My Target

As at Oct 2014, these are my monthly expenses which is too high (I feel) but I am able to save 30% of my salary. My wife says its good enough but I am not too sure. I was thinking 50% :)

Parent $900
Utilities bills$500
Credit cards$500
Income tax$400
Personal expenditure$500

Things to do to reduce spending:
1. I think I need to review my insurance plans. All of them are life policy, should be considering whether to convert them to term policies.
2. Credit cards expenses are quite high, mainly because of eating out at restaurants during weekends and car petrol expenses. Maybe to reduce trips to restaurants.
3. Although this is my own personal plan, however I still have a family to feed. I have discussed and communicated this to my wife and she more or less agree (she didnt object). My wife is not as prudent as me but still quite ok at least she doesnt like to buy branded goods but she likes to eat at restaurants and travel :( My 2 gals are more or less influenced by her. So when I say we eat at hawker centre or suggest travelling to a neighbouring countries, I will have 3 protesters :( But sometimes my wife will support me and convinced the girls to eat at hawker centres but not everytime she will oblige haha I also dont want to be so harsh on saving up and caused my family to suffer with me or call me "meow". So there will be times when I will give and take. Spend a little bit more and make my family happier. Why not? :) What I am trying to say is that I need the support of my family in order to be able to execute my plan seamlessly.

My target (10 years plan):
After listing out my expenses, I now know what will be my target of monthly dividends from stocks.
Assuming the following:
1. An average of 7% return from my portfolio.
2. Investing $30,000 every year ($5k per month if possible). Of course I am assuming this is constant but it can be more if I earn higher salary, etc
3. Dividends are reinvested
4. CPF savings not included
5. Rental income not included
6. Spouse's income not included. My spouse risk appetite is lower than me. Although she is fine to use her savings in this investment but I explained to her the risk involved and probably will inform her to join in when there's a global stock market crisis again. She is more like a reserved fund for me to activate during emergency :)

•Portfolio Size: $550,000
•Target # of Stocks: 20-40
•Maximum Stock Concentration: 5.0% of portfolio
•Maximum Sector Concentration: 20.0% of portfolio
•Maximum High Yield Concentration: 20.0% of portfolio
•Minimum Dividend Yield: 6.0%

TargetTargetted Portfolio sizeTargetted Monthly dividendsPeriodYearly CONDividends Reinvested
1st target$85,000$495 2015$30,000$5,900
2nd target$120,000$700 2016$30,000$8,400
3rd target$161,000$920 2017$30,000$11,000
4th target$213,000$1200 2018$30,000$14,900
5th target$257,000$1500 2019$30,000$18,000
6th target$320,000$1800 2020$30,000$22,400
7th target$372,000$2100 2021$30,000$26,000
8th target$428,000$2490 2022$30,000$29,900
9th target$487,000$2800 2023$30,000$34,100
Final target$551,000$3200 2024$30,000$38,500

I think I should be able to meet my 1st target in 2015 because of my cash reserves. But subsequent targets will be difficult as I need to double up my portfolio size by $30,000 every year. Of course this is just a 10 year plan, it can go further if I just carry on the plan. But this is roughly the time I need to see my financial freedom. Things may change as I may have lower expenses due to my kids grown up and maid not required. If that's the case, I will meet my target earlier. Hmm, lets see how we go...

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