Friday, January 8, 2010

2009 Review: Financial Goals

With 2010 now well under way, it is time to review what happened to my finances in 2009. I'll begin by reviewing my 2009 goals to see how successful I was in meeting them, as well as setting goals and objectives for 2010.

First, a reminder of some definitions:
  • A goal is the statement a desired result.
  • An objective is a quantifiable measure to evaluate progress.
  • A mean is a way that is used to reach an objective.

Financial Goal 1: Increase my Net Worth -- Success

My objective here was to increase my net worth from $70K (at the end of 2008) to $85K at the end of 2009. As of January 1st, my net worth was $108K, which means I completely fulfilled this objective. Even if I ignore the increase in the value of our house, which accounts for $8K of the total increase, I still doubled my objective. I had a lot of help from the markets' recovery, but I think my basic plan was sound.

So for 2010, my objective is now to reach a net worth of $125K.

The means remain pretty much the same -- regular deposits to my RRSP and to my DRiP portfolio, keeping an emergency fund, continued debt reduction (mostly house-related, since I have little personal debts remaining).

Financial Goal 2: Increase my Dividend Income -- Partial success

My objective here was to grow the dividend income from my DRiP portfolio from $700 to $850 through additionnal purchases in the portfolio. I almost made it, since my total dividend income was $840. The shortfall is partially due to smaller purchases at the beginning of the year, when I focused on debt reduction, and from the investment mix I selected -- I purchased more corporations (with lower yield) at the beginning of the year than income trusts, since I saw the recession as an opportunity to load up on quality dividend growers. The move paid of in terms of net worth, but this meant slightly lower dividend income for 2009. I can live with that.

For 2010, I would like to see my dividend income grow from $1115 -- which is what I will receive if I make no additional purchases and get no dividend increases -- to about $1300. That's a steeper objective than last year, because I expect more dividend increases than last year. I will account for dividend income from both my DRiP portfolio and my TFSA brokerage account.

Financial Goal 3: Reorganize my Investment Accounts -- Done

My objective was to evaluate my current brokerage accounts to see if they still fit my needs, and open/close accounts accordingly. In June I closed my Canadian Shareowner Investment account. And in October I began the process of opening a TD Waterhouse account to host my TFSA equity investments. I moved out my emergency funds from my TFSA at ING Direct, since I'll benefit more from having better-yielding investments sheltered by a TFSA. I also decided to keep my account with Disnat, since the service I can get there for signature guarantees are quite handy for dripping.

There is no need to renew this goal into 2010.


What are your financial goals for 2010?


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