2024 Financial Goals

2024 Financial Goals

Welcome to our 2024 financial goal-setting post along with a recap of our 2023 goals.

Happy New Year!

I hope 2024 is a healthy and prosperous one for you and your family…

2023 Goals Recap

Before we get into our financial goals for the new year, I thought I should reconcile the year that was. While our financial goals year-over-year remain simple, they also continue to be SMART (specific, measurable, etc.) as much as possible. My professional role is to encourage this type of thinking in the workplace so I figure I better practice at home what I preach. πŸ™‚

via GIPHY

Ha. Loved that AI interview…

Our Goals On Debt

As referenced in our September 2023 update, 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. It’s easy to feel like you’re not making progress or keeping up with others…

For the most part, we focus on us and tune-out the noise. 

Years ago, we shared a goal to try and pay off our mortgage sometime in 2024. Here is one example of that. 

β€œIn the coming 3-4 years, without any mortgage debt, we’ll have financial options….”

Before the pandemic, when money was dirt-cheap for many years, we happily killed mortgage debt and renewed our mortgage at under 1.7%. We knew more money paid down then would mean less interest costs if/when rates climbed higher.

Well, here we are. πŸ™‚

With less than $9,000 to go on the mortgage, at the time of this post, we will be mortgage free by March 2024. 

My Own Advisor Mortgage Free

To reconcile one of our 2023 financial goals, we made a significant reduction on our mortgage and remain on track to kill it this spring. 

Our Goals On Saving and Investing

Long-time subscribers will recall I favour the TFSA as an investment account, the one key account to prioritize over your RRSP for many reasons every year. Managing the RRSP-generated tax refund every year is just one thing to be mindful of in this debate…

Well, true to our own cooking during 2023, we saved enough money to max out our 2024 TFSA contributions – and did so on January 1, 2024 (yesterday).

Another financial goal from 2023 was to complete our cash wedge for any pending semi-retirement. We believed in 2023 as we do today in early 2024, that keeping some cash or cash equivalents beyond our stock and ETF equity portfolio will not only shield us from any equity market calamity but cash savings could be advantageous to deploy if/when equities tank in price – only to buy more stocks on sale!

The Cash Wedge – Managing market volatility

With cash savings held between personal and corporate accounts, we’ve fulfilled this goal.

We now have ~ 1-years’ worth of cash available across various accounts to cover basic living expenses if/when/should we want that.

How much cash should you really keep is personal and is usually aligned to other objectives, something I believe all DIY investors should consider here: 

How much cash should you keep?

Although I can’t speak for you, keeping cash does offer a meaningful sleep-at-night factor for us that’s very hard to ignore. 

β€œWe do it because cash is the oxygen of independence, and – more importantly – we never want to be forced to sell the stocks we own.” – The Psychology of Money

In that book, Housel (the author) goes on to say with his cash wedge philosophy in reference Charlie Munger whereby keeping cash avoids touching the stock portfolio over time:

β€œThe first rule of compounding is to never interrupt it unnecessarily.”

Finally, we desired to max out contributions to our RRSPs and did so, in 2023. We continue to believe that RRSP contributions and growth offer two great benefits as we continue to work full-time: 

  • The first advantage is our RRSP contributions reduce our taxable income.
  • The second positive – assets held within our RRSPs β€” 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.

2024 Financial Goals

With 2023 goals accomplished, the new year brings new opportunities. The aforementioned mortgage goal is a given for 2024, so it would seem foolish to include as a goal for 2024. I will however keep you posted and let you know what we decide to do to celebrate this major financial milestone in the coming months… πŸ™‚

Financial Independence Mortgage-Free
Financial Independence Mortgage-Free

Here is our short-list of saving / investing goals for *2024:

  1. Max out our RRSP contribution room by April 2024.
  2. Save for our 2025 TFSA contribution room by September 2024.

*potentially our final year of aggressive savings for investment purposes???

That’s it. Two goals.

Without any mortgage debt in a few months, most of the income we make beyond our day-to-day living expenses of course will be diverted to investing, as a final push towards fulfilling some semi-retirement dreams including the income we need to live from, from our portfolio.

We cannot share in detail what that means at this point, but once again, I will keep you posted as the dream remains alive and becomes more clear as 2024 progresses…

2024 Financial Goals

I look forward to keeping you updated on My Own Advisor in 2024 including how our long-term financial independence, work on our terms dreams might finally be here…

Happy New Year and best wishes, more new content to come in the coming weeks!

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

20 Responses to "2024 Financial Goals"

  1. Hi Mark – re: the cash wedge – I’ve done something similar but am holding that in a registered account to avoid any taxes on the interest. Above, you mention you hold it in savings accounts where I assume you would have to pay taxes on the interest. Any reason why one shouldn’t hold the cash wedge in a tax-protected account? Also note – I don’t have a corporation account like you do – so maybe that’s how you’re able to get around the whole tax on interest thing?

    Reply
    1. Hey MikeyP!

      Happy New Year, nice to hear from you…

      When it comes to cash wedge, as we prepare for some work on our own terms/wishes in the coming year or so….our cash wedge is constructed like this:

      1. always keep $10k in cash savings, in a savings/interest savings account for emergencies/extra when needed. Very easy to access, liquid, etc.
      2. ~$10k maintained inside various *investment accounts, mainly TFSAs, RRSPs, etc.
      3. ~$30k maintained inside my corporation account.

      *We tend to keep some cash inside our TFSAs, RRSPs, just in case some stocks/ETFs go on sale. πŸ™‚

      With just cash savings inside the corporation, for now, yes, nothing paid on tax until the $$ comes out. Keeping some cash inside TFSAs, RRSPs, etc. shelters tax and/or I don’t pay tax (TFSA).

      I personally think it’s not wise to keep tens of thousands of dollars in GICs, interest savings accounts, etc. in taxable accounts since you are taxed at a high rate there, like employment income. Just my approach for now!

      Thoughts?
      Mark

      https://www.myownadvisor.ca/how-much-cash-should-you-keep/

      Reply
      1. Happy New Year right back at ya Mark! πŸ˜‰ Got it – makes sense that you’re sheltering most of the cash wedge – leaving only 10K tax-exposed for that really easy “emergency” access. All good then.

        Reply
  2. Lloyd (63, retired at 55) · Edit

    “That’s it. Two goals.”

    Not much better than simplicity in a complex issue. That and it feels good to accomplish all the goals.

    I find it better for me to accomplish something, *then* write it down as a goal and cross it out right away. Makes the wife think I’ve been busy. πŸ˜‰

    Reply
  3. Happy new year! Thank you for the informative posts. I always learn something!

    Where do you put the cash so that you donΒ΄t touch your portfolio?
    And do you have a rule of thumb of how much cash to have on hand?

    Thank you again!

    Reply
    1. Thanks Ray, Happy New Year back!
      Well, as much as we can, we build the cash savings over the year in a savings account and then make the TFSA contribution transfer each January 1.

      We are/have been slowly building a cash wedge for semi-retirement between our personal accounts and my corporation account. That work is now done.
      https://www.myownadvisor.ca/the-cash-wedge-managing-market-volatility/

      We always tend to keep ~ $10k in a savings account, ready to use, if/when needed, that is never touched per se.

      I hope that helps!
      Mark

      Reply
  4. Mark,
    March will come sooner than you expect. How do you plan to celebrate this party?? It will be a great feeling when you have paid off the mortgage. Your comments and advice have been very informative and helpful all the times. Many thanks again.
    Cheers, Mark.

    Reply
    1. Ken, I think so too! πŸ™‚

      I think we’re planning on a nice dinner out in fact, at a local restaurant we want to try. That’s the current thinking.

      Our plan for the rest of the year as per post is to 1. save away to max out RRSPs in potentially our final year of full-time work (?) and then 2. save up for any TFSA contributions in Jan. 2025. That’s still a lot of saving for investing but needed to meet some future spending goals of ours.

      I appreciate your kind words. I share my journey, what I know, what I learn about, in the hopes of paying it forward so others can tailor their own path and live their own dreams too – whatever they may be!

      I look forward to more engagement in 2024!

      What are your saving and investing plans for this year?
      Mark

      Reply
      1. Mark, I plan to invest more wisely and not to be swayed by emotions at times!!!! Ha..ha.. I have to admit sometimes I am like many investors not investing as cautiously as I should have!!!! May be, I incline to “gamble” and aim too high!!!! Hope to invest in index funds for this year in my registered and investment accounts. I already maxed out my TFSA and drawing down my RRSP.

        Too bad, 2024 started way down, not the way we wanted. But, we still have a long long way to go and hopefully, the market recovers soon and makes everyone richer!!!!

        Reply
        1. Nothing wrong with the odd gamble, Ken. I mean, sometimes those work out but you can’t expect it – I’m the same. I own a number of CDN and U.S. stocks on the “gamble” that collectively they should all help me and perform well. Will they? All of them? Nope. That’s the risk.
          This is why I own some indexed ETFs and always have – just in case – to get index returns as a default for part of the portfolio. πŸ™‚

          2024 hasn’t started off hot but nothing I can do now. Already funded and bought assets in my/our TFSAs. Onto the two big goals for 2024 and hope to have the RRSPs maxed out in another 4 months.

          2024 has a LONG ways to go yet – who knows?!
          Best wishes,
          Mark

          Reply
  5. Hi Mark:

    Nice work and congratulations on seeing the light at the end of the tunnel to sweet retirement!

    Are you planning on deploying the recent 2 x 7000$ in your TFSAs right away or dollar cost average? Or side line the new funds for a future dip?

    Rick

    Reply
    1. Ha, thanks Rick. I’ve heard life begins once you are debt-free!? from other retirees or aspiring retirees.

      I have just recently made my TFSA contributions (x2 for $7k) and going to deploy the funds very soon. I tend to believe in lump sum investing for the most part – simply buy when I have the money to do so and go back to living my life. πŸ™‚

      Lump sum investing doesn’t always work but studies show it does work about 60-70% of the time so those are decent odds.
      https://www.myownadvisor.ca/dollar-cost-averaging-versus-lump-sum-investing/

      What are your plans for 2024?
      Mark

      Reply
    1. Thanks very much. I think they are simple but should be effective to meet our upcoming spending needs and wants. The goal for us, as you know, is to have a good portion of our portfolio deliver dividends or distributions to cover expenses. It won’t be 100% but anything over 75%+ would be excellent and then any work could cover the rest for the coming years. Basically, financial independence, work on own terms.

      We could have crushed the mortgage debt a year ago but we decided to put the savings to work via investing given our very low interest rate. We figured March 2024 would come soon enough, and it will.

      Any big investing plans for 2024?
      Chat again soon,
      Mark

      Reply
    1. You are welcome to contact me, anytime, Mario – no advice to provided but I can provide some insights into what we do and why, how that’s working for us.
      Cheers!
      Mark

      Reply
  6. Happy New Year to you both. I hope it brings good health and happy times. When I paid off my mortgage many years ago, it felt so freeing like a constant burden had been lifted off my shoulders. I hope you both feel the same way in March. Thank you for continuing this blog as I continue to learn new things from it. Cheers!

    Reply
    1. Great stuff, Jan. Thanks for the kind words. We look forward to this March without the mortgage!!
      Happy New Year to you and family.
      Cheers back!
      Mark

      Reply

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