2018 Financial Goals – October Update
Where does the time go…?
I just looked at the calendar and I can’t believe it’s been five months since our last goals update. Geez.
Now, before we review our progress to our 2018 goals we have as a reminder to you just two major financial milestones to reach before our semi-retirement begins:
- Be debt-free, and
- Own a $1 million investment portfolio to spend in semi-retirement.
To the outsider, these might seem like insurmountable goals. The truth is, they probably are – unless we break down these monster milestones into more manageable chunks.
That’s been our game plan over the last 10 year: breaking big goals into smaller component parts that we can steady achieve. That equates to paying down debt bi-weekly while saving and investing – trying to do these simple things really well over time.
On that theme, here’s a recap of 2018 financial goals and what we have achieved:
- maximizing contributions to our TFSAs (for long-term dividend income and growth), and
- killing debt.
Goal #1 has long since been accomplished. In January 2018 we decided to maximize contributions to our Tax Free Savings Accounts (TFSAs). If you don’t already know, there are many great things you can do with your TFSA here! What did I invest in back in January? I decided to buy more Canadian dividend paying stocks including some of the ones I said I would in this post here (utility stocks) and here (bank stocks).
Our TFSAs are now fully maxed out. Based on recent calculations the investments inside those accounts now churn out close to $8,000 in (tax-free) dividend income per each year. Recent dividend increases by the companies we own (like Fortis) definitely help. Dividends are nice but we don’t dare touch this money now though – investments should continue to grow inside our TFSAs to help cover future retirement spending needs when we’re no longer working.
With 2019 TFSA contribution room looming, we’ve managed to save a good portion of money for January 2019. I don’t know if we’ll have $11,000 ready to maximize contributions again to both accounts in a few months but it would certainly be nice if we did! We’ve got other priorities. So let’s go to Goal #2.
Regarding Goal #2 we are actively paying down debt. We took on some debt to make a down payment as part of this final housing dilemma decision but we believe this was the best decision for us as it relates to our near-future semi-retirement lifestyle. This move back to downtown Ottawa was certainly not a financial decision. This move is costing us tens of thousands of dollars. But this was very much a lifestyle decision. I do however believe our condo will appreciate in value over time. How much? I don’t really know and I don’t worry about it. We need a place to live and that’s primarily what our condo will be for.
At the time of this post, our mortgage debt is still in the 6-figures and it bothers me to a degree that it is. We could have been debt free sooner had we done some things differently in life. Then again, live and learn and you gotta live in the first place. Case in point: I’m currently writing this post from Whistler Village where we’ve spent the last few nights. It’s great to travel to appreciate what you’ve worked so hard to enjoy…
Whistler Village October 2018
Joffre Mountain Hike October 16, 2018. Not quite to the top of that (!) but our elevation today was ~ 5,000 feet or 1,600 m.
So, we’ll continue doing what we’re doing…pay down debt each month via bi-weekly accelerated payments, save and invest, and have some fun. Goals are great but the journey is best part.
That’s it for now. I’ll provide more details on our debt management plan and any plans we have to maximize TFSA contributions early in 2019 in the months to come.
How are you doing with your financial goals this year? Did you set any?