Bert’s 2017 Goals

With 2016 coming to a close and New Years rapidly approaching, we are running out of time to publish our 2017 goals so that we can hit the ground running on January 1st and sprint towards the finish line.  If you haven’t noticed, the two of us have spent a lot of time thinking about taking the right approach to the goal setting process.  We are not aiming to cross a low bar here on this website.  Instead, we have taken months to find purpose driven goals that are challenging and are going to push us.  Will it be comfortable achieving all of these goals…no!  But is that really the point of the goal setting process?  We want to sweat, we want to force ourselves to scrape every dollar together….we want to feel the burn.  Man, I’m starting to sound like Lanny here.  After a month of brainstorming, number crunching, and debates, here they are, my five 2017 goals!

2017 Goal Setting Process

This was not an easy task this year and I feel like I struggled more than ever to set my five 2017 goals.  Each year, I try to set a blend of investing and life goals.  I don’t ever want to be so focused on financial goals and setting up my future that I forget to take time and enjoy what is going on around me now.  Conversely, I don’t ever want to be too focused on living in the moment that I jeopardize my future financial security.  There is a fine line and a perfect balance between the two that can be achieved and my goal is to find that focal point.   The life goals were easy for me to set; however, I ran into trouble ironing out my financial goals.

The uncertainty of what 2017 holds for my wife and me is what made setting financial goals for the year difficult.  A month ago, I wrote about five lessons I learned about the goal setting process to help me focus and set the best goals I possibly could.  Lessons two and three in this article were to set goals that push yourself and are achievable, respectively.  But setting these kind of goals are very difficult when there is a message cloud of uncertainty hanging over your financial situation.  The cloud comes from two very big life situations that are going to significantly alter our monthly cash flow (No – I am not using this article to announce that we are having a baby).  First, I mentioned a few weeks ago that my wife recently graduated from graduate school to become a nurse practitioner.  Once she completes her board exam and passes, she will be able to seek employment in this new position.  With new employment, she will get a much nicer, regular work schedule versus the chaotic schedule of a night-shift nurse and she will also receive a pay increase.  Obviously this is a huge positive on many fronts, life and financially, and we will be able to increase our income once she settles on a position.  However, we have no idea when this is going to occur because I keep encouraging her to take her time finding a new position that she will love versus taking the first position that becomes available.

The second major event is one that I have documented pretty well so far on this website.  My wife and I have actively began the house hunting process and would like to purchase our first home and be settled in before the end of 2017.    We have ironed out our list of must-have features and are off to the races.  I think this goes without saying, but buying a home and the ensuing mortgage will put a significant dent in our monthly cash flow.  DUH!  Plus, there are all the extra costs of owning a home, such as insurance, taxes, maintenance, decorating, etc., that will continue to eat away at our cash flow.  We will find the most frugal way to go about each of those major expenses, but they typically are not avoidable in the home-owning process.  One thing I have learned with the house hunting process is that it is difficult to know when “the one” will be found.  We could find the perfect house during our first home visit, our tenth visit, or our one-hundreth visit.  So we could be purchasing our house in March or December, it is difficult to tell at this time.

Here is my plan to handle the uncertainty of these two major life events for the purposes of setting my 2017 goals.  Plan based on my current situation, ignore the noise, and adjust my goals accordingly when the picture becomes more certain.  Therefore, my financial goals will not project or account for these two situations since I cannot estimate the impact they will have on my finances or when they will occur. However, once I can measure the impact, I am going to adjust my goals accordingly and will write an article to explain my thought process.  So for all financial goals in this article, you will see and asterisk (*) next to the specific dollar amount because hopefully they will change as our life changes.

my five 2017 goals

Goal #1: Add at Least $45,000* to My Portfolio

Goal #2: Cross $6,250* in Forward Dividend Income

I decided discuss goals #1 and #2 together since they are both so closely correlated.  Also, please note the asterisk surrounding the number as this will be subject to change once our two major events unfold during the year.   In the past, I have focused my goals on investing “New Capital,” which only accounted for funds that I transferred into my savings account for the year.  Sure, that captures an important piece to helping my portfolio grow, but that really doesn’t tell the full picture about how your portfolio and dividend income can grow during the year.  This realization hit as I watched Lanny’s year unfold.  About halfway through the year, Lanny decided to change his contribution levels and max out his 401k contributions to take advantage of the tax benefits.  As a result, he had less capital available to purchase individual stocks as he had in earlier years.  Did his dividend income suffer? Clearly not considering he recently crossed $8,000 in forward dividend income.  Was 2016 an investing failure because he didn’t transfer cash from his savings account to his brokerage firm to invest?  Heck no – he clearly stated so last month and I can’ find a reason to disagree.  So for me, focusing only on the last scenario doesn’t account for the full investing picture, especially if I decide to perform a similar tax move as Lanny.  That is why my goal this year will reflect all capital placed into the market, not just cash transferred in post 401k contributions and re-invested dividends.

I identified three main sources that will drive the $45,000 contribution and $6,250 in forward dividend income figure for my family stock portfolio, which currently has dividend income of $4,515 (post update article where I began reporting my wife’s account).  These three sources will be the key to my success and here are some of the assumptions I used to calculate my totals.

  • 401k Contributions and Employer Matches – Both of us contribute, at a minimum, the amount needed to receive the full employer match.  This is a no brainer.  For me, I have been slowly cranking up my traditional 401k contribution to automate my investing and to receive a larger tax benefit.  Now, my contribution sits at 10%.   Using our current salary figures, match percentages, and dividend yield on the funds we invest our contributions in each paycheck, this will account for $14,600 in contributions and an estimated $286 in forward dividend income.   This amount could potentially change if I receive a raise from my employer halfway through the year or if I decide to embrace the full-blown tax benefits of the 401k.
  • Dividend Re-Investment and Dividend Increases – Ahhh, the power of dividend re-investing.  Isn’t this the name of the game and the reason why all of us are so passionate about finding dividend stocks that pay a growing dividend payment?  As I mentioned earlier, our forward dividend income at the moment is $4,515 and we anticipate this amount being re-invested fully into our portfolio during the year.  Plus, each quarter we will receive a slight increase in re-invested dividends as the power of compounding begins to set in.   With each re-investment, our forward dividend will increase as well, so to estimate the impact each re-invested dividend will have in growing my forward dividend income, I multiplied each stock’s forward income by their current dividend yield.   Lastly, I estimated my portfolio’s dividend growth rate at 4% to be conservative given the slowdown in dividend growth rates experienced during the last few years.  There have been some surprises lately, but my portfolio’s dividend growth has been pretty meager in 2016.  In total, re-investing dividends and the impact of dividend growth will account for $4,515 in contributions and $283 in forward dividend income for the upcoming year.
  • Individual Stock Purchases – Finally, the plug of the equation.  If I want to hit $45,000 in contributions and $6,250 in project dividend income, the remainder of the difference will have to come from individual stock purchases.   This amounts to $25,885 in individual stock purchases that will produce $1,166 in forward dividend income, or an average yield of 4.5%.  The key will be to not chase yield in my purchases just for the sake of hitting my goal, so don’t worry, I’m not going to buy risky high yielding stocks just to hit this mark.  There are plenty of great dividend paying companies near this mark for me to choose from.

Goal #3: Stick to My Student Loan Payoff Plan  – Earlier in the year, I wrote about how I am aiming to pay off my wife’s student loan debt in 6 quarters, one to match each semester of schooling she was enrolled in.  I won’t go into too much detail in this article since it is covered extensively in the original article; however, my plan is to knock this goal out of the park and stick to the plan.  I have my mind set on paying off our student loans quickly, which is aided by the stock market that continues to shock us all, so it is up to us to meet this goal.  Following this plan will require quarterly payments of approximately $4,000 to the government.  Time to put my money where my mouth is!

Goal #4: Read 1 Book per Month – And now, I enter the life goal section of this article.  Earlier in the year, I wrote about how I want to read more books.  You can’t doubt the benefits – a lot of knowledge to be learned, improves sleep, it is fun, time away from a computer screen, and so on.  Plus, I may uncover something that really interests me that I previously was unaware of!  I know and I understand the benefits, but I have never put in a serious effort to consistently read and get myself hooked on the hobby.  Well, 2017 is presenting an opportunity to change that as I am challenging myself to at least finish one book per month.   I’m not restricted myself to a specific genre, such as only reading finance books, I want this goal to be accomplished by reading a blend of biographies, mysteries, fiction novels, investing books, history books, and so on.  Much like investing, the more diversified, the better!

Goal #5:  Travel to 3 new places – Last, but not least, the famous travel goal.  Most people seem to have one goal of this nature.  Well, for the first time, my wife and I are not going to be in school,  won’t have a wedding to plan, and won’t have kids.  The last one will eventually occur, so my wife and I want to make sure we take some time to enjoy our marriage in the pre-kids, no school/planning stages of our lives.  We both like to travel, but aren’t obsessed with it.  We won’t be selling our stuff and backpacking around the world for the next three years.   However, we also recognize that there is so much of the country, let alone world, to explore.  Our goal is to identify and travel to three new places that we have not previously visited together.  The place can be within a couple of hours driving, a cheap flight away, or on a different continent (most unlikely of the bunch, but I want to keep our options open!), but the important thing is that we are discovering and experiencing a new place together.   I’ll keep all of you updated with pictures on our Twitter account when we finally settle on where will will be going!

What are your thoughts on my 2017 goals?  Any travel suggestions for this couple from the Midwest?  What do you think about how I handled setting financial goals with two major uncertain financial events looming?  Would you have handled it differently?  Do you have any great book suggestions for me to read during the year?  Do you share any of the same goals as me?

-Bert

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40 thoughts on “Bert’s 2017 Goals

  1. Great goals, Bert! I like how you decided to handle the uncertainties of your life situations. Are you planning to stay where you are now? To me, it sounds like you should see what happens with your wife’s job prospects before buying a house.

    I like how you mixed in life goals as well. Perhaps I should do that, too. I added a health goal, but no life goals.

    • Thanks Ferdi, much appreciated. We aren’t moving until my wife’s job shakes out. So much depends on that. My realtor was actually making me mad because she was trying to force me to get a pre-approval earlier in the year. I told her multiple times that I didn’t want to run my credit and check it out since so much is going to change once my wife gets her job. After insisting and insisting, she finally backed off when I said no and held firm. It just didn’t make sense to me to make such a big decision (buy a house) when your income is going to change and that change could impact your decision.

      What type of life goals are you considering??

      Bert

  2. Hi Bert,
    A great set of goals to start the year with! Looking forward to watching you beat them. It’s good to plan on being flexible due to changing circumstances as you’re doing.

    The 4.5% yield on individual stocks seems a little high to me, but hopefully the underlying growth will be more than 4% so will make the overall goal easier. I’ve used a 3% growth average for my 2017 projections but then I’m not 100% stocks in any case.

    Wishing you and your family a happy and successful 2017,
    -DL

    • DL,

      Thank you very much. It should be fun doing what I can to crush them this year haha 4.5% is definitely high and the picking of quality stocks above this mark is slim. But I assumed a 4% average dividend growth rate, which I thought was conservative. So each individual stock I own that increases their dividend over 4% will help me reduce the yield I need on new stocks purchased to beat my dividend income goal. Let’s see what the year has in store for us!

      Best of luck to you and your family in 2017 as well. It will be a fun ride, so buckle up!

      Bert

  3. Awesome goals. I like your approach of adjusting as go since you have the job and house uncertainties.
    We started maxing out our 401(k)s a few years ago and never looked back. I like not having to pay taxes on those dividends and hopefully be able to withdraw under the Roth IRA conversion ladder when we’re retired.
    As far as life goals, we started a new routine this month which includes reading more books, practicing piano, dancing salsa, meditating, writing and exercising. It’s a life changing routine and we’ll be talking more about it next month on the blog.
    Good luck on your goals and cheers to a successful 2017!

    • Enchumbao,

      Thank you so much for the comment. Hopefully when those two situations become certain I can take the opportunity to pursue even more aggressive goals. Smart idea maxing out your 401k and planning the conversion. I know that is what Lanny is planning to do as well and I may be hopping on that train too.

      That is a very fun routine. Have you played piano before? I played for 10 years and will sit down periodically. I can’t wait to read your article about it and see what ideas I can steal from you 🙂

      Bert

  4. Seems like some very nice goals to achieve for the next year, Bert! And good to see the book reading goal up there too 😉

    It’s probably best to stay flexible with all the upcoming plans for both you and your wife. But it’s still nice to have some goals to work with in the first place. Very interesting how things will turn out next year.

    I’m still pondering about setting my own goals for 2017, especially because the 2016 were a bit overambitious at some points… So I’m thinking of not only setting goals on what to achieve but more on how to get there as well.

    • Thanks Divnomics! When all was said and done, I was happy with the process for setting goals with so many major, uncertain events set to occur in the coming year. You must be flexible and be willing to adapt when the situation calls for it. Do you have any good book suggestions for me?

      Definitely make sure you can achieve your goals, it is an important part of the process. That shouldn’t take away from being ambitious though, you want to push yourself. But at the end, you need to make sure you are getting to the mark you are pushing so hard for.

      Best of luck and I’m really looking forward to seeing what you are able to put together in 2017!

      Bert

      • It’s the best part when you’re are satisfied with your own plans. Nothing can beat that. Sticking to fixed goals without any room for adjustments and flexibility isn’t always for the best. Hope we can beat some new goals for the next year!

        As for books, currently reading Sapiens by Yuval Noah Harari. Might not be for everyone, but heard some great stories about it.

        • Thanks Divnomics! I am pretty amped up and ready to go with these goals. Am happy that 2017 is finally here so we can get the ball moving! I’ll have to check that book out, thanks for pointing it out to me!

          Ready for 2017??? LETS GO!

  5. Awesome goals Bert! I wish you the best of luck in 2017! I plan to publish my 2017 goals in a few days. For some reason I like to wait until the start of the new year to do this. 🙂

    • Thanks dan! Looking forward to reading your goals as well when I get the chance to sit down with a nice cup of joe. I get where you are coming from. Last year I published my goal article in early December and it felt like I was cheating by getting an early start on the income figures. This year, a few days before the end of the year sufficed for me.

      Have a Happy New Year. Cheers to a prosperous 2017!

      Bert

  6. Great goals Bert!

    Reading more was my goal for 2016. I set my pace at a chapter a day everyday. I ended up finishing 22 books! It was a life changing experience for me. I hope it will be for you too.

    Sincerely,

    Ray
    SmartMilitaryInvestor.com

    • Thanks Ray! I like the chapter a day idea. It gets you excited to read every day ad it is a very manageable about. If you are reading before you go to bed, then perfect, one chapter later you should be out cold. If not, there are always plenty more chapters for you to read. I’ll make sure to keep you updated with how it all goes.

      Have a healthy and Happy New Year!

      Bert

  7. You have outlined some very solid and approachable goals. I commend you for saying point blank that you will not chase yield to hit your ’17 projected dividend income. As we all know too well, chasing yield never ends well over time. Of course, goal #5 sits well with me as I love to travel a lot and visit new places all the time. Invest and spend on experiences rather than things and in the long run you’ll be happier and richer. Thanks for sharing. Look forward to seeing how ’16 ended for us all.

    • Thanks Divhut, much appreciated. The last thing I want to do is to chase yield and take a major step back in future years when the company ultimately cuts its dividend. Plus, that is the wrong goal to be promoting to investors. By the way, traveling is a lot of fun, isn’t it? What’s more fun than sharing a new experience, new city, with a loved one and possibly your family?

      Let’s finish 2016 strong here!

      Bert

  8. Excellent to hear, looks like you guys are doing well.
    I am just starting out myself so I am always looking for other peoples ideas.
    Very good to see that your portfolio is quite diverse. Something to aspire to for myself.
    All the best

    • BHL,

      Reading other peoples ideas in the community is a great place to get started. We all do an excellent job being open with each other and motivating each other to push ourselves across the finish line. Best of luck in the beginning stages of investing, it is such a fun and exciting experience. What stocks are you considering now??

      Bert

  9. These are some solid goals for the year especially the read more books one. I started getting back into reading a few years back and it is truly a worthwhile hobby. I read mainly fiction novels but sneak the occasional finance book in there once in a while. Have any particular books you want to read on your list?

    • Thanks TITM! Reading has been amazing and the Kindle my wife got me was definitely a gamechanger for reading. Fiction books are fun and offer a nice change of pace, especially considering I stare at numbers all day at work and afterwords with the blog. My mind sometimes needs a mental break from finance related stuff and I enjoy the madness of a great fiction novel. Any good suggestions for me??

      Bert

  10. Europe is pretty cheap right now if you’re looking to travel abroad. Some flights to Western Europe (think London or Paris) are less than $500 right now. If you can swing some frequent flyer miles, you could go for even less money. Both of the cities I mentioned are great to visit. The strong dollar will also make lodging and food cheaper.

    • Chris,

      I’ve been reading a lot about Europe and how now is the time to strike and take a trip there. My wife and I have always wanted to go to Europe and are planning on taking a trip at one point over the next five or so years haha I’m curious how much an international flight would be in terms of frequent flyer miles….hmmmm looks like you have given me a new research project.

      Thanks for the suggestion!

      Bert

      • It depends. Are you looking to go coach or business? Are you going in the summer or in the off-season? What airline are you taking? I’ve written up a few articles on how I’ve scored some pretty cool trips to Europe with miles. The best one was probably booking six off-season tickets to Madrid and Paris on United over last spring break for 240,000 American AAdvantage miles. Unfortunately, American changed their off-season dates and raised the round-trip price a bit. I’ve got a pretty epic trip booked for next summer that goes through four cities for 60,000 United Mileage Plus miles apiece. Here’s how I scored that one:

        http://wp.me/p339uI-8D

        • I forgot to say that all of those flights were in coach (AKA economy). I also forgot to point out that the last time I checked (which was a few weeks ago), Alaska Airlines had not yet updated their award tickets to price the same as the new American prices, so it’d be 20,000 each way between around October 15 and May 15.

          • Chris,

            I would definitely fly coach though, don’t want to spend money on the flight and would rather have it to enjoy the final destination. My United points total is only around 30000, so I won’t be able to fly there on just points. I was checking flights last night after our initial comment and there were some different ones to Europe for under $500. Maybe I’ll save those for a flight within just the US. Might be hard to pass that up! I wish I could use Alaskan Airlines more here in Ohio, but there just aren’t too many routes available and I haven’t had the chance to amass any points through their airline.

            Appreciate the info here! I’ll let you know if I end up booking any of the flights.

            Bert

          • Bert,

            30,000+ miles would get you a free one-way ticket, but it might only save you $200 right now, depending where you want to go, but my itinerary to the Czech Republic priced out at about $1,200+ when I booked it on miles for $83 each.

  11. Bert,
    Sounds like you have a lot in the air to juggle at the moment. It’s hard to decide on a house location before really knowing where your wife may wind up working. Until you know that, it’s tough to commit additional capital to the stock market as well. In the interim, you can always just raise cash to have a cushion!
    Looking forward to seeing your 2017 goals as they unfold.
    Take care,
    – Ryan

    • Ryan

      Thanks for the comment! I agree, my wife’s career decision is too big of a decision and will impact our finances too much to commit to buying a house or now before that situation irons itself out. We have a pretty comfortable cash reserve waiting for our house purchase, so I’m comfortable investing at a regular pace as long as I don’t tap into those reserves. But who the heck knows what the future is about to bring us…I’m excited to find out though!

      Bert

  12. My vote would be to go to Iceland. I am trying to convince my wife to go and flights are fairly affordable at around $500 here in the DC area. There’s one main road that goes around the island so from what I’ve read it’s somewhat hard to get lost. The scenery is supposedly beautiful and the temperature at the end of August is still in the mid 50s. But I guess we’ll see what my wife says 🙂

    I look forward to hearing where you all decide to go.

    • My friend and I were talking about Iceland last night. He has been there before and cannot say enough nice things about the place. And yes, he mentioned how affordable it is to go there. I will definitely need the simplicity of the one highway system to avoid getting lost haha

      I’ll make sure to keep all of you updated with how our travel schedule plays out and where we end up going!

      Thanks for the comment.

      Bert

  13. Bert, I think you have some great goals as well. I really like your goal of reading more. I am constantly reading investment books and can’t get enough of them. I see that “The Intelligent Investor” was on your list to read. Have you started yet? It is a great book that I’ve re-read several times. You might also consider “Uncommon stocks and Uncommon Profits” by Philip Fisher. Slightly different from Graham’s style but helps you think about really high quality companies to focus on.

    • Thanks Mike! It is sitting in my queue. I’m pissed off because I had it on my Kindle, read the first few chapters, and then my loan from the library ended so I couldn’t finish the book. Now I have to wait until it is my turn again. Do you have any other investment book suggestions?? I added the Fisher book to my list of books to read as well!

      Bert

  14. No problem Bert. I also really enjoyed “Stocks for the long run” by Jeremy Siegel, “One up on Wall Street” by Peter Lynch, and ” The most important thing ” by Howard Marks. If you want to be really serious then there is always “Securities Analysis” by Ben Graham as well! I’ve almost given you your 12 books for the year!!

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