2020 Financial Goals – September Update
When it comes to goals, I once read the following:
“Set goals that both excite you and scare you at the same time.”
The reasoning behind that is simple: goals should motivating and somewhat daunting.
In that spirit, here is where we want to be in a few short years to start semi-retirement with:
- Own a $1 million investment portfolio. That portfolio value excludes any future workplace pensions and excludes any condo equity, which brings me to major goal #2;
- Own our condo – kill the mortgage for good.
2020 Goals Update
We got VERY close to goal #1 earlier this year but COVID-19 changed everything. Alas, no big deal. We’ll get there eventually. Our portfolio of Canadian and U.S. stocks is chugging along – dividends are being paid albeit we’ve had a few Canadian cuts: Suncor (SU), H&R REIT (HR.UN) and Inter Pipeline (IPL).
Our ETFs pay boring distributions.
All dividends and ETF distributions are reinvested in our registered accounts so that money makes more money over time. The portfolio is now doing all the heavy lifting after 10+ years of steady contributions.
I’m not really worried about a couple of these companies in our portfolio – especially since Warren Buffett just made a HUGE bet on Suncor. As per recent regulatory filings I read:
Berkshire Hathaway increased its stake in Suncor Energy; as of June 30, 2020, Berkshire holds 19.94 million shares of the bellwether energy stock versus 14.94 million shares at the end of March 2020.
For the record, I don’t own that many shares 🙂 That would be nice…
When it comes to major life goal #2 we’re plugging along. I don’t dare make just debt repayments our only financial priority and I informed you why in this post:
In ensuring our long-term goals align to what we value, this is what we are striving for in another four months:
- Kill debt more aggressively.
- Maximize contributions to next year’s TFSAs.
- Increase our travel fund.
Latest 2020 Updates
1. Kill debt (a bit) more aggressively.
Since January 2020, we’ve increased our standard mortgage payments by $100 bi-weekly and have kept it there since. I will be renewing our (final) mortgage term in the coming months and I’m leaning on taking a 5-year variable term for it or a 5-year fixed term if I can get that around 2%. The biggest advantage I see with variable right now is if we wanted to pay off the mortgage early and break the mortgage. The penalty to do so would be less expensive with variable. Thoughts???
2. Maximize contributions to next year’s Tax Free Savings Accounts (TFSAs).
Since Day 1, we’ve used this account as a retirement account and will do so, for the foreseeable future.
With our TFSAs out of contribution room since January 2020, our focus naturally turned to funding 2021 contribution room. We figure the annual contribution limit will remain the same for 2021 – so that’s $6,000 to fund per account, or $12,000 total for us. At the time of this post we’ve saved up just over $9,000 for these contributions. We should be ready to roll for investing as of January 1, 2021.
3. Increase our travel fund. HA!
All work and no fun makes for a boring life! But now we can’t go anywhere?! Thanks a bunch COVID-19….
The view from our villa in Belize, just a few months ago.
Regardless, we’ll save a bit of money when we can travel. We had plans to go back to Belize again in the winter of 2021 but that is not likely to happen unless COVID-19 protocols change drastically and/or we feel far more safe to travel abroad than we do today. We will travel internationally again, someday, eventually, probably and when we’re ready our bank account will be too.
Instead of international travel we’ll make some small side-trips around Ontario or to neighbouring provinces for long weekend getaways or other.
We’ve only made modest progress towards this goal since my spring update – putting aside $2,500 for any future trip but that’s because we’ve been focused on setting aside money for our TFSAs first.
What about RRSP contributions or investments you might ask?
We don’t really save up for RRSP contributions per se. I mean, we do, but they are automatic. At the time of this post, both RRSP accounts (like a 401(k) plan in the U.S.) are out of RRSP contribution room. We’ve had automatic contributions set up to fund these accounts for years so it’s designed into our budget and so ingrained over time that we don’t really see RRSP contributions as financial goals any longer. Assuming we are able to keep our jobs for the coming years prior to semi-retirement, those contributions just happen…
So, pretty good given the circumstances. Needless to say we are very blessed and fortunate.
I look forward to sharing our final update for 2020 in a few months.
In the meantime, I’ll be back again soon with more original content including if travel hacking is really worth it, my latest dividend income update, and much more.
Got questions for me? Fire away!