My One New Year’s Resolution For 2008



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It seems everyone is busy writing down his/her New Year’s resolutions these days. This is a fabulous idea, and I’m not about to get left out of this party. I’m going to succumb to this boisterous bandwagon, only because publicizing one’s goals and signing them with blood is an effective way to hold oneself accountable, and accountability is what empowers us to make great strides through out 2008 in achieving our goals. I urge everyone to do the same either by conveying your 2008 resolutions to someone other than yourself (or your pets). Hey, be my guest if you’d like to announce them right here at Financial Jungle.

As long-time readers, you may have guessed this year’s theme is dividend investing. For 2008, my goal is to boost our monthly dividend income by $300 — from $1,560 to $1,860. $300 may sound miniscule, but in the context of 1 year, that’s a $3,600 raise, not to mention it’s passive and recurring. This figure is possibly more than my salary raise this year.

What’s my action plan? I anticipate attributing half of this increase to organic growth of dividend increases and smart dividend reinvestments. The other half will come from the sheer power of disciplined saving and investing. I figure the recipe to achieving this goal is to turbocharge our saving rate up from 36% to 43%. :shock: This means we must adhere to the following rules:

  1. Brown bag our lunches once a week. (Too much of a shock to my system to brown bag every day.)
  2. Sniff harder for vacation deals without sacrificing quality.
  3. Target those “one-time” discretional expenses that contribute little to the quality of lives.
  4. Top up the new RRSP contribution room with tax-inefficient income trusts from non-registered accounts.
  5. Pray for decent salary increases.

If 2008 is anything like 2007, this year will again flash by before our eyes. If I squint hard enough, I can almost see the $300 hovering on the horizon. How is that to keep motivation sticky? Yes, living within your means still rocks!

Sign Signed by Financial Jungle Guy, January 8th, 2008.



Let’s round up a few New Year’s resolutions from around the blogsphere.

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Reader Comments

Comment Number:
1
Written by:
mg
Posted on:
January 8, 2008 at 1:18 pm

Good luck with your goal FJ. I’m sure you will be able to achieve it.

Comment Number:
2
Written by:
MillionDollarJourney
Posted on:
January 8, 2008 at 1:24 pm

Thanks for the mention FJ!

Comment Number:
3
Written by:
mg
Posted on:
January 8, 2008 at 5:41 pm

FJ, I know you picked up some IGM and BNS, but I’m curious if you bought any BAC.

What are your thoughts re: BAC’s dividend safety?

Comment Number:
4
Written by:
Financial Jungle Guy
Posted on:
January 8, 2008 at 6:31 pm

Yeah… I have a large holding in BAC. Busted!

I believe BAC is solvant enough to maintain their dividends. Looking at revenues, BAC is about 2/3rd the size of Citigroup, but BAC has $35 billion in the bank while Citi only has $38 billion.

Not only that, Citi cheated. Citi absorbed $177.8 billion from financing during the first 3 quarters of 2007, while BAC only needed $71 billion.

Warren Buffett recently loaded more BAC to his existing holding. WB does his homework, and he shows you his answers during the exam.

Edit: When I have the time, I’ll confirm BAC’s Tier I capital ratio. I recall BAC’s ratio being healthy.

Comment Number:
5
Written by:
mg
Posted on:
January 8, 2008 at 6:54 pm

If you posted about why you don’t believe BAC will cut their dividend, I would be your most ‘loyal reader’… :)

Comment Number:
6
Written by:
Financial Jungle Guy
Posted on:
January 8, 2008 at 7:31 pm

How about another topic? :D

The thing is, no matter how much I research or write, the possibility of BAC hiding their subprime exposure still exists. If all the facts are not out in the open, nobody can guarantee that BAC will maintain their dividends.

Risks exist, but take some risks. :) BAC is just as likely to maintain their streak of dividend increases in every August. Warren Buffett’s other bank, US Bancorp, just raised their dividend last quarter.

David Driscoll of Toron said that there’s one banking crisis in just about every decade. There’s nothing extraordinary about the current credit crunch debacle. BAC will come out of this alive and well.

Comment Number:
7
Written by:
mg
Posted on:
January 8, 2008 at 8:50 pm

Well said. I agree with you. I guess I can’t expect you to be a superhuman stock analyst…

Comment Number:
8
Written by:
Dividends4Life
Posted on:
January 9, 2008 at 3:16 am

Great goals! I too believe in BAC it is one of my largest holdings.

Best Wishes,
D4L

Comment Number:
9
Written by:
Keep the Status Quo for 2008 « Legal Andrew
Posted on:
January 9, 2008 at 4:28 am

[…] Increase dividend investments […]

Comment Number:
10
Written by:
FourPillars
Posted on:
January 9, 2008 at 5:22 am

This means we must adhere to the following rules:

don’t have kids…. :)

I like your brown bag approach - baby steps.

Mike

Comment Number:
11
Written by:
Middle Class Millionaire
Posted on:
January 10, 2008 at 12:18 am

Hey FJ,

A very ambitious goal $3600 additionally annual dividend income even with a 10% dividend increase would be about $50,000 in new money. Good luck I’ll be checking back for updates.

Cheers,
MCM
http://middleclassmillionaire.blogspot.com/

Comment Number:
12
Written by:
My One New Year’s Resolution For 2008 | Financial Solution News
Posted on:
January 16, 2008 at 1:21 pm

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