Income Portfolio Investment Goals
If I do not know where to go, how can I start the journey? This seems to be a very simple question we face day-in and day-out. But when it comes to investment plans, in general, most of the individuals fall short in identifying the defined final destination. In this post, I am discussing what is my vision and what would I like to achieve from my income portfolio.
The name of this blog is ‘The Income Portfolio’ therefore; I will focus on my goals for my Income Portfolio. In general, the goal is to create an investment portfolio that generates a stable and sustainable stream of passive cash flow. So why not just use savings, CDs, and/or other fixed income vehicles? Well, a Rs. 100K invested in CD’s and/or savings will generate at 7% to 8% interest income. In addition, it does not have potential to increase the value of my capital. Instead, if I make investments in fundamentally strong companies which consistently pay and grow (y-o-y) dividends, then I will not only have an “increasing” passive cash flow but also have a potential for capital appreciation.
To begin with, I am targeting to have an annual passive cash flow of Rs. 5,00,000 by year 2020 with minimum possible capital investment. At this point in time, I have selected an arbitrary number, in a sense that why this particular number? Why year 2020? I have a planned model or process, which showed that with consistent dividends and by continuously reinvesting it, this level of cash flow is an achievable target with minimum capital investment. Here I have not yet considered the potential for capital appreciation. Its only the dividend/interest based passive cash flow. Since this is based on past historical data, I acknowledge that it may not be possible to repeat such scenarios in future. However, I have identified a goal that I want to achieve and started my journey.
I am very confident that I can achieve this goal (and possibly exceed it) by following a well-defined plan and executing it with discipline.
I invite you to join me in my journey.
goals
i fell bad at times, i should have found this blog in February 2009 and i am sure i wound have saved much more.
100 % joined you sir , although joined a little late.
Vikrant,
it is always a good time to start…. looking back never helps…
while i was reading another post “Dividends are Necessary for Me to Buy a Stock” this question popped into my head. i understand that the main purpose of your investment goal as per this post is to generate a passive cash flow of 5L/annum by year 2020, however in the past 11 months haven’t you ever invested for capital appreciation, every time you have invested in anything new were you able to keep this goal in mind? didn’t you ever find difficulty while the market went up or down? and if so how did you overcome it?
Vikrant,
No, it is not difficult to focus. I have spend learnt how to ignore markets. I think you are missing the point. Dividend investing is not, pure dividend investing. Dividend investing is inherently about capital appreciation. A good quality of dividends, will come with potential for capital appreciation. Read this one, http://www.tipblog.in/strategy/overlooked-aspects-of-dividend-investing/
Best Wishes,
hi,
just had a pleasure reading this article in the blog. And really I am very impressed to find such a person. Hats of to you TipBlog. I hoped to have joined you much earlier , but anyways as you mentioned no use of looking back. I am now willing to dedicately follow your portfolio, even though I may buy it with very low value(sometimes with even 5000 Rs).
Hello Snh,
you are right, looking back and cribbing does not help. Move forward. Good Luck.
Best Wishes,