2023 Financial Goals – September Update
“Enjoy your journey as much as the destination.” – adapted from Marshall Sylver.
Welcome to our September update for our 2023 Financial Goals.
Enjoying the journey
Related to the quote above, I/we try and stay focused on our financial journey because there is a lot of calamity and drama that could weigh us down otherwise. Lots of financial news of late that is very much doom-and-gloom. For the most part, we try and tune-out the noise.
We focus on what we can do, things within our control.
I do my best to avoid financial worry beyond my sphere of control or influence.
I shared in a previous post on my site and on Twitter/X we’re close to paying off our mortgage.
With interest rates now normalized per se, historically speaking, looking back before the pandemic when money was dirt-cheap for many years we are happy that we killed some debt. More money paid down then has meant less money owed on the books today…
Making our final push to kill off the mortgage is a goal in 2023.
As far as I can remember, in running this site and sharing our journey (the good, the bad, and the indifferent!), we’ve been busy investing while the mortgage debt was coming down.
As fall arrives, and reconciliation of our 2023 goals comes into focus, I’m thankful we’ve made contributions to our RRSPs this year to lower our taxable income this year while still working full-time AND to earn more tax-deferred growth inside our RRSPs for any future retirement drawdowns.
Like other semi-retirees or retirees have shared with me, based on their experiences, it makes sense to me as we approach semi-retirement to focus on maxing out our TFSAs almost exclusively in the coming years vs. RRSP contributions – when our salaries will be lower with part-time work potentially on the horizon.
On Our Portfolio
On some social media platforms, including Twitter/X/Whatever Elon calls it 🙂 – I’ve observed an increasing volume of criticisms directed towards DIY investors from some financial professionals.
As I age, including my evolving thoughts about personal finance and investing, it becomes almost crystal clear to me at least that you don’t need to be striving for some perfect, rational financial decision at every corner.
I just don’t have the energy to tolerate negativity as I get older. Seems like a waste…
When it comes to people who feel they are on higher moral investing ground I’m becoming more like Keanu Reeves all the time:
Last time I checked: we all live in the real-world. We don’t live in a spreadsheet.
I continue to find personal finance a highly emotional subject.
I’ve come to the conclusion that instead of debating others on pretty much any financial subject, including after I got personally attacked online months ago, that’s it’s perfectly rational to be unrational when it comes to financial decisions as long as:
- you understand the pros and cons of your decision, and far more importantly,
- you genuinely feel you’re making the best decision for you.
Source: Behavior Gap, Carl Richards
I/we invest by holding a basket of stocks for income/growing income and a mix of ETFs for growth/extra diversification. I/we also keep some cash handy.
That’s a good mix of diversification for us.
That doesn’t mean that approach nor level of diversification works for others…even the best investor of our time does not practice very much diversification.
Would you keep >50% of your portfolio in one stock??
Back to us, keeping some cash will be an important wedge/buffer for semi-retirement in the coming years. Raising that cash position remains part of our 2023 goals.
2023 Financial Goals – September Update
To summarize, these are our goals and updates (including things we’re already thinking about for 2024)…
1. Save for our 2024 TFSAs. This goal implies we’re going to try and sock away at least $13,000 this year (based on 2023 TFSA contribution room) before January 1, 2024. As of this month, savings are coming along. We are halfway there.
2. Reduce our mortgage by $30,000 by the end of this year. By continuing to make our bi-weekly accelerated mortgage payments, and by making the odd lump sum payment while our debt is cheap, we’re ahead of schedule and on track to have our mortgage dead in March 2024.
3. Complete the “cash wedge” for semi-retirement. With cash savings between personal and corporate accounts, we’re on pace to have this accomplished by January 2024.
4. Max out contributions to our RRSPs. As mentioned above, RRSP contributions and growth offer two great benefits as we continue to work full-time now:
- The first advantage is our RRSP contributions reduce our taxable income.
- The second positive – assets held within our RRSPs — both the amount I/we contribute and any gains we see – is also sheltered from tax until we withdraw it. So, our thinking is, when money comes out of our RRSPs in full-retirement, we hope to be in a lower tax bracket and therefore pay less tax.
Given this could be close to the final year (or so?) of full-time work, we might as well max out RRSP contributions. For 2023, done! 😉
2023 Financial Goals – aligns to our early drawdown ideas
A reminder as I close, there are a myriad of drawdown tactics that can be used to balance short-term and long-term tax efficiency needs, optimize retirement income, let alone fulfill any wealth transfer desires but we believe something like this should work for us eventually:
- Use a mix of Non-registered (N), RRSPs (R), then TFSAs (T) assets in an NRT draw down order – to smooth out taxation over time while meeting semi-retirement income needs.
- Defer CPP income to at least age 65 or beyond.
Once all debt is gone, I’ve heard from other early retirees that “life really begins” since you’re unshackled from paying other people first and any money you do make, beyond fixed costs that will not go away (food, housing bills, transportation) is yours to largely enjoy.
Well, we hope to be debt-free very soon.
Reducing debt, keeping our savings rate intact for investing purposes, and sticking with your portfolio investing plan are things that remain within our control for financial success. Worrying about other things outside our financial goals are likely to distract us from things that really matter. I suspect the same will be true for you as well.
I welcome any thoughts, opinions, different perspectives or investing approaches on this site. Ask and comment away!