Reasonable Goals...

   Everyone should have reasonable goals for saving and investing. It is my opinion that people dont really need a million dollars to retire comfortably. This may be a fallacy on my part, but I will explain what I think is appropriate for a single male, at 43 years old to shoot for. That is me, if anyone is wondering. Im 43, single, have an income of a little over 40k a year. I live in an apartment, my rent in 535 a month, and I have an old F-150 that is paid for. When I came home and my wife and I decided to divorce, I was broke. I spent the next year saving. I saved about 13k dollars. You may think that is a good amount to save in one year, but it isnt. After looking at my situation carefully, I realized I left a lot of savings on the table. I didnt contribute anything to my 401k until this December, lol. That was mistake number 1. And I didnt have a real plan for saving either. I simply looked at my bank account from time to time, did a quick mental calculation of how much I could afford to send to my broker, and hit send.
     So I have an IRA with 5k dollars in it. Its with Sharebuilder. I also have a taxable account with Scottrade, it has 6600.00 in it. I have 2k dollars in a Government TSP, which represents the fact for the last two years I have had 10% taken off the top of my National Guard check each month. The overwhelming majority of that money came while I was deployed, and really represents the only significgant amount of money I was able to save while I was overseas. One day, I will sit down and talk about just how much money I made over there, and what happened to it. It is a cautionary tale for any military member. I also have 400.00 in my 401k, which is the 11% off the last two checks I have made at my job. Next year I will contribute for the entire year, and I expect there to be roughly 5k dollars in the 401k. I also have a taxable account with Sharebuilder with a scant 300.00 in it. In my personal banking account I keep a balance of roughly 2k. Anything over 2k I usually send to my broker.
    I plan on retiring at 65. So that leaves me 22 years to work, save and invest. So here are my goals for the next twenty two years.
   Have a home that is paid for.
   Have a fairly newish car/truck that is paid for that will hoepfully last me for a good ten to fifteen years into my retirement.
   Have 300k dollars in savings.
   Wow, 300k that isnt very much, is it? Most Financial Planners will tell you to save much more than that. However, I wont have a house payment. I wont have a car payment. Thanks to the National Guard my medical bills will be covered 100%, and even if they arent, Medicaire is there also, and the VA. If I can somehow manage to finish out my twenty years with the military, I will receive a small but much appreciated pension of around 1k dollars a month.
   1k dollars a month isnt very much right? Wrong. 1k dollars a month represents 12k dollars a year. You would have to save 200k dollars, earning 6% interest each year to spin off 1k dollars a month in income. Which brings us back to the 300k dollars in savings. At 6% interest, that will give me and additional 1500 a month in income. So I am up to 2500 dollars a month in income without adding in Social Security yet. SS should pay me 1500 a month by the time I retire. Thats 4k a month now. Remember, I have no mortgage or car payment, and my bills should be very low. I believe I can live off that amount, even twenty or so years from now, 4k a month should be a good income.
   How do I get 6% income off my 300k dollars? Investing in Dividend stocks, which I am already doing. My income this year from dividends was 700.00 a year, or a little over 50 dollars a month. That compounds annually as I reinvest the dividends and also add to my principal with contributions. Next year, my goal will be to have 1200 dollars a year in dividend income. Thats still a long way from 1500 a month of course, but I have 22 years to get there. I think theres a good chance I can save much more than 300k before Im 65, but we will see. 300k is a good number to shoot for. Right now, my actual yield on investment is a tad over 7%, so I am ahead of the 6% number already. So, to summarize, here are my goals once again:
  A housed that is paid for.
  A vehicle that is paid for.
  300 thousand dollars in savings and investments.

What do you think of these goals? Too grand? Too conservtive? Tell me what you think. In my next post I will talk about some of my investments so far, what stocks I like, and how these stocks figure into my strategy. I dont plan on giving specific investment advice. I will share simply how I see things and what seems good to me at the moment.

MrGreenshanks comes home from War.

Nov 12, 2010...Thats the day I made it home from Afghanistan. By the time I pulled into the drive at home, I already knew I was single again. A man was in my yard, clearing the lot next door, the one we bought a few years ago, for no other reason than to make sure no one moved in next door. He was more suprised to see me than I was. No one is that brave: to be there when the husband of the woman he has been living with comes home from a combat zone. His jaw dropped when I got out of my brother's truck in uniform, but he had nothing to fear from me. I walked past him, knocked on the door, and my wife gave me the keys to my F-150, we exhcanged a few words, and then I left....
     I dont relate this story to gripe and complain and blame my wife or the military for my predicament. It is what it is. I wasnt the best husband, and this was and is my second divorce, so my track record wasnt exactly pristine anyway. Marriage is 50/50, so regardless of the outcome, failure is shared equally. But that day changed my life almost as completely as spending 9 months in a war torn country.
Its a good starting point for this blog, since on that day I was basically homeless and nearly broke. I was staring at a divorce, which I knew would be expensive, and at the same time trying to work my way back into civilian life and go back to work at my regular job. I was blessed to have an employer who held my job for me. Not all Guardsmen are that lucky.
    This blog is mainly about my efforts to invest and save and restructure my life after war and divorce, and to share my goals and methods. I have learned a lot in the last year, some of which I believe is worth sharing with others, and hopefully I can learn from my readers. In my next few posts Ill attempt to lay out the investments I have made in the last 13 months. Stocks and dividend income interest me greatly. I plan to link my portfolio here and invite others to critique and advise. Ill also share my savings techniques, since over the course of the last year, I have managed to save quite a good portion of my net income, although not nearly as much as so many others I have read about online. I have found quite a bit of inspiration online when it comes to saving and investing. Hopefully, I can pay forward the debt I have to those bloggers who have inspired me.