Building passive income has been a goal of mine for the past several years and is one of the reasons why I started Passive Family Income. While I have focused a lot of my attention on building these alternative sources of income, I have not done a very good job at defining exactly what my goals are. In an effort to take my business to the next level, I have decided to create a SMART goal for the upcoming year that will help guide me through this process.
Today I would like to define how I plan to build an alternative income portfolio that will earn over $36,000 per year.
2010 SMART Goal – Alternative Income
Build a diversified portfolio of alternative income streams that will earn at least $3,000 per month by December 31st, 2010. I will commit to creating several new sources of income (other than my job) during the next 13 months, while continuing to grow existing passive income sources. In order to limit risks, each income source should not make up more than 20% of the total monthly earnings. I plan to leverage FREE internet tools such as Info Barrel and eHow as well as purchase additional internet real estate in order to reach my earnings target. Earning an additional $3,000 per month in alternative income will help to grow my business and put my family on track to become financially independent within the next 5 years.
Is my Goal SMART?
I have always had a long term goal to become financially independent through passive income sources. In order to take the first step towards that goal, I have decided to make it part of my 2010 objectives. While earning $3,000 per month in alternative income will not allow my family to become completely financially independent, it will help us lay the foundation towards this longer range target. So is this a SMART goal?
Is my goal Specific?
YES – The statement “… build a diversified portfolio of alternative income streams …” is an actionable statement. I have specified that I plan to create a diversified portfolio where one income source does not make up more than 20% of my monthly earnings. While I have not disclosed how I plan to create each income source, I believe my goal is still specific enough to be successful.
The goal includes information on Why this is important – “… help to grow my business and put my family on track to become financially independent …”. The ultimate goal for me is to become 100% financially independent and this will help my family take the first step in reaching that longer range target.
The goal also details How I plan to reach this target – by leveraging FREE internet tools such as eHow and Info Barrel as well as investing in internet real estate. While there are many opportunities to create alternative income, the internet provides the most cost effective opportunities, which is where I will be focusing my efforts.
Is my goal Measurable?
YES – I have stated that I plan to earn $3,000 in alternative income per month, which is a measurable amount. In addition, I have also stated that an individual income stream should not make up more than 20% of the total monthly earnings. Both of these measurable amounts will help me reach my goal.
Is my goal Attainable?
YES – I believe that earning $3,000 per month in alternative income will be challenging and require a lot of hard work. However, I also believe that as long as I stay focused, this goal is more than attainable in the stated time period.
Is my goal Relevant?
YES – This is probably the most relevant goal (to me) that I will set for the upcoming year. The reason for creating passive income in the first place is to become financially independent. This is the first step in reaching that longer range goal.
Is my goal Timely?
YES – I have set an exact time line to reach this goal – December 31, 2010.
Final Thoughts
All of my other SMART goals for 2010 will play a role in the success or failure of earning $3,000 per month in alternative income. For example, I have set another SMART goal for the upcoming year to earn at least $500 per month in passive income from eHow. The income generated from eHow will help to make up the $3,000 per month amount.
I would also like to point out that I am not defining my $3,000 per month in earnings as 100% passive. While over time I plan to make each income stream as “hands off” as it can be, I also realize this may not be possible in a shorter time frame. As a result, I have defined my income as “alternative” and intend to make it as passive as possible.
Tell me what you think – Is my plan to earn $3,000 per month in alternative income a SMART goal? Do you have similar earnings goals?
For more information on SMART goal setting, check out – How to Create SMART Goals.
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- Increase Twitter Followers to 50,000 – SMART Goal Setting
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- Increase eHow Earnings by 100% – SMART Goal Setting
- SMART Goals – Clearly Define Your Objectives
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{ 8 comments… read them below or add one }
Hey John, another SMART goal, huh? Glad to see your still setting goals and I really like how they’re intertwined (how the eHow monthly goal is part of your overall monthly goal). The one question I have is: would you benefit from more definition? You kind of addressed it in the “Specific” section above, but much like the eHow goal is part of the puzzle (and it’s well defined) do you feel that more definition for the other puzzle pieces would make it easier to fit together. I would love to hear more about your internet real estate puzzle piece; it would certainly help me evaluate my passive income portfolio.
One more question (if you don’t mind); how often do you evaluate your goals? I know it’s not healthy to obsess over them, but 13 months may be too long to see if your methods are working.
Keep up the good work and can’t wait to hear more!
Reed
@Reed – I am planning to evaluate my goals once a month. We will see how that goes.
In regards to being more specific, I plan to provide more details as time goes by and I add viable income streams to my portfolio.
BTW – Keep up the good work on your site. I look forward to seeing all your new ideas for making money online!
Wow you are really pursuing alternative income streams, aren’t you? Well, if you put $50,000 in dividend stocks yielding 3%-4% which could grow distributions by 12% annually and you reinvest dividends, you could be making $4,000-$5,000/annual dividend income in 5-6 years. That’s between 10%-15% of your income goal.
The most important thing of course is to have complete diversification of income – online income is fine but you never know when the things would change, leaving many bloggers with little to no income in the process. Thus having something “brick and mortar” like common stocks could be a very good diversifier.
@DGI – I couldn’t agree more. My long term plan is to move a lot of this passive income created online into more traditional accounts like dividend stocks, certificates of deposit, savings accounts, and possibly real estate (still not sure on that one yet!).
Sounds good to me – DGI has a good point – I’d diversify by refunneling some of that online income into boring, steady stocks with dividends that increase yearly. I know you already have some good diversification online, though.
@MoneyEnergy – Yeah, I plan to be diversified across not only online income streams but more traditional ones that DGI points out.
This is a great goal! It really makes me think about my own goals. I have not set specific income goals, but I really should. I am very much looking forward to seeing how you do with these goals, it’s a great way to start by posting about them in so much detail.
@Ruth – Thanks. I am finding that publishing these goals gives me a plan and something to keep me on track when I tend to stray. That has been a big weakness of mine – not staying on track, so my goals should help.