Today we’re going to do our best to create some realistic, though challenging personal finance goals for ourselves.
After completing 5/6 goals in 2020 and being fairly close on the numbers we’re going to be trying to use that momentum and push ourselves just a little bit further in 2021.
These goals may not all be directly related but they will all be pushing us along our path to reach our longer term goals of financial independence and being in a position where working our current jobs is optional and only done so because we still enjoy what we do rather than feeling forced to keep up our current level of income to “survive”.
Goal # 1: Put $4,000 per month into our brokerage accounts
Goal # 1 is for us to contribute $4,000 per month into our dividend accounts. The plan is for both of us to transfer over $2,000 at the beginning of each month and continue building up our passive income stream by purchasing high quality dividend paying stocks that not only have a long history of paying – but also of raising their dividends year over year.
This is very close to being mandatory for us to reach many of our longer term goals and is an aggressive number for us to reach.
Goal # 2: Spend less than 2020… especially on take out!
We tracked our spending for the first time consistently starting in April of 2020, we found that we spent just under $70,000 so if we extend that projection out over a full year that works out to about $93,000 for a 12 month period.
I know to many $93,000 seems like a lot of money to spend and to others it may seem like peanuts but we live in an expensive area in a secluded part of Canada so prices are a little inflated and taking a couple vacations per year are near mandatory for our mental health sometimes so while we’re never going to cut this way way back just beating this number in 2021 will be plenty for us – especially if our income increases with Mrs. FIC going back to work.
Also we were on pace to spend nearly $4,500 on take out so we will look to cut that back.
Goal # 3: Keep a savings rate of 50% or greater
You can see immediately how this formula works… basically a completed goal 1 + a completed goal 2 = a completed goal 3. Saving 48% of our income in 2021 was a great accomplishment for us and if we can keep that kind of rate up moving forward while adding a baby into the mix then we will absolutely take it.
50% is a nice round number that we will is right where we will be for 2021.
Goal # 4: Receive $11,000 in dividends for 2021
Last year we eclipsed our $8,000 goal in dividends received and we’re currently projecting to make a little over $9,300 for 2021 with no further contributions.
I’m adding another $23,000 to my personal portfolio in the coming days in an account transfer of an index fund over into my dividend portfolio so this should add another ~$800 in immediate projected income.
Our goal will be to make the additional $900 in income, which may sound easier but the problem, or challenge rather is that you have to get enough funds in in time to actually see the dividend payouts within the calendar year.
So while we may be projecting a fair bit more than $11,000 by years end actually receiving that amount in the year should be a close one.
Speaking of projections…
Goal # 5: Have a year end projection of $12,000 dividend income!
How I come up with this number is basically we will try and secure a 4% portfolio yield on the $48,000 we expect to invest in 2021 – an aggressive number again but definitely attainable especially in a Canadian market where the payouts tend to be a little bit more generous amongst our dividend aristocrats than on the US side (which we also invest in).
Recap
So looking back on our 5 goals it’s very easy to see just how interconnected personal finance is, this is why we track so many facets of our finances because it’s all one big jumbled calculation working together.
If we’re able to spend less then it immediately boosts our disposable income to invest and if we invest more then we receive more passive income all of which adds up to us being financial free and independent at an earlier date. The other side of the equation is for us to keep finding ways to increase our income as well – whether that’s through working overtime or finding alternative income streams.
That’s all we have for you for today, we hope that our goals have given you some of your own.
If you have any questions or comments leave them below or check out our
INSTAGRAM @FindependenceCanada and we’ll be sure to reply to you there.
Thanks for stopping by,
FIC.