2020 Financial Goals

Welcome to my 2020 Financial Goals. As I do every year, I’ve been thinking about how we fared in 2019 in terms of our financial goals and about where I’d like us to be in 2020.

I want to make the point that improving our financial situation doesn’t just happen magically on its own. We all need to plan for it, and a great way to get started is to set some goals. They don’t have to be anything crazy, it can be as simple as earn an extra $100 a month or contribute $25 a week to an RRSP or TFSA. Or pay down $X amount of debt. We all need to start somewhere.

Related: Questrade Review

If you want to build wealth start tracking your income and expenses, then set some goals to challenge yourself to do more. I’ve done this for years and it’s served me well so if your struggling financially give it a shot.

Just to recap, we had 3 major goals last year so let’s see how we fared.

2019 Financial Goals in Review

1) Net Worth Goal

In 2019 our goal was to grow our net worth to at least $1.2 million by aggressively reducing debt and investing as much as we possibly can.  As of January 1^st, 2019 we were at $1,084,269.

2019 was a great year for our finances overall and our Net Worth in particular. We were coming off a terrible 2018 with the stock market correction and debt from our home renos.

We killed it last year, our net worth on January 1, 2020 was just over $1.3 million. We’re up over $216k from Jan 1 2019! In the process our investments have recovered and we paid off all our debt from the renos.

2) Passive Income Goal

The Passive Income Goal for 2019 was $17k.  That was a 21% increase over 2018.  I thought this was a stretch but ultimately achievable with regular investing, dividend raises and by re-investing our dividend income.

Well, we crushed this goal too! We made $19,095 in purely passive dividend income last year. We beat the goal by 12.33% thanks to staying invested and adding new money throughout the year.

3) Pay Down Debt

In terms of our debt, 2019 was a year to dig ourselves out the hole from our home renos in 2018.  We borrowed money from our line of credit to get us through the renovations and we had to pay it off.  In addition to paying off the line of credit, I wanted to pay down $20k on our mortgage in addition to our regular payments.

We beat this goal too. I have to say that this was the hardest goal because repaying debt sucks. But we managed it and by year’s end, not only did we get out of consumer debt, but we made $23.6k in extra lump sum payments.

2020 Financial Goals :

1) Net Worth Goal

The net worth goal for 2019 was to increase it by $100k, and we actually increased it by $200k (to $1.3 million). For 2020, I want to shoot for another $200k increase, bringing us to $1.5 million.

I realize that’s an ambitious goal because a big part of our net worth is in stock market and we have absolutely no control over it!

But I think if we stick to our plan to pay down our mortgage and keep investing, I think it might be achievable.

Here’s a snapshot of the growth of our net worth since 2014:

2) Passive Income Goal

The Passive Income Goal this year is $22k.  That’s a 16% increase over 2019.  This should be achievable with regular investing, dividend raises and by re-investing our dividend income.

Here’s a snapshot of the growth of our passive dividend income since 2014:

3) Pay Down Debt

In terms of our debt, 2019 was a fantastic year for us.  We paid off our consumer debt and a nice chunk on the mortgage too.

I fell that as long as we have a mortgage hanging over our heard we’ll never truly be financially free. So paying it off over the next 5 years is a priority.

For 2020, the goal is simply to avoid taking on consumer debt and to make $30k in extra mortgage payments. Along with our regular payments this should knock off $50k a year.

Well that’s it for my 2020 Financial Goals, I hope this inspires some of you to create your own financial goals and I wish you all the best in 2020!