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Saturday, February 25, 2017

I finally decided to throw up a long range goal and it's ambitious

So like many other people, I've read some of the literature and decided to begin dividend growth investing. I started out really to try and learn how to invest and build a portfolio in my Robinhood account. As I've begun learning a little bit about how to invest, I've been investing more. I had been setting short range investing goals. But I had been reluctant to set a long range goal this was pretty much a hobby. But as I have become more committed to investing I realize that I should have a long range target for this money.

The first thing I ruled out is a desire to retire early. I have a ton of respect for those that are attempting to do this and I see the appeal. However, I love my job, it brings me a lot of fulfillment. I'm less than 14.5 years away from qualifying for a full pension and benefits. I then have to wait until I'm 59.5 to collect. Though pensions aren't what they were used to be, and I do believe my pension is going to face some cuts in the coming years, 7% of my salary goes to my pension and it will be a significant portion of my retirement income.

Of my addition income I have been splitting my money between a Betterment Roth IRA and a Robinhood account. My hope is to have an even split between my funds and stocks to supplement my pension. The magic number for each is 400k for a total of 800k in the next 22 years. The number is ambitious and despite the fact that I'm currenty putting away less than 1/4th of what I need, I believe I can get there.

In the next couple of years a huge daycare which is currently over 2k per month begins to come off the books. Thanks to an amazing gift from my mom college is basically taken care of for both of my children. So I won't have those costs on the back end. I'm on track to be an administrator in the next couple of years and fully expect my salary to jump 30k or more. I also have a good chunk of change sitting in a high fee 403B account that I plan on rolling over as soon as I change jobs or turn 59.5.

So why 800k split. I believe I could retire safely at any point after qualifying for my pension and have my pension plus 24k per year. Even with a very conservative estimate for my pension this would allow me to retire comfortable before the age of 60, if I were to choose. This now gives me a target to shoot for. It also let's me budget my spending based on the goal. I have found myself getting extremely frugal so I can invest. This isn't a bad thing. But I would like to make sure that I'm making my decisions based on a savings goal. I don't want to deny my family a vacation, or not enjoy life because I'm trying to invest as much money as possible. Having this new target should help keep me balanced.  


  1. I think you've taken a wise and balanced approach to investing. Any decision to invest is a decision to give up what I could have today in order to have a better tomorrow, but there is little point in dying rich after having lived poor all your life.

  2. RAnn,

    Thanks for the comment. You've summed up my thoughts perfectly. I appreciate the feedback.

  3. Congrats on taking the step of starting to shape some long term goals. Its so much easier to focus on how much to save and measuring the progress.

    If you want to add more to your long term goals I recommend reading "The Art of Retirement" written by Gary Williams. It was very basic on investing principles but was really strong on how to define goals for what you want out life.

    1. Thanks for the comment Ken-K. I hope having a target will help me focus. Thanks for the book recommendation. I will add it to my list.

  4. Having a good balance is hard with money sometimes. Having a long term goal with a path there will help you a lot. Thank you for sharing.

    1. DM,
      Thanks for the comment. I'm hoping the goal will help me focus my decision making. I was reluctant to do it because for at least the next two years my investments will be far below what I need to be putting away. But I think having the long range goal will help me make better decisions about what to do as my cash frees up.

  5. Hi Dividend Seedling,
    Investing is definitely a long-term thing so it's great that you're planning ahead. Your plan looks like a good compromise to me and is based on realistic expectations.
    I think the most important thing, as you've noted, is finding balance - we all have a different set of scales and all that really matters is your own one.
    Best wishes,

    1. DL,

      Thanks for the comment. You speak the truth. I think a lot of disagreements I've seen on these investment blogs have to do with people having different expectations from their investments.


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