Are You Planning On Knocking 2015 Out Of The Park? I am.

Knocking Out My Goals - Nailing It

I set some pretty aggressive financial goals for myself this past year, and am pumped to see how things shake out over the course of the year. After posting about my 2015 goals last month, Mike from The Dividend Guy blog wanted to know what exactly I planned on doing to reach these goals. Great point Mike, and even better suggestion for a post.

For me, everything is a process, and in the course of setting my goals for the year, I lay everything out exactly how I hope it might happen. For me, the end goal is important, but the journey in figuring out what I’ll have to do to hit these goals is even more so. Call me crazy, but I just think it is fun.

Planned Pursuit: Nailing My 2015 Goals

Before sharing what I’ll do to try and hit my goals, let’s quickly recap what my financial goals for 2015 look like.

Knocking Out My Goals - Comparing 2014 Actuals to 2015 Goals

As you can see, there are five different financial goals. Of the five, only four will really require some concerted effort and planning. Let me explain as we walk through each goal:

Traditional Interest Income: This is the regular interest my wife and I earn on our savings accounts. We have a substantial stash of cash socked away, and it just sits there and earns interest each and every month. We shouldn’t have too much trouble hitting this goal. There are some potential uses for our liquid savings on the horizon, so I shot a bit low not knowing if we’d maintain our level of cash throughout the entire year. This is the one income type that did not require much planning.

Peer to Peer Lending (Marketplace Lending): As I’ve done in the past couple of years, I’ve set goals that encapsulate both Lending Club and Prosper. As an asset class they get grouped together, but for income purposes I track them separately.

  • Prosper: I only have one account with Prosper, which prior to a deposit right at the end of the year, sat around $2,650 in value. During all of 2014, this account earned $322.19 of net interest. With declining interest rates and a harder time finding loans at times, I will have to put some serious capital to work to hit my goal of $525 in 2015. Assuming a full year of fresh capital, with a net return of 10%, I’d need to add approximately $2,000 to hit this goal. Since I’ll be contributing throughout the year, and have a 4-6 week lead time before receiving payments, I will likely need to more than double that number to hit the $525 mark for the year. Of course, the earlier I add capital, the smaller the number needs to be. That being said, I am targeting the addition of $4,000 in fresh capital to this account.
  • Lending Club: I have two accounts with Lending Club, a Roth IRA and taxable account, with a goal of $1,800 of net interest in 2015. The IRA is at this point on autopilot. During 2014 it earned $1,302.56 of net interest. Based on the natural reinvestment offset by the declining interest rates being offered at Lending Club, I expect to net around $1,350 this year from this account.For my taxable account, I will be making up the remaining difference between my goal of $1,800 and the $1,350 generated in my Roth IRA. Given the balance at the end of the year of approximately $2,300, I have a ways to go to generate the $450 of net interest in this account. Using the same concept for my Prosper account, assuming a 10% return I would have to add nearly $2,700 to this account prior to the start of the year to bring my $184 of net interest in 2014 up to $450 in 2015. Knowing that the capital hasn’t been contributed at this point, I am targeting adding $4,500 to this account by the end of the year.

Dividends Received/Forward 12-Month Dividends: I have two dividend goals, the first being the quantity of dividends received during the year of $2,750, and the second is closing 2015 with a forward 12-month dividend mark of $3,000. The dividends received goal is to plan for given the lead time on investing new capital and receiving payments for that investment. Depending on the ex-dividend date, it can be 4-5 months before seeing any payments from a purchase. With all that in mind, I ended 2014 with a forward 12-month dividend amount of $2,062.57, leaving almost $690 to go for my dividends received and $940 for my forward 12-month dividends.

Given the overall gap in between my goals and where my forward 12-month dividends stand, I’ve got a ways to go. Simple back of the envelope math will tell me that at an average yield of 3%, I will need to add nearly $23,000 to my dividend growth accounts to gain the additional $690 to hit my dividends received goal, and $31,300 to hit my forward 12-month dividends. However, neither of these take into consideration a couple of things.

  • Actual Dividends Received: Given that I currently DRIP most of my investments, this is at minimum over $2,000 that I won’t need to add to lift my overall dividends. Since my average portfolio yield is over 4%, this should provide a nice boost to both goals.
  • Dividend Growth: Based on my rough calculations, the positions I owned for all of 2014 enjoyed an average dividend increase of over 7%. If all of my positions raise their dividend payments a similar amount, I should pick up some additional momentum towards reaching my two dividend goals.

What none of this really considers is the overall timing of these contributions. For dividends received, the earlier the better. For forward 12-month dividends, I have the full 12-months of the year. Based on my expected dividend raises and the reinvestment of my dividends received, I anticipate needing to contribute approximately $26,000 to my dividend growth portfolio. No small potatoes here.

The best tool I have for planning around my need for capital in my dividend growth portfolio is to leverage my 2015 Dividend Calendar to see exactly where I stand as the year goes on. As of today, this calendar reflects that I will receive $2,183 of dividends. While I’m not there yet, this is some solid progress being less than two months into the year. The faster I get this number up, the better off I’ll be.

Overall Goal Accomplishment Strategy

If we quickly review what I’ve said above, you’ll see that I need to add approximately $34,500 to my investment accounts to hit my goals this year. This will mean averaging just under $3,000 per month. While this isn’t going to be easy, I have confidence that I’ll be able to accomplish this and meet my goals. The worse thing that happens? I come close and still stand much further down the path towards financial independence than I did one year before. I can’t think of a worse consolation prize than that.

What planning do you do when setting your goals? Do you map out exactly what you’ll need to achieve your financial targets?

 Flickr: Adam Collins

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  1. I’ve definitely found that by setting goals, I get further than not setting any at all. It’s like having a budget. I am absolutely terrible at sticking to it, but the fact that it exists means that it is in back of my mind when I want to buy something and I’m slightly less willy nilly about what I buy.

    I map out exactly what I need to do to hit my goals before I set them, to make sure they’re achievable.

    • Leigh, I couldn’t agree with you more. Last year I failed across the board to hit my goals. Disappointing, yes, but did I end up further ahead as a result? Absolutely. Challenging oneself, but keep goals within reach is important, and the associated accountability with have goals (especially public ones) is fantastic.

      Great to see you map things out for yourself as well. Thanks for reading and stopping by today!

  2. W2R,

    I love the ambitious nature of this post! You are right about the journey being more important and fun than the end result. Now let’s get to work.

    Batter up!!!


    • Batter up indeed. You’re never going to hit one out of the park if you don’t step up to the plate. I’m happy to be on this journey and thankful I’m in a position to share some of it with you guys.

      Best of luck this year as you work towards your goals as well.

  3. I truly believe by setting achievable goals will allow you to stay focused and make more effort to achieve these goals. Keep up the good work!

    • I agree – part of the challenge with goal setting is making it a stretch to reach, but within the limits of possibility. If you fail to meet either of those items, your goals are too easy or out of reach, neither of which will propel you down the road to success.

      Thanks for sharing your thoughts.

  4. W2R,

    Very aggressive goals indeed. I believe with your laser focus on what you need to do to achieve these goals, you will fare better than you did in 2014 in terms of actual success rate. I look forward to following along with you on the journey this year.


    • I am certainly hoping to fare better! Of course, even if I don’t, I know I’ve put together a plan that will put me in a position to be extremely successful not just in the short-term, but in the long-term as well.

      Thank you for reading and following along!

  5. Nice post W2R with recapping the goals and the documenting the steps towards achieving the goals. I am behind on my investment goal for the year and because of that, I am behind on the dividends received and projected dividends goal. Like you mentioned, dividends received is really tricky since based on the ex-div dates, we might end up getting only 1 or 2 dividends if we don’t invest early in the year.

    • Very tough to nail down exact dividends received goals because of the timing, but at the end of the day, if you come close, and hit the forward-dividend mark, you’re likely in pretty good shape. Essentially, 80% of the new capital needs to be added in the first 8-9 months of the year, which is difficult since you’re accelerating the flow of capital. I’m hopefully going to be able to accomplish this, but it will be a stretch goal, no doubt about it.

      Thanks for the comments DGJ!

  6. Sounds like you have a plan! Time to sit back and watch you execute!

    I have to be fairly aggressive to reach both my goals income/12 month div goals. I just need to be careful not to reach for yield and make another mistake like ARCP =0

    Good luck!

    • Execution is 99% of the battle. I am confident I’ll be able to push forward with these levels of contributions, even considering some of the demands for my resources elsewhere. The larger the financial nut I can build here, the better off I’ll be in a few years from now. Like yourself, staying away from the yield trap is important, and something I’ve also become more cognizant of after the mistakes of ARCP and PSEC.

      Best of luck on your journey, and thank you for reading!

  7. W2R,

    Looks like you have a solid plan to hit everything across the board. With all the capital you’ve been putting to work, you should be able to crush that dividend income goal.

    Looking forward to seeing how it goes for you. I know you’re going to give it 100%. :)

    Best regards.

    • ‘Crushing my goals’ – I like the sound of that! I’m fortunate to be in a position to invest as much as I do in these portfolios and other investments, and I’m glad to be on track to hit my goals given the investments I’ve been able to make so far.

      DM, I appreciate your support and well wishes!

  8. W2R,
    Excellent post! One of the most important step towards FI is by setting a goal, the second one is the execution, the HOW. How are we going to achieve it and what are we willing to give up/what are we willing to do to achieve that goal. You set a nice blueprint on how much is needed to achieve that goal, and I wish you best of luck. I will be following your journey.

    • It really is nice to have a blueprint to follow. I can easily measure my current contributions to date and have a solid gauge in understanding where I likely stand on my overall progress. It is part of the reason I love having my dividend calendar. Gives me a pretty close approximation of the dividends I’ll receive, and shows the gap that needs to be closed.

      FFF – as an aside, I read your name and think about someone saying it five times fast… is that weird? I hope not!

      Thanks for reading and for your support!

  9. This is great. Last night I came up with my own goals for the remainder of this year, so it’s cool to read yours right afterward.

  10. Nice post W2R — I like how you lay out your plans to reach your 2015 goals.

    In setting my goals, I made some “back-of-the-envelope” calculations, trying to figure out what are realistic goals. Then I rounded up to nice round numbers, arguing that the difference would be the “stretching” part of my goals.

    I haven’t done a detailed analysis like you’ve done here, though I realize investing earlier in the year rather than later would be better for reaching my dividend income goal.

    • For the most part the ‘back-of-the-envelope’ calculations are good enough, however it never hurts to dive in and take a detailed look at your progress and investment goals and see what gap needs to be covered. As with anything, it is often a fairly large guessing game, since the overall yield of your purchases differ so much. And as you’ve highlighted, the timing is everything. Such a wide difference between $10,000 today and $10,000 at the end of the year.

      I appreciate you reading and commenting.

  11. roadmap2retire says:

    Looks like a pretty extensive plan, w2r. Im sure if you stay committed, you will achieve them without any problems.

    Best wishes

    • Commitment generally isn’t my issue, it is having enough capital to go around. As I’ve said before, this blog only covers a partial snapshot of my overall financial picture, and sometimes it is left out in the cold when other area’s demand more resources! Regardless, I’m hopeful that I’ll be able to meet or exceed my goals this year.

      Thanks for the well wishes and for reading.

  12. Hehe! You certainly put my comment into action! That’s a good plan! I surely do the same. I never set myself a goal without thinking about how I’ll reach it. I think it’s the first step to success! ;-)

  13. w2r,

    that really sounds like a detailed plan! And I really like your diversification of your passive income – something I didn’t thought about yet. The dividend increase is also looking very nice – hopefully I will get there too, once I added enough DGI stocks.

    I wish you best of luck reaching all your goals!

    • Diversification of income is something I care a lot about, not just within a particular asset class, but across my entire portfolio.

      Building a detailed plan around your goals is important. It ensures that your goals are both realistic and appropriately stretching, to make sure you have something strive for and add motivation to your pursuits. Best of luck as you start out on this journey and build your portfolio.

      Thanks for reading DivRider.

  14. I have no doubt that you will be able to hit your goals in 2015, especially with the accountability and support system you have built over her at Write Your Own Reality.

    And like you said, the worst case is that you miss, but still make solid forward momentum to your ultimate goal of financial independence. Les Brown said:

    “Most people fail in life not because they aim too high and miss, but because they aim too low and hit.”― Les Brown

    Its always a good idea to have a bit of a stretch in our goals. I have found that planning and reviewing things like this on a regular basis help make these things a reality.

    I have a goal to increase our net worth by about $70K this year before any sort of market appreciation, dividends, or interest. That is a lot of contribution money, but with a solid plan I have no doubt we will hit it.

    Like this post I just finished this past weekend writing up a longer term plan to my 20 year goal to $10M in net worth. Looking forward to sharing that next week on my blog and getting input from the community.

    Anways, keep up the good work, and as always fight the good fight.


    • Sounds like you’ve got a great set of goals for yourself, both short-term and long-term. While I can’t fully anticipate the full blogging community’s response to your upcoming post, I will say that you will receive some negative feedback from people who don’t understand the need or drive to hit that $10MM mark. Ultimately, each of us has our own priorities and objectives, and I wish you the best as you follow your own path. You’ll get there if you stick to your guns and follow your plan.

      “…planning and reviewing things like this on a regular basis help make things a reality.”

      This could be a tagline on this site! Accountability and planning are way more than half the battle. Keep on grinding my friend, and thanks for your comments!

      • I fully expect a lot of questions, doubts, and haters. To me that is half the fun in blogging and getting other peoples perspective. It would be a pretty boring life if everyone agreed with everything I said.

        The greatest thing about personal finance is that its…well PERSONAL!

        I enjoy your blog man.


        • I agree completely on the ‘personal’ side of personal finance. It isn’t a matter of right or wrong, but more of what’s right for me, and the reasons why it is right. Of course, the added input and thought-provoking conversations are superb, and really help to solidify the learning process that comes with being exposed to different viewpoints.

          I’m glad you like the blog, it is great to have you as a reader and a fellow publisher.

  15. Instead of dividend income, I have a goal of receiving on average 9% dividend increases. So been buying lower yielding, higher dividend growth stocks.

    • That is certainly an interesting perspective on setting a dividend goal. While I’ll prefer the metrics listed in the post, I will still be calculating a straight average of dividend increase across the board.

      Thanks for commenting and sharing your dividend growth goal.

  16. Great goals W2R. And with a plan set in place, you’ll know what you need to do to achieve them. Best wishes on achieving your goals this year!

  17. You are knocking it out of the park. Nice work. Couldn’t be happening to a nicer person.

  18. You’ve already achieved a nice chunk of income from passive sources. Good for you! Having that money come to you automatically is great. I need to work on that, myself, the most passive I’m getting is with the rentals, and that has it’s periods of hard work.
    I am sure you will definitely hit your goals this year, you seem focused and organized about it.
    I also love writing down goals, and having my new blog helps with keeping me accountable. I try to map out exactly what I need to do to achieve my goals, but often times, things change and I have to constantly adjust. That’ s OK though, I think you need to be flexible and allow for adjustments, that’s life and things happen.

    • Automation is the key for long-term success in my opinion. Trading time for money is only a short-term solution, and finding ways to scale will be difficult. You’ve already found a path with your business that I believe could turn into something over the long-term that will maximize that time to money ratio. Once everything is set up, your time will be reduced and your income will go up.

      You’re doing well with the blog. Accountability is key with any goal setting pursuit, and by posting regularly and interacting with others you’ll find the motivation to hit your goals will stay high. I’m happy to have set clear goals for myself, however if an opportunity comes down the road that overturns the apple cart, I’m happy to adjust and continue moving forward.

      Best of luck and thank you for stopping by Felix.

  19. Very inspiring post. I am still formulating my plans, but mine are more about exploration at this point. I wish you luck, but am confident in saying you’re already ahead of the curve.
    Take care.

    – HMB

    • I’m glad you gained some inspiration from it, that means a lot. Plans are always meant to guide you on a path, but not necessarily be the only method of going from point A to B. There is always the chance something comes up and throws a monkey wrench into the middle of things, and at that point it is a matter of adjusting and driving forward again.

      Thanks for the visit HMB!

  20. Good luck hitting that $5,000 + mark! I’m pretty jealous (although also excited for you)! We unfortunately came to the game pretty late, and Marie and I are hoping to hit just $1,000 in divs in our taxable accounts this year.

    Our returns are hampered by the significant mortgage paydowns we did right after buying our house. That said, I know that the $50,000 we dropped in early payments will ‘yield’ $1,500+ in reduced interest expenses each year from here on out, come hell or high water. I like to think of it as the “bond” in my portfolio, which frees me up to buy all stocks in the market.

    Keep on saving,

    • I certainly hope I make it, although it is going to be pretty tough. I’ve got to get some serious capital to work over the next few months to have any chance.

      If you feel you’re limited by not having access to that capital, you could always look to do a refinance if you’ve got some substantial equity but are a ways away from paying off the mortgage. Either way, you’ll find a way to maximize your capital over the next year or two and should be in a much different place than today!

      Keep up the good work, and thanks for stopping by.

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