As we bid farewell to the rollercoaster that was 2021, it’s time to share the intricate details of a financial journey marked by strategic decisions, newfound wisdom, and daring aspirations. Come along as we unfold the chapters that defined this remarkable financial odyssey.
In our pursuit of financial independence, a fundamental principle emerged—consistency is key. As a family of six, residing in a modest apartment, the journey toward contributing a total of $76,000 to our investment portfolio in 2021 wasn’t merely a financial commitment; it was a testament to our dedication. Each hard-earned dollar was carefully laid as a building block for a solid financial future. Amidst our daily lives, we faced the challenges of space constraints and the discipline required to save for the future. Furthermore, this year presented an additional feat as we directed an extra $25,000 towards our mortgage, underscoring our unwavering determination to secure a stable and prosperous tomorrow.
In the intricate world of financial strategies, 2021 was a revelation. We stumbled upon the transformative power of dividend investing. It wasn’t just about potential capital gains; it was the promise of a continuous income stream. This discovery led to a fundamental shift in our approach—we were no longer tethered to the need to sell stocks. Instead, we embraced a new strategy that pledged sustained financial growth.
Choosing dividend investing wasn’t a random decision; it was a thoughtful one rooted in practical reasons. Firstly, dividends offered a reliable income source, shielding us from the unpredictable swings of the market. Secondly, dividend-paying stocks typically belonged to stable, well-established companies, adding an extra layer of security to our portfolio.
With the dividend strategy taking center stage, we sought to maximize its potential. Enter the dividend forecast—a strategic tool blending the reliability of dividends with the proven 3% rule. This forecast became our financial compass, guiding us toward sustainable growth and resilience in the face of economic uncertainties.
Setting financial goals is akin to placing markers on the journey. In 2021, we aimed high: a monthly income of $6,000 before taxes. This wasn’t just a number; it was our vision of attaining true financial independence. Achieving this required meticulous planning, strategic decision-making, and an unwavering commitment to the long-term vision.
The real magic happened when we combined dividends with the 3% rule—a powerful strategy that not only transformed our financial journey but also accelerated our path to independence. Reflecting on the summary of 2020, where we projected retirement in 2036, our new approach now allows us to retire even earlier, by the year 2032.
This significant shift is attributed to the foresight of our financial strategy. By 2032, we anticipate a substantial dividend payout of $32,000 before tax, providing a comfortable cushion for the first five months of the year. The remaining seven months are seamlessly covered by the 3% rule, allowing us to sustain our lifestyle without the need to liquidate assets.
However, it’s essential to note that this isn’t an optimal plan, as selling stocks from the dividend portfolio may reduce future dividend payments. Despite this trade-off, the value lies in gaining a clearer perspective on our goals. The newfound clarity has become a driving force, instilling stronger belief in our vision and fueling our commitment to financial independence.
Moreover, our journey doesn’t end with reaching this financial milestone. While I may not be planning to stop working when we achieve our goal, the flexibility in our plan allows my spouse to make that choice. Additionally, we are not factoring in stocks that were given to me by my employer, this adds another layer of strategic consideration to ensure a comprehensive and resilient financial future for our family.
As the pages of the calendar turned, our portfolio flourished, reaching an impressive $433,806 by the end of the year. Yet, the true victory lay in the realization of our dividend dreams. A total dividend distribution of $3,700 wasn’t just a financial gain; it validated our efforts to create a passive income stream that could sustain us in the years to come.
As we step into the new year, the reflections on 2021 are profound. The lessons learned, the strategies refined, and the goals achieved are the foundation for the chapters yet to unfold. This journey is far from over, and we invite you to join us as we navigate the financial landscape, sharing insights, victories, and the occasional setback.