December Update – working through our 2010 financial goals

Wow, Christmas is almost here…are you ready?

My wife and I are normally the types to have our acts together but this year, with our move to a new home just days away and many other things on the go, we’ve fallen behind in our holiday preparations. It doesn’t feel good because it’s not our style.

Luckily for us, most of our family is committed to a wine bottle exchange for Christmas. Well, at least the adults are!  🙂

Kidding aside, we have tons of shopping to do over the next week while getting settled into the new place; we’ll be brave and hit the odd store besides the LCBO but at least we’ve got a few things to be proud of – we managed to achieve many of our financial goals for 2010.

Let’s take a quick look at what did and did not happen this year…

Goal # 1 – Put down $20,000 on our mortgage

Yep, this one was a BIG stretch assignment for us, but why not have lofty goals?  Earlier this year, I think we were actually on pace to meet this goal by way of some frugal living but things quickly changed when we fell in love with a house and our purchase offer was accepted on it.  Life happens, things change – that was early fall. Up until that point, we managed to put down many lump sum mortgage payments but have since diverted money towards moving costs, lawyer fees and other monies required for the move.  Moving is certainly not cheap, we’re reminded of.  In any event, in the end we 55% of our target. In grade-school, 55% means you almost failed. I don’t think our efforts were too bad!?

Goal # 2 – Maximize TFSAs

Earlier this year, I was proud to say we accomplished this goal and I still feel that way. My wife and I opened discount brokerage TFSAs and promptly filled them with ETFs and one REIT, HR.UN. The XBB in each of our TFSAs has yielded a tidy 4%.

Goal # 3 – “Clean-up” RRSP Accounts (ETFs instead of high-MER funds)

This housekeeping exercise was a big one for us, probably just as important as the lump sum payments on our mortgage.  If you’ve been reading my blog for a bit, you might recall this exercise started in earnest in late 2009 after revisiting our RRSP mutual fund holdings and their performance over the last few years.

We completed our transition to holding ETFs in our RRSPs this summer and we haven’t looked back since (and won’t).

Goal # 4 – Frequent contributions to DRIPs

After making major investments (for us anyhow) into businesses like Bank of Montreal, Sun Life and CIBC a year ago, my early 2010 focus turned to Bank of Nova Scotia (BNS).  I turned to BNS earlier this year and started investing in this company since it behaved well out of the financial storm of 2008-2009.  Not only that, they’ve been a dividend stalwart:  paying dividends for over 150 years.  Why not me?  Although my portfolio at the time was entirely comprised of stocks from the financial sector (this is no longer the case), I wanted BNS in my portfolio since it was (still is) a very good company and I couldn’t resist my entry point at just under $47.  Since February, I’ve had my Scotiabank stock DRIPping.  While BNS did not raise their dividend this year, unlike most over the last three decades, I bet they will in 2011.   For this year at least, goal accomplished.

Goal # 5 – Optimize RRSPs

I’ve already written about this goal in a few other posts, but it’s worth repeating. My wife and I believe we should only contribute enough money to our RRSPs to avoid paying any additional income tax. This is not because RRSPs aren’t a good savings vehicle (they are, we have them, we fill them with ETFs) rather we feel our income is better used elsewhere if RRSP optimization is achieved.  Paying down our mortgage for one, buying and holding established dividend paying companies for two.  For the most part, I consider this goal complete.

Goal # 6 – Save for and take a great trip

If you spent some time on my blog last month, you’ll know my wife and I took our highly anticipated trip to Argentina. Visiting Buenos Aires, spending half a week in the jungle in northern Argentina, taking a high mountain bus tour through the Andes and a private wine tour around Mendoza were experiences and sights we’ll never forget. While saving and planning for retirement are important, so is living for the day.  

Looking back on our 2010 financial goals, I can’t help but think it was a successful one. Did we hit the mark on everything? No, but we weren’t that far off.  We’ve been fortunate in 2010 and are thankful for that, very thankful.  Even if you have good plans and goals things don’t always work out and things tend to change.  That’s life, and I’m learning to accept that more and more.  However, on the road to financial independence, what I’ve learned this year is having a few goals to work towards is certainly an enabler to getting to your destination.  This blog has helped keep me honest and accountable by putting our financial objectives in writing.  That unto itself was progress and I hope to accelerate that ride down my financial independence road in 2011. 

How about you – any financial goals you were proud of this year?
Got any BIG or small plans for 2011?

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, we're inching closer to our ultimate goal - owning a 7-figure investment portfolio for semi-retirement. We're almost there! Subscribe and join the journey. Learn how I'm getting there and how you can get there too!

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