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10 Jan 2022

2022 FINANCIAL GOALS

Have you set your own 2022 financial goals? For me the main goal is the standing 'project 2021 July to 2023 June' to double our net worth and monthly income without acquiring new physical assets. It is very ambitious but after such a challenging two years I reckon we deserve a bit of excitement. The previous post detailed the 2021 financial goals review. Let's dip into our 2022 financial goals:

1. Net Worth Tracking. Goals that are shared are more likely to be achieved. Like most bloggers, I come from that background where money talks are a taboo. But writing about my financial freedom journey helped me achieve my goals. So, my first goal is to keep myself accountable by tracking my progress here every quarter. The reason I choose quarterly is that, I update my net worth spreadsheets and report to my family about our progress quarterly. I used to do this monthly but realised that there is too much volatility in a short period. 3 months is also a short period but hey, there has to be a cut off time somewhere.

2. Keeping Focus. In my 2 years of rest I spent a whole lot of time on social media. I realise that I need to schedule my social media times. I can do with limited distraction in my life. Having strict work and family times without social media has become top priority this year. I am catching up on my reading. One huge book done and halfway the second one. I have also set a full day aside weekly to do work for others/freelance work.  

3. Earn More. Right now I am working on increasing our real estate income, as per the main goal above. There are three ways in which we are doing this:

  • Most of 2021 was spend renovating existing property. We had renovations on a small 2-bedroom duplex, our own home, and current renovations in the biggest unit in our multifamily property. The latter should increase the rental income of the unit by at least 60%.
  • I am working on a short-term rentals strategy using the Airbnb model. I will furnish the units that will be let in this way. The first property will be the unit that is in an upmarket residential estate. 
  • We are also working with our town planner to rezone a property which is in an erf earmarked for densification by council. This will be our first 'build to rent' property.
  • Lastly, I will work on increasing the income of this blog. I want to add a channel/ podcast to it by June. 

4. Debt. We will continue to lower the rental property debt. This is a new strategy because of early retirement. We may as well get rid of this debt. This is our only debt. 

5. TFSA. Of course, we are maxing our tax free savings accounts. Mr V spreads his contributions throughout the year. I do a once off payment towards the end of the financial year. I am more likely to forget to do this, so Mr keeps telling me to try and make my lumpsum investment in March. That way I get maximum growth benefit. I need to start listening. We both use ETFs as an investment vehicle for this. It makes sense to use stocks, since a TFSA is more suited to long-term kinds of investment. The Geek (our son) will be having his second year of maxing a TFSA in 2022-23 too.  

6. Education. The plan is to invest in tax education for personal growth this year. A short course to help grow my understanding and learn about new tax provisions and laws will suffice. 

7. Stocks. This is where we plan to invest more to maintain a well-diversified portfolio. We love property and are over exposed in that investment category. We are currently trying to focus on investing in equities. We have both local and international individual stocks and ETFs. 

8. Retirement. We continue contributing to our retirement accounts. We only have this increased by 10% annually. Mr V and I both have 2 retirement accounts each. We have a retirement annuity each, Mr V's employer linked pension and my pension preservation fund. I have been tempted to cash my preservation fund a few times in the past. But I also think I need this kind of a safe option.

9. Family Finance Alignment. Every quarter I track progress on our goals and discuss with family. This way, our plans are aligned. We all pay attention to global economic conditions, to reshuffle our investments as a need arises. I am the one tasked with a responsibility to take some sort of a lead on this this year. So, I start my days with some light markets reads.

10. Will vs trust. Right now I am investing in weighing the pros and cons of a trust. We still do not have a family trust. We have been dragging our feet because of the expenses that will go with the transfer of assets. I'm onto it this year.

11. Getting rid of assets. The other important item on my to-do list is getting rid of all small property units. I no longer want to keep the apartments in our portfolio. We currently prefer the multifamily rental property. We have 3 units to sell in the year. This will depend on the property market conditions. If prices drop, we will just hold a bit longer.

12. Giving. I keep forgetting to mention this. We give over 10% of our income as a principle. As a family we assist our parents financially and have a scholarship. We have foster kids that attend a small private school on this family scholarship. We believe in this kind of giving.

Please share your own goals with us.

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Author Mbini Kutta, a businesswoman, personal finance author and investor.

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