Estimating Your Dividend Growth Income

[cannew]

I've usually just picked a figure, say 6% or 7% and multiplied last years income to get my next years estimate.  But I thought I'd try to be a bit more accurate, or at least more creative.  So I've decided to:

1. Take the 5yr Ave DG% of each company
2. Multiply it by the % holding of each of my stocks, to get an Ave Gth %
3. Then add all the Ave Gth%, to get an estimated div gth for next year.

I only own 12 stocks so mine was fairly easy to compute, which came to 8.17%.  As of today, I'm up 6.08%

I'll post my actual income increase% at year end.

ps: At the end of Dec I'm going to set up a new worksheet with the opening %Holdings as fixed amounts (actual as of Dec). Because I reinvest most of my dividends, the %Holdings will change slightly during the year so I'll have a different worksheet to reflect that change. Then at the end of the year the difference in the income amount will be due to the reinvestment.

[crimsonghost747]

I have a feeling that your old system might even be more accurate since you still actively follow what's happening and you'll have a pretty good estimate of what the growth rate for this year will be. In your new system you are just basing your estimate based on the numbers of the past 5 years.

Personally I just pick a nice round number as my goal for the year. It's been awfully close even though there isn't a single calculation involved.

[EricL]

(06-04-2018, 10:59 AM)crimsonghost747 Wrote: I have a feeling that your old system might even be more accurate since you still actively follow what's happening and you'll have a pretty good estimate of what the growth rate for this year will be. In your new system you are just basing your estimate based on the numbers of the past 5 years.

Personally I just pick a nice round number as my goal for the year. It's been awfully close even though there isn't a single calculation involved.

I always update my spreadsheet at new increases are announced, so I always have my projected income up to date. I'd probably just throw an extra 5% on or something if was trying to get a more exact number.

It will be many years before I actually draw on the dividends for income, so the exact amount doesn't mean much now, other than the dividend reinvestment buying new shares that I get from it.