2016 Financial Goals – September update

Welcome to my third financial goals update for 2016.

All plans remain nothing more than guesses.  However it’s the process of planning, making some educated guesses, monitoring how those guesses turn out and revisiting the outcomes to learn from them – that’s more important.

Let’s recap our goals for this year and see where we’re at as of this month.

  1. Maximize our Tax Free Savings Accounts (TFSAs)

The TFSA remains a gift to all adult Canadians regardless of their income status.  If you don’t know the rules of the TFSA yet please read this post here.  Our TFSA is maxed out – which feels great.  We’ve actually started to save a few hundred bucks already for 2017 TFSA contribution room.

  1. Make double-up mortgage payments

I continue to say this on my site and it’s worth repeating again:  I don’t think there’s an absolute right or wrong way of tackling debt.  We’re fans of getting rid of all high-interest debt first – and we do.  We don’t carry a balance on our credit cards.  We have a car loan that costs us just over $400 per month.  This loan is done in another four months but we don’t really worry about this payment.  This is because we figure we’ll always be saving up for or paying for a car for many years to come.  At some point in our future though, we might only have one car, which will help our operating expenses.

Beyond car payments our largest debt payment focus is our mortgage – and rightly so.  Our mortgage debt remains in the six-figures.  If we keep after it though we could potentially retire the mortgage by the end of 2020.  We continue to make double-up mortgage payments year-to-date.

  1. Save $5,000 for a future trip

Investing for our financial future is needed but you gotta live now and then – otherwise life is just plain boring.  Over the last few years we’ve travelled to Costa Rica and Scotland.  This year we’re going to do some wine touring in British Columbia for a week.  (Most of that trip is already paid for (flights and accommodations – a future post to come about how we did this)).  We’re currently trying to save $50 – $100 every few weeks for a winter trip.  We figure a sun destination will cost us about $3,500 so we’ve got some saving to do this fall.

I’ll keep you posted on our plans.

Thoughts and comments on our saving and investing goals for 2016?

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19 Responses to "2016 Financial Goals – September update"

  1. Hi Mark,

    Great to see you’re still on track to financial freedom!

    With mortgage rates so low I sometimes wonder if it’s still a good idea to pay it off quickly. Also some people may decide to downsize or move to markets where real estate is cheaper once they no longer need to work (retire, or earn enough in dividends), which means the mortgage will eventually be gone….just later than sooner.

    Good to see that you’ve saved for your trip before actually getting on a plane, I wish more people would save before spending big bucks.

    cheers,
    Kanwal

    Reply
    1. Good to hear from you Kanwal.

      Even with mortgage rates so low, we figure paying down the mortgage aggressively is good. Having no debt in life will eventually give us options.

      Reply
    2. I actually slowed down my mortgage payments when we renewed last year. Investing the extra money has a much higher benefit for us.

      We did that because I can easily pay it off in lump sums if needed. If I had not gotten to that point, I would not have changed my approach. We also did it once we got the mortgage in a comfortable loan size.

      Reply
      1. Thanks for sharing your approach.

        We’ll likely slow down on mortgage payments once the mortgage is sub-$100k. If we have a job loss or a health issue, you never know, I prefer to have less debt.

        As long as we can continue to max out our TFSAs and RRSPs every year, then I feel paying down debt is also a smart move.

        Reply
  2. Keeping your goals focused and simple makes them easier to track and achieve. Good luck.

    My only goal, other than hoping the majority of holdings continue to increase their dividend, is to see a market correction. I’m sitting on some cash and would like to get it invested, but feel the prices are currently too high. Once this money is invested I will have achieved one of my Income goals.

    Reply
  3. Mark, I really like that you are relentless with the updates and much more importantly with the actual actions needed to enjoy life and get you to your future goals. Well done indeed.

    Maybe it’s an idea to think of the $400 car payment as (if you haven’t already) something you’ll keep up but just as savings for a replacement vehicle for your bomb. One vehicle in retirement sounds like a sound objective. Heaven knows why we have four, and maybe if you keep blogging about that I’ll cave and give up at least one. LOL

    Congrats on the mortgage progress and projected anchor shedding target in 2020! Life begins when you’re debt free!

    Looking forward to reading about how you dealt with the upcoming BC trip and the actual journey. Maybe we’ll see you on our southwestern journeys this winter! Cheers.

    Reply
    1. Thanks RBull. We save, we invest, and we have fun with what is leftover. It’s all true.

      That’s exactly what we see – after the car payment is done, we’ll just keep saving the $400 or so each month for the next car. This way, hopefully, we can pay cash for our next car. That will be nice.

      We appreciate the support for the mortgage anchor!

      Reply
  4. Hey, the wine region of BC is my neck of the woods. Hope you have a good trip! Soon or spring/summer?

    I booked airfares for February a month ago as I thought it was a good price. Not sure where I will go, booked to Mexico City return and will decide where to go from there later. I am away in your part of the country now, so told my husband to pay the Visa bill, and he said what are those 2 airfares on there??? Ha, hadn’t told him yet.

    I have finally got my rrsp money away from a financial advisor and into my own control. I would also like a correction, but what percentage drop would be a good amount to jump back in? I am very indecisive….

    Reply
      1. Thanks, that is a good article. Think I will slowly buy into the market once I am back home.
        I am in Ottawa now and just had dinner with an old colleague I haven’t seen in 25 years, when I left to be a full time mom . He is retired with a pension of $90,000 and his wife, the higher income earner, is still working. Can’t imagine how you could even spend that much money.

        Are you hitting the fall wine festival events, Mark? Have a great trip.

        Reply
        1. Thanks Barbara, I think that article sums up how I think about investing over time. Kinda just do it and do it slowly when you have sizable money to invest. To use an analogy, as they say, the best time to plant a tree was yesterday.

          I can’t imagine a pension worth $90,000 per year. That’s insane and if you have no debt that a boatload of money to spend in retirement.

          Reply
    1. Barbara: “but what percentage drop would be a good amount to jump back in? I am very indecisive”

      Not sure what or how you are planning to invest the funds, but one of the main reasons I switched to DG investing was that my goals changed. Instead of concentrating on the price of stocks, I began to look at the income I would receive from my investments and which stocks would best provide that income. I could then come up with a list of quality DG stocks I like and set buy prices (knowing how much income I would receive). If I bought and the price continued to drop, I could buy some more and increase my income. Mark has listed many Cdn & US quality stocks.

      For Indexing maybe check out some of Marks previous posts.

      Reply
      1. Funny you wrote this cannew because my wife and I have recently decided that income from the CDN part of our portfolio is what we want. The US-side, I’m fine with a more total return approach using an ETF like VTI with 2% distributions.

        As for the CDN-side, if we can grow the portfolio to yield our desired $30k per year, we’ll be in a very, very good place financially by age 50. Nothing is guaranteed though.

        Reply
          1. Thanks RBull. Hopefully between now and January 2017 we’ll be able to save at least one part ($5,500) for the TFSA contrition. Maxing out that account is very important to us as a financial goal every year.

            Reply

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