With 2016 winding to an interesting close, here are my goals where I’d like to be at by the end of 2017.
- Add $41,250 to my 401k – 401k limits are not going up in 2017 as inflation remains rather low. So I will contribute the max of $18,000 in 2017, plus since I am solo employed, I get to add 25% of the income I pay to myself as an employer contribution, or $23,250. This lets me both lower my taxable income substantially, which is important since I have no meaningful tax shelters. The ability to accelerate your retirement savings is the biggest reason why I think forming your own corporate entity – whether you work for the man, or not – is one of the best financial moves you make. That way you can open up your solo 401k at any brokerage you like, and buy equities and not crappy funds with high expense ratios that the majority of companies offer their employees today.
- Buy a modestly priced condo with 20% down (probably in Q1) – I actually am someone who does not look at the home you live in as a great investment, as our culture generally pushes. Sure there is a tax benefit, but most homes are generally money sucks, and you’ll always have to deal with things breaking, as well as property taxes and in the case of condos, an HOA, which is used to hire annoying dudes who blast leaf blowers near you and things like that. But the fact is I’ve been living with family for a year trying to jumpstart my finances, and I actually am starting to feel like a bit of a mooch since I don’t pay rent – plus I would like to get on my own & have my own space. So I could certainly rent, but interest rates remain at historical lows (despite heading up recently), so the cost of debt isn’t too bad. Further, I would like to start dipping my toes in real estate, and so I would envision after a few years turning the condo into a rental property to generate some additional passive income diversification. Ideally I would like to put cash down for the home, but I’m not swimming in cash, so while I could theoretically do that in another year or so, that comes with additional opportunity costs. So my idea would be to put 20% down to avoid PMI and then put a little extra each month to pay down the principal faster. In short, purchasing a home will make me inflation neutral, which I think is going to be a good thing in the coming years, as there is the potential for inflation to pick up again. Again, we never know what will happen, but I’m putting my bets on that happening, and riding the dividend gravy train until that point.
- Earn $250k income – I think the best financial move you can make is starting a company and selling it. Or writing a best selling novel. In lieu of that, I think the best thing you can do is try to increase your income. I’m currently going to end up 2016 around $230,000 earned. If I could stretch that to $250k, I’ll be able to accelerate my early retirement that much faster.
- Maintain a $30,000 emergency fund – Given that I’m freelancing, I’ll need a decent sized fund in case I lose clients, which happened earlier this year. My income remains sporadic, and the last thing I want to do is have to start using credit cards or sell stock. Your own monthly nut and requirements may vary, but this is just what I think works for my particular situation.
- Invest any remaining money in my taxable account, on as regular a basis as possible – I’ll continue to purchase equities that make sense to me, filling out my existing positions, or entering some new ones, preferably in sectors I don’t yet have exposure to. I don’t have a number on this goal, which probably isn’t ideal, but this one is more of an intention than a number. I’ll also try to do it as regularly as possible, as I have a tendency to try to “time” my moves. Which isn’t a bad thing, but is a hard thing to pull off, as the recent Trump rally has shown me. Logically I should have known this would be amazing for the economy, but I believed at the time the market would tank, so it just goes to show, anything can happen in the short term.
- Get to 10% bodyfat – I’ll just say I’m far away from that currently, and leave it at that. While this isn’t a financial goal, it will impact my finances. I just recently got a proper gym membership & trainer, which is a huge expense. It’s one I justify by saying that in my opinion, the best investment you can make is in your health. Because there’s no point in being financially free if you’re not healthy. And while one doesn’t need a gym or a trainer to do this, for me, given the type of person I am, I’ll need that help to hit this goal.
- Earn $10/ mo with this blog – If I can cover the cost of hosting, I’ll be happy. Your views and clicks )support for our Adwords advertisers) are appreciated.
Welp, that’s basically it for what I want to accomplish in 2017. What about you? Have you started thinking about your resolutions for the new year? If so, what are they?