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Winter Update – 2011 Personal Finance and Investing Goals – The Final Chapter!

“You don’t have to be a fantastic hero to do certain things – to compete. You can be just an ordinary chap, sufficiently motivated to reach challenging goals.”

Sir Edmund Hillary – New Zealand mountaineer, explorer and philanthropist. On 29 May 1953 at the age of 33, he and Nepalese Sherpa mountaineer Tenzing Norgay became the first climbers known to have reached the summit of Mount Everest.

From Bobby Orr (photo above) to Sir Edmund Hillary, it’s important to have goals.  I know my fellow bloggers feel the same as well.  I know this from a conversation I had with one prominent blogger I respect quite a bit, Michael James.

In fact, a few months ago, Michael gave us some free analysis on our personal finance and investing goals for 2011.  Michael noted while most folks look at goals on a pass/fail basis (sometimes I do this), he tends to look at dollar amounts (which are more specific).  I think Michael’s focused approach definitely has some merit.  So for this post, the final chapter in our 2011 financial goals, I’m going to do both – show a pass/fail and dollar values associated with our goals.

Here goes!

It seems like a lifetime ago, but back in January, I wrote down our personal finance and investing goals for 2011:

• Goal # 1 – Increase mortgage payments by $200 per month.

• Goal # 2 – Contribute $5,000 each to TFSAs.

• Goal # 3 – Optimize our RRSPs.

• Goal # 4 – Continue my full DRIP with Bank of Nova Scotia.

• Goal # 5 – Start my full DRIP with Fortis.

• Goal # 6 – Build up our emergency fund to $10,000.

In April, I provided you with an update on our goals – some good progress was made early actually. In July, I provided you with our summer update and the progress continued into October.

Drum roll and results…

Goal # 1 – Increase mortgage payments by $200 per month

Pass!

Since January 2011, we added $200 per month extra payments on our mortgage.  Not a huge contribution I know but much better than paying the minimum.

Goal = $2,400.  Result = $2,400.

Goal # 2 – Contribute $5,000 each to TFSAs

Pass and Fail.

Very early on this year, I maxed out my TFSA contribution for 2011.  Pass.  Unfortunately for my wife’s account this did not happen.   Fail.   We had the best intentions but other priorities took over.  More details will be under goal # 6.

Goal = $10,000.  Result = $5,000.

Goal # 3 – Optimize our RRSPs

Pass!

Thanks to some savvy financial tutors in the blogosphere like Canadian Couch Potato, Canadian Capitalist, Michael James, Andrew Hallam and many others in recent years, I’ve been schooled on the importance of managing our RRSPs efficiently for the long-haul.  That means keeping our management fees as low as possible.  We’ve decided to use ETFs in our RRSPs – no mutual funds folks!   We also tend to optimize our RRSPs, that is, we only contribute enough money to avoid paying any income taxes.  If anything, we might get a tiny tax return (which is fine).   As of calendar year end we’re on target to accomplish this prior to the RRSP deadline in late February 2012.

Goal = $2,000 for each RRSP ($4,000 combined).  Result = $4,000 combined.

Goal # 4 – Continue my full Dividend Reinvestment Plan (DRIP) with Bank of Nova Scotia

Pass!

Not only was I able to continue my full DRIP with Bank of Nova Scotia, I was able to accumulate enough shares this year to start my synthetic DRIP with my discount broker – one whole share will now be purchased every quarter when dividends are paid starting in 2012.  This compounding machine will be up and running very soon.

Goal = Needed ~ $1,200 to start synthetic DRIP at beginning of 2011.  Result = invested $950.

Goal # 5 – Start my full Dividend Reinvestment Plan (DRIP) with Fortis

Pass!

My full DRIP was started this year and I’ve recently closed it because I have enough shares acculumated with the transfer agent to add to my brokerage account to run a synthetic DRIP in 2012.  Another compounding machine ready to turn on!

Goal = no defined amount at beginning of year.  Result = invested $700.

Goal # 6 – Build up our emergency fund to $10,000

Big Fail!

This one barely got off the ground.  We had a line of credit (LOC) to pay down this year, and at 4% interest, that took priority.  It only made sense to put most of our efforts to our highest debt (the LOC).  We have a couple thousand saved in our emergency fund but not nearly enough for us to feel comfortable with.

Goal = $10,000.  Result = $2,000.  Variance = -$8,000.

While we bombed on this goal this year, the great news was we paid off over $15,000 on our LOC this year!  (It wasn’t a 2011 financial goal, explicitly, since the LOC started this spring.)  We’re extremely proud of this effort.  We’ve made a few small sacrifices to pay down this debt, we put off buying a car we needed for some time now (we owned not one but too clunkers) and we didn’t take any vacation (we took a staycation this year) but it was worth it.  We put ourselves into debt and we’re the only ones that can get out of it.

With a few more thousand to go on the LOC in 2012, we should have it finished by the end of February 2012.  (Surely you can guess what our #1 priority will be for 2012 but that’s another post in a few weeks.)   We won’t get to relax much because a car payment is on the way in early 2012, we replaced one of our vehicles.  We’ve been fortunate though – we haven’t had car payments for almost 7 years now.

Overall, we’re proud of our accomplishments.  Not every goal was knocked off as expected but few plans follow every ingredient in the recipe anyhow.  Life happens and you need to enjoy life as well.

I’m convinced we accomplished many of our 2011 personal finance and investing goals because of this blog; writing them down, monitoring them and sharing the good and the bad with you.   I’m going to do the same for 2012.  I look forward to sharing our 2012 goals with you in a few weeks.  I’m also looking for feedback on them, that goes for you too Michael!  :)

Got any feedback on our 2011 goals?  Got any ideas for me, for 2012?

How are you doing with your 2011 goals?  Are you going to set some goals for 2012?

As always, share your thoughts!

Filed in: Goals & Planning

22 Responses to "Winter Update – 2011 Personal Finance and Investing Goals – The Final Chapter!"

  1. Mike Holman says:

    Looks like you made great progress, which is the main thing.

    I don’t understand why you wouldn’t have added the LOC to your goals for the year, even if it didn’t exist at the beginning of the year?

    Once the LOC happened, I would have removed the emergency fund goal from 2011 and added the LOC.

    • Thanks Mike, re: great progress.

      Yeah, we probably could have added the LOC as a goal, during the year, when plans changed. That would have made some good sense, but I kept the original goals because I thought all of them were attainable; goal # 6 was really pushing it though.

      That will be some improvements for 2012, update “the plan” as it evolves. Hopefully the LOC will be done in early 2012. That will be goal # 1 in a few weeks.

  2. Good progress! I want to start adding to my wife’s TFSA too as we are 3 years behind :(

    • Thanks PIE! We’re getting there. A few months, debt-payment, saving and investing at a time. I look forward to watching your progress in 2012. I think 2011 was a very fine year for you!

  3. MOA,

    Great progress man. Those were some pretty tough goals and you hit them for the most part. Like you said, you have to enjoy life along the way. It’s important to have goals and challenge yourself, but life is most certainly not all about money. That’s important to remember. It keeps things in perspective.

    Good luck going into 2012. If your 2012 goes as well as 2011 that would be great.

    For my goals, I think I’m going to hit all 4. I’ve already hit 2 earlier this year (get rid of my car and reduce expenses by at least $150 per month).

    The other 2 (save at least 50% of my net income and earn $1,200 in dividends through the year) will also be reached. I think I’m going to exceed $1,200 in dividends by about $2.00. How’s that for forecasting??? Couldn’t have come any closer had I tried.

    Best wishes!

    • Thanks Mantra!

      Yeah, those were some aggressive goals for sure.

      Thanks for the wishes in 2012. I hope it is a successful year on many fronts. Time will tell, as always.

      As for your goals, yes, that is some amazing forecasting. You need to work at The Weather Network ;)

      I look forward to follow your progress in 2012.

  4. Echo says:

    Nice job on your goals, Mark. Great progress on your LOC, imagine once that’s paid off and you can start directing those funds elsewhere. 2012 should be a great year for you!

    • Thanks Echo. Yes, that’s the plan – probably like you – to make a bunch more extra payments on the mortgage in 2012. Hopefully we can pay down the mortgage, with an extra $500/month. 2012 goals to be posted in a few weeks from now. Stay tuned :)

  5. How well you did on your goals depends on the exact amount of “a few more thousand” on your LOC. For Goals 1 to 6, your result is $15,050. To be honest you’d have to add an implicit goal of having a LOC balance at 0 the way it started the year. I’d subtract the LOC balance from $15,050 to get your result for the year. I assume that this still leaves you with a strong positive result, which is great. Sadly, for too many people the LOC growth outstrips the total of all other supposed savings.

    On the good news side, you get to make paying off the LOC a goal for 2012 and count the balance reduction as a result for 2012. Good luck.

    • Good points Michael. Even with a few thousand left to pay down in 2012, we did make a good dent on the LOC this year. We’re happy about that.

      With the new house, we have a long ways to go (to pay off the mortgage) but having $0 on an LOC in early 2012, we should be able to devote about $500/month in extra payments for the mortgage. We can’t wait for that to start.

      Thanks for the feedback and positive support on our goals, it is appreciated.

      Mark

  6. Elemag says:

    You’ve done a great job with your goals! Sometimes things don’t work out the way we have planned and we shouldn’t get stressed about it. As long as we keep our eyes set on the final destination and keep walking toward it, we’ll get there. Look at it this way: your house has a brand new roof(that’s where the borrowed money went to, right?) and you don’t have to worry about it for the next 25+ years. Plus, you will eliminate the LOC in early 2012 and be back on the investing front with full force. From my personal experience I know that setting plans is good but you shouldn’t get too much attached to them, because many unexpected things can happen and you need to shift gears accordingly.

    Keep up the good work next year, Mark! I am wishing you and your family a very Merry Christmas and a successful, happy, adventurous and sunny New Year!

    • @Elemag,

      Thanks for the positive and supportive words!

      I guess things never fully go as planned and you’re right, we (I) shouldn’t get stressed about it.

      Yes, the house has been improved this year and that repair was needed.

      I appreciate the support about the goals – I definitely want to keep up the good work next year!

      Wishing you a very Merry Christmas and Happy Holidays with family. Looking forward to chatting more in 2012.

  7. Dividend Player says:

    Excellent job for 2011. Which DRIPP’s do you plan to initiate in 2012?

    • @Dividend Player, good question! Not too sure yet. I’d like to get some Rogers (RCI.B) if the price is right, say under $35, but that would be in my TFSA where I already have a small position. That would be a synthetic DRIP. In terms of full DRIPs, not looking at starting any for 2012.

      Although Tim Hortons (THI) is very tempting…

      You can take advantage of a Direct Share Purchase Plan (DSPP) with them here:
      http://www.timhortons.com/ca/en/about/dividend-reinvestment.html

      2012 goals should posted in another couple of weeks. Stay tuned for that!

  8. Hi, congrats on your accomplishments in 2011. I am a newbie to investing in general. I have just purchased 4 shares to start DRIPping. Right now, I don’t have a strategy yet and I have develop one. Do you have a post written on the process transferring a stocks from your Transfer Agent to your brokerage account (Questrade TFSA specifically, for myself) to continue synthetic DRIP but take take advantage of the tax implications for holding it inside a TFSA? I’ve gone the Dividend Primer site and read about the strategy but I am hoping to get a personal view on the process. Any other tips for a beginner is much appreciated, thanks

    • @Simple Rich Living,

      Thanks for your comment and stopping by! I appreciate the blog support.

      I also appreciate the congrats for 2011. Hopefully 2012, we can get a little bit better :)

      Great to hear about your DRIPping journey, I think it can be a rewarding one. I used to DRIP many stocks with transfer agents, but now I have enough shares to DRIP stocks synthetically with my discount broker.

      If you want to know more about DRIPs, or others do, I have a very comprehensive series on that:

      http://www.myownadvisor.ca/drips/

      I wrote 4 posts on this very topic this fall, and shared 2 of those posts with my friend Dividend Ninja.

      I don’t think I have written a post yet about transferring shares, from a Transfer Agent to a discount brokerage account. I’ve done it before, many times, just not written about it. I will be doing that in January 2012 myself, so I think it’s time I share those activities with readers. This way, folks can understand my logic or at least criticize it :)

      Stay tuned for that post! A very Merry Christmas to you.

  9. Congratulation! You accomplished many goals this year.
    Good luck on the emergency fund in 2012. Once that LOC is paid off, you shouldn’t have too much trouble, right?

    • Thanks! Yeah, a few goals down, many to go in 2012. Thanks for stopping by my blog. I’ve been a fan of yours for some time and will do my best to stop by more in 2012.

      Yes, once the LOC is done, we’ll have a car payment and mortgage. That’s plenty of debt for the next couple of years.

      Happy Holidays retireby40!

  10. Wow good job Mark!

    Doing the $5000 is a ton of work (and contributing to RRSPs too). Way too many things to contribute to.

    I was able to contribute the TFSA only because I transferred my non-registered stocks over to my TFSA, otherwise it would have been very difficult.

    Great job on the $200 a month- hey every little bit counts! I just started with the $200 extra per month as well.

    • @Y&T,

      Thanks – we’re trying!

      I know, too many things to contribute to. Makes it tough: RRSP, TFSA, mortgage debt, emergency fund….oh yes, and you need to live life!

      We struggle with the right balance but it’s getting better with time and making some focused goals. I should be posting that in another week – my 2012 goals. How about yours?

      Cheers,
      Mark

  11. Thanks for the mention Passive Income Earner!

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