With the new year celebrations well and truly enjoyed, now is an opportunity to reflect on 2017 and plan for the upcoming year. Last year I didn’t write about formal financial goals on my blog but I thought it could be fun this year. I’m sure as hell it will motivate me knowing you all know what I’m shootin for!
The underlying theme for me this year seems to be around building foundations and making my life one of greater ease. I don’t necessarily mean ‘making my life easier’ – I’m a big fan of hard work. I do want to try and be more at ease with myself and find simpler more efficient ways of doing things, without so much mental stress and pressure to optimise. For example, why spend time hopping from one bank account to another chasing an 0.2% interest p.a. when the dollar difference is $2 per $1,000. I can use that brain space far better just enjoying life.
With that in mind, I only have a few of financial goals for 2018. They’re mostly about saving and investing just a little.
2018 Financial Goals
- Savings rate after tax 35%
My savings rate in 2017 was 26% after tax. So achieving a 35% savings rate would feel great. It’s my most important financial goal for the year since it underpins everything else – without free cash flow, I can’t save and invest!
- Increase the fortress fund to $16k
My emergency fund, fondly called the “fortress fund” (who doesn’t like castles!) currently sits a touch over $12,000. Increasing the fortress fund to $16,000 gives me 4 months living expenses in reserve. Eventually I’ll save a full 6-months, but that will be a goal for 2019.
- Save for a commercial property deposit
I work for myself and whilst I pay pretty modest rent I don’t have a long term lease. The office suite I rent though is pretty affordable in terms of commercial property – for a capital city. So I’m planning to make an offer to buy it from the owner, who is half hearted about owning it. It’s not a great investment due to its age and the strata fees, but as far as entry level office space goes, it’s a bargain. Plus it means security of knowing for the next 25+ years I have a place to work from without the need to worry about rising rents, relocations etc. I can also sub-let an office or two from the suite to cover the strata fees and maybe make a small profit. Loans for commercial property have a LVR of 30% so I’ll need to save $60k – $70k.
I won’t be able to do this in 2018, but hopefully I can get a good chunk of the way there – $20k would be a great start.
- Invest in the stock market
Since saving is my primary goal I don’t want to go overboard here. I’d like to grow my portfolio by adding $4k – 8k in 2018. Half of this I plan to invest in low cost index funds / ETF’s and if I find compelling value elsewhere, then the balance in specific stocks. Although I’m not a macro guy, I have a bit of an idea on which sectors I think might do well over the next 20 years, so I’ll be hoping to uncover a few gems there and elsewhere in 2018.
Depending on what my taxable income looks like in May/June I might invest in my Super account – it all depends on my expected tax rate and overall income for the financial year. It’s a bonus that any money I deposit can later be withdrawn (up to $30,000 plus deemed earnings) under the new First Home Saver Scheme. I expect at most I’ll deposit a couple grand.
2018 Life Goals
Aside from financial goals, I also have a few health and fitness goals and general life goals.
- Exercise 4 hours a week
- Eat more home cooked meals (i.e. brown bag healthy lunches!)
- Develop and try out a morning routine consistently for at least a month
- Study Japanese language 3hrs per week – once I submit my PhD.
That’s it. If you’re a regular in these parts you’ll notice I left off *submitting my PhD* which feels like a gimme at this point. I’m probably 3 months away from submitting so to make it a goal seems a bit redundant. I do want to really buckle down and get it done in the next few months though!
What are your goals for 2018? How did you go in 2017? Which goals did you get there on?