Although it has already been more than a month since the beginning of the year, I would like to take a brief look back at 2017, before giving an outlook on 2018 and redefining my annual goals.
Take a look back
From a financial point of view, 2017 was our most successful year so far. As the following table shows, our previous year’s figures improved in every respect. Our path to financial independence is in full swing now. I’m particularly pleased by the significantly higher savings rate and the more than doubled passive income.
But as you should still be honest with yourself, I have to admit that contrary to the great results shown above, we weren’t fully able to reach our last year’s financial goal of €2,400 in passive income. That’s because I was too reluctant to buy more shares given the high price level towards the end of the year.
Looking into the crystal ball
Whether the bull market is going to continue, or the current price correction will trigger a turnaround in the markets cannot be said with certainty yet. However, there are other factors that lie primarily in your hands.
As our savings rate has already risen from 22.9% to 38.3%, I guess there is not much more room for further improvement. Nevertheless, we have decided to give it another go and try to achieve a savings rate of at least 40% in 2018. In January, we already made it to exactly 40.0%!
Currently, our portfolio consists of 11 companies. These are from 8 sectors and 5 countries. Although I’m not a huge friend of over-diversification, I would like to increase the variety of sectors and countries in my stock portfolio a little further. Candidates for my potential portfolio expansion can be found in the following overview.
I admit that last year’s goal of €2,400 in passive income was quite ambitious. But as the Austrian conductor Herbert von Karajan put it:
Therefore, I don’t want to set myself a less ambitious goal and aim for €3,000 in passive income in 2018.
Conclusion: My goals for 2018
Instead of doing too much at once, this year, I deliberately made a small but fine selection. For 2018, I set myself the following 3 goals:
- savings rate of at least 40%
- diversify across sectors and countries
- €3,000 in passive income
All three goals are really challenging. However, I’m particularly curious, if we’ll be able to increase our savings rate again. Because only those who save enough, can invest enough and thus become financially independent someday. True to our motto: “save. invest. be free.“