So my main goal this year when I started this blog was to achieve a dividend income level of $2000. What I mean by this is that I want to get my portfolio to the point where it would produce $2000 in the following 12 months. The reason I use this metric instead of current year dividends is that I want to know what dividend income to expect if I stopped reinvesting dividends right now. So right now I’m at $1300. I need $700 more in yearly dividend producing income. Some of this could come from dividend increases but the majority of this will be through new purchases. If the stocks I purchase average 3.5% yields then I will need to purchase $700/.035 or $20,000 worth of stock. If they average 3% yields then I will need to purchase $700/.03 or $23,333.33 worth of stock.
The main issue will be to find high quality stocks that aren’t too overvalued at this point. Let’s face it, the market has had a huge run-up since last fall. As the market continues to rise faster than dividend growth rates the dividend yields start to fall. This means I will have to spend more money for the same amount of income unless I increase my risk profile. I’m hoping for some sort of a correction. I have a feeling the majority of my purchases will be in the second half of the year.
I’m also saving for a home purchase within the next 12 months and have a few trips planned including going to Germany in the fall. I want to do some traveling before I have kids. It’s tough sometimes to manage having a life and being a dedicated investor. This could throw a damper on my goal but I think I will still be able to manage it.
Some stocks I’m currently watching: WAG, COP, UGI, VOD, LMT, UL, RTN, MCD, HAS, TGH, WMT, PEP, BDX, AFL