I have a feeling this year is going to amazing and epic and not just in terms of money. Last year was amazing and epic because I became a new mom, but I think this year I will start to be able to sleep through the night. Right?
Amazing and epic could mean a market crash too, which means being able to buy more dividend paying shares that I love.
Here are my personal finance resolutions for 2018. No, it doesn’t involve drinking a lot of champagne, though that would be nice.
As with 2017’s personal finance resolutions they are pretty similar but with different (hopefully achievable) targets. I love sharing my goals with you on the Interweb, it really makes me more accountable. For example, I had about two months left to achieve my $6000 dividend income goal and it was looking pretty slim. Then I buckled up and committed to investing more to achieve this goal. If I didn’t have the Interweb to be more accountable, I probably would have let it slide for another year (meaning not achieve my $6000 dividend income goal AGAIN for another year). So thank you, Internet!
Increase Net Worth to $745,000
This year my income will be really hit because of maternity leave (my top up from my employer will end) so I’ll be conservative with my net worth increase expectation. Barring a major stock market recession in 2018 or a housing recession, hopefully achieving $745,000 net worth will be achievable. The last two years have been great for my net worth because of the stock market ride.
Max out Tax Free Savings Account (TFSA) Contribution
This is low hanging fruit, and I am a big proponent of giving yourself some low hanging fruit goals, so that you feel more motivated to achieve some more difficult goals. Likely this would just involve transferring some money from my non-registered account into my registered TFSA account.
The TFSA contribution limit for 2018 is $5500.
Max out Registered Retired Savings Plan (RRSP) Contribution
Again, another piece of low hanging fruit. I’m not sure what my RRSP contribution room will be like in 2018. I will have my pension buy back to pay for as well once I return from maternity leave. Hopefully I will be able to contribute to both. I anticipate that my RRSP contribution room will be lower since my income was lower in 2017 because of parental leave.
Read 5 Personal Finance/ Investing Books in 2018:
- The Essays of Warren Buffett: Lessons for Corporate America by Lawrence Cunningham
- Security Analysis by Benjamin Graham and David Dodd
- The Dhando Investor by Mohnish Pabrai
- A Random Walk Down Wall Street by Burton Gordon Malkiel
- Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week by Phil Town (my friend went to a seminar by Phil Town and spent hundreds of dollars for a ticket, it would be interesting to read what Phil Town has to say in his book)
Security Analysis is sitting on our bookshelf, and it stares at me all the time but I haven’t read it yet. I had some ambitious ideas that I would have all this free time during parental leave to be able to read a book, let alone a behemoth of a book like Security Analysis.
I will tackle reading Security Analysis again for 2018. As you can see, these books are more investing-focused compared to last year’s selection. My husband has The Dhando Investor and Security Analysis so I will borrow them from him, and for the other books I will try and see if they are available at the library. I’ve been able to not spend any money on books for my 2017 book selection picks (they were all available at the library) so hopefully I will be lucky again this year.
I’m going to take a page from Frugal Money Man’s resolution to read 30 minutes a day! What a great idea. This makes the daunting task of completing a book into a small baby step task.
Spend Less than $4000 on Travel
Again a similar restriction on travel. Last year I spent just about $4000 and this year I think it will be the same. We plan to do a road trip down the west coast, go to the Daily Journal Annual General Meeting in Los Angeles to see Charlie Munger (he is 94 this year in 2018) and then venture into Tijuana, Mexico for a day trip. I have never been to Mexico and I have a goal to see a different country each year.
In addition, a trip to Asia might be in the works (meaning I will have to do some major travel planning to find the best deals because husband’s idea of travel planning is just going with the flow), and I hope to go to the Maldives if we are going to Asia.
Stop the Shopping Ban but be Aware of What I am Spending Money On
I know this personal finance resolution isn’t SMART or measurable, but the last few years I have imposed a shopping ban (alternate month) on myself. It worked but sometimes on a shopping ban month I would buy something, and on a non-shopping ban month, I would not buy something. So I think in general, I will just be more aware of what I am spending money on, and making sure that what I am spending my money on is reflective of my values.
Increase Dividend Income to $7000 per year
I was thinking of making this goal to $8000 per year, but given that I have had trouble achieving the goal year after year for the past few years, I’ll be more conservative this year. This means investing another $27,000 or so with an average dividend yield of 3.5%. I will likely be selling my condo next year so then I will have more capital to deploy, but in the meantime, cash is limited and therefore investing in dividend income stocks and ETFs will be a bit more challenging.
One PF Resolution I am Omitting
As you may have noticed, I didn’t include a ‘get rid of 365 more things’ for 2018. It was quite the challenge to remove 365 from my home in 2017. Instead of getting rid of 365 things in my home, I think I’ll just make sure I don’t add to what I have right now. What comes in (e.g. if I buy a new pair of shoes) must go out (get rid of a pair of shoes). The lessons I learned about getting rid of 365 things will be shared next week 🙂
There we have it, that’s my 2018 personal finance resolutions. Now I have to get started working on it.
Readers, what are your personal finance resolutions? Have you been to Tijuana?
Have a healthy, wealthy, and happy 2018!