I love this time of the year.  Time to sit down in a quiet space with no distractions going on and reflect on the year a bit and then prepare for the successes and even failures of 2016/the next year.  2015 has been an amazing year, big ups and big downs throughout this time period – but that’s how we learn, that’s what makes us stronger and it’s on the pursuit of being happy.  Cannot wait for what the upcoming year has in store and obviously will try to make due on my goals that I am establishing for the upcoming 12 months.  My 2016 goals are as follows:

Also, I’m excited for Bert and his 2016 goals that he posted last week.  He is set up to have a life-changing year and I cannot wait for his wedding.  You are reading the Best-Man typing right now and I cannot feel any more honored than I am right now.  Bert’s one of my best and closest friends, essentially a brother to me and seeing him and his beautiful & wonderful fiance become one in marriage is tear-jerking.  Bert deserves to have incredible things happen and these two are damn lucky to have each other.  Bert’s going for the main thing in life – being happy with someone you love, so all of these goals, investing, writing, being the  small silhouette in our icon/symbol, driving his Camry with endless liabilities (part 3 haha) – don’t mean anything when it comes to being happy with the one you love.  Congratulations Bert, bottom line.  Excited for you, very excited for you.  Now that you are all choked up reading this and also congratulating Bert, let’s look at my 2016 Goals for the upcoming year:

1.) Dividend Income Projection by 12/31/2016: Given the extreme challenge I set for myself for 2015 – where I began at a projected $5,062.57 on 12/31/14 and set a goal of $6,750 – I was very ambitious, to say the least.  I thought with the compounding of the dividend reinvestment, plus the dividend growth and my desire to place as much capital into the market as possible would get me there.  Getting me there it did.  Until unforeseen events happen, that one cannot control or predict, with the biggest set back coming from KMI’s news to cut their dividend given their current debt, investment and capital structure – had an impact of $210 alone on my portfolio.  Going into the end of 2015, I am currently at roughly $6,505 for projected income.  I do not plan on making any further contributions as of right now, and am hoping to open 2016 with a bang.  Therefore, I am setting a nice target of $8,000 by the end of 2016 in projected income.  I achieved increasing my annual amount by $1,442 during these last 12 months – well, with more income and more power, $1,500 doesn’t seem like too lofty of amount to have an increase.  Here is how I will get there:

a.) Dividend Income of $6,505 reinvested at a weighted average yield of 3.91% = $254 added via reinvestment alone.

b.) Dividend Growth on $6,505 on a weighted average dividend growth rate of 6.27% = $407 added via dividend growth alone.

c.) 401K Matches, considering I still will be at my employer, of $2,250 (approx.) at 2.25% yield = $50 added via 401k Match (power here is real).

d.) Contributions of $24,000 throughout the year or $2K per month (I did $28,131 this year not including dividends or 401K purchases) at 3.30% = $800 added.

Total Amount to be added above = $1,511.  This will help me arrive at my goal and I feel like it’s still hard, but yet can be attained with discipline.  Big one here, $8K is $667 per month, do you have any idea what you could be doing with that income coming in from your portfolio?  Pumped and excited, LETS GO.

2.) Keep Trading Costs on the year below $100.  In 2015 my trading costs were an alarming $162.70!!  That is insane and is just quite a bit of capital to use for trading.  At a 4% rate, it takes $4,067 to keep those trading costs up and also, $162.70 produces $5.37 in forward income as well.  Not this year – my plan is to keep trading fees below $100, which to me means bigger purchases and less frequency in activity, as I had quite a bit this year.  A decrease of $62.70 would mean a 39% decrease in costs, which helps in purchasing more shares or to use on other items.  I am excited to kick the crap out of this one.

3.) Make 3 trades north of $3,000.  Some may think this is foolish, but this also goes hand in hand with my goal #2 above to keep trades down.  If I use 9 out of 24K of available capital on 3 trades only, it will reduce chance of error on the trading fee portion, as well as reducing my overall expense as a ratio per trade, i.e. $6.95 dividend by $3K is 0.23% as opposed to 3x that when I make only a $1,000 investment.  Given what I learned with KMI’s cut, I look forward to making these trades into dividend aristocrats – some may be the one’s on Bert’s always buy list, this could mean they are a foundation stock for a portfolio or it could be another investment into ADM that is sizable.  That I’m not sure of, but I’m looking to make 2016 an investing year that is simple.  Bigger purchases, grabs more income in a big fashion, reduces expenses and also keeps my activity levels lower.  The more fundamentally sound the investment is, the less I will have to scour the stock prices on a daily basis.  I like this goal, as I feel it will reduce time, stress and expenses.

4.) Monthly Plan Expenditures Goals. This is going to be a different variation/combination of a few items to keep my expenses and contracts in check – including phone, insurance, internet, etc..  I know Bert also had a continuous and endless liability discussion surrounding his car, as well as my most recent update on my auto insurance.  Damn, is all I have to say, as well as our pursuits on helping my mom out with her battle with AT&T, and Bert’s debate on cutting the cord.  It all comes down to keeping expenses in check.  One combined goal here: I want to switch from Verizon (VZ) by the end of the 3rd quarter, my Auto Insurance to be, by mid year, below $70 per month annualized, and also – to switch from AT&T’s internet to a new provider that provides after speeds at a lower cost than I am paying now by June of 2016.  There we go – Cell Phone, Insurance and Internet – keeping those all in check.

5.) $2,000 extra towards the Mortgage in 4 installments.  I achieved this goal in 2015, fairly easy, and I like seeing the astounding results if you keep this up.  Essentially, we all know the debate of paying your mortgage off early or investing your savings (I love hearing everyone’s thoughts on that subject), but also – there is the rule if you make one extra payment towards your mortgage each year, you can reduce the life by 5-6 years.  In this case, my mortgage (P&I) is approx $447.  Therefore, $2K is more than 4x that amount, really speeding up the paydown process.  I accomplished it in 2015 and will set it again for 2016.  I believe this will be reducing my mortgage term by almost 10.5 years, and I like the sound of that, plus over $25K of interest.  Would like to see $5,300 in more cash flow in less time per year (12 mortgage payments) – just need to keep that property tax in order!

6.) Sell 3 Items on eBay.  I am going to go through my old clothes that were fashionable and never worn by me in the past (some still have tags) and sell them on eBay – as long as I make a net profit after shipping and fees on them.  I have done this almost every year, I hope to make approximately $5 per shirt.  Why?  I can bring in a few dollars and also clean out what’s in my closet.  I like simplicity and this is a way I’ve been cleaning out.  Also, I typically donate 3-5 bags of clothes per year and will challenge myself to create 1 very large bag to donate this year.  So goal is – sell 3 items and donate 1 bag now.  Nice.

7.) Go on a trip.  I want to get away again, I was able to do some pretty nifty adventures/trips in 2015 – West Virginia cabin/weekend bachelor trip, Seattle for 3 nights, Florida twice (one was a wedding, the other a December getaway) – another adventure would be great.  Could be another one to Florida, maybe somewhere to Europe, Boston or South Carolina.  This will all occur post March as busy season will wind down at that time.  Excited for exploring.

Goals Conclusion

Overall, very financially based above there.  There are the generic items – such as – working out 4 times per week, packing more lunches while OUT of town for week as opposed to going out to eat, then there are the big challenges for learning an instrument or language, something I still extremely want to do but haven’t dedicated the time to it.  It’s hard to dedicate the time given my work schedule, the traveling and the unknown schedule.  I may have to change something else then, if you catch my drift.  All in all – 7 big goals there that you can measure without a shadow of a doubt.  I know the focus I have there are finances until #7, as I’ll keep maybe a few other things close to my heart, but excited for 2 things – to finish 2015 and to crush 2016.  I am more than passionate about creating additional forward looking income to further reduce the stresses of life and the focus of using “money” as a means to what you do in your life.

What’s interesting, as well, is that you are simply exchanging one asset – cash – for another asset – ownership into an entity.  Individuals feel to believe that when you invest in a company that your money is gone, forever.  What they fail to realize is that the equity market is one of the most liquid markets that there is, and that the cash flow off of a business is far greater than cash flow, at least in today’s age with interest rates, from cash in a bank account or under a mattress. I am looking forward to accomplishing my goals in a much more orderly and systematic fashion than I have in the past.  I’ll continue to buy stocks that are undervalued per our dividend diplomat stock screener and will not use the 5% rule on a decrease on my last purchase as the golden rule.   An example is – if I bought ADM at $34.50 – as long as it is still undervalued right now at $36.65 – I will buy it and attempt to use the $3K capital contribute goal above at a minimum.  Example, obviously.  Maybe it’ll be the other stock on Bert’s December watch list, who knows, though I think he used Target (TGT) from much discussion from me, as well as my stock analysis on them, excited to see if you get it Bert.  With that, what do you think of my goal list?  Achievable?  What’s the hard one?  Too hard or are they too easy?  Please let me know and congratulations to everyone for putting another year in the books and the continuous look ahead!  Happy New Year!

-Lanny