Having personal goals is often seen as a Good Thing. Like a rudder on a boat. No rudder, no direction it is assumed.
But does the same hold true for investing?
In many ways goals seem like the important motivation, the Why. Without goals, it is said, it is impossible to measure one’s progress, without goals a person would not know what to do or where to aim. Without goals a person has no Reason to do something. Or so it is said.
Is There a Downside to Goals?
Why it is clear that too slavish attention to too-high goals can cause difficulties. Anxiety. Self-imposed pressure. Parsimoniousness. Self-abnegation. All harmful to the self.
The other extreme are goals that are too simple, too easy to satisfy, unchallenging. The outcome of these goals is laziness, sloth, egoism.
So
It seem obviously clear that a mix of realistic goals and flexibility might provide the best combination of aims and objectives that can provide the appropriate mix of ambitions.
Dividends
So what of dividend investing? I realize that if I had set a goal, of say $X per month of dividend income early in my investing life, I would likely either set a gool too high or too low.
Too high a goal sets one up for frustration and disappointment. Too low a goal sets one up for narcissism and even self-delusion, not to mention low returns.
The Reality
The dividend investing experience for me is one of shifting goals. I could summarize my actions as seeking a good monthly dividend income with moderate risk. I did not put a dollar amount on the monthly income. As much as feasible without undue risk might be the best summary.
When I mention that I did not make dollar amount goals on monthly dividend income, I did pay attention to that monthly figure. In fact, it is the figure that I pay most attention to. The size of my portfolio is not as relevant, as my goal is income, not capital gains.
If I had any goals in dividend investing, it was towards the next large number. From $100 to $200, and so on. If anything, it is astonishing and gratifying to see that monthly income number grow over time. It rarely declines. The monthly income declines only rarely. If a dividend paying company gets acquired for cash, or a company cuts its dividend, then a decline will occur. But these events are so much rarer than stock price volatility. As a result, I can say that for me the increase in dividend income has been a great success.
What are your income goals? Let me know here.
The drawing of a beast is from “Book of Hours” attributed to an artist of the Ghent-Bruges school and dating from the late 15th century. Courtesy Beinecke Rare Book & Manuscript Library at Yale University.
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