When I finally paid off my credit card debts back in 2010, I started to save a bit of money.
Not a huge amount, since I hadn’t come across FI/PF blogs, hadn’t heard of savings rates and what-nots, was too busy enjoying my life debt-free but it was something that was better than nothing.
As the cash grew little by little, I decided I wanted to invest it, so I bought a bunch of funds.
I’d never heard of ‘dividend investing’ before until I’d come across the term while reading up on FI and investing in general. Building up a big share portfolio and then living off the dividends sounded (and still sounds) great to me.
Yet, I didn’t want to deviate too much from my original plan (and relative comfort zone) of investing in tracker funds so I thought I’d diversify (in September 2014) by starting up my own little share portfolio and be content with getting small but growing dividend income.
I didn’t have big ambitions – in fact, my goal this year was to just earn enough dividend income to cover my TV licence, ie £145. I surprisingly smashed that goal back in July!
I’ve revisited my spreadsheets and have calculated that I need to factor in a lot more income from dividends into my plan.
This will partially make up for the shortfall from my reduced company pension (due to the company I work for being sold off and the pension being frozen).
I will still keep to my original investment strategy of investing in tracker funds, but my share/investment trust portfolio will now form a larger part of my overall portfolio than originally planned as I reckon I will need it to be producing an income of at least £3k per year, or around £250 per month.
At the moment, my dividend income is averaging around £25 a month (as at December 2015), so I’m looking at a ten-fold increase!
A pretty daunting prospect – best pull my socks up and get busy saving and investing – need to get Christmas and my holiday out of the way first, though!