Many people believe that their investments are performing satisfactorily, usually because their portfolio manager assures them that this is the case. It can come as a nasty surprise then, when you reach retirement age, to discover that your retirement savings are insufficient to cover your annual costs of living and you have to keep working.

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The only way to verify that your investments will meet your requirements when you retire, is by checking their performance at least once each year and by tracking the growth of the dividend income being generated by your portfolio. This information should be used to determine whether your savings and annual dividend income are on track to meet your financial goal within a reasonable length of time, or whether you need to adjust your rate of saving or investment strategy. Not knowing this information is akin to driving on a narrow, winding mountain road at night with your eyes closed. The probability of arriving safely at your destination is very low.

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It is not necessary to track the market value (market price times the number of shares) of your investments. It is essential, however that you track the growth rate of the dividend income generated by your portfolio, to verify that you will reach your required minimum dividend income when you retire. The dividend income and its growth will be much less volatile as compared to the market value of your investments.  

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Tracking your dividend income is neither difficult nor time consuming. Once you know the average annual growth rate of your dividend income over the most recent 3 to 5 years, you can adjust your rate of savings and your investments, as necessary, to ensure that you meet your financial goal.​​​​