Since starting this blog, I’ve set financial goals every year to help keep me focused. One strategy that has been written a lot about a lot in the blog world is using the SMART goal strategy. SMART is an acronym for:
T: Time Based
The SMART goal system is similar to my philosophy of making baby steps towards a larger goal where it creates a systematic method of achieving even the largest of goals.
As I’m still working towards my stretch goal of $1M in net worth by the end of 2014 (age 35), I’ll need annual financial goals to keep me on pace (baby steps). For 2011, here are some of the financial goals that I have.
1. Maximize Investment Contributions
2. Grow our Net Worth
In order to reach the $1M milestone in 4 years time, I need to get aggressive in net worth growth. This year, my goal is to reach the $600k mark which is an increase of approximately 20%. Seeing that our net worth grew just over $100k in 2010, I’m going for it again!
3. Simplify our Portfolio
It takes time to watch stocks. As time always seems short, it’s only going to get shorter as we are expecting another addition to our frugal family in the coming months. The solution? I’m going to index a large portion of our portfolio. My goal is to completely index my wife’s RRSP account with ETFs. Likely similar to this low cost ETF portfolio I wrote about before.
4. Grow my TFSA
I admit that I can have issues spending cash, even when they are in an investment account. First, there are very few stocks that get cheap enough for me to buy, and when they do, I tend to dabble instead of going all in. My TFSA is sitting mostly in cash, so lets change that with a bit of a challenge. Right now, the account is worth about $15,000 and I’m challenging myself to grow the account by at least 33% ($20,000 portfolio value) by the end of the year. I’m going to call this my play account where I’m going to experiment with various investment strategies.
Since we’ve started supporting local charities, we’ve automated the process on a monthly basis. As our income has grown, I’d like to grow our charitable contributions to match. For 2011, I plan to donate at least $3,500 to charities. I’d like to hear some of your favorite charities for ideas!
What are Your Financial Goals for 2011?
With the SMART philosophy in mind, what are your financial goals for 2011?