Sunday, January 12, 2020

Investing Goals. Why Have Them?

What is Your Why?

So, when setting a goal for your investments you need to ask yourself "What is your why?"

When setting your goals it helps to know your why
Know your why and set a goal

Why do you need to ask this?

Would you leave your house on a journey before deciding where you want to go? Are you going to the store? Are you taking a trip around the world?

You need to know where you are going to, just so that you will know when you get there.

So make a plan. Set up a series of way points. So you can check your purpose and success at various times. 

I have wandered, Now I have Goals.

Ten years ago I set up a Roth IRA, It is just the thing to do when you live in the United States and plan to retire. My only plan back then was to build a portfolio that would build up my net worth. It did just that. I have a nice little portfolio. 

Then about three years ago, I noticed a problem with the income stream of my Roth IRA. I had four months of great cash flow. March, June, September and December. The other eight months were pretty poor, from several hundred dollars in the quarter months, to one or two dollars in the other months of the year.

I think this is a common problem with U.S. portfolios, so many companies that pay dividends pay out in those quarters, not many pay out in the other eight months,

What is my Why?

So I had to ask myself was I happy with the situation? The answer was no. I did not want the majority of my income coming in those quarter months. I wanted smoother cash flow.

I needed new goals.

I decided to build my dividend  income in January, February, April, May etc. to just $100 per month.

That was three years ago. I added more stock from companies that paid dividends in those months, Apple, Starbucks or Disney. 

I also added stock in monthly dividend payers, the likes of Realty Income and other real estate investment trusts and a mutual fund or two.

Of course monthly income also caused my quarterly months incomes to rise too, but my aim was not to match the quarter month income. Just to increase my income cash flow in the non quarter months.

This week-end, looking at my Roth IRA income for 2020, I see my income for those eight non quarter months is now set to be over $100 per month.

Goal Achieved!

Now I will expand my goal to make my non monthly dividend income to reach $200. 

That should not take as long. With dividend re-investment plans and new cash going into the account.

Plus I hope a little in capital gains.

Why have investing goals? Simple, for me. To help you get to place that you want to be.

Happy New Year. I wish you health, wealth and happiness.

Please share this post with your friends and family if you liked it. Thank you.

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