+- Dividend Growth Forum (http://DividendGrowthForum.com)
+-- Forum: Dividend Growth Investing (http://DividendGrowthForum.com/forumdisplay.php?fid=15)
+--- Forum: Dividend Growth Investing (http://DividendGrowthForum.com/forumdisplay.php?fid=33)
+--- Thread: What are you aiming for? (/showthread.php?tid=1271)
Pages:
1
2
What are you aiming for? - crimsonghost747 - 07-26-2015
Ok so I thought that due to my own plans still being a bit uncertain, I would love to hear your general plan when it comes to DGI investing and personal finance. Obviously we all started this to get growing dividend income but what is your personal goal and why? Some of you have elaborated quite a bit about your plans in other threads but I think it would be good to collect our thoughts about the future into a single tread.
Is this something to give you supplemental retirement income? Maybe you are planning to retire early? Are you guys planning on liquidating parts of your investment at some point? Any certain amount of portfolio networth or dividend income you are aiming for? Overall I'm eager to know what motivates you to save X amount each month and use it for DGI. And when do you say "ok I have saved enough, time to focus on spending." ?
We spend a lot of time talking about the journey but what is the destination?
A little about me: (feel free to skip until the very end for a 1 sentence summmary)
As I said earlier my own long term plans are a uncertain. I'm young (26 to be more precise), don't own an apartment/house yet, very unstable job and recently dipped my toes into the whole long term relationship business. So my future is wide open and for the moment my main reason for investing is to build passive income to have some financial security despite my unstable job.
In the long run I am aiming for dividend income equal to my living expenses but I do realise that this is probably not going to happen, at least not anytime soon. I have no exact figures that I'm aiming for. But every little income stream helps and I'm confident that my investment portfolio will help me out immensely by the time mortgages, unemployment and kids come into the picture. Okay hopefully not all three at the same time! I am most definitely not planning on selling my holdings but I realise that there are times when I might have to use the incoming dividends for everyday expenses instead of reinvesting them.
Long story short: for the moment my goal is simply to create a as-large-as-possible passive income to help me cope financially with what ever life throws my way.
Looking forward to hearing your thoughts and plans.
RE: What are you aiming for? - rayray - 07-26-2015
Good topic!
I've always been a fairly good saver; however, not always a good investor. When I was your age, I was buying Exxon (pre-ExxonMobil days) through their drip plan. It was a great investment and proved to be very reliable and continued to grow and split and grow. However, I sold that stock and bought my first house at the age of 27, a fixer upper. I spent my late 20's and early 30's fixing the house up. Of course, in between, life happens. Life happens? Yea, the dot com bust, so many funds tank, girls come and go, mom gets diagnosed with emphysema, mom breaks her hip, step-father who I love dearly has one stroke then two weeks later a massive stroke that puts him in a wheelchair, mom breaks her hip AGAIN. Oh and I bail out my parents financially so they don't loos their house? I know, I should have seen a lawyer but I knew if they lost their home it would have killed one of them so I sucked it up and bailed them out cause they mean more then money to me. Then everything settles, right? No, I'm diagnosed with cancer with a 30 percent survival rate, and kicks my ass. Another woman gone, but who steps up to the plate? My parents, my grandmother, my friends...Wait, that's not fair, my at the time gf helped me through everything until I got semi-better then left LOL. I adopt a dog, meet a new woman, fall in love, get engaged, get married upgrade to our forever home and now we're trying for a kid. Uhhhhh ha, life happens. Oh, and before and even during all this I enjoyed having a good time!
I guess my point is, I like investing for the future and seeing our nest egg grow in order to some day be FI. But, I love and appreciate life more, I love and appreciate my family and friends more. The goal is to continue on saving, working and living life, appreciating life because we only get one. It's finding that balance.
As we age, our goals change, our needs or wants change, sometimes circumstances change our goals. It happens.
As far as investing in long term dividend paying growth stocks and two non- dividend paying stocks (MKL and Brk.B) I don't know when enough will be enough. I'll stop working when I'm done. When life tells me to stop.
RE: What are you aiming for? - cannew - 07-26-2015
(07-26-2015, 07:08 AM)crimsonghost747 Wrote: "for the moment my goal is simply to create a as-large-as-possible passive income to help me cope financially with what ever life throws my way".
You've stated what took me 30 years to understand, starting at age 40. It's not the size of the pile, the buying and selling, the seeking for the next google or apple, it's investing in Solid companies that have paid and have grown their dividend for many years that counts. Buy those companies, reinvest the dividends, and never sell. You'll see your investment grow and retire happy.
RE: What are you aiming for? - Kerim - 07-26-2015
I agree it is a great topic.
I’ve always felt a little guilty that I do not have an investment plan / philosophy actually written out. Lots of smart people seem to think it is a prerequisite for success. On the other hand, as rayray’s post highlights, three-quarters of life seems beyond planning.
I think I can sum up my approach as: save as much as possible while still using my assets to make life manageable, and occasionally fun. And from what I manage to save, I invest a large portion in great companies that pay growing dividends when they are at fair prices or better. That’s it.
I daydream all the time about being financially independent, but I am not sure it will ever happen. So I don’t have a target number, I’m just trying to amass as much as I can.
My situation is a bit unusual. I’m 45 now, make a solid salary, and live far below my means. If that was the end of the story, I’d be retiring nice and early – maybe by 50. But my daughter was born with some really severe medical problems, which cost thousands of dollars every month to manage. So it really cramps the amount I can save every month. Worst of all, she will likely never be independent, so my planning is not just to fund a normal retirement, but also for a lifetime of care for her. I’m still overwhelmed by the problem, and am not sure what it will take. In any case, I am in no danger of over-saving!
RE: What are you aiming for? - Roadmap2Retire - 07-26-2015
Great topic, crimsonghost.
To put it simply, I am building my own pension. I do not have a pension from work and do not trust the government with the public pensions to still exist when I get to retirement age (I am in my mid-30s). Time and again, we see that public (and private) pensions mismanaged and raided. I do not want to be left in a position where I have nothing to show for...so, I manage my own money, invest to grow my passive income and hope to build enough of a nest egg to retire on dividends.
RE: What are you aiming for? - KenBob - 07-26-2015
I am now 59. I have come to realize that investing for retirement is a worthy goal; however, life does happen. Having gone through several lay-offs and furloughs during the great recession (I am an engineer in the construction industry), I found that an income stream is needed prior to retirement to compensate for life's setbacks.
This has directly affected my investing. The goal must be developing an income stream that can used as required, not going for capital gains that would be converted to income at retirement. For the same reason, investing is now done in a taxable account rather than the tax deferred account. I had to pay a penalty when I needed to withdraw money from a retirement account during one lay-off.
RE: What are you aiming for? - navyasw02 - 07-26-2015
I'm going to retire from the military with a pension. That said, my goal is to save as much as I can before I retire so that when (not if) the government plays with my retirement I wont have to go back to an office just to survive at 70.
RE: What are you aiming for? - rayray - 07-26-2015
(07-26-2015, 09:49 AM)KenBob Wrote: I am now 59. I have come to realize that investing for retirement is a worthy goal; however, life does happen. Having gone through several lay-offs and furloughs during the great recession (I am an engineer in the construction industry), I found that an income stream is needed prior to retirement to compensate for life's setbacks.
This has directly affected my investing. The goal must be developing an income stream that can used as required, not going for capital gains that would be converted to income at retirement. For the same reason, investing is now done in a taxable account rather than the tax deferred account. I had to pay a penalty when I needed to withdraw money from a retirement account during one lay-off.
KB,
Seeing my industry drastically change within the last few years has also made me think about this subject. I would think and ponder different investment ideas in order to prep for whatever situation might creep into my life. It took me a while and the light bulb kind of went off in my head, "Hey, what about dividend investing?!?" I did research and came to conclusion that was the way to go, that I would have been better off if I was doing this 20 years ago. However, in my experience this is not what I was told to do, by friends, family or even financial experts. I was told to stay with solid well managed mutual funds or cash. Well, I should have realized that one of my best investments was that Exxon drip plan, that light bulb should have gone off when I was in my early to mid 20's. Now, having said all this, I did not do terrible in the stock market and I do have a nice padding between my 401k, ROTH and a brokerage account. The problem is that capital gains are inconsistent where dividends are more reliable. I really did not have a clue what my investments were going to bring in--when the stock market was great so were capital gains but when the market was bad...Well, I don't have to tell you what happens to those capital gains. Some of the worse advice I got were from the so-called financial pro's, does the word salesman come to mind? Now, I'm not knocking financial advisers and I will see one, when the time comes, but at least I'm being pro-active in my investment earnings. Since I've been slowly moving towards a dividend growth portfolio I am seeing what my investments bring in on a consistent schedule, it makes me feel more secure. I never saw the full picture in what dividend stocks do and how they compound your dollars. The funny thing is that it's not as hard or complicated as it seems.
RE: What are you aiming for? - notexactly - 08-18-2015
This is a very important topic, great thread.
It's something I am very guilty of, I do not have a clear objective for my investments. I haven't put as much thought as I should. I'm in my early 20's, and initially I thought that this will be a nice form of passive income in about 18 years when I'm 40.
I have also thought about going into real estate. Possibly in about 10 years borrowing against my portfolio to purchase a condo and using the dividend income to help pay off the monthly payments while leasing the condo.
However, there are people likeDividendMantra, who inspire me to save a higher percentage and look to retire as early as 40. There are many options I suppose
Mostly just thinking out loud right now, but for the time being, I'm just focusing on being frugal, investing 100% into big stable companies that dish out dividends, enjoying life, and pursuing my academic/career goals.
RE: What are you aiming for? - hendi_alex - 08-18-2015
We always saved until it hurt, but with no firm plan in place. Also had a fear of the market through most of the roaring 90's. We both have state retirement so savings have always been marked for supplemental needs. My current plan is to invest in a very diversified array of holdindings that have an emphasis toward income (average yield 4-5%) with secondary emphasis toward growth. We won't place any priority on an age appropriate mix but will add more bonds, preferred stocks, and other fixed income in the future when those segments are experiencing 'blood in the streets'. Most of our social security checks will be directed to the investment accounts where only the cash flow will be spent. Those additional savings combined with the growth emphasis should give us a buffer against inflation which I consider to be our greatest enemy.
RE: What are you aiming for? - Rasec - 08-18-2015
I'm in my mid 30s, married with a toddler, I have a good salary and a job I'm passionate about, so early retirement is really not what I'm looking for right now.
Due to my education I've always lived below my means which allowed me to save a fair amount for the last 7/8 years or so. Last 5 years I saved to pay for a house by the beach in my home country (now fully paid) which I rent out for holiday vacations, it generates a nice income plus I have a place to stay when I go back. For the last year money has been accumulating and sitting in my savings account and I had no plan to do anything with it (even though I knew I was losing money every day to inflation), until my manager convinced me to invest in CEFs or ETFs and told me a little about DG. He basically helped me beat inertia with something simple to start with!
I spent almost a year reading about the stock market and the various investment options and realized he was right, DG might be the lowest risk form of investment and I started a portfolio only a month ago with 16 positions + 1 CEF. Right now I'm addicted, I'm reading about DG every day, subscribed to several blogs, this forum, etc. I want to learn as much as possible, and heck, even if I have to lose a couple grand in the process of learning, so be it (hopefully won't happen). I'm looking forward to add more positions asap, but everything seems terribly overpriced apart from energy...
The goal is to grow my total portfolio value for as long as possible, if life continues to smile back at me, i'll keep compounding and one day I'll leave a few millions for my kids, if I need to, I'll live out of the dividends in retirement + whatever retirement I get from the various countries I've lived in, worst case scenario, I'll sell my positions and go back home with the money knowing I had fun with the process.
The scary bit are the taxes to be honest, still trying to crack that part of the story...
RE: What are you aiming for? - rapidacid - 08-18-2015
I have an initial 12 year goal of doubling my current dividend income twice over (compounding 12% a year) : http://cashoiledmachine.com/mission-impossible/
In 2026 my first kid will be going to college. Depending on all other factors in 2026 I would hopefully be able to pay all tuition + expenses with the incoming dividends.
After that I hope to keep letting the dividends compound and eventually leave a portfolio that makes life easier for all my children and grandchildren.