what’s best for my health since that’s worth more than any paycheck they can offer.

    • says

      wes mantooth,

      Thanks for adding that. That’s something I’ve been meaning to write an article about – the flexibility that the path to financial independence can offer. You could stop half-way through and decide you want to work part-time for the rest of your life. Or, you could find a job you really love, stop the journey altogether and spend most of your money while the portfolio you built up during your lean years continues to grow into a nicely funded traditional retirement. The flexibility is fantastic with the early retirement/DGI/FI strategy.

      I hear you on the golden handcuffs. I think sometimes about leaving it all behind and getting some easy breezy job on the beach serving up cocktails to pretty women in bikinis. But then I think I might get bored with it and miss the fact that I can’t continue to invest. I really enjoy being an investor – the research, the reading, looking up fundamentals and ratios, monitoring progress, collecting dividends – but I can’t be a very good investor with no capital. So I continue to do what I do. It’s an interesting conundrum of sorts.

      Thanks for stopping by and adding that. It’s the lucid thoughts we share here that are most valuable to me.

      Best wishes!

  4. says

    Your goals are well defined and more importantly- are measurable. There are many benefits to diversification and my advice is to start small no matter what you choose to invest in. Real estate has worked well for me. But I also ‘invest’ in fruit trees and guns, instead of precious metals, which I will discuss in more detail in my blog soon.

    • says

      Investing Early,

      Absolutely. The keys to a good goal is that it be measurable, time-specific, achievable and within your control.

      I know you know a lot about real estate. I would definitely start small if I were to invest in it. Likely it would provide personal shelter at first and perhaps turn into a passive income generator later down the road. I have no desire for the maintenance a house requires, however, so that provides a barrier to entry. A townhouse or something of that nature might be something I look into in the future. We’ll see. I’m not totally sold on it. Interest rates just seem to make this the most attractive asset to diversify into right now. If things were different I’d be looking at fixed income.

      Best wishes!

  5. says

    DM,

    I’m a big fan of setting measurable goals that have a clear yes you met them or no you didn’t. And it’s even better to put them out there so others know about them. There’s something about telling other people that makes it so you don’t want to disappoint them.

    I’ve been thinking about diversifying my passive income as well, but I know my wife would hate to have to manage the properties while I’m out of town for work and I feel like I wouldn’t be able to get as much out of them if I let an property manager do it. I guess it’s on hold for now.

    Hopefully you get some clarity on your job. I know it’s a pain whenever you have to deal with that. It seems like it’s always in the back of your mind. It’s a shame that a lot of your savings will be going to cash instead of DG stocks, but if something better comes along you’ll have a good chunk of free cash to start investing with.

    Best of luck in 2013!

    • says

      Pursuit,

      I hear you on not wanting to manage properties or deal with a property management company who will take their cut. My ability to invest in real estate will also depend a lot on further clarity on my standing at work. Obviously the last thing I’d want to do is buy property just before being let go or quitting.

      Yeah, it’s unfortunate I have to be so conservative right now as I am a bit of a dividend addict! Of course, the market is a bit heated right now so if any time is a good time to be a bit cash heavy it’s now.

      I look forward to your progress as the year goes on!

      Best wishes.

  6. says

    This is going to be a big year for cash saving for me. I have some worries that my company may be slowly heading South. If certain things don’t go well for the company in the next 2-3 years my continued employment may be in jeopardy. Which is kind of a shame, because I really like my job.

    I also drive a 16 year old car. It’s going to give up the ghost eventually, so I need to get enough cash on hand to get a replacement.

    My goal is to save one year’s worth of living expenses over the course of this year and the next. That’s probably severe overkill and not my preferred way using my capital, but until the economy improves, it’s better to be ready for a stint of prolonged unemployment.

    • says

      Journey,

      I take no solace is knowing I’m not the only one going through some uncertainty right now. I feel for you. It’s always a bit stressful and unfortunate whenever we find ourselves in such a predicament. The harder thing for you is that you really like your job. I can’t stand mine. So if I were to be let go I wouldn’t exactly be crying about it.

      Good for you driving a 16 year old vehicle! That’s awesome! I hope that thing keeps going for a while.

      I’m with you on not wanting to be so conservative with cash, but uncertain times call for uncertain measures.

      Best wishes!

  7. says

    I like all of your goals and I look forward to watching you meet them this year. Not only could you eat for free, you could start eating better and healthier foods (I really like fish but it’s expensive) due to your dividends increasing faster than inflation. That could also help with Goal #3.

    In regards to additional diversification, I hold physical silver, numismatic coins and two rental properties. Both of the rentals were primary residences first as you get better rates on a primary vs investment loan. Having lived in both rentals, I know how to fix most maintenance issues which is another plus. As Investing Early mentioned, I also think starting small is the best way to go.

    Good luck!

    • says

      AAI,

      Haha, great point about eating better food with my dividends which would help with goal #3. I’ll have to take that to heart. Of course, as I type this I’m munching on some nachos and watching the Baltimore vs. Denver football game! :)

      Nice diversification there. Not only do you have an outstanding dividend stock portfolio built up, but you have two rental properties on top of it. You’ve set up a fantastic foundation for your wealth. Keep up the great work!

      Best regards.

  8. says

    Nice goals. I like your 60% goal. I am currently at 10% of my income + 401k contributions + any irregular income and suffering hard to pay all my bills. At this point I am not able to save more.

    • says

      Martin,

      That’s still a pretty good savings rate for you. I’m blessed right now as, in my opinion, I’m very well compensated for my job description and my qualifications/education. My job is stressful and thankless, which is why I think the compensation is as high as it is. A few years back I didn’t even save 10%.

      Keep up the great work. In the end, a 10% savings rate still translates to a comfortable traditional retirement. A high savings rate (higher than 30%) is not necessary unless you’re looking to retire at an extremely early age. I happen to really dislike my job, but of course I could at some point find something I enjoy much more and wouldn’t require such a high savings rate. I think no matter what, however, that I’ll always want to gravitate towards financial independence because life changes and one should be flexible.

      Best wishes!

  9. says

    Nice goals there. The job situation sounds unfortunate, but you have positioned yourself well to weather it. The dividend stream already in place can be spent if necessary plus you could always sell a few positions if times get tough. It’s an awesome cushion. Your expenses are very low so you could even take a low paying temporary job or just collect unemployment and still keep the train rolling.

    I’ve had a lot of success with REITs, it’s something worth looking at for income diversification. All my favorite REITs are pretty pricey at the moment, but I still listen to conference calls and continue to learn more the industry. Some of my favorites are O, NNN, LTC, NHI, and SNH. I do believe LTC has been the best performer out of my whole portfolio, but it may have been lucky timing. I’m not a REIT expert.

    Cheers

    • says

      CI,

      Thanks for stopping by.

      “Your expenses are very low so you could even take a low paying temporary job or just collect unemployment and still keep the train rolling.”

      One of the great things about having such a high savings rate and trying to achieve FI is that it does give you tremendous flexibility, and the cushion you mention.

      You know, the more I go along and start to despise what I do more and more I start to think about taking advantage of that flexibility. I’m now at a point where I could probably work part-time for the rest of my life and still get by, or even take a job that I enjoy much more but get compensated much less and still probably continue saving a little bit of money. When I originally started this blog I imagined early retirement at 40 and all the benefits that go with it. Although the numbers will certainly work, reality may get in the way. I’m starting to get to the point where I can’t imagine doing what I do for even one more year, let alone 9. Flexibility is invaluable. I’m so happy that I’m not “stuck” and have to be miserable with no options.

      I’ll have to look into REITs more. I’ve done mild analysis on them and looked at them from time to time. They had a pretty big run, and like you mention many of them are pretty pricey. That higher yield is certainly very attractive!

      Best regards.

  10. says

    DM,

    That’s too bad regarding the instability around your current employment situation. I hope you get some clarity soon. Helps to put in perspective why we should be looking at trying to build up the passive dividend stream as rapidly as we can.

    Has this made you more interested to try drive for higher upfront yield and maybe less on the growth to get more income faster?

    I’ve often thought about the wealth diversification point as well (like you I have a majority of my wealth in stocks) but for me it ultimately comes down to investing in what I know, and I love being part owner in the different businesses that I invest in with the flexibility to move in and out of them should circumstances warrant. I’m yet to come across this compelling combination in any of the other asset classes I’ve considered looking at for investment.

    Integrator

    • says

      Integrator,

      You’re absolutely correct. Perspective is something I always try to maintain, and situations like the one I’m in (constant emails about “changes in my department”) remind me of why I’m doing what I’m doing is so fantastic.

      “Has this made you more interested to try drive for higher upfront yield and maybe less on the growth to get more income faster?”

      Yes. I have thought about this. I’m not sure I’m going to make it to 40 doing what I’m doing. So, I’ve started to think about this in relation to my own portfolio and some of the lower yielding stocks (PSX, ABT, WMT). I haven’t decided to make any moves yet, but I’m going to make a decision on this pretty quickly, unless I’m led to believe my employment is secured.

      I hear you on the love affair with stocks. It’s one I certainly share and will continue to share. Stocks provide so many attractive qualities, and some of the ones you mention are what gravitated me towards them in the first place. I don’t even own my residence, so that would be the first place I’d start. On the other hand, the recent turmoil at work reminds me of why renting is so fantastic – the flexibility. If I was to be let go I could technically go anywhere.

      Besides real estate, the other asset classes are very unattractive to me. The low interest rates ensure that right now. Fixed income is something I’d eventually like to get into, but not until interest rates make some significant moves upward. The risk is too high with bonds right now, with little return to compensate.

      Best wishes!

  11. Anonymous says

    Been following the blog for a while now, congrats on your progress. In my experience the best way to lose pounds is to restrict carbohydrates (sugars). If you can cut out the cokes and bread and pasta you will see a change, its tough though. The first few weeks are the worst, but eventually your body adjusts. I can’t even drink soda anymore (unless it is after a hard run or something), too sweet. Good luck with 2013!

    • says

      Anonymous,

      Thanks for stopping by. I appreciate you looking out.

      Great points there. I know I definitely eat too many simple carbohydrates/sugars and not enough complex carbs. That’s one of the problems with my diet. I’ve always been able to make up my diet shortfalls with extra work at the gym, but lately have been having a hard time with that as I’m just so worn out at the end of the day. God, I’m getting old and whiny! :)

      I’ll probably have to make adjustments to both sides of the equation (diet and exercise), even though I don’t really want to. :)

      Best wishes!

  12. says

    I love the sound of a $20 Gold Coin dropping on a table, compared to a Quarter. That gold coin was worth 4 suits, 40 years ago, and is worth 4 suits today.

    Though with stocks you get upside potential with Capital Gains, and of course Dividend growth companies usually outbeat inflation in the long run anyway; You still get grey area ethics between CEOs pay and hiring or firing employees to generate revenues, let alone how that business generates revenues.

    • says

      FYC,

      I’m definitely not a fan of physical gold. It provides no cash flow and no intrinsic value. Just not an investment for me. I suppose I wouldn’t mind a very small percentage of my wealth in it (less than 5%) at some point, but certainly not right now. I can see the value in it as a hedge against currency worries, but even then that value is really limited.

      Best regards.

    • says

      As I have mentioned…. I l enjoy reading your blog. It helps me think thru my decisions. And since you asked I will share my goals for the year as a record for all to see but more importantly for me to strive for.

      Physical—I also think good health is a foundation to a good life. My health goals include:
      • walking my dog each morning for 15 minutes,
      • practice my Tae Kwon Do exercises with my son each day for at least 10 minutes
      • Earn my Black Belt by July 2013
      • Sleep… get at least 8 hours a night. That means in bed by 9 and lights off by 10:30PM.

      Family….My wife and I have been blessed with three great kids. My family goals are:
      • Spend two hours a day on weekends doing family activities with kids
      • Go on a date night for 2-3 hours once a week with my wife

      Self …I want to spend at least an hour a day doing something fun

      Financial…..save 47% * of our income and earn $200/ month in dividends in 2013.

      Project…..spend 4 hours every other Saturday morning working on our addition on our house to complete it this year.

      That’s 9 goals…seems like a lot….?

    • says

      Shop Teacher,

      Great list of goals there! Sounds like a diverse mix of interests, financial and non-financial.

      The black belt sounds especially interesting. Good luck with that!

      I like the date night idea with the wife. It’s important to keep the spice alive.

      The financial goals are equally great. Saving almost 50% of your income is really great, and something I strive for as well. It’s a lot easier said than done, so keep up the great work. And $2k in dividends would be fantastic. You’re right there with me.

      Best of luck with achieving all your goals!

      Take care.

  13. says

    I personally have a rental unit and it is not bad at all. I will address the 2 big issues below.

    The biggest issue that a landlord has to face is maintenance and the associated hassles. This can be nearly eliminated by getting the house updated/repaired before you start renting the property. It is so much easier to work on a house when no one is living there.

    I have found that finding good tenants is not too difficult. I have them pull their own credit report, fill out an application, evaluate their creditworthiness, and pick the best of the lot. The process has several parallels to picking stocks.

    To start off, you would likely be best served by a duplex. That way you can live in one side. As mentioned above, you get a better interest rate. Also you can monitor the tenant closely while you build a trust relationship with him/her. If something breaks you are close. The downside being that you are close to the tenant. Since you are already living in an apartment, this likely would not be an issue for you.
    A duplex, purchased at the right price, could be nearly free to live in from a cost perspective.

    I like being diversified in real estate. Everyone needs a place to live. So, I am always on the hunt for another property. The key is to get it at a price that works for you and gives you a positive cash flow.

    • says

      Glenn,

      Thanks so much for that information. Very helpful!

      I agree with you in regards to a duplex. I can see how that would be a great way to invest in real estate. You get to live on one side and stay close to the action, and potentially get your shelter for free. Not much to dislike about that. It’s something I’ll have to consider.

      I hear you on being diversified in real estate. You’re definitely correct about everyone needing a place to live…and they certainly aren’t making more land. (Except those islands out in UAE)

      Best wishes!

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