We are just past the halfway point of the year, so it’s a good time to see where I stand with regard to my 2018 Portfolio Goals.
If I’m no longer projecting to reach my goals, making some adjustments now would still give me 6 months to get back on track.
As you may recall, I set 3 Portfolio goals for 2018 (see my 2018 Portfolio Goals post from the end of last year for the full write up). I’ve heard many times that writing down goals is a key for success, so I thought I’d give it a try. I kept my goal list small since it was my first time writing them down and trying to achieve them.
Revisiting my Portfolio Goals for 2018
1) Invest at least $15,000 of new capital in the Portfolio
At the time I wrote down this first goal, I was feeling good about the prospects for achieving it, given that I was able to accomplish it for each of the two prior years. However, college expenses were looming, so there was an unknown about how much new capital might be available.
Well, at the halfway point, college expenses are anticipated to be less than projected… so that helps. It turns out that I’ve made 11 buys and 3 sales in the 1st half of 2018 for a net investment of $18,980.18… well past my $15K goal. I don’t expect to invest much more in the 2nd half of 2018. As long as I don’t start liquidating Portfolio positions, I should stay above my target and have this goal accomplished at year’s end.
PROJECTION –> SUCCESS
2) Generate $1,800 in options income to then invest in the dividend Portfolio
This second goal was an unknown at the beginning of the year. I’d only started trading options last year, and while I was successful, there was no telling if the success could continue given my short track record. I set a target of generating $150/mo. in options income, which was about 25% more than what I did in 2017.
For the 1st half of 2018 I’ve been able to realize $980.90 in options income, or a tad less than $163.50/mo. This is above my target amount of $150/mo. needed to achieve my goal. However, I’ll have to stay diligent in order reach $1,800 by year’s end. One negative month could set me back and make it difficult to reach my desired total.
PROJECTION –> TO BE DETERMINED, STILL UP IN THE AIR
3) Reach $8,700 in annual forward dividend income
I started 2018 with an annual forward dividend income of about $7,317 (or $609.75/mo.). The goal was to add nearly $1,400 in forward dividend income to give me $8,700 by year’s end (or $725.00/mo.).
I was confident that I could reach a smaller total of $8,400 without too much trouble if I:
1) invest the $15K of new capital and $1.8K of options income at my then current portfolio yield of 2.52%
2) reinvest the $7,317 in forward dividends I was expecting in 2018 at my then current portfolio yield of 2.52%, and
3) pick up about an average 6% dividend raise across the current Portfolio holdings.
I suggested that getting to my $8,700 goal in annual forward dividend income could be possible by investing more than $15K in new capital and $1.8K in options income, by investing the new money (or the reinvested dividends) at a higher yield than 2.52%, or getting a larger average dividend raise than the projected 6%.
Well, at the halfway point, my annual forward dividend income stood at almost $8,457, or $243 short of my goal. Clearly, the majority of what was needed to achieve my goal was obtained in the 1st half. My investments have already exceeded my annual projection, and I’m certain the new capital was invested at a yield higher than 2.52%. In addition, I believe my dividend raises have exceeded the 6% average that I was projecting. So there were a few factors helping me in a positive way in the first half of the year.
If I assume that I don’t make any further new capital investments or invest any new options income, then reinvested dividends and dividend raises would have to carry me over the finish line. Given that I have 6 months remaining in the year, I need to have a little over $40/mo. in new forward dividend income to reach my goal. I think at least $20/mo. will come from the reinvested dividends, and that $20/mo. from dividend raises should not be a problem either (assuming no dividend cuts!). Once again, as long as I don’t go liquidating Portfolio positions, which would reduce my forward dividend income, I’m in good shape to achieve this goal.
PROJECTION –> SUCCESS
Summary
Overall, it’s hard not to like my current position. I project success for 2 of the 3 Portfolio goals, with the remaining goal (options income) still having a good chance for success.
I will say that having written the goals down earlier in the year keeps them in the forefront of my mind. I usually factor them into decisions that impact my Portfolio.
Are you in good shape with respect to achieving your 2018 goals? If not, are you making adjustments to rectify the situation? Please feel free to share your current goal status.
ED – congrats on your progress. The +$15k new capital is great.
I’ve been following your Option Income for a while now as well. It’s very interesting to see your concept be put into action – being able to generate income to then feed another (although perhaps related) income stream is terrific.
Thanks again for sharing. – Mike
Thanks, Mike! I’m somewhat surprised I’ve already deployed $15K+ of new capital. I certainly don’t see that continuing in the 2nd half of the year, but I’m sure there will be a purchase or two, just on the smaller side.
The Option strategy has been going well… still taking it slowly though. If it all goes according to plan and the option expires, I look at it as a way to earn a better return on my cash. If the option is assigned, I either end up buying a stock at a price I’m willing to pay, or selling a stock at a price I’m willing to accept. Any extra income I can generate to feed my dividend Portfolio is a good thing!
Hey ED. $18k in new capital within six months is hard to do – nice work! Your options income is impressive as well. I know some folks who have lost money trading options and I’ve shied away from it for that reason.
I agree (based on your buys this year) that your overall yield should go up, but you’ve done a good job of focusing on dividend growth stocks, which naturally will keep the yield down a bit in the short term. Over the long run your yield on cost should increase every year.
Keep up the great work!
Thanks, FIREman! I’m really happy to have been able to add so much capital to my Portfolio, but I know I can’t keep up that pace. I’ll have to be especially selective the latter half of this year.
I wish I could add more options income, but I’m still taking the options trades cautiously. So far, it’s gone well, but I don’t want to ruin a good thing by deviating too much from what I’m doing. I don’t want to be one of those people you know that lost money trading options!
My projected dividend raise percentage for 2018 has exceeded any expectations I had, so I’m certain that’s playing a big role in my good progress towards my forward dividend income goal. Having my new capital investments and re-invested dividends going in at a dividend yield higher than 2.52% has helped, too.
Thanks for your comments, FIREman.
Nice work ED
That dividend income is going to be over 10k in no time! I need to catch up..haha
Thanks, Jordan! I was hoping to get to $10K in forward dividend income by the end of next year. Although now I might have an outside chance at $10K of actual dividend income by that same time. I ought to have a real good idea on what’s possible by the end of this year.
Your portfolio and income are growing at a good rate so I wouldn’t put it past you that you can run me down. I’ll keep my eyes peeled!
Excellent progress towards achieving your goals ED. Although one is TBD, you are definitely on track to meeting it. I wrote down goals at the beginning of the year but for some reason, I’ve been reluctant to check to see what my progress it. I might just do that after reading this post.
Go for it, DP. Now’s the time to make any needed adjustments to reach those goals you set. Maybe you’ll even find you are on track or better, and it will provide a nice energy boost.
Whats not to like about updates usch as this? Its shows your determination and hard work and the results you ca achieve with the former two.
Great work ED!
My current goal status is quite encouraging, Mr. Robot. I just need to “stay the course” at this point.
An interesting thought… Is my determination and hard work resulting in possibly achieving my goals, or are my written goals resulting in my hard work and determination???
Congrats on your progress! Investing $15,000 in new capital will pay off very nicely. You should see a nice YoY growth in 2H of this year.
Hi Tawcan! Happy to see you stop by.
Thanks, it was definitely good progress toward my goals in 1H’18. In general, my YoY growth each month this year has been terrific, and I foresee this continuing for the 2nd half. However, it’s presenting quite the challenge to try and achieve similar results next year… a good problem to have!
Congrats on your progress for this year – and the very nice income generating portfolio that you built!
I recently tracked my progress on my 2018 goals as well. I still have a lot of work to do, but progress is progress!
Keep it up – just subscribed to your blog.
Welcome TI! Thank you. I like what I’ve built so far… always more work to do though.
I saw that you had posted a 1st half report for your 2018 goals, but I haven’t looked it over yet… I’ll have to mosey on over to see the details.
I agree that any progress is a good thing, especially when it comes to growing the portfolio or increasing the dividend income stream.
Thanks for leaving a comment… hope to see you again soon.