My Long Term Goals for Dividend Investing

One of my goals for the blog is to have a place where I can share my goals for dividend investing. I believe that if you write goals down, you are far more likely to stay committed to those goals.

I'll get into more specific goals in future posts, but today, I want to share with you what my long-term goals  for my portfolio.

#1. Live off the dividends
          Ultimately the goal for any dividend investor is to be able to live off the dividends of their investments. In that sense, I'm no different than most dividend investors. I believe that it's impossible to time the market, and I'll never fully be certain if "it's a good time to buy" or if "it's a good time to sell." Therefore, by investing in dividend-producing stocks, and using them to provide me an income in the future, I never have to time the market to figure out when to get the most income out of my investments.

#2. Provide a stable economic future for my children and their children
         Even more than living off the dividends, my goal is to create a portfolio that constantly grows, throughout generations, in a way in which I can pass it on to my children and their children. The fastest way dividend investors grow their portfolio and the dividends that they are paid is by constantly reinvesting their dividends in more dividend growth stocks. The beautiful law of compounding then begins to work its magic, essentially making it easier to grow our money the longer we are investing in such stocks.
         I want to be able to take advantage of that even after I "retire." (I don't believe I will ever "retire," but rather just move on to a new line of work or activity.) Many investors when they reach retirement age employ the 4% rule. Although I'll get into that in greater detail in a future post, the 4% rule relies on the premise that as one's portfolio is growing at a conservative rate of 8-9% a year, they can create an income by selling 4% of their assets every year and not run out of money.
        I want to use this same concept in terms of dividend investing. My ultimate goal for my portfolio is to reach a point where my dividend portfolio has a YOC of 9% or higher, while at the same time, I only need the first 4% to replicate my income. While I know this is a bit tougher to achieve, I know that if I can use 4% for income, and the remaining dividends to reinvest, I not only will never worry about running out of money in retirement, but I also know I can pass on my success to my children, should they ever need it.