Tuesday, 30 December 2008

Goals for 2009?

I'm a bit wary of setting goals for 2009, after failing to meet my 2008 goals. Some of the goals (around investment portfolio returns and increased net worth) turned out to be wildly optimistic given my asset allocation, use of gearing, and the GFCs impact on my equity investment returns. It's disconcerting to consider that I could have come close to meeting my goals if simply closed out my stock portfolio a year ago, paid off my margin loans, and put the balance into an online savings account for 2008!

This year I'll not even try to guess where the market might be in 12 months time and set any ROI goals - I'll just aim to meet my home, real estate investment and margin loan interest payments out of current income (salary, dividends and rental income), and to keep socking away 50% of my pre-tax salary into retirement savings via salary sacrifice and SGL contributions into our SMSF. A sub-goal will be to ensure that my employer makes the salary sacrifice contributions at the right times so I avoid any "excess contributions" tax liability.

It would be nice if there are further interest rate cuts by the RBA in 2009, as this would reduce the amount of cash DW and I have to contribute each month towards the interest-only payments on our home loan. Any surplus cash flow could be directed towards paying off some of my margin loan debt (or possibly some of our home loan debt - although the interest rate on the home loan is lower than the margin loans, the home loan interest isn't tax deductible).

I'll have to roll over my 2008 goal of losing weight and going to the gym - I only managed to lose around 7kg this year, and my BMI is still around 30. Given that my diastolic blood pressure is way too high (although my systolic is OK), I need to get down to an ideal BMI of around 22 to see if I can avoid taking blood pressure medicines.

One new goal for 2009 is to keep my current job (although that is somewhat out of my hands given the current economic climate). This time last year my net worth was high enough to toy with the idea of "early semi-retirement" - perhaps taking a pay cut in order to change careers into teaching or financial planning. But the drop in my net worth during 2008 means that I probably need to keep earning at my current income level until 65 in order to afford a "comfortable" retirement. My direct boss "left the company" suddenly a couple of weeks ago (he wasn't inclined, or allowed, to give specifics of his departure, but I'm pretty sure it was a "voluntary redundancy" along the lines of what I got from my previous employer ten years ago). If I'm lucky that cost saving will be the extent of the belt tightening required by our department, but it could just be the start of a round of company-wide "right sizing" if Australia goes into recession during 2009.

My other perennial goal is to start tracking all my income and expenses using Quicken. If I get can get my "new" Dell laptop repaired under warranty (it was doing strange things when I took it on holiday last October, and the DVD drive isn't working) I'll load Quicken 2008 onto it and be able to update my accounts during my lunch break, rather than trying to do so at night when the kids have been put to bed.

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