2022 Financial Goals – June Update

2022 Financial Goals – June Update

Welcome to my latest update about my 2022 financial goals, this is my update for June.

A countdown to semi-retirement if you will…

2022 Financial Goals

For any non-subscribers (yet!) to my site, here is a screenshot from our actual written plan below:

Sticking to many of the bullets above as I/we work towards semi-retirement are a bit of a given:

• We’ll continue to live within our means/keeping spending inline.
• We’ll assume our future, long-term investment returns remain aligned to long-term historical returns (or even lower to be extra conservative!)
• We’ll continue to invest in a number of stocks and low-cost ETFs for diversification.

Other objectives still, we need to work on. This is where our 2022 goals come in:

1. Max out contributions to our Tax Free Savings Accounts (TFSAs) this year.
2. Max out contributions to our Registered Retirement Savings Plans (RRSPs) this year.
3. Continue to pay off our mortgage.
4. Initiate a larger emergency fund to start semi-retirement with.

2022 Financial Goals – June Update

1. Max out our TFSAs

Using your TFSA as an investment account is one of the best things you can do with your TFSA, although other ideas exist as well. Since January, we moved some cash into our TFSAs and maxed both out.

Although the stock market is much lower in price now, what’s done is done, TFSAs are contributed to and assets have been purchased:

• I bought some XAW to own 9,000+ stocks within a single ETF.
• AQN was just one of the 5 stocks I wanted to buy more of in 2022 – so I did.

Goal completed, folks. 

2. Max out our RRSPs

After our TFSAs were maxed out in January, we started saving for RRSP contributions. We tend to max out our TFSAs over RRSPs for these two key reasons – you might want to consider the same:

1. Regardless of how much money you make, every adult Canadian has the chance to max out contributions to this account for investment purposes and earn tax-free growing income.
2. The RRSP account essentially has an expiry date: you must consider converting your RRSP to a RRIF in the year you turn age 71. There is no such age expiry date for the TFSA!

I purchased some Fortis (FTS) and other existing dividend income stocks we hold inside our RRSPs. We now need to save money for future investing. More in a bit on that. 

Goal #2 completed, folks. 

3. Continue to pay off our mortgage

Ya, a given.

Thank goodness, given interest rates are going higher.

I mean, this is scary:

Reference: https://www.cbc.ca/news/business/homeowners-interest-rate-survey-1.6487137

We’ve been good with debt – meaning, we don’t have very much debt on the books.

We intend to enter semi-retirement without any debt. That’s always been our plan. That will be liberating.

Without any debt, regardless of interest rates or inflationary pressures, we feel we’ll be in a great position to work on our own terms via part-time work. I hope our employer will consider it!

As we stay the course, at our current fixed rate of just 1.69%, our mortgage debt will be dead in just over two years. 

Goal in progress. 

4. Increase our cash wedge for semi-retirement

Some readers will recall I made the decision to incorporate in late-2020.

I’ve written about my thoughts on whether I would take a salary or dividends from my corporation eventually.

In the near-term however, I will do neither.

Instead, I will keep some some cash inside our corporation and consider that money as our cash wedge for semi-retirement…even though some bloggers couldn’t care less about cash.

(Early Retirement Now thinks an emergency fund is still useless!)

Keeping cash is hardly useless…

I have my reasons to keep upwards of 1-years’ worth of living expenses in cash:

1. For years, we’ve kept our emergency fund at this steady amount. It’s our sleep-at-night factor.
2. As we age, $hit will happen. I just don’t know when. I know the last thing I want to do, as I get older, is go back into more debt when a small financial emergency hits. 
3. Lastly, a reminder to all readers we are 100% equity investors. No bonds. No fixed income. No GICs. Nada. This means if the stock market goes down, a lot, as in now, our portfolio value will go down with it. My portfolio, like yours maybe, is down tens of thousands of dollars in this stock market cycle. My dividend income however, is up, at an all-time high. With a cash wedge, if we had to, we can “live off dividends” and distributions and draw on some cash savings for a year or so in a terrible stock market climate without ever touching the capital from our portfolio.

So, as 100% equity stock investors, I feel with our semi-retirement cash wedge our money will remain invested, dividends will get paid out, and it will allow us to spend the dividends and distributions earned without selling any equities at the worst possible time (when markets could be delivering lengthy, poor total returns). 

Goal in progress. 

Further Reading:

Read on – How much cash should you keep?

Learn how and why to own your own cash wedge to manage any market volatility here.

The Cash Wedge – Managing market volatility

2022 Financial Goals – June Update

Since we’ve been very fortunate to realize most of our financial goals, already in 2022, we’ll likely spend more money on fun this summer while saving up for 2023 TFSA contribution room. 

Our new sub-goal for the next six months is to have $12,000 saved up and ready to roll for January 2023 TFSA contributions. I’m not sure what I’ll buy yet but I do know it will be Canadian dividend paying stocks or more low-cost XAW or potentially a bit of both.

Our financial plan is rather boring: save, invest, and prosper by staying the course. 

Simple is not always easy, but it can be.

Thanks for reading and let me know what comments or questions you might have about our goals this year or our financial independence plan. I’m happy to answer those questions from you. 

For some frequently asked questions (and my answers), check out my dedicated FAQs page.

You can also visit my standing Retirement page where I’ve interviewed many successful retirees and learned from them to tailor my own investment path. 

Stay well, hang in with the markets folks, and remember to buy more when stocks go on sale.

Other Related Reading:

This is how you can Beat the TSX by owning the best income and dividend growth stocks.

This is how I’m investing to fight higher inflation.

I keep my holdings and how and why I invest the way I do always posted here.