2017 Financial Goals – August Update

2017 Financial Goals – August Update

For the last few years, I’ve posted some financial goals on this site…so we have a hope of realizing them.  I figure you can’t manage what you don’t measure.  Then again, goals can change over time.  Sometimes the path you’re on needs to be adjusted.  Then again life just happens and changes anyhow.  More on that in a bit.

Before I touch on our 2017 goals, essentially our long-term financial goals boil down to these two biggies:

  • A paid off home; and debt-free thereafter
  • A $1 million investment portfolio

We dream big here on My Own Advisor…and why not!  We figure the combination of both goals above should set us up nicely for an early retirement or at least provide some financial flexibility many years from now.  (In addition to these assets we will also have two small-modest workplace pensions (~16 years’ worth each) and government benefits such as Canada Pension Plan and Old Age Security to draw from in our 60s, and beyond.)

To achieve these two, monstrous, major financial goals (while living our life and having some fun along the way) we establish some short-term goals, including these ones this year:

  1. Do not to incur any new debt.
  2. Maximize our Tax Free Savings Accounts (TFSAs).
  3. Make double-up mortgage payments.
  4. Save $5,000 for a vacation.
  5. Save $5,000 towards a new car.
  6. Top up our emergency fund.

Here is where we are at folks…

  1. Do not to incur any new debt. I had my doubts about this one earlier this year, namely because I wasn’t sure if we could afford a newer car but we managed to pull it off.  That said, we may be taking on more debt later this year (or next year?) if we purchase an income property.  We’ll see.  More on that soon.
  2. Maximize our Tax Free Savings Accounts (TFSAs). Goal long since accomplished!  We maxed out contributions to our TFSAs earlier this year, in January.  In fact, that is our goal every January and we have plans to do the same in 2018.
  3. Make double-up mortgage payments. You may have read about our housing dilemma and we continue to work through that.  Do we sell and buy a new place in the city?  Probably can’t afford that.  Do we sell and buy a resale home in the city?   Do we downsize from this house?  Downsizing is 100% assured – our next place will be smaller.  Do we buy a rental property, with plans to move into it in a few years?  Possibly.  Do we sell this house and simply rent for a few years?  That’s on the table as well.  What does this have to do with our double-up mortgage payment?  We’ve stopped it.  While we continue to make more than the minimum payment on our mortgage we’ve turned down our double-up payment privileges.  We’re going to use that money instead to build up our cash reserves for the next few months and decide from there.  This money could be used for future moving costs or other housing needs.  Besides, we can always put any money saved back onto the mortgage as a lump-sum payment.
  4. Save $5,000 for a vacation. Our trip to Portugal is coming up soon!  Our tickets are bought and paid for.  We’ve paid for our Airbnb accommodations already.  Beyond what is bought and paid for I figure we need another $2,000 to cover our rental car expense, food and fun.  We’ve got about $1,000 in the bank so I feel we need another $1,000 saved up so the trip can be paid for in full when the credit card bills come in.  Goal remains in progress.
  5. Save $5,000 towards a new car. Goal accomplished and the old car is now for parts.  We purchased this car and hope to drive it into the ground in another 10-12 years.  (I didn’t always think this way but I think there are great benefits of buying used cars over new cars.)
  6. Top up our emergency fund. Goal accomplished.  We keep our emergency fund at this amount.   We’ll probably increase it by $1,000 next year and every other year going forward to cover inflation.

Not too bad.  More work to do though.

What about RRSP contributions? 

They are no longer a goal.  My RRSP is out of contribution room.  My wife has some RRSP room left, but not very much.  We hope to have her RRSP maxed out in 2018.  That would mean both of our TFSA and RRSP accounts would be fully contributed to – a huge milestone for us if we can get there in 2018.

Back to the present, that’s our update.  Three of six goals accomplished, a couple more in progress but also one abandoned.  Things change and we’re ready for some in the coming years with this house move; at least I’m getting more comfortable with the idea.   I’ll keep you posted if anything happens sooner than later.  It could.  You never know.  Thanks for being a fan.

How are your goals coming along this year?  Do you monitor them like I do? 

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, we're inching closer to our ultimate goal - owning a 7-figure investment portfolio for semi-retirement. We're almost there! Subscribe, join the journey to learn how I'm getting there and how you can get there too! Follow my on Twitter @myownadvisor.

19 Responses to "2017 Financial Goals – August Update"

  1. When you talk about moving closer to downtown Ottawa and/or perhaps buying an income unit, you don’t mention buying a duplex. Although a duplex would reduce your privacy (which may be a high priority for you), it may be a workable and practical option leading to a win-win situation. Just a thought.

    Reply
  2. Nice update Mark. A ton of options are opening up for you based on good financial discipline and choices in the past years. Building cash now for what lies ahead is sage.

    Good luck with the upcoming decisions and get ready for fun in Portugal.

    Reply
  3. Congrats on your progress. Regarding housing I think the market in Canada has a way to fall based on valuation and will likely correct in the next few years. What are your thoughts on low volatility / high dividend funds such as Powershares SPHD and XSHD?
    Wishing you the best.

    Reply
    1. I think the RE market is in for some form of a correction but who really knows eh?

      As for low vol/high dividends funds like those, I’m all for lower fees on those dividend products where possible. So, I like VYM or HDV. Comparatively VYM over 5-years = 13.5%, it would be good to know what the SPHD product is but only 3-year data is available. VYM is far more diversified, operates like an index fund but with 3% yield. I haven’t read up on XSHD much. Yield seems good but I sometimes worry about funds with a short inception history. That’s just me. I’m rather conservative Ray!

      Cheers,
      Mark

      Reply
      1. Mark. I agree that fees are important but if the performance justifies the fees I’m fine going with a higher fee (still index/passive) product. As for the history you are correct that both funds launched relatively recently but the performance data for the indices on which they are based goes back decades and is quite impressive. I think allocating a greater % of one’s wealth to small-caps and value (over growth) given the historical outperformance of these factor tilts makes sense.

        Reply
        1. I think allocating some part of the portfolio for smaller caps can be quite good, that is certainly where more growth will come from – you just don’t know what stocks per se. I think ETFs are great for that reason; you avoid making guesses on individual smaller-cap investments.

          It will be interesting to see the performance over time. Early days, but things look promising for both. Are you a fan of smart-beta ETFs in general? I interviewed a VP on that here:
          https://www.myownadvisor.ca/smart-beta-etfs-for-your-portfolio/

          Reply
  4. So, I incurred a lot of new debt this year… It is not even funny as I had never had any debt really ( besides some CC arbitrage a few years back).

    It is called “good debt”, since it is a mortgage, but I do not like it one little bit. My housing payments are equivalent to my rent payments, but still I feel like I want to just pay it off. I expect that over the next 20 – 30 years equities would do better than a 3% – 4% yield on a mortgage, but perhaps there is a part of my brain that wants this debt paid off, and places lower priority on expected returns on equities.

    Reply
    1. “Good debt” can be a mortgage if it appreciates in value. Right? Thoughts? Otherwise, if you’re borrowing money AND your asset loses value it’s probably not an investment and a good use of debt 🙂

      Our housing costs are higher than any rent in the city, which is making us really question if we should have bought a house at all. (Probably not). It hasn’t increased in value like we thought/wishes. Alas, such is life…

      If you can yield 3% – 4% on your house, that’s great. I know historically houses have not returned that much but don’t say that to people in Toronto or Vancouver in Canada.
      Google the house prices in those cities and you’ll see what I mean…. 🙂

      Cheers DGI,
      Mark

      Reply
      1. Actually, in my city, I rented for $1/sqft. I bought at roughly $100/sqft. So that’s why I think buying makes sense over renting. Meaning, if I stay in my place for two-three decades, I would be better off than renting even if the price of the house never goes up (or even if it goes down).

        When I said yield 3% – 4%, I meant the yield on the mortgage itself.. Not the house..

        The housing markets in Canada and Australia are beyond my comprehension.

        Reply
  5. Congratulations Mark! You’re doing fantastic, accomplishing pretty much all your goals before 2017 is over! I have always wanted to go to Portugal, sounds like it will be a lot of fun! I’m not sure if they have “Turo” over in Portgual but that’s like an Airbnb for cars, perhaps that might save you some money on your rental car.

    Reply

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