Posted by Canadian Dream on December 14, 2011
Well it’s been a good year so far and now that I’m on vacation I’m actually starting to get caught up on my backlog of things to do around the blog. One of those items was a final report on my 2011 goals.
For your memory the goals were fairly damn straightforward:
Goal #2 was the publish my book, Free at 45. This was completed back in March of this year. Sales were relatively modest, but I didn’t go broke doing it, which was the main idea.
Goal #1 was to pay off $39,000 of my mortgage. While it isn’t the official year end yet, I can project that the final mortgage balance will be about $43,000. That means I would have paid off $40,500 over the year. Yep, I exceeded my goal by $1500!
This now sets me up nicely to go after my 2012 goal of paying off the mortgage completely. So that will be a bit of stretch for us given what we paid off in 2011, but as the balance keeps dropping so does the interest portion of our payments which should assist us in bridging that gap.
So how have you done on your goals for 2011? Pass, fail, or did you have to switch them along the way?
Posted by Canadian Dream on November 17, 2011
I was recently attending a leadership event put on by my employer which featured a interesting guest speaker. While I normally don’t find leadership training particularly interesting, I did find this speaker’s one particular point very illuminating on the problem of why people don’t save for retirement or any other long term goal. His advice was merely “people can’t commit to what they can’t see.’ To me this seemed obvious, but I had never articulated it here on the blog.
Basically if people can’t visualize it, the ability to commit to a goal is difficult. Hence this is where long term goals are difficult to save for including retirement. We don’t have a clear picture in our heads of what we are trying to achieve. For example, I have a goal to pay off the rest of my mortgage by the end of 2012. What motivates me to keep working towards this goal isn’t so much the numbers or the logic of the decision, but rather a picture in my head. In my vision of what this will be like I have a party to celebrate where good friends and family come over. We drink wine, eat some appetizers, and I’m in a extremely happy mood while I give a little speech and thank everyone for coming out and they cheer our good fortune (aka the plan). It’s not a complex vision, but I do have one part firmly set in my mind: the feeling of accomplishment.
Yet that vision is what most people can’t even tell you about in all that much detail with regards to retirement plans. What are you working towards? What will your days be like? What will you do to provide a sense of accomplishment? We have no vision of the event so committing to getting there is difficult to do without the vision to provide emotional motivation to keep going when things are tough.
Not surprisingly I do have a little vision in my head of the ‘perfect’ retirement day. While the details shift around a little bit the general gist of the story goes something like this.
I wake about 7:30am and the proceed to do a little yoga, eat some breakfast and drink coffee for a while while I lounge around reading the news. By 9am, I’ve grown restless so I’ve dressed and sit down at my computer to write in the library/den. I split my morning writing into two periods: one for a paid project or more commercial writing and the other for a fun project like my latest novel. Selling the novel is irrelevant since I do it for my enjoyment and not to make any money at it.
By noon, my wife and I sit down for lunch together and discuss our plans for the rest of the day. We typically split our afternoons into personal projects and doing something together. Today our plans include me working on a simple wood bench for our son’s apartment. I’m making it more to have a place to sit and take off my boots than for him. I’m not that good at woodworking so it isn’t a masterpiece, but I enjoy it. Later that afternoon, about 3pm, I meet my wife at the library where we browse the latest books and check out this week’s stack of books to read. Then we go home and cook a simple meal and talk about our day. Then that evening friends stop by and we visit over a pot of tea and perhaps if we are in the mood play a game of cards, a board game or something that doesn’t distract you too much from chatting. Then I read for a while after the guests leave and then head of to bed.
You will notice my vision doesn’t involve me a in another country, have any sports cars or sailboats or giant houses. It’s largely like my life right now, but just more time to do things I like to do. You might have also noticed it did contain a little paid work, but perhaps only an hour and a half. Which was mainly to help pay for the other hobbies, I don’t really need the money.
The point of this little story isn’t to say what you should do, but you should have a daydream in your head to work towards. So go ahead and take some time and dream. What would my day be like if I didn’t have to work?
Posted by Canadian Dream on November 2, 2011
Being an engineer for my day job does have some particular problems for me…I’m a bit of data hound. I like data to help make decisions (even when I don’t always follow what the data is telling me). This has lead me to try something rather extreme in my view, but regardless of that fact I really want the data. So for all of 2012 I’m going to track my spending…every damn cent of it. I did something similar before back in 2007 for a month (see here).
Overkill? Perhaps for some subcategories like our cash spending, but in general I will be keeping a closer eye on the outflows in order to give me a sold data set on what I’m actually spending. After all if you have read this blog or my book you will know the foundation of any retirement plan is not your income, but rather what you spend each month. What I find particularly interesting about this experiment is my wife wants to do as well. In her case, she wants some black and white information on where her spending cash going each month.
This tracking project is going to be one of my goals for 2012 along with the obvious one of paying off the remainder of my mortgage. Yes neither goal is particularly sexy, but that doesn’t bother me. After all, getting to financial independence isn’t about flashy goals, but rather a long hike where you get to enjoy the scenery and still get the job done.
I would like to personally thank everyone for helping out Gwen last week with ideas on how to track expenses. I was taking notes as well for potential ideas. So far my plan is to use an existing spreadsheet I already have to help track our spending. What I’m struggling with at the moment is what graphs/reports should I generate from it? Do you use any reporting functions for your software? If so, what do you like to see (pie charts, line graphs…)? I’m currently leaning towards a classic wall chart style with income, spending and investment income per month.
