“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.
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.
Drum roll and results…
Goal # 1 – Increase mortgage payments by $200 per month
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
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
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
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
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!