The goal is to become a full-time private investor. To achieve this I will create several income streams, where dividend income makes up the majority.
Why do I want to become a full-time investor?
The short answer is that this is my version of Financial Independence, Retire Early (FIRE). If I was to retire early I would grow bored real fast, get fat or be hard to live with. But, there are no chance that I will work until the retirement age, which in Norway is 67. The retirement age is expected to increase and is already higher in other Nordic countries.
To achieve my goal I’m depending on a high savings rate, increasing my active income, developing passive income and investing to compound my assets.
In numbers: Goal of 10 million Norwegian Krones in free capital (not including my real estate where i live).
With a dividend yield of approximately 4%, this will give me an annual dividend income of 400.000,- NOK.
My savings rate is around 50%, but will increase as my income increases. Next year I’m aiming for 55% and 60% in 2021.
In the stock market my goal is to achieve a annual return of 10%. I’m not disappointed if my return one year is 10% and the general stock market is up 15%, but I will be disappointed if my return is only 5% and the stock market is down 5%. The reason why is because compounding relative outperformance to the stock market doesn’t make you wealthy if the return is low or negative. To read how I will achieve this annual return, see the post «The investment strategy – part 1». In short, I’ll exploit special situations and the power of dividend growth investing.