We have already set our goal and framed our profile. Now, how we will know how good or bad are we progressing in our journey? Setting targets related to the value of our portfolio, to the income that we are generating, and to the expenses that we are incurring in, and tracking them all the way in our journey.
These targets have to be realistic according to our goal amount and timeframe. For example, if our goal is very challenging in terms of the money that we want to get, we have to set a higher income target. It must be also tuned to our profile, as if we have a more conservative profile, we can’t expect to have high income for example.
The first target we have to set is the desired percentage of change in the value of our investments every year. For example, if in the year 2020 we started with a value of $50.000 and we set a value target of 10%, we are expecting that our investments are worth $55.000 when starting 2021. This target is important if our goal has as an objective to reach a specific amount (for example to buy a house or to pay children education).
The next target we need to set is the percentage of income that we want to get every year from dividends, interests or sales, calculated over the money that we have invested. For example, if we have invested $60.000 and set an income target of 5%, we are expecting to get every year $3.000. This target is more important if our goal has an objective to reach a regular income (for example support to retirement or financial freedom).
The last target we need to set is the maximum percentage of expenses over the income that want to spend every year. So, for example, if in a year we have get $4.000 from dividends, interests, tax and sales profits and spent $150 from operations commissions, brokerage fees and loses sales, we would have spent a 3.75% of our income.
In #imap you can follow up all of them and track which target is influencing the progress towards our #imapGoal using different tools like past achievements, averages, and rankings.
Also, it may be some ranges that are more convenient based on your goal and your profile, and also you may need to update them along the journey if your circumstances or your context change. You can get which targets are more convenient for your anytime using the snaps.
Aim for adequate results, not extraordinary results.
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