Goal setting for 2017

As 2016 draws to a close at the end of this month, I thought it was time to think about 2017 and what I want to achieve during planet earth’s next rotation around the sun.

At work, I will also have a my end-of-year-talk with my manager soon. Those talks typically evolve around the targets and goals we set for 2016, how it went during the year, where I am now and what I want to achieve next year. Everything is usually discussed in the SMART terminology. That means that goals have to be Specific, Measurable. Achievable, Realistic and Time bound. Personally, I always wonder what happened to Challenging but I guess SMACRT didn’t sound like such a good acronym.

smart-goals-2017

Anyways, I thought I devise this blog entry along those SMART lines and as a first entry I would like to discuss my dividend income. This was a specific item for 2016 and it is certainly measurable.  For example, I expect to end the year with about EUR 473 and USD 373 in dividend income. This would mean a total dividend income of 846. I think that this is pretty measurable 🙂 However, when I started 2016 I did not set a specific goal ie achievable sort of strikes out looking backward. The same goes for realistic. Time bound is relevant as the dividend income simply belongs to the year 2016.

So, for 2017 we are looking at an measurable and achievable number. Measuring is easy as it will be the same unit as in 2016. A combination of EUR and USD. Achievable is a bit more difficult and what the he… let’s throw in challenging too. Because the simple annualization effect of having added to my portfolio during 2016, will result in a higher dividend income. As a matter of fact, I estimate that my dividend income will be 964 in 2017. That is an increase of 118 or 14% in the case of my ETFs maintaining their dividends and me doing nothing all year. So, any target should be above 964 but how much above? Let’s see… if I add EUR 278 a month to my portfolio and invest in ETFs with a 3% yield my portfolio will generate another 100 in dividends (278 x 12 x 0.03). However, given that I will add to my portfolio on a monthly basis through the year, I will have additional dividend income of 50 (278 x 12 x 0.03 x 0.5) if the dividends are paid evenly throughout the year. So, the current forward dividend income of 964 plus an additional 50 will bring me nicely above the 1000 level (1014 to be exact). Therefore, I will use 1014 as a target. I think this challenging, achievable and realistic all at the same time. It also has to happen before year end 2017, so it is definitely time bound.

Also, and this is just a personal preference of mine, I would like to add a small twist. A second target which is expressed in much more simple terms which is that I like my dividend income to be relatively evenly spread. In 2016 for example, I will have had four  months in which my dividend income will have been above 100. I would like to add to other months such that an additional month will have income of more than 100. Therefore an additional target is having one additional month (ie 5) in which dividend income is above 100.

Another target I would like to add is that of more stringent budgeting in 2017. To be honest, I first have to do some budgeting but then I right away want to increase my savings rate. I started the process already but it is not very detailed at this stage. More on that in another post. For now, I want to have a goal for 2017 of completing a monthly budget. I think this is specific, measurable, achievable and realistic. Is it challenging as well? Not so much. But at the same time, I do not want to go overboard. So, what I want to add here is that of my monthly contribution of EUR 278, at least 50% have to come from reduced monthly spending elsewhere by the end of the year. In other words, I will have to identify and realize at least EUR 139 in costs savings by December 2017.

For now, I think I will keep it at this. Below, you see the four goals that I have set for myself for 2017. I cannot wait for the new year to begin and get started.

Goal 1: 2017 dividend income of 1014

Goal 2: 2017 dividend income above 100 for 5 months

Goal 3: Create monthly budgets in 2017

Goal 4: Achieve at least EUR 139 in monthly savings by end of December 2017

Have you thought about your goals for 2017 already? What are they? How SMART and Challenging are they?

 

Disclaimer: None of the content of this site is to be considered investment advice. Readers have to form their own opinion about which investments are right for them and take full responsibility for their own actions.

9 thoughts on “Goal setting for 2017

  1. Hi DIB,
    Your goals look reasonable to me and I look forward to watching you beat them next year!

    I’ve not made mine yet, although I tend to use them more as waypoints for checking progress than hard targets to beat. I try not to set challenging goals as far as income generation (since it might encourage me to pick higher yielding / riskier investments, or pick investments with a given payout schedule), whereas goals such as the amount of capital investment made or money saved can be more challenging. In reality my target income is based on the amount of new capital I expect to invest similarly to how you calculate it and that’s a reasonable compromise I think.

    Best wishes,
    -DL

    Like

    • Hi DL,
      Thank you for your comment. You raised a very good point there. I should not try to reach my short term goals for 2017 by buying a high yield fund only to see it cut its ubsutainably high dividend yield after a while. I will try to avoid that.
      Thank you for stopping by.

      Like

  2. Good job getting started early! I typically don’t start my goals until the new year starts haha. However, I have a few things in mind like how much to invest every month. Thanks for sharing!

    Like

    • Hi Par,
      Thank you for your comment. I agree that my post was a bit early. Either way, don’t you think that you should have your goals before year end? Otherwise you might already be behind if you only start in the new year. Thank you for stopping by.

      Like

  3. I think those are some awesome goals. I like the twist you added. I love having income spread out and it bothered me until I finally achieved at least $100 in every month. What I like best about it is how aiming for $100 in five months is going to push your overall income in much faster than you will anticipate. Just wait and see. Looking forward to following along and to a successful 2017!

    Bert

    Like

    • Hi Bert,
      Thank you very much for your comment. It will take a while for me to have every month above 100 but maybe I can achieve that in 2018. Maybe earlier if I can exceed my goal for 2017. We shall see. To a successful 2017 indeed!!

      Like

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