It has been a little over a year since reaching the million dollar net worth milestone and a number of you have emailed me requesting an update on what I’ve been doing since, how it feels to be a millionaire, and mostly, how my new financial goals are progressing.

Life Since Becoming a Millionaire

Back when I was in my teens (or younger), imagining being wealthy, I always thought that hitting the millionaire label would be a life changing event. At the end of the day though, it’s just a number, and on a number of levels, nothing has changed.  Now mind you, it feels great to hit goals, but for me, it was far from life changing.

Since hitting the milestone, our family still lives within our means.  Our means have actually decreased since we’ve recently decided to become a single income family.  With tight fiscal management, we’ve discovered that we can live well on one government salary while raising two kids who can still enjoy their extracurricular activities.

We still use credit cards to funnel our spending for the points, which also has the added benefit of expense and budget tracking through online programs like mint.com.  All in all, it’s business as usual.

Passive Income

In terms of financial goals, I’m mostly concerned about how much recurring income that our savings can generate – perpetually.  Many years ago, my original plan was to generate passive income through real estate, a side business, and investment income.

I realized a number of years ago that I don’t have the aptitude and tolerance to be a landlord.  So I quickly sold off my rental properties and never looked back. In terms of the online business, it works well for my skill set, interests, and temperament.  However, running and growing an online business is an active pursuit. While satisfying, the business is nowhere close to the definition of passive. I continue to run the online business, but it has slimmed down a lot over the years. First when I gave up the consulting side of the business, and second when I sold my half of CanadianMoneyForum in 2014.

For me, passive income will come from investments that pay dividends.  While picking and watching your investments may not be all that passive for some, for me, I generally buy and hold dividend growth stocks for the long term.  So once I buy a dividend stock, I generally do very little except watch for further buy signals.  Now mind you, I also enjoy watching over my portfolio, doing research, and watching those dividends collect in my account.  Dividend growth investing really works for me and my financial goals (it’s not for everyone).

It may make some readers happy to hear that I’m currently dabbling in private equity, mostly to help a friend in growing his business.  Right now, the investment is in the form of a convertible loan that produces a small amount of interest every month. I have until October to decide either to convert the debt to equity, or to move onto the next deal.  Stay tuned for the next update to see what I decide to do with the investment.

Financial Goals

So now that I’ve declared that recurring income is what I’m really after, how much am I looking after and by when?  As with the original Million Dollar Journey goal ($1M in net worth by 2014), I believe in setting specific, measurable, achievable, realistic, and timely (SMART) goals.  While the financial industry wants you to believe that your retirement income goal should be a percentage of your current income, I believe a more accurate and dependable method of determining retirement needs is to look closely at your expenses.

Our current annual recurring expenses are in the $50-$52k range, but that’s without vacation costs.  However, while travel is important to us, it is something that we consider discretionary. If money became tight, we could cut vacation for the year. In light of this, our ultimate goal for passive income to be have enough to cover recurring expenses, and for business (or other active) income to cover luxuries such as travel, savings for a new car, and just simply extra cash flow.

Major Financial Goal:  To generate $60,000/year in passive income by end of year 2020 (age 41).

Reaching this goal would mean that my family could live comfortably without relying on full time salaries.  I would have the choice to leave full time work and allow me to focus my efforts on other interests, hobbies, and other capitalistic pursuits.

Current Financial Numbers

So now that I’ve declared my financial goal, where do I stand now? Here are the annual dividends generated by account:

 Account Dividends/year
SM Portfolio $5,786.67
 TFSA 1 $1,508.50
 TFSA 2 $1,873.35
 Non-Registered $750
 Corporate Portfolio $2,369.10
 RRSP 1 $3,520.84
 RRSP 2 $282.90

Total Dividends: $16,091.36/year

While we currently generate around $16k a year in dividends, there is potential to deploy more cash towards income producing investments.   In other words, we are not 100% invested.  The accounts with the most potential for income growth are the non-registered and the corporate portfolio.  Both of these accounts are still sitting on a significant portion of cash (bad habit that has persisted throughout the years).

Final Thoughts

With a goal of generating $60k/year passive income in less than 5 years time seems like a tall order, especially starting with a passive income of $16k/year.  We will continue saving, investing in dividend growth stocks and perhaps this will light a fire under me to be more aggressive and active in my business interests.  Stay tuned, more updates to come!

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