Last year was the first time I set any Portfolio goals. I’d heard so many good things about actually writing one’s goals down that I thought ‘Why not?’, especially if it helps me achieve those goals.
I kept my 2018 Portfolio Goals list short given that this was my first foray into goal writing. I had three Portfolio goals in total. Let’s review…
Review of 2018 Portfolio Goals
1) Invest at least $15,000 of new capital in the Portfolio
This was a goal I felt good about achieving at the time, as I’d succeeded at this level of investment each of the two prior years. However, there was some doubt about reaching it again given some potential college tuition expenses on the horizon.
Well, it turned out my good feelings were justified, and the college expenses were not as burdensome as I’d anticipated. I was able to not only invest my target amount, but better than double it! I ended up with a net investment of $33,862.52.
2) Generate $1,800 in options income to then invest in the dividend Portfolio
This goal I wasn’t too sure about heading into 2018. Sure, I’d generated over $1,200 in options income in 2017 in about 10 months, but I was still new to writing options, so bumping up the income level could turn out to be a reach.
I was ahead of my $150/mo. pace for the first 3 quarters of the year, but then hit a dry spell. I got short on time, and didn’t find suitable options to write. In addition, with a declining market in Q4’18, writing put options didn’t seem like the best idea, as I wasn’t ready to purchase several 100-share lots. Besides, I was using the cash I normally had set aside for cash-secured put options to add to existing Portfolio positions in small chunks instead. In the end, I didn’t have any options income in Q4 at all, and I wrapped up 2018 with $1,499.90. This was ~$300 shy of my goal, but I still succeeded in surpassing last year’s total, and it was an extra ~$1,500 that became part of that ~$33,862 net investment from the first goal.
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.). Attaining my goal would require adding nearly $1,400 in forward dividend income over the course of the year. This would put me at an average of $725.00/mo. by year’s end.
At the beginning of 2018 I was thinking that, at a minimum, ~$423 of this additional forward dividend income would come from $16,800 of new capital investment (at avg. 2.52% yield), ~$184 would come from reinvested dividends (at avg. 2.52% yield), and another $439 would come from dividend raises (assuming an average 6% dividend raise across the current portfolio holdings). This would get me to nearly $8,400 given my conservative estimates. So, I set the bar a tad higher and chose $8,700 for a goal.
Getting to $8,700 in annual forward dividend income would be possible by investing more than $15K in new capital, generating more than $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%.
Despite falling a bit shy on the options income, I exceeded expectations with regard to all the other items. I invested about double the capital I planned on, I was able to invest new capital and reinvest dividends at a higher yield than 2.52% (thanks to falling stock prices), and my overall Portfolio dividend growth exceeded my 6% target by a good margin thanks to all those generous dividend raises in 2018.
When all was said and done, I finished out the year with a total of $9,276.42 in annual forward dividend income (or $773.04/mo.) – well over $500 more than my goal. This was a hefty 26.78% increase year-over-year.
Three goals, two achieved. Not bad for my initial goal-setting effort. Even the goal I did miss (options income), I didn’t miss by much. In the end, all efforts resulted in driving my dividend Portfolio to new heights.
I’ll be setting some goals for 2019, too. Maybe even more than three. Keep an eye out for that post in the next week or so.
Did you set some goals for 2018? If so, how did you fare? What did you consider your best achievement? I look forward to hearing your 2018 success stories.