2017 Financial Goals – May Update

2017 Financial Goals

In previous updates I told you my wife and I focus on some financial goals…so we have a hope of realizing them.  This blog is an enabler for that.

Our 2017 money goals are rather simple but also aggressive.  Stretch targets are good to have.  They push you.  As part of our long-term goals we’re inching closer towards covering basic living expenses from dividend income eventually.

(Sorry indexers, I know some of you aren’t a fan of my dividend investing approach but this is part of our broader financial plan.  I’ve gotten more emails and comments on my site recently (and on other sites) about this – why invest this way at all – it seems “ridiculously stupid” to quote one reader on my friend’s site here.  No doubt your money habits and investing journey has been different.  I might want to remind you that no two indexers probably have the same portfolios, in the same products, in the same amounts, let alone have the same long-term financial goals.  I think that’s great.  Why?  That doesn’t make your investing journey “ridiculously perfect” – it just makes it different.  Anyhow, just a point I wanted to get across. Small rant over).

In today’s dollars, here’s a list of expenses we hope income from our portfolio can cover within 10 years, by age 50 if possible:
• *Property taxes ($4,200 per year)
• *Home utilities (heat, hydro, water, internet, cable; up to $7,800 per year)
• Home maintenance ($4,800 per year)
• Home insurance (at least $1,500 per year)
• Food and household supplies (up to $11,000 per year)
• Healthcare needs (various).

*Can already be used if we really needed it to.  

When we do the math that’s about $30,000 per year to cover basic living expenses. Not trivial…

Image courtesy of Carl Richards, Behavior Gap.

Goals Update

Since March we’ve made some small progress:

1. Do not to incur any new debt. Check!
2. Maximize our Tax Free Savings Accounts (TFSAs). These accounts are used to help us with our dividend income goal so they remain a big priority to maximize contributions every year. Check – goal accomplished.
3. Make double-up mortgage payments. Even with our mortgage borrowing costs as low as they are today (less than 2%), we believe having no debt in our financial future will give us options.  Goal in progress.
4. Save $5,000 for a vacation. We’ve purchased our tickets for our next big international trip. Portugal should be fun. Tickets are bought and paid for. We need to save another $2,500 to cover accommodations, our rental car expense and food. Another saving goal in progress.
5. Save $5,000 towards a new car. This hot rod is now 17-years-old. It is rusting out but it does the job. We’ll try and keep it on the road until 2018. This way we have time to save up for a newer car in advance.
6. Top up our emergency fund. Check – goal accomplished. We keep our emergency fund at a decent amount. We’ll probably increase it by $1,000 next year to cover inflation but that’s next year…

Lastly, you might notice we don’t have any RRSP-contribution goal. My RRSP is out of contribution room. My wife has some RRSP room left but not very much. We believe maxing out our RRSPs and TFSAs is a healthy financial thing to do before really ramping up the non-registered investing.

So that’s our update. Two goals accomplished. One goal well underway (saving for vacation) and a few more in progress. I’m optimistic things can keep going forward. Stay tuned for more updates and thanks for being a fan, even the indexers.

Got comments on our savings goals and general approach?  Happy to hear it.