When you set a goal means you are setting a GPS for your life journey which gives you the right direction to reach your dream destination.
Your goal should be specific, measurable, attainable, realistic and timely.
As many of you, I set my financial goals in this page which give me the right direction to reach my financial destination.
Ultimate long-term financial goal
My first ultimate financial goal is to achieve 1 million dollar net worth in
10 9 8 years. Therefore, become a millionaire by December 31, 2024.
My second goal is much more connected with my first goal – receive $25000 yearly dividend income by December 31, 2024.
To reach my ultimate long-term goals, I have broken down then goals into many short term goals (yearly goals). So, when I reach my short term goals, I will be one step close to the long-term goals.
I like to set three financial goals for 2017. As I mentioned above, when I achieve these small targets, I move little close to my big goal of financial freedom.
- Goal 1: Reach at least $225 000 net worth by December 31, 2017 This target is $50 000 higher than 2016 target and $69 000 higher than my actual net worth in 2016. This goal is fully depending on my stock portfolio performance as we are a one-income family now.
- Goal 2: Receive $8000 dividend income for the year 2017 (by December 31, 2017) In my view, it is an achievable target as dividend income is more predictable than stock price/ capital gain.
- Goal 3: Increase my estimated passive income to $8400 by December 31, 2017 I strongly believe that I could achieve this target using dividend reinvestment, new capital and dividend hikes from the current holdings.
I am little nervous to set a big goal this year as we now one income family with a little kid; however, setting a defined target will guide me to achieve it.
- Goal 1: Reach at least $175 000 net worth by December 31, 2016 This target is $50 000 higher than 2015 target and $65 000 higher than my actual net worth in 2015. This goal is fully depending on my stock portfolio performance as we are a one-income family now.
My net worth reached just to $155 900.
- Goal 2: Receive $7200 dividend income for the year 2016 (by December 31, 2016) This is pretty much achievable target as dividend income is more predictable than stock price/ capital gain.
I received only $7049.17 dividend income in 2016.
- Reach at least $125 000 net worth by December 31, 2015 . My net worth reached only to $110 100 of December 31, 2015. I missed the target by $15 000 as Canadian market didn’t perform well due to the oil crash. Also, I had some new home & new baby expenses last year.
- Receive $5000 dividend income by December 31, 2015 . I received $4955.01 dividend income for the year 2015. I missed the target by $45 as few energy stocks, COS and CVE, reduced their dividends.
Even though I failed to achieve my 2015 goals, I really made a good progress and reached very close to the targets. I am very glad.
- Reach at least $75 000 net worth by December 31, 2014 – my net worth reached $83 000 by the end of 2014.
- Receive $3500 dividend income by December 31, 2014 – received $3597.36 dividend income for the year 2014
- Buy a home under $30000 before December 31, 2014. – bought a townhouse for $260 000 and moved on December 01, 2014
I hope that purchasing dividend paying stocks and compound interest will over time build a cash generating machine for life time and this habit eventually makes me millionaire.
Is one million dollar net worth good enough for comfortable retirement?
Here is my plan;
I will adjust this plan over time with the economy situation and potential higher inflation.
Currently, my monthly expensive is less than $3000 with rent and student loan payment. If I pay-off my student loan and mortgage loan, then my expensive will be around $2000 per month, in other words, $25000 per year is good enough for my comfortable retirement.
If I reach my goal (one million dollar net worth) and pay off my house mortgage by December 31, 2024, then my investment worth will be around $700 000. With 3.5% yield, my investment can generate around $25000 per year dividend/interest income.
In here, inflation needs to be taken in these calculations; however, dividend growth helps to offset the potential higher inflation.
So, my financial tasks are pay off my home mortgage (not sure how much will be) and increase my investment worth to $700 000 by December 31, 2024.
I will update this page periodically as new goals become present and old goals are attained.