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Greatest Goal II

I’ve been reading a lot of blogs about 2015 goals. Most of the blogs I read are personal finance goals, so their goals are usually financial. Goals like contribute an extra $100 per month to the mortgage, pay off all my debt, earn $5,000 in dividend income, etc. I think financial goals are important, but this represents only one aspect of life. I decided I would break down my goals into four sections: Financial, Career, Health, and Personal. I got the idea from Lululemon which has some good information on goal setting along with a worksheet which I used, but altered a bit.

Their worksheet says to visualize your life in 10 years. I chose to visualize my life when I reach financial independence which will likely be later than 10 years.

  • What would you dare to do if you knew you could not fail?
  • Describe what you see, hear, and feel in your ideal life.
  • Who is there? How do you spend your time?
  • Where do you spend your time?

Once you make your vision statement you are supposed to work backwards setting 10, 5 and 1 year goals in 3 categories: Career, Health, and Personal. This leaves you with a roadmap of sorts on how you can reach your vision in the future. I added financial goals as a fourth category and a 20 year financial goal. I also included stretch goals along with some of my regular goals. Stretch goals are meant to push you to achieve your goals quicker, but you are less likely to achieve them.

My Vision Statement

I am healthy and I spend the majority of time with my friends and family. I have two kids and a beautiful, loving wife. I am financially free, but I work part-time because of my interest in business and investing. I travel frequently with my family to see friends/family and to seek the sun out in the winter. My daily schedule is flexible so I can work when I’m motivated and still hang out with the kids. My work challenges and fulfils me, I am good at it, and others respect and value me. I am healthy and active. I am always learning and trying new things.

My Goals

20 Year
Financial I am financially independent by the end of 2034. Stretch goal: I am financially independent by the end of 2026 (12 years).

I turn 40 in 2026 so I thought this seemed like a good dare to dream age for a stretch goal to become financially independent. 12 to 20 years is big difference, and I have a feeling I’m underestimating how much children will cost, but it’s not out of the realm of possibility. Stretch goals are meant to be hard, but this will require some serious dedication and focus.

10 Year 
Financial I have paid off my mortgage by Sept 4, 2024. Stretch goal: I have paid off my mortgage by Sept 7, 2022 (8 years).

I’m locked in for 5 years at a fixed rate of 2.94%, after which I’ll have to refinance. I expect interest rates to be higher when it comes time to refinance. I ran a scenario where the interest rate is 3% higher at 5.94% in five years’ time and I can meet my stretch goal of 8 years, but it requires large pre-payments on the mortgage. I think it is feasible, but kids could be the breaking point. Everyone says that kids are more expensive than you think. Time will tell.

Career I make $100,000 in salary per year by the end of 2024.

In order to become financially independent at an early age I’ll need to make a bunch of money before then so it can be invested in high quality dividend growth companies. The dividends I receive from these companies will be used to pay for my expenses. The best way to make a bunch of money is to increase my salary. $100,000 would be a very substantial raise over my current salary, but I’ve got 10 years to get there. Another reason why a high salary is important is because I have a defined benefit pension that uses the average salary over the 5 highest consecutive years to calculate the pension amount. I want to try and have a high salary in my last 5 years so that the pension payments are higher. If I have any chance of reaching my stretch goal of financial independence in 12 years then a high salary will be needed.

Health I am active with my family 3 times per week by 2024.
  I still exercise at least 30 minutes per day on average by 2024. 
I still sleep on average 7-8 hours per night by 2024.
I still have a healthy balanced diet by 2024.
Personal I am happy. I have learned what makes me happy and have incorporated daily habits into my life that promote happiness by 2024.

I’ve been thinking about happiness a lot recently. I’ve only just started learning about what makes us truly happy, but I’m looking forward to learning more. One theme that I found interesting is that once you have enough money to meet your basic needs (food, shelter, etc.) earning more money won’t make you materially happier. If you compare someone who isn’t making any money to someone making $50,000 per year then the person with $50,000 is generally going to be happier because they don’t have to worry about where their next meal is going to come from or where they are going to sleep. However if you compare someone making $50,000 per year to someone earning $500,000 then it’s interesting to find out that the $500,000 person won’t be materially happier. Once you get to a certain point more money won’t make you materially happier. Malcolm Gladwell pointed out in his book David and Goliath that this tipping point for happiness is around $75,000 per year in family income.

For someone in pursuit of financial independence this is very important because I sometimes get caught up in the financial side of things, when really I should be learning about what makes me happy. That way, when I do become financially independent I’ll be doing things that make me happy. At the end of the day, I think most people just want to be happy, but sometimes we don’t take the time to learn what would make us the happiest.

This is a goal I’m looking forward to as the journey should make me a happier individual along the way, not just in 10 years. I should also point out that I’m currently a pretty happy guy. That said, it doesn’t mean that there isn’t room for improvement.

I’ve found that if you start to think about how you want to live your life and you remove money from the equation then a natural theme becomes your happiness. This goal isn’t about making me a happier person because I’m depressed, it is about being aware that I need to spend some time figuring out what makes me happy once I get to a level where I am financially independent. Money does make you happier to a certain point, but there are other factors which I need to explore more, in preparation for financial independence.

When I talk to someone about my dream of reaching a point in life where my dividend income covers all my expenses at an early age and use the word retirement when I should have said financial independence, I get asked the following:

“What will you do with all that extra time if you aren’t working?”

I don’t think I’ll have any problem filling that extra time with projects that pop into my head, life and my other hobbies (some of which could involve working), but this goal is about focusing this extra time. I think it is important to have researched happiness so that I can spend this extra time doing what makes me and others around me happy.

If you are interested in this happiness stuff try watching the 2011 documentary “Happy” directed by Roko Belic. I watched it on Netflix in Canada, but it’s available on US Netflix too.

5 Year
Financial  I have $80,000 left owing on the mortgage by Sept 2019.

I have a 5 year fixed rate of 2.94% and pay on an accelerated bi-weekly basis. We can contribute an extra 20% to the regular mortgage payment and contribute an extra 20% of the mortgage amount as lump sum payments each year without penalties. There is no limit on the number of lump sum payments we can make in a year, but the total has to be less than 20% of the mortgage amount we applied for.

In order to meet this goal I will have to make aggressive pre-payments. To start, I topped up the regular bi-weekly payments with 20% pre-payments. The mortgage was setup this way and the amount is taken automatically with our regular payment. I set it up this way so that we could get used to paying a higher amount as it is likely that interest rates will go up in the future. It’s also nice to have the option to lower it back down to the regular payment without a penalty if an emergency comes up.

On top of the bi-weekly pre-payments I’ll also have to make large lump sum pre-payments during the first 5 years in order to get the balance down to $80,000 by Sept 2019 (when I’ll have to refinance). From the beginning of 2015 to Sept 2019 I’ll need to make a total of $80,000 in lump sum pre-payments. I plan to do this by contributing an extra $2,000 every 4 weeks while I don’t have kids. When kid #1 pops out there will be a 6 month grace period when no extra lump sum payments are made because of our reduced salary. After the 6 month grace period the lump sum payments will continue again every 4 weeks at $1,000. When kid #2 shows up there will be another 6 month grace period and lump sum pre-payments will resume at $500 every 4 weeks until the end of the 5 year term. This still leaves me a little short, so I’ll have to make annual $2,500 lump sum payments at the end of each calendar year and a one-time $3,500 extra payment in 2015 and a $6,000 extra payment in 2017. This works out to extra lump sum pre-payments of the following, but doesn’t include the extra 20% paid with each bi-weekly mortgage payment.

2015                             $32,000

2016                             $15,500

2017                             $21,500

2018                             $6,000

2019 – Sept 2019           $5,000

This is a very ambitious goal, but the hope is to have a large portion of the mortgage paid off while we are locked in to a low interest rate and before we have kids or while they are still young. The BIG variable will be the cost of raising children, which could throw a serious wrench in this goal. The other X-factor is that you can’t predict when you will have kids. With the lump sum pre-payments dropping when kids start to show up this could alter the plan depending on when they show up. Also in the back of my mind is the fact that twins run in both sides of our family. If two kids show up when we are expecting one then the plan will have to be adjusted. At the end of the day I’m not going to obsess about when children will show up, as I can’t control this. If they are healthy, I’ll be happy.

  I have an emergency fund of $15,000 by the end of 2016 and $20,000 by the end of 2018.

Our costs and potential emergencies will increase in the future so I thought it prudent to increase the emergency fund. Ms. DGI&R has a higher risk of large dental costs, we own a condo now, and plan to have children in the future. The condo means potential strata special assessments in the future or other large maintenance costs that come with home ownership. With kids planned in the future we can expect larger expenses that come from raising children.

When we bought the condo we started contributing an extra $200 per month to the emergency fund. The plan is to continue this regular contribution in order to meet the goal. At the start of 2015 our emergency fund was $10,800.

Career I am making $1,000 after tax and expenses per month from my blog by the end of 2019.

The focus of my blog isn’t to make money, but the readership has gotten to a point where if I’m able to continue to grow it then I could make some money with it. This appeals to me because of the flexibility blogging provides. All you need is a laptop and an internet connection and you can post from anywhere in the world. If I can start earning a decent amount of money from the blog it gives me more options. Not only could I travel more in the future, but it could provide a small alternate income source to aid in my quest for financial independence.

Blogging is a passion for me, so I’m worried about attaching a monetary goal to it. My hope is that if I can continue to write valuable and useful content, the website will continue to grow and my income from advertising will naturally grow. Currently I’m making about $100 to $300 per month from various advertising efforts on the blog. The income comes in sporadically and was I to average it out over the year it is likely closer to the lower end of this range.

To get to $1,000 per month will be a serious challenge as I don’t want to compromise the integrity of my website. To get to $1,000 per month I would try and be making the following amounts by the end of each year.

2015     $200

2016     $400

2017     $600

2018     $800

2019     $1,000

I’m not sure how realistic this is, but it is worth a shot.

  I have a permanent position three levels above my current permanent position by April 2017.

This would be a $9,000 raise from my current salary and a $13,000 raise from my current permanent salary equivalent. I have a temporary position that is two levels above my permanent job, but I’m not sure if it will be extended. If it isn’t then I’ll fall back to my permanent job and the lower salary.

Health I still have a healthy balanced diet by 2019.
  I still sleep on average 7-8 hours per night by 2019. I hear this could be difficult if I’m also planning on having kids. 😉
  I still exercise at least 30 minutes per day on average by 2019.
Personal  I have two healthy kids by the end of 2019.

For effective goal setting it is important to set a deadline, but with this goal I was a little hesitant to add one. At some point in life I’d like to have healthy kids. The timeline is nice, but if they are healthy then I don’t care when they show up. I think it’s important to not put pressure on a timeline when trying to get pregnant.

  I have researched happiness and have started incorporating habits into my routine that promote happiness by the end of 2016.

The idea behind this goal is that I’ve done the research and I can start changing parts of my life to see if I become happier. I want the research to be done so I can start some trial and error testing on what makes me happier.

  Find a charity or cause I’m interested in and volunteer there by the end of 2019.

It would be nice if I could find a charity that is involved in business, investing or personal finance as I’m interested in these topics. I’m not really sure if there are many charities out there in these areas, but if you know of any good ones, let me know.

1 Year
Financial I contribute $200 per month to my emergency fund for a total of $2,400 by the end of 2015.
  I contribute a total of $32,000 to the mortgage in lump sum pre-payments by the end of 2015. 
  I keep my regular bi-weekly mortgage payments at 20% above the regular rate during 2015. 
Career I am making $200 per month from the blog in net income by the end of the year.

To reach this goal, I’d like to become more consistent with my article posting and write 52 high quality new posts in 2015. I’m also interested in writing more about topics that can stand the test of time.

  I spend an hour or two reading or learning each day at work.

I work in a very technical position and we are required to learn a lot of information in order to perform our job effectively. In order to get promotions they sometimes make you write a knowledge test. In order to prepare for these tests while also becoming more effective at my job I’d like to beef up my knowledge.

Health I create a food plan and start using it by March 2015.

I hoping with a food plan I’ll eat better. I’m also hoping that with a set list of groceries to buy I’ll save money by not going off list.

  I floss once a day.

This is something that I always intend to do, but somehow it doesn’t always get done. I think we all experience these moments, but enough is enough.

  I exercise at least 30 minutes per day on average starting January 26, 2015.
  I sleep at least 7-8 hours a night on average by February 2015. 

A good night’s sleep is important to stay healthy. I’ve also noticed that a lack of sleep can sometimes trigger migraines for me, so this is doubly important.

I have researched what weight and BMI I should target to be considered in good health by July 2015.

There seems to be a lot of different information out there and I don’t know a lot about fitness targets. I’d like to have a concrete target so that I can come up with better health goals in the future.

Personal I have read 12 new books by the end of 2015.

There are some books that I’ve been meaning to read for a while now, so I plan to set some time aside and finally get this done. Most of my hobby books these days are related to investing or personal finance.

I travel in Europe by May 2015.

We have already booked a flight to Paris. We’ll be gone for all of May, with most of our time spent in Italy after checking Paris out for a few days. If you know of any good spots, let me know!

I have completed “The Science of Happiness” course by the end of 2015.

The Science of Happiness is a free online course offered by edX and developed out of the University of California, Berkley. I’ve been interested in some of the free online courses out there, and this one piqued my interest. It should be a good one to take as I’ve recently become quite interested in what makes us happy. Huffington Post describes the course as “A free eight-week Science of Happiness course that will offer practical, research-backed tips on living a happy and meaningful life.” If you are interested check out the link: https://www.edx.org/course/science-happiness-uc-berkeleyx-gg101x#.VMAE5DEg-Uk.

I have gone one month without watching any TV by the end of 2015.

I watch too much TV, so this goal is about reducing the amount of TV I watch overall. Often I’ll come home from work and veg out in front of the TV with dinner. The next thing you know the night is over and I’m going to bed, having wasted my entire evening on TV. I don’t think this is a healthy trend and it is one I’d like to reverse. Mostly it is a big time suck. I’ve laid out some pretty ambitious goals which are going to require more time and commitment from me. Hopefully watching less TV will give me the extra time to meet my goals.

And those are my goals, what do you think?

 

Photo credit: scottwills / Foter / CC BY-NC-ND

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10 Comments

  1. That’s a lot of goals! Most bloggers write about their financial goals because they think personal goals will annoy or be boring to others. Doesn’t mean they don’t have any. Thank you for sharing yours though. You might want to make another sheet just for this current year so it’s easier to follow and probably reach as well. Have both standing near you while you write! 😉

    1. That’s a good point about other bloggers. I decided to post all of my goals so that I’d be more accountable.

      Everytime I buy or sell a stock I write a post about it, making myself accountable to my readers. I’ve noticed that this has made me a better investor as i’m forced to explain my actions as opposed to buying on whim.

      I’m hoping this accountability to my readers will also help me stick to my goals.

      Cheers,

      DGI&R

      1. “I’ve noticed that this has made me a better investor as i’m forced to explain my actions as opposed to buying on whim.” —> So true! It also prevents “mood” decisions.

  2. I really like your holistic approach to life. Your roadmap will serve you well. Though plans do change, I think you have laid out a great list of expectations to strive for. You need to know the direction you want to go in, and keeping your plans in mind everyday, sure helps out your decision making!

    Now close to mid fifties, I have been a dividend investor and have utilized synthetic DRIP’s for many years and I am certainly starting to enjoy the fruits of that strategy now. As an example, my BCE shares with the announced div increase today to $2.60 / annum, my yield on cost is over 13%. I have quite a few div payers and importantly, div growers that are giving me the same return rates.

    Having had health and fitness and wealth goals all these years also have served me very well. As I plan to leave the working world in a year or so it is with no money concerns, great health and a extremely positive outlook for retirement.

    keep on track!

  3. Nice detailed goal setting and action plans. I think I’ll make this into a template for myself. I think it makes it easier to be accountable and breaks down goals to very manageable pieces. This method also forces you to look for positives more frequently. Thanks for sharing all of this, very much appreciated.

  4. Well done. I really like your goals as I feel it is important to take all aspects of life into account. Money isn’t everything (though it helps to make things easier). I will be checking in to check your progress.
    Michael

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