Setting Goals: reach a 10% divident portfolio

I think I never mentioned before, until now, what I would like to gain, per year just from dividents. I mean it’s nice to start investing and see a company rise from 10 bucks to hundreds, but what I am more interested in is gaining passive income from having stocks that pay dividends.

I know that the current goal of my portfolio is to invest 1100USD in stocks, for this year, but this is for short term planning.

But the bigger milestone for this type of investment is to have an amount of 1000USD income from dividends. And to reach this target I want to have @10% income each year so this equals a total of 10.000USD invested, ten times the current self-proposed goal.

We will not discuss it if it’s possible or not, because it has to be.

If you talk about it, it’s a dream, if you envision it, it’s possible, but if you schedule it, it’s real.

Tony Robbins

In this idea, we started investing in stocks this year. First of all, I’ve selected internal stocks that pay dividends and have a good yield, and afterward, I applied the “must be some energy” stocks filter because I find them to be more stable and more attractive for the future (search my post about Nuclear Power).

Current situation

At the current time, we have 841 USD invested in 8 different stocks. Unfortunately from this 8, one of the companies has problems this year and asked for permission to not distribute dividends (and that is a shame because their yield was 12 or 13%) and another one doesn’t distribute, but I liked her potential gain factor as it’s an IT company.

Now, back to the mathematical part, at 841USD I await 84USD in form of dividends. 

The currently invested sums in each company as are in the following table:

Now comparing this table with my current goal, we are far away from it with only 41USD in dividends this year. Unfortunately, multiple things happened at this time and some companies lowered their share a bit, BRD which had a dividend yield of 12,7% last year doesn’t pay, and so on.

I did not put the average cost of each stock in the table because the dividend is calculated on a different value than the present one (or my average cost).

Conclusions

The goal I’ve set for the long term can be feasible, but I managed to make some mistakes and didn’t consider the bigger picture from the start.

First of all, with the current downtrend of the market, I tried to reduce the average cost of each stock at a minimum so I did not do the proper allocation considering the dividend yield.

Second of all, looking back to what dividend yield is pretty clear that I can’t match a 10% allocation if the companies don’t pay higher than this. With the current yield, we are closer to 5%. But I will give it one more year before reconsidering the target.

In the third place, some companies don’t pay dividends, but if we had only companies that pay dividends maybe we were higher than the actual 5%. And I have to sell some of the ones that are under 5% or make a higher allocation to the ones that bring more money.

But as usual, I’ll keep you updated with my current targets in the next posts. See you soon!

Disclaimer: I am not a financial consultant, all the information you find here are my decisions, I taken at that moment, on my own analysis. I am open to any type of discussion about money. If you want to replicate my portfolio take into consideration that it is your money.

P.S. The header image is the creation of Alexsander-777 on Pixabay

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