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2016 Goals – 2 Month Status Update

Posted on February 29, 2016 in dividend investing

Now that we’re two months into 2016, I thought I’d take a minute and check on the status of my 2016 goals. Below you’ll find my 2016 goals reiterated, with my status updates in blue.


  1. $2,750 in dividends
    In 2015 I earned just over $2,000 in dividends. Check out the chart image below to see how this has grown since 2012:
    Capture
    It may be a little hard to tell, but from 2012 – 2013, my dividend income increased by 1,015%, from 2013 – 2014 it increased by 264%, and from 2014 – 2015 it increased by 157%. For 2016 I’m aiming for an increase around 35%. This is achievable and could very well be exceeded, we’ll just have to see how the year goes. I admit that this is kind of a small goal and not very aggressive. I wouldn’t be surprised if I beat this one easily this year.One thing about this year – if the markets continue to be slightly depressed, as they are now, this could be a great opportunity to load up on quality stocks at uncommon prices. That’s a fantastic way to really get the dividend machine rolling. Look for opportunities to make smart entrances into great companies that are being unfairly punished this year.
    2016 goal #1 will be more of a challenge than I originally anticipated. I finally got smart and cleaned up my portfolio (a post for another day) and as a result I closed positions in two junky bond funds that I was in because they paid out a pretty high monthly dividend. Those positions lost around 25% – 35% over the last couple of years, but I basically broke even when I closed the positions due to dividends received. Lesson learned – don’t chase yield. At this point, I’ll be happy to match or just slightly exceed the approx. $2,000 in dividends I received in 2015. We shall see how this plays out during 2016.
  2. $3,500 in side income. I’ve got a couple of small side projects that I work on right now. Both of these have been more effort than they’re worth, from a purely financial standpoint. Last year I probably took in about $2,500 from these two projects. I could see this number being anywhere from $2,500 to $10,000 this year – it really depends on a few different things – some are within my control, some are not.
    2016 goal #2 is underway. I anticipate picking up the bulk of this in the 4th quarter of 2016. As of today, I’m approximately 0.5% of my way to hitting this goal. I’m fairly optimistic that I’ll meet or exceed this number.
  3. Pay off the car loan. We bought a 3-year old Subaru Forester in June 2015. We decided to finance $10,000 because the money was so cheap and those dollars could be more productive in actual investments and not in depreciating assets (side note, I hate the fact that rapidly depreciating assets are called assets). We’ve already retired approximately 28% of this debt and I anticipate paying it off completely in 2016. Mostly just because it’s annoying and while it’s definitely true that our money could be more productive elsewhere, I’m also pretty happy to clean up the balance sheet a little bit.
    2016 goal #3 is on target and I feel pretty good about achieving this goal. When I originally posted this, I noted that we had retired approximately 28% of the original debt. We are now up to just a shade over 40% paid off. We should be on track to make this goal by year-end.
  4. Figure out what to do with money I’m holding in trust for my daughter. We have a bit of money from grandparents and great grandparents that we are currently holding in trust for our daughter. This is currently sitting in a savings account. I have delayed setting up any kind of custodial account because I wanted to figure out the best approach, but the time has come to actually do it. I’m not at all convinced that a 529 or ESA make sense – I think the tax advantages are actually pretty slight and the purposes are too specific for my liking. I’m leaning toward establishing some sort of custodial trust account that would be turned over to my daughter when she reaches a certain age, something like 25 or 30. I’m not 100% sure yet.
    2016 goal #4 is partially achieved. As noted in this post on opening a custodial investment account, I opened the custodial account and transferred most of my daughter’s cash into the account. I made investments into CL, HSY, JNJ, KR, and SBUX on her behalf. I also left her a chunk of money in cash in a savings account. The idea is that those positions will be held (and added to) until she has reached an as-yet-undetermined age, at which point control of the assets will be turned over to her. In order to fully achieve this goal, I need to still explore a trust arrangement. 
  5. Optimize my holdings in my employer-sponsored 401k. I contribute enough to my 401k to get my full employer match. Right now that money is split up between several funds that are offered – some are ok, none are great. I’m not in love with mutual funds. I actually don’t like them very much. But I want to research what my options are here and make the most intelligent allocation that I can. There may even be a self-directed option. I just haven’t taken the time to really look.
    2016 goal #5 is probably about as complete as it’s going to be. I looked into this. The bottom line is that like most employer-sponsored retirement plans, mine isn’t great. I’ve made my selections and am as happy as can be with what’s available to me. I’ll keep investing in this plan up to the point of receiving the full match from my employer, and any money I want to invest after that I can do on my own – I have several vehicles for doing that: traditional and Roth IRAs as well as a regular taxable investment account.

    So there’s my update. Mostly on track. A couple minor setbacks. I’ll check in again later in the year with another update on my 2016 goals.

 

7 thoughts on “2016 Goals – 2 Month Status Update”

  • Optimizing your 401k holdings is really important. A lot of investors don’t pay attention to their 401k the same way they do individual stocks. Many 401k plan administrators offer funds with outrageous management fees. My new employer allows for a portion of my money to be self directed. I just opened that account and was able to funnel 25% of my 401k into a brokerage account with no trading restrictions.

  • DivHut says:

    Great job growing your dividend income stream over the years. Keep buying high quality names and watch that passive income continue to rise. On another note, I set up a custodial account for my child and added dividend paying stocks to the account. The plan is to always reinvest the dividends for the next twenty years or so as we grow out the portfolio holdings. I recently wrote an update a few days ago about the custodial account. Thanks for sharing.

    • Matt says:

      Thanks for sharing! I’ll check out what you did with the custodial account. I’m also planning to reinvest the dividends for my daughter for the next 25 years or so and then turn it over to her when she’s 25-30 years old. I think by that point it should be a significant portfolio and should hopefully put her on great footing towards achieving financial independence.

  • I love your progress so far Matt. Keep up the great project. Having side hustles is always fun, but you hit the nail on the head. They sometimes can exhaust a lot of energy. For me, I found myself asking was it really worth it in the end? Hence why I am not performing some of them still haha

    I love the trend your income is making. As you mentioned on my website, the cleanup has seemed to do some great things for your portfolio and you definitely seem much more content about it. I agree with the other commenters here, maxing out your 401k from your employer is huge because of the benefits the all might match can provide. Instant gains without performing a thing.

    I’ll be jealous as heck of you when you make that final car payment. I have two more years to go and cannot wait for the day that is gone. It’ll be a nice jolt in additional free capital each day.

    Take care and have a great weekend.

    • Matt says:

      Thanks!

      I’m hopeful that my side hustle income can increase and the return will become more worth it. I think that should happen this year.

      I’m definitely happy that I did the portfolio cleanup. I’m in a pretty good place right now. If I was not able to sell any stocks in the next 10 years, I think I’d be pretty happy to sit with the companies I own right now. I keep looking for good places to add to my positions – just have to wait and find the right opportunities.

  • Jonny Pean says:

    Planning your dividends wisely is a great achievement. You have done that successfully. great!!

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