2013 Passive Income Goals Revisited

2013 Passive Income Goals - Two Goals

After the first five months of the year, my progress towards generating passive income in my dividend growth portfolio and peer-to-peer investments was making great progress. After achieving 40.67% of my original passive income goals is an important step in leveraging these assets into providing the financial freedom I desire later in life. [Editor’s note: While this is getting posted in late October, I made these changes (offline) to my spreadsheets and tracking mechanisms at the beginning of this past summer.]

Financial Goals ARE Accountability

Goals are meant to challenge and in the case of passive income shouldn’t be just conservative projections of anticipated income based on existing investments. So after the first part of 2013, and an evaluation of my investment desires and objectives, I am updating and modifying my 2013 goals. This modification continues to follow my blog’s objective of helping to hold myself accountable and maintain my focus on furthering my financial future.

That being said, before making any changes, here is a quick recap of my original 2013 passive income goals:

Peer-to-Peer Lending: This goal was actually $1,000 originally, but revised up to $1,120 after including my taxable account into the mix. As of the end of May, I had earned 40.94% of my goal.

Dividends: My original goal for dividend income was $700. A complete shot in the dark as I hadn’t really laid the foundation for the start of this portfolio when setting this goal. As of the end of May, I had earned 43.28% of my goal.

Trading – Options Income: Having never traded options before, this was definitely an uncertain goal of mine. Of the $300 dollar original goal, I have earned 33.57% of my goal.

Striving for More – Updated Passive Income Goals

So while I have made great progress with my original goals, I have decided to make a bit of a change, eliminating one category while boosting the goals for the other two.

The elimination: Trading options for supplemental income. Given my current investment strategy (larger than what is discussed here), continuing the pursuit of options income just isn’t something I am very passionate about at this time. Given the time and energy required to appropriately research positions, it isn’t something I am going to focus on to the point of having a set goal for a level of income. Going forward this goal will be removed from future income updates.

Eliminating trading means the other two are getting boosts! Who doesn’t like increasing their goals because they are well in hand and obtainable?

Peer-to-peer lending: As a combined goal, for both my Lending Club and Prosper accounts, I will be increasing the $1,120 to $1,600 in net interest (interest income less defaults, charge-offs, and fees on payments) for 2013. This significant increase primarily reflects the higher performance of these accounts and the addition of my Prosper investment. Breaking that down a step further, I have taken the $1,600 in net interest and broken it down between Lending Club and Prosper, at $1,480 and $120, respectively.

This updated goal is definitely a stretch amount and will be contingent on a high level of performance from both of these accounts as well as some additional contributions. Ultimately, this number represents a greater than an 11% return, which will have been hampered by the cash drag, defaults, and late notes I will experience while investing in these accounts.

Dividends: Having gotten a solid start on my dividend portfolio, my goal of $700 ended up looking pretty low as I have already achieved 43.28% of this goal without a whole lot of income in the first couple months of the year. Given the capital I have available for this account, I increasing my goal from $700 to $1,000. To achieve this goal I will need to contribute some additional capital as well as hope for some dividend increases!

So where do these changes leave me? My original goals had me looking to achieve $2,120 in passive income. Given the reduction of income from options trading is offset by the increase in dividend income, the actual overall increase comes from my peer-to-peer lending investments. My new total passive income goal for 2013 is now $2,600, and as of the end of May, I have hit 29.29% of that goal.

How are you coming along on your goals? Going to accomplish everything you’re working to achieve this year? Let me know in the comments below!

Check out my passive income goal progress here, but note that these amounts for the first five months of the year are based on my original goals. Going forward this will reflect my updated goals.

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Flickr: daniel.d.slee

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Comments

  1. Good to see you revisiting your goals. I did not set any financial goals at the beginning of the year. Planning to for 2014. Hopefully that will help keep me more focused.

    -RBD

    • Thanks for stopping by RBD! I think setting goals is extremely important as we look to further ourselves financially. I’m looking forward to seeing what you have in store for 2014!

  2. Nice progress on the dividend goal. It’s good to have something to work towards, helps keep you motivated when your discipline lags.

    • Thanks Integrator! I agree the shorter term goals help you plow through when struggling to maintain focus on the bigger picture. For me personally, it allows me to play with spreadsheets, so that’s an added bonus!

  3. Glad to see your back my friend!

    I’m not really into options either, but I know a lot of people have made money with the strategy. I don’t always have the luxury of watching the markets like a hawk which is the main reason I tend to avoid them. Anyways, I’ll stay tuned as you progress towards exceeding those goals!

    As for me, my only goal this year was to increase my forward annual income stream by $1,000. It appears that will be accomplished, although some help from dividend growth would make it easier.

    • Thanks CI, glad to be back, although this past summer was a blast!

      I agree, options require a much higher level of monitoring, and one that right now I don’t have the time for with all of my other pursuits. Certainly there are plenty of folks who have had success with them, I just don’t find that it is aligning with my mindset, goals, and as I said, time.

      Increasing by $1,000 is definitely respectable and whether it is from contributions or dividend growth doesn’t matter! An increase is an increase! Plus that $1,000 will only snowball into even more next year.

  4. Great!

    Keep stacking the bricks to build your financial fortress.

    Just don’t forget to lower the drawbridge and throw a couple parties :)

  5. Howdy mate, curious to know why you decided to do LC and Prosper? Seems kinda a PITA no? I just went with Prosper, and am having trouble staying on top of it.

    • Having originally started with Lending Club over four years ago, I wanted the additional diversification, in both underwriting models and companies. While I think the entity risk is relatively low and not necessarily a large factor, I am still a fan of utilizing both. I know you prefer to manually evaluate loans, however I tend to utilize my filters and allow them to do the heavy lifting. If given two options with the money for one, I will take a look at them, but again, I rely on the overall underwriting of LC and Prosper plus my own filters. I actually have Prosper set to automatically invest for me using their “Quick Invest” feature.

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