Setting My Sights on Financial Freedom
As I reflect on my financial journey, I realize that setting annual goals has been instrumental in keeping me on track with my long-term plan. This year, I’m more determined than ever to make progress towards my ultimate goal of achieving financial independence.
Building a Safety Net
My top priority is to grow my emergency fund to cover six months of basic living expenses. As a self-employed individual with a fluctuating income, I need a cushion to fall back on in case of unexpected events. With the rise of generative AI, I’m also aware that my income may be impacted in the future. By saving a little more each month, I aim to hit my target by the end of 2026.
Boosting Passive Income
Dividend stocks are my primary source of passive income, and I’m committed to increasing my annualized dividend rate by 20% by the end of 2025. To achieve this, I’ll focus on dividend growers like Energy Transfer and Brookfield Renewable, which have a history of steady payment increases. I’ll also continue to invest in higher-yielding dividend stocks with strong financial profiles.
Diversifying My Portfolio
In addition to dividend stocks, I’ve been diversifying my portfolio through alternative investments like private real estate and private credit. These investments offer higher yields and lower correlation to public markets, making them an attractive way to further diversify my passive income and reduce risk. My goal is to increase my projected annualized passive income from these sources by 25% in the next year.
The Bigger Picture
My near-term goal is to be able to live off my emergency fund and passive income for one year if needed. In the long term, I aim to produce enough passive income to completely offset my expenses. With a clear plan in place, I’m confident that I’ll make progress towards my target each year.
Taking Control of Your Finances
As you reflect on your own financial situation, I encourage you to set your own financial resolutions for the new year. Whether it’s building an emergency fund, increasing passive income, or diversifying your portfolio, taking control of your finances is the first step towards achieving financial freedom.
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