Weekend Reading – 2024 Goals edition
Happy Holidays Everyone!
Welcome to some holiday-time Weekend Reading, recapping our 2024 goals from the year that almost was…
In case you missed my Holiday Wishes to you, here they are 🙂
And…
Looking ahead, here are 3 stocks or ETFs I want to buy more of starting next week!
Weekend Reading – 2024 Goals edition
I post my financial goals on My Own Advisor every year to keep me honest and focused. One thing I’ve learned over the years is I have a much better chance at realizing my/our goals if I keep tabs on them…I figure you can’t manage what you don’t measure.
I’ve also learned from other savvy DIY investors over the years, individuals that have “been there, done that” per se – what it takes for financial success. There is huge value in learning lessons from others. These individuals kindly share their wisdom on this site in the comments section or via emails to me and I publish what I can to reshare all content with you.
The most savvy and successful DIY investors I’ve engaged with over the years do not do anything flashy nor engage in any radical attention-grabbing stuff. They just do the personal finance basics very, very well for a really, really long time:
- They don’t invest in meme stocks or fads.
- They worked hard to get out of debt and stay out of debt.
- They keep their money management fees low by avoiding expensive wealth managers who may not add lots of value – they know fees erode performance.
- They invest in a diverse basket of stocks or ETFs for income and growth.
- They don’t actively trade.
- They keep a bunch of cash/cash equivalents on hand for emergencies or near-term spending as to avoid interrupting their investment portfolios from ongoing compounding power.
- They know there is an inverse relationship between following what the financial experts say they should do and their own investment performance and goal-setting – including what some “experts” suggest:
Weekend Reading – More experts saying you need $5 million to retire
Given we were sooo close to financial independence at the beginning of 2024, you might recall we only had two big financial goals for this year:
- Max out our RRSP contribution room by April 2024.
- Save for our 2025 TFSA contribution room by September 2024.
That was it.
Well, after we retired our mortgage in early January this year, and after we bought our new PHEV this summer, we diverted savings to near-term investing – as a final push towards fulfilling some potential semi-retirement dreams for 2025.
Related to the 2024 financial goals above, we did max out our 2024 RRSP contributions and we also managed to save up next week’s 2025 TFSA contributions as well. I’ll be making my etransfers to our TFSAs next week.
In addition to the above, we also managed to save up/confirm at the end of 2024 we have ~ 1-years’ worth of expenses saved in cash/cash equivalents across all our various accounts (including my corporation) to cover basic living expenses if/when/should we need to use that.
Although I can’t speak for you, keeping cash/cash equivalents on hand does offer us a very meaningful sleep-at-night factor that’s very hard to ignore.
“We 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
What’s up for 2025? Any goal setting?
Well, I’m not quite there yet mentally. 🙂
I’m enjoying some holiday time with family right now. At some point, my attention will turn to goal-setting or at least some meaningful cashflow planning for 2025 given some transition from full-time work to part-time work may occur for me. I’m excited for that and I hope to learn more about that in January. Whatever I learn, I will keep you posted!
In closing, goal-setting is an important exercise for many things in life. When it comes to personal finance and investing, if you need some assistance in mapping out a plan for multiple financial goals, beyond my site, Morningstar has a few tips here.
When it comes to building some cash buffer, I have a dedicated post about that since some form of a cash wedge can be used at any age – you can download my visual below for free as an option to structure your portfolio around as you wish.
I look forward to keeping you updated as My Own Advisor in 2025 on many subjects, including how near-term savings and long-term investments have been positioned across our portfolio to begin any semi-retirement lifestyle that is planned to occur at an age much sooner than most.
Happy New Year and best wishes, with more new content to come in the coming weeks!
Mark
Happy New Year everyone. Great job Mark. In 2024 I had one big goal, to see if all my planning for retirement would work in reality. I decided not to look for any contract work in 2024 unless absolutely necessary (it was in the back pocket). As it turned out I was able to live very comfortably using the money I withdrew from my LIF and RIF and a small amount from my TFSA. All of the money I withdrew was covered by dividends or the money made from selling options (covered calls). I was able to cover all my daily expenses, I went on three trips south and one back east to visit family, I golfed with friends all summer (not cheap in Toronto), and I ate very well (usually I cook at home but do go out once in a while to a restaurant but steak is on the menu many nights). It was actually a good year in the market so even though I was withdrawing money to live, my portfolio actually went up in value which is great because it means I can take more out of my LIF.
As the new year rolled around I evaluated my finances from the prior year and looked forward to 2025. Once the bank published my min / max for my LIF I compared them to my calculations then used this information to decide how much to withdraw this coming year. I take a payment every month for a couple reasons, one it simulates a monthly pay cheque like we get use to during our working years and secondly it works better with my monthly dividend payments. I try to max the amount I take from my LIF and then adjust my RIF payment as needed. So for the upcoming year I gave myself a 13% raise, all covered by dividends. Even though I was able to do everything I wanted with less money the previous year, I figure I can splurge on another trip (although they are expensive at the moment) or I can take any left over cash and move it to my TFSA and use it to produce additional tax free income for future years.
In 2024 I calculated that I was able to generate 70% of my last year’s working income (net to net). In 2025 after giving myself a raise I will increase this to over 80%.
Hope you are doing well and all the best in 2025.
Thanks, Paul. Happy New Year to you too!
That might be my goal this year – test all my semi-retirement assumptions! 🙂
Seems ideal, no? re: “…live very comfortably using the money I withdrew from my LIF and RIF and a small amount from my TFSA.”
Seems your portfolio covers your expenses? If so, amazing and more than enough to “retire” I suspect?
Then, yes, smart to move any leftover cash to contribute to your TFSA for longevity risk AND to produce more income as you age.
Keep me posted on your withdrawal process in 2025!
Mark
Hello Mark, Thank you for your post. Thinking back over the years of our financial journey, establishing meaningful , practical, achievable goals was ( and is)a key factor in our financial progress. Putting realistic goals in place early in life enabled us to retire early ( at age 59), grow our yearly income, be faithful to the charities we support, and develop important investment skills and habits. Some of the important goals were; to paydown and eliminate debt; to maintain an emergency fund; to direct a portion of each paycheque to investments; support our families and chosen charities and to be a steady investor through market cycles. We are truly blessed and grateful.
All the best in the new year as you continue your wise counsel and progress toward financial independence. Always keep learning and moving forward. Mike
Sounds like you’ve done soooo many good things over the years to contribute to your financial success.
I wish you the best to you and your family in 2025, Mike!
Stay in touch.
Mark
Love the Bobby Orr photo! I’m in the process of getting my old Bobby Orr autograph sealed and authenticated (unnecessary since I got the autograph from Bobby at a charity baseball game in the 70s as a teenager 🙂 ); fun little project since I had to figure out the other autograph I had on the same blank card but a search through the Boston Stanley Cup team rosters turned up Mike “Shakey” Walton who was Bobby’s roommate on the road, exact match once I knew the name. He played for the Leafs on their last Stanley Cup team too.
Have a happy new year, I’m just waiting for the markets to close so I can update my yearly net worth spreadsheet, cheers!
Very cool, Zack.
Happy New Year and yes, time to update my final December dividend income tally for 2024 and add my chart to the site on this page. 🙂
https://www.myownadvisor.ca/dividends/
Mark
I finished a contract midway through 2024 and haven’t picked up anything new so I seem to be officially retired. 🙂 My husband and I had small LIRAs and we were able to consolidate them into our RRSPs. I’ll start taking funds early from them in 2025 so we’ve converted to RRIFs to avoid the withholding tax on the minimum. Even though we’ll have tax to pay, I’d rather be in control of the money and making a min 3.25% during the year and until the following April. We are still waiting for some complicated details to shake out to fully implement a plan – it’s out of our control at the moment so in a holding pattern. My goals this year are to discuss options with a new accountant I found regarding paying out of my corp (Q1), figure out if we want to buy an insurance policy through the corp to reduce estate taxes (Q1/Q2) and enact the plan fully. It’s been a crazy busy time of year for us lately, but my goal is to be more consistent with my blog and post regularly throughout 2025. I’m also working on various travel plans, need to do more research for a lengthier fall vacation in Europe. I’ve been eyeing a cruise similar to the one you did but not sure if that will happen this year.
Sounds like some excellent, detailed financial planning work along with a bit of fun in your future!
Keep me posted!
Mark
All the best in 2025 Mark !!!
I had a question re: TFSA
Historically do you typically plan to buy your ETF/Stock, once the funds have been transferred or might you wait to see what the market is doing in the first couple weeks of January? I know right here it is …. the “time in the market vs Timing the Market” question LOL
Good question, Sue!
In recent years, I tend to save up cash for our TFSA contributions, deposit the cash, then buy assets (i.e., stocks or ETFs) in early January and then let things go from there. I don’t tend to take any “wait and see” approach. The reason is, rightly or wrongly, the sooner I get my money working for me the better and the less I fuss over at what price I bought things at.
Beyond that, I have learned that generally speaking, lump-sum investing wins over trying to do some dollar-cost averaging.
https://www.myownadvisor.ca/dollar-cost-averaging-versus-lump-sum-investing/
Always pros and cons with timing any investing approach but for the most part, I buy when I have the money to do so and I don’t look back. 🙂
All the best to you and your family in 2025!
Mark
Hi Mark,
Happy New Year to you and yours! After setting my BHAG for the end of 2023 I continued to push our dividend paying strategy to the limits in 2024 by contributing whenever we could and by doing some rebalancing. We will end the year with a 31% increase in go forward dividend income.
With my job loss, and getting control of my DPSP in the New Year, after bouncing all over the place I have settled on opening to new positions in CNQ and TD in my self directed RSP once I get my hands on that money. A part of me would rather do XAW, or something similar, but I believe I’m a better investor when I stick with dividends – being able to measure the outcomes so easily while (largely) getting to ignore stock prices is just a better place for me to be in.
With those changes, 2025 TFSA contributions, and maxing RSPs, we will have 2-3 years to go and we will be only 15% shy of our annual dividends goal for retirement. Once I’m comfortable we’re going to hit my number then I’ll be comfortable with diversifying to XAW or other like options! I am fairly confident by the end of 2025 there will be a clear path to our target, which might permit an even earlier retirement (current goal is me 60, her 58).
Thanks for the guidance over the years and I look forwarding to reading more about your journey.
James
Good stuff, James.
I know a lot of DIY stock investors that own a bunch of TD and CNQ as part of their portfolios, along with XAW or VTI, etc. for global stocks or U.S. investing respectively.
We hope to hit $50k in annual dividend income as reported from a few key accounts by early-2025. We’ll see?!
I also like ignoring what the market is doing, for the most part, via dividend income.
Happy 2025 to you and your family,
Mark
Happy New Year Mark! I’m also in the process of setting my 2025 goals – including pulling the trigger on some conversions (RRSP->RIF, LIRA->LIF) as I start on my “decumulation” journey!
Perhaps you’re already on this, but also look into splitting the LIF in two. In Manitoba, my wife was able to go from the LIRA to the LIF and then move 50% of the fund into a Preferred RIF. The benefit of moving 50% of the fund out of the LIF is that the PRIF has no maximum on the withdrawal amount. You might not want to exceed the full LIF’s maximum withdrawal today, but who knows if you will want or need to in the future. The LIF conversion to 50% LIF/50% PRIF was done at the same time the LIRA was converted. It was all done in-kind, in Questrade via a letter to explain what she wanted. Here are the rules for Manitoba (so you know what you’re looking for in your province): https://www.gov.mb.ca/asset_library/en/pension/pdf/bulletin3_2021.pdf
Thanks Bob – yes, that was already part of my plan. The rules depend on the jurisdiction of your LIRA – mine is Ontario so when I convert it to a LIF, I’ll be able to unlock 50% to an RRSP/RIF. And yes – the benefit is the that you don’t have the max withdrawal percentage on the RIF that you would have on the LIF. Unfortunately, if you’re in certain provinces, you don’t get that 50% unlock feature – and (I believe) in some cases, can only do it if you can show financial hardship – which I obviously would NOT want as part of my plan. Take care…
Thanks for the contribution, great details – big fan of “unlocking” the LIRA once you start your LIF as rules permit. I will be doing the same with my small LIRA in a few years.
Mark
Excellent, I’m not far behind you on that stuff!!
Happy New Year to you too!
Mark
Oh, and btw, I forgot to mention – EXCELLENT choice of a picture for the post. That Bobby Orr shot is absolutely iconic! Several years ago, my boss (at the time) and I had the privilege to golf 3 holes with Bobby at a charity tournament near Cape Cod. That’s when our head office was near Boston. Total class act Mr. Orr – not to mention one of the best of all time!
LOL. Yes, I had my picture taken with Bobby Orr when I was about 6 years old.
Classy guy for sure. Top-10 player of all time, easily.
Happy New Year!
Mark
Great list! I have one more that I’ve come to realize as I got older. Comfort zones. Realizing these are almost always personal/situational and sometimes, in the case of couples, conflicting. Comfort zones can, and often do change over time. Sometimes several times over a life span, and in opposite directions. Above all else, don’t let anyone else define your comfort zone. It’s yours and you don’t have to defend it.
On to 2025!
Nicely put, Lloyd!
Best wishes for 2025 to you and your family.
Chat here again soon.
Mark
Mark, congratulations on reaching financial independence in 2024!
I encourage everyone to carefully review the bullet points you listed on personal finance basics. They are bang on! The only item I could add would be to consciously maintain a healthy balance between spending to meet current needs/wants and saving to meet your future needs/wants (with a factor of safety).
Thank you so much for sharing your investing journey for 15 years. You have helped many DIY investors, including me personally, to reach our retirement goals.
Best wishes for 2025!
Very fair, Stuart…you have to live for today, too!
Thanks for the kind words. It’s a pleasure to run the site and interact with so many DIY investors on their own path too.
Best wishes back for 2025!
Mark
And a HAPPY NEW YEAR to you and yours Mark!
My, things do change when you are “under spending” the net income. My “cash wedge” consists of some cash but mainly that spare cash went in to stocks that pay me. So what I consider my “cash wedge” keeps growing. Plus this year I actually have enough on the side (actual cash) to max out the TFSA without touching my LIF/RIF cash positions. They presently have enough in them right now for the 2025 minimum (not 4%) mandatory withdrawal which in previous years I tapped for the TFSA. Built that up mainly because of uncertainty about any economic fall out for the US elections that might come to pass in 2025. I don’t really like cash sitting around gathering dust but just a bit too much uncertainty for my liking.
Going through a financial position review with the bank (CIBC) to see if I need to live longer. He doesn’t think I will need to take a part time job yet. LOL
Depending on market fluctuations I would guesstimate as available approx three years of cash or equivalents when combined with the various “guaranteed” government & company pensions all while leaving the RIF/LIF alone to do their thing.
The maxim of “Time in the Market” still holds true.
To One and ALL – A happy and prosperous New Year
RICARDO
“Going through a financial position review with the bank (CIBC) to see if I need to live longer. He doesn’t think I will need to take a part time job yet. LOL”
Ha. I highly doubt it based on what I know from you. 🙂
Best wishes for 2025. Stay in touch!
Mark