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.

Thank you for visiting Safe Investing SA. For daily motivation like us on Facebook, Twitter and/ or Instagram.

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

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OUR NET WORTH AND 2021 MONEY HIGHLIGHTS

 When Mr V (husband) and myself planned our lives together in our 20s we took a decision to focus more energies on our family and family businesses and less on top careers. We had decided on shorter career lives. This was before the ‘fire movement’ came to be. For those who do not know, ‘FIRE’ is an acronym for ‘Financial Independence Retire Early. We never imagined that this decision would be the one thing that gives us purpose and a strong joint passion. Financial independence and early retirement were the goal. I have been outside formal employment for almost 5 years now. I also took my semi-retirement break at 35.

The past few years were super challenging. We lost my mother in December 2020. The pain that I went and am still going through cannot be articulated. My mother was a close friend. The year 2020 was the most difficult year globally. I have not blogged in both 2020 and 2021. However, in 2021 I went back to tracking my finances. This was a needed distraction. 

Back in January 2020, our family’s financial plan was to double our net worth and income in two years without acquiring new physical assets. Then 2020 turned to be the weirdest period of our lives. I rested more that year. The plan to double our net worth was only implemented in mid-2021. My excel spreadsheets and graphs are beautiful to watch every quarter.

Whilst excel is great, I miss keeping myself accountable through blogging. I will use this platform to keep track of the progress in our ‘project July 2021- June 2023’. It will take a lot of doing to achieve this goal but it is doable. The detailed plan for 2022 will follow in the next blog post.

2021 Highlights:

1.Stocks. What we have done from July 2021 is increase our investments in stocks. We did get lucky with the SASOL dip and the great performance of the US dollar stocks in the past year. The year or semester rather, was great. We did not forget our tax free benefit accounts which are also in Exchange Traded Funds (ETFs).

2. Rental Income. We also had major renovation projects to increase the rental income. One renovation project was in our multifamily let. We renovated the biggest unit. This property has 6 lease contracts in it. We are finalising this remodel project soon. The renovation should increase the income of the unit by 60%. The plan was to further develop this property. The city’s 2018 Regional Spatial Development Framework (RSDF) removed the erf from the area that they earmarked for densification. So, we could not.

3.Retirement and savings. We also contribute to our retirement accounts monthly. We each have two accounts with one being a retirement annuity. The performance is not stunning, but they are a great addition. We also keep some small figure in savings to serve as an emergency fund. We no longer have a big sum in the emergency funds accounts. Interest rates are too low for that. My zero-fee credit card is my emergency account. I never pay interest on a credit card.

4. Gigs. I achieved more in 2021 than I did in the past few years. My freelance income has been channelled to fast-track Mr V’s retirement. This deserves a separate post.

5. Content creation. My content creation income was very small. Like I mentioned, I went AWOL. See next blog post for the plans for 2022 on this.

6. Speaking. I was a visiting lecturer and had a few speaking appearances last year. Noteworthy is my appearance as an expert at an ‘Africa Trade Conference 2021’ and the full week radio show talks.

7. Wealth transfer. The Geek (our son)  turned 18 in 2021 and started on the investment journey of his own. The boy has done very well and invests in the US stocks and ETFs exclusively. He has impressed us by his focus on managing his finances. We have discussed building a good credit rating record and getting his first credit card. We are also helping him max his tax-free savings account. 

8. Budgeting. I still work with a budget that is in my head. Budgeting never works for me. I make my targets, save, invest and then spend. Paying myself first helps with my impulsive habits. 

9. Debt. On debt, we still only have investment property debt. We also have reduced this remarkably in 2021. We are generally not bothered by rental property mortgages. Our priority is having no debt in our primary home and no debt anywhere else. This has always been the case.

10. Travel. I had plans to travel in 2021. Ireland and Egypt were on the list. Due to the pandemic I only managed to travel between Angola and South Africa. I am looking forward to open borders. The family’s feet itch.

11. Comfort. Our primary home was the most costly project for the year. We are a family that believes in comfortable living, and always prioritise comfort and healthy food. OH, we sure love our food. We did get approached by interested prospective corporate tenants to lease this property. I was welcoming the idea of great income, but Mr V and the Geek refused to let go.

12. Finally, 2021 had its challenges. We had a few months of vacancies and unpaid rentals due to the pandemic. This is not common as we invest mainly in the heart of national government and diplomat presence. Our 2022 goals will highlight how this discomfort pushed us to grow. Our investment city is also growing and is now with a population of over 2.5 Million.

Thank you for visiting Safe Investing SA. For daily motivation like us on Facebook, Twitter and/ or Instagram.

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

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PERSONAL FINANCE GOAL REVIEW JUNE 2019

My first month of goal setting did not go very well. A month is too long for one to remember their goals apparently. I was supposed to check my list every Sunday. I did not. Oh well. The personal finance goal review for June goes...

Personal Finance Goal Review

JUNE PERSONAL FINANCE GOAL REVIEW

NET WORTH: I will have to check the values of all my investments and real estate debt, add determine the net worth. ROUGHLY DONE

EMERGENCY FUND: DONE

OTHER SAVINGS: 32 days notice account. I  was supposed to top this up. NOT DONE

GIVING: Over 10% DONE

REAL ESTATE: I am only doing repairs to and cleaning up the property that will have new occupants mid-June. DONE

STOCKS AND DIVIDENDS: Exchange Traded Funds (ETFs), invest. NOT DONE

INCOME: Improve on online income. NOT DONE

JUNE NON-FINANCE GOALS:
Family:  Travel sometime in June for a short family holiday. DONE
Personal Improvement: I need to study more. I commit to competing 2 chapters this month. NOT DONE

I will also walk more this month to get close to my 10,000 steps per day. NOT DONE

I will also get back to a strict Keto diet with some intermittent fasting thrown in for good measure. NOT DONE

Social: I will meet a friend or associate for coffee every two weeks. PARTLY DONE

Please help rate the performance on my June personal finance goals. All my energy, time and money was consumed by the property cleanup. I never knew that a boundary wall costs that much. I spent a lot of money on unplanned expenses. 
Did you have your own goals dotted down? Let us know if you are up for the challenge in July.

Feel free to email your questions through our contact page. I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on Facebook, Twitter and/ or Instagram.

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INTEREST BEARING EMERGENCY FUND ACCOUNT

We are looking at one more good interest bearing emergency fund account. You may refer to Capitec's Global One account in the previous post. Again, I confirm that we are not paid by below mentioned service providers to provide this information.

Our Twitter handle @SafeInvestingSA asked a question:

"Do all banks have an interest bearing 24-hour or 1 day notice account that requires an initial investment amount of below R1000. Our #SavingCommunitySA needs that or similar for individuals."

interest bearing emergency fund account

Nedbank was one other bank that responded as follows:

"We have various Investment accounts with different offerings and minimum Investment amounts. Click on the link for more info on our account: xxx  :)".

We have looked at the Nedbank money market accounts and came up with the one that is most suited to the Emergency Fund. JustInvest account is our interest bearing emergency fund account of choice. One may start very slow as the minimum investment amount is only R500. This makes it ideal for the new savers.

This is the only one day or 24 hour notice account that we know of. I find the notice account with only one day notice fascinating. One day notice is long enough to ensure one sleeps on the decision to withdraw funds, whilst it is short enough to take care of an emergency.

One can use their debit account for monthly stop orders into this money market account. A great idea to ensure that one pays themselves first. This account earns interest from 4% at the time of publication of this article. The higher the balance the higher the interest earned. JustInvest also attracts no monthly fees. The interest on the balance at the tie of publication is:
Below R2,500 interest is at 4%; R2,500 – R24,999 at 5,25%; R25,000 – R49,999 at 5,75%; R50,000 – R99,999 at 6,2%; R100,000 – R249,999 at 6,3%; R250,000 – R499,999 at 6,35%; R500,000 ­– R999,999 at 6,4% and R1 million and above at 6,5%
For our emergency savings of R5,000 to R10,000 our interest bearing emergency fund account earns about 5%. This is not a bad interest on only one day notice.

I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on Facebook, Twitter and/ or Instagram.

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INTEREST BEARING EMERGENCY FUND ACCOUNT

Our quest for good interest bearing emergency fund account lead us to the social media platforms. We are also analysing the Nedbank JustInvest account in the next post. Let me confirm that we are not paid by below mentioned service providers to provide the information below.

Our Twitter handle @SafeInvestingSA asked a question:

"Do all banks have an interest bearing 24-hour or 1 day notice account that requires an initial investment amount of below R1000. Our #SavingCommunitySA needs that or similar for individuals."

Only two of the four banks responded. Capitec responded

"We have a savings plan as an addition to our Global One savings account however there is no 1 day notice. You can get the funds immediately in emergencies".

Having checked the Global One account we agree that it is indeed a good interest bearing emergency fund account. At the point of writing this article Global One would get one a transaction account and four free savings plans. This works much better if you are the Capitec client as this is linked to the debit or credit card.

Most importantly for us is that this account earns from 5% interest per year on the balances. This is again at the time the article was first published. This is obviously adjusted with changes in the South African interest rates. The account earns 5% for R0 – R24,999 balance, 5.4% for R25 000 – R99 999 and 5.65 for R100 000 and above. Remember that we mostly save R5,000 to R10,000 in our interest bearing emergency fund account. 5% is not a bad interest on an account that has money readily available.

Lets get to the catch. One needs R25 minimum balance and a monthly administration fee of R5. But this is for the main account which you use for your daily banking activities. Hence the savings plan account itself is marketed as free. One may then link the four free savings plans to their main debit account.

I trust that you have started with the savings challenge. We have four steps and groups. 1. Debt pay-up, 2. Emergency Fund, 3. Other Savings Accounts, and 4. Investments. Please do keep moving. Start slow but do not stop. For daily motivation like us on Facebook, Twitter and/ or Instagram.

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EMERGENCY FUND ACCOUNTS

This post is mainly for our daily savings challenge members and readers who joined the monthly saving challenge. I thought I would easily compare various bank accounts that are better suited to emergency fund accounts. It seems it would take me forever to complete that kind of a task. I will just explain the account that I use for my own emergency funds. If your bank has a similar account, you might consider using it. If they have a better account, that is even better.

emergency fund accounts

Emergency fund accounts are meant for emergencies. No surprise there. There has to be a high level of liquidity in the account you choose with cash being available almost immediately. The account used has to earn interest. My bank has an account with both features. I use a 24 hour or one day notice account as my emergency fund account. You make a 24-hour notice to withdraw. It is very convenient for quick access to cash.

More on this money market account:

• To open this particular account, one needs a minimum amount of R500. Hence, I thought most of our daily saving challenge members can use similar after keeping their two weeks savings of R560.
• 5.25 percent interest (at the time of publishing) is not bad at all for the typical funds of between R2,500 and R25,000. I realise that most banks do not have good interest rates on savings and money market accounts. I have seen below 3 percent for accounts similar to the one that I use. 
• Whenever I need funds, I make a notice a day before my withdrawal. It could be an evening before the day I need the funds. In this way it is not strictly applying the 24 hours waiting period.
• I have not created a stop order for my funds to be transferred into this account, but this is possible and a good thing to do. This way one can automatically pay themselves first.
• My emergency fund is capped at about R10,000. So, I will never get the 6.2 percent interest rate earned on a R50,000 balance. I am pleased with the 5.25 percent that I earn. 
• It is important to choose an account with no monthly fees or commissions. Most of them do not. 

Please look at the features above and get an account from your bank that works in a similar fashion. Funds have to be available immediately or almost instantly. The account has to earn interest. Time value of money is a thing.

Please like us on Facebook and on Instagram.

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JUNE PERSONAL FINANCE GOALS

I am so grateful to be doing this again. These are my first personal finance monthly goals in 4 years. I am back to this and more. I need to keep myself motivated again. It will be great getting into 2020 following a smooth planning rhythm.

June personal finance goals

Did I mention that I have not had a job in over a year? My last job was supposed to be a part time gig, except, it was too hectic. Let us look at the June personal finance goals.

JUNE PERSONAL FINANCE GOALS

NET WORTH: I have not measured my net worth in 4 years too. I will have to check the values of all my investments and real estate debt, add determine the net worth. It is an exhausting exercise. I need to locate the spreadsheet I had drawn for this exercise in the past.

EMERGENCY FUND: I am so happy to report that my emergency fund is intact. I am keeping the EF at the very minimum levels. It is saved in the 24-hour (one day) notice bank account.

OTHER SAVINGS: I have a 32 days notice account. I just like how generous the interest rates are on this account.  I keep a small amount in it and whenever I have funds to keep, I store them here.

GIVING: Giving is one of the most important activities in my family. We give more than 10% of the income. We are intentional about it. It is a permanent feature in our plan and budget. You will see it monthly. I will also post about it at some point.

REAL ESTATE: There is not much that we are doing here. No new acquisitions. I am only doing repairs to and cleaning up the property that will have new occupants mid-June.

STOCKS AND DIVIDENDS: My Exchange Traded Funds (ETFs) are at their lowest level ever. I withdrew quite a bit last year. I started a new work from home business. Setting up cost a small fortune.

INCOME: I constantly look for gigs for my business.

Online income has not improved since 2015. I maintained the same earning rates. I only started working on this last week. For four years I have not done anything. I am giving it a year to get to a constant flow.

JUNE NON-FINANCE GOALS:
Family: I spend a good amount of time with my family lately. I make the time but I also work from home, which gives me ample time to do so. I will travel sometime in June for a short family holiday.
Personal Improvement: I need to study more. I am a student this year. I commit to competing 2 chapters this month. SIGH. I will also walk more this month to get close to my 10,000 steps per day. Winter is the worst time to keep fit for me. I will also get back to a strict Keto diet with some intermittent fasting thrown in for good measure. I enjoy following a food plan. I wish every area of my life was this orderly.
Social: I will meet a friend or associate for coffee every two weeks.

End of June we will be back to check if I managed to achieve any of my June personal finance goals. But every Sunday, I review my progress. Hope you have your own goals dotted down. Let us know if you are up for the challenge, even without details.

Like our Facebook page and Instagram page to keep track of my progress. 

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MONTHLY SAVINGS CHALLENGE

Since I posted the daily savings challenge plans two posts ago, a few readers requested that we embark on a monthly savings challenge as well. It makes perfect sense as most of my readers get paid once a month.

monthly savings challenge

Anyway I also want to thank all of you for joining the savings drive. Those who follow us on Facebook have sent amazing messages. Remember to like our Facebook and our Instagram page. It is easier to inspire and encourage each other in social media platforms. And our hashtag is off course #SavingCommunitySA because we are building a community of savers.

We will once again choose the plan we are comfortable with from the four in this article. By the end of the month or whenever we get paid, we will open our emergency (or any) fund accounts. We will post the suitable accounts here for each reader to choose. The 24 hour (one day) notice account requires about R500 initial investment. The ETFs require about R300 per month. Please remember that each plan has our investment or own contribution and no interest added. We will save everything in interest bearing accounts or stocks.

Know your WHY. Are you saving towards building:

• Emergency fund.
• Children school fees fund.
• Deposit on their home.
• Deposit on their car.
• Investment for retirement.
• Investment for passive income.
• Business capital.
• ETC.

 I wish us all the very best in this monthly savings challenge. Keep pushing.

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DAILY SAVINGS CHALLENGE

This daily savings challenge is my idea of fun. I know, I'm even more boring in real life. Get over it people. Here goes the fun. We have six daily savings plans for you to choose if you are joining. I so hope you are. We are saving up to R150,000 (about $12,500) per year each. This is an accountability stokvel and savings club of sorts.

How it Works:
We will each choose the plan we are comfortable with from the six listed below. We will then save our daily amount mentally and leave it wherever it is. We will then open our emergency (or any) fund accounts in 2 weeks time. The 24 hour (one day) notice account requires R500 initial investment. The ETFs require about R300 per month. Please remember that each plan has our investment and no interest added. We will save everything in interest bearing accounts or stocks.

Some of our readers are saving towards building their:

1. Emergency fund.
2. Children school fees fund.
3. Deposit on their home.
4. Deposit on their car.
5. Investment for retirement.
6. Investment for passive income.
7. Business capital.
8. ETC.

Remember, depending on each one's needs, one can save in a notice account, money market account or invest in exchange traded funds (ETFs) for better returns. For those who prefer a monthly plan, we'll work on a few options for the beginning of next month. For now, choose from one of our daily savings challenge plans below.

daily savings challenge

This is our basic daily savings plan. You may just save R280 per week. If you convert it into a monthly savings plan, you will save less because there are a few extra weeks in a year. A year is not made of exactly 4 weeks per month. Keep records of this and follow us on Facebook to keep track of where we are.

daily savings plan

 Above is the double of the basic plan. A number of the readers can spare more than the R500 per week. Remember again that if you convert it into a monthly savings plan, you will make less because there are a few extra weeks in a year. Keep moving with us.

And now we look at half of the basic plan. Students and young professionals who are starting out might go for this plan. The most important part of building wealth is consistency. We are developing a culture of saving here more than anything.

Below are R50K to R150K daily savings plans.

All the best to you. I will keep reminding all of us on our Facebook page. Stay tuned.

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I CHANGED MY BAD FINANCIAL HABITS

Changing bad habits is a constant battle for all of us. It does not matter how not life altering the habit may seem. From eating in instead of dining out to raiding your closet for the next wedding instead of paying a designer for a new outfit. It takes a lot of discipline and intentional effort. I changed my bad financial habits and still continue to relapse and rework on them again and again. We need to understand that this is a ceaseless battle.

I changed my bad financial habits

I am fortunate in that, my own habits do not encompass carrying huge debt quantities. It is mostly shopping for stuff I do not need. Carrying consumer debt should be frightening for all of us. It is strange that when people are in that high debt situation, they tend to behave like frogs that are being boiled from low water temperatures. They simple adjust to their situations, and then start borrowing even more. The longer one is in debt, the deeper they tend to dig the grave.

Let me start by confessing, to demonstrate how easy this happens to most of us. A few months ago, I finally got myself a credit card. Phew! Was I ever so eager to get into debt? The thing is, I started an exciting, high capital and slow growth business. I was rushing the business to be self-sustaining ahead of its time. I'm not a patient type. It emerged that it is not happening anytime soon. I had to get a credit card to assist the business. I do not believe in bankrupting myself to assist the business but the situation called for it.

Well…I swiped the credit card for the business transactions and ahem, mine. In no time, the card was maxed out. I started having the business pay the debt, but it was very difficult. Instead of me working harder on doing this, I just got used to carrying this debt. I got comfort in the fact that I was not paying any interest because I was paying the credit card balance up monthly and transferring my money back again. The credit card debt was becoming part of me, until I realised that I was getting captured (as South Africans would say) and paid it up. The business may reimburse me someday.

A lot of people carry huge sums of credit card debt like it is a perfect way of life. Some have intentions to get out of debt but regress back to it. This is just one of the habits that keep us trapped regardless of our intentions. Then comes January, we repent and promise to get ourselves cleaned up. The main reason we don't permanently kick these habits is that, they somehow fill the void inside of us. You can only replace a bad habit with a good one. That void needs to be filled with something, Right.

I changed my bad financial habits by replacing them with good habits. I am a designer and tend to buy a lot of home stuff. I also have acute hoarding habits. I decided to have a business that sells used, vintage and antique home-ware. This enables me to acquire new stuff as often as I wish. I simply resell existing. You may not be reselling (I don’t see why not though), but need to replace the mall time with something that adds better value to your life.

We also need to understand that changing bad habits is a very difficult and lonely journey. The society is about spending and spending more. The higher your debt, the more likely you would be "liked". Our society shows a high level of respect for people who are flashy. Being one's own person often takes swimming against the tide. Do it despite everyone else's perceptions. It is your own journey and your own goals. Your ability to exercise self-control can stretch beyond your imagination. It is easier than you imagine.

• Always keep your eye on the ball. Refer to the article on setting SMART goals posted in the blog.
• Know what triggers your bad habit. If it takes cutting mall visits and people who are bad influence from your life, do it.
• Keep busy with something else. Physical exercise could be one.
• Get support structure if you must. Surrounding yourself with like-minded people does wonders for one's goals.

Those are a few steps I took when I changed my bad financial habits. I stay put most of the times.

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SHARING GOALS

Sharing goals with friends, family and other like-minded people can help provide one with the much needed support. This may also provide a safe place to "sort of" account on implementation and progress. I am very much aware that this is a non-negotiable NO for many people. But the outlier in me makes this perfectly OK, at least for myself. Well, I am evidently a blogger. You know, the crazy bunch that deliberately thinks aloud.

Sharing goals

In the previous post, we detailed how to set personal finance goals. If you haven't already, go check the post before this one. You will not be disappointed *broad smile*. Having set the smart goals, I find that sharing them with just one person helps me strive to bring them to fruition. I cannot be the only one who thrives on support. Anyway today's post will be about me…of course, my self centeredness knows no bounds *more smiles*.

For as long as I can remember I had an accountability buddy. My accountability person is usually a like-minded friend who also derives similar benefits from the friendship. In my twenties I had a friend who impeccably played this role in the finance area of my life. She had a lot of goals herself, which gave a high degree of mutuality to this accountability role. We never planned to keep each other accountable, but we did. She would tell me how she plans on paying her apartment up in a very short space of time. I would do the same. That is when most of our friends were shopping just to kill time and to feel "rich".

I later started this blog, specifically to keep myself accountable. I account to myself with no reservation here. If I set a goal using this blog, I am sure to achieve it at the set time. But this happens when I commit to constant reporting. You may not have been following me for long enough to have been part of my mortgage pay up journey that I took about 6 years ago. I was very excited each time I write the progress report. This pushed me to pay more on the mortgage, to beat my set target deadline. All of this happened here in the open, in my blog. I did that until my mortgage was fully paid. What a feeling!I attribute my bond repayment success to the target setting and tracking that I was doing in this space.

I still share some of my goals with close friends. Apart from that, I have set an accountability club on Facebook to keep myself and others accountable to ourselves. It is a closed group with like-minded friends. Every month each of us reports on progress towards achieving their set goals. One may have only one goal communicated to the group. Reporting is done in the form of sharing evidence which is done monthly on all set goals. The regular updates keep each member of the group accountable not only to us as group members but to themselves too. I would recommend this approach to anyone who has ambitions to build wealth.

Sharing goals does have its cons too by the way. One has to be careful when they choose their accountability buddies. Negative buddies are to be steered clear of. I know people who bring so much negative energy to one's excitement and dampen the spirit. Choose wisely.

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SETTING FINANCIAL GOALS

I must have told you about the guy who goes beyond the exercise of setting financial goals by framing and hanging them on the wall of his home office. He takes pleasure in seeing his goals on display daily. I don't quite do that, but it seems to do wonders for people as visual as the guy. I myself am a goal driven nutcase. I can never achieve anything without intentionally setting a goal for it. I am currently re-building on my emergency fund for instance. I have committed to a specific amount that I save every month towards my maximum emergency fund. Without that commitment, I tend not to be consistent. I can be that messy.

setting financial goals

I advocate for goals that are challenging enough to push one where they are aiming to be, but yet attainable. Whenever I plan to achieve a financial milestone, my goal states the amounts to be saved and/ or invested with target returns. The idea of SMART (specific, measurable, attainable, result-focused and time-bound) goals will never get out of fashion. I have a detailed explanation of SMART goals which entails writing goals down, setting targets and celebrating every milestone achieved below.

• Specific. You most likely have different goals at any given time. The "my goal is to build wealth" is a goal too broad and overwhelming to work on. I have heard of this particular one far too often in my wealth class. A smart goal is more specific than that. When setting financial goals, one needs to break a goal down with an attempt to respond to their own "What", "Why" and "How" for specificity.

What is my goal? My goal is to earn high rental income.
Why this goal? I need high rental income to supplement my current income and invest for early retirement.
How will I achieve this goal? I am saving through a high interest investment vehicle towards acquiring my investment property. I am currently saving R5000 per month. I am also working on improving my credit rating to increase my chances of getting charged low interest by my lender of choice.
It does not get more specific than that.

• Measurable. The measurability of your goals enables you to track your progress. This is the only way that you can have an evidence of the work you are putting towards achieving your objectives.

Let's take our rental income goal as an example. The investment property will only be purchased in exactly two years' time. Break this goal into smaller targets goes:

• Monthly:- I am saving R5000 every month to build towards my deposit.
• 6 Months:- To improve on my credit rating I am paying all my consumer debt off by month 6. I will also be having R30,000 plus interest at this date.
• 7 Months: In month 7 I am getting a new credit card that I will take great care of for the purposes of improving my credit score.
• 12 Months: By the end of year one, my credit rating will have improved to excellent. I will be having over R60,000 in my investment account at this time.
• Year 2: I will be having extra income to boost my savings at month 13. By the end of year two I will be having R240,000 in my investment account.

You must be getting the measurability point of this post. I do this a lot. I go to an extent of adding interest to my excel spreadsheet. This makes the goal tangible and motivates one to work harder to achieve it.

• Attainable. I have come across a lot of people who have dreams that remain dreams purely because of lack of their dreams attainability. We all wish to achieve stuff but it takes a bit of time and proper planning to get where we want to be. We have to be millionaires before we become billionaires, unless of course we win lottery. Our current goals cannot be to be billionaires in a short space of time whilst we have not even attained the first R1 Million.

Having said that, your goals should challenge you. Easy will not cut it either. Remember to break your goal down into smaller targets. This enables one to determine how possible achieving their goal is. Always remember to start where you are when setting financial goals.

• Results-focused. The only way to get things done is by focusing on the outcome. Always keep your goal alive. Take care of the processes but have your goal in your face/ mind at all times. Keep in mind that your main outcome is owning your investment property. Every step that you take is for the advancement of that goal. And the question asked is "how is this objective advancing my ambition to earn my rental income".

• Time-bound: Tying your goal to a time frame helps one to pace themselves in achieving it. A lot of us are procrastinators. A time-bound goal will keep one moving.

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YOUR RELATIONSHIP WITH MONEY

Have you ever given yourself enough time to sit down and analyse your relationship with money? Yeah, neither have most of us. We just walk around pretending that our financial crisis is going to somehow sort itself out. We also get scared of being associated with the "love" of money. Because we may get labelled as "evil". To keep ourselves as saints we choose to lead a life of low productivity and high wastage. As if that makes us better citizens.

your relationship with money

Oh well, let's be serious for a minute. The main challenge with the majority of human beings is lack of patience. The idea of getting satisfaction sooner rather than later is so much more attractive. This, in most cases is what leads to a lot of us being highly indebted. Wanting a great lifestyle is by all means not a bad thing. Wanting it too early and with money one does not have is the main cause of the debt crisis that we are faced with.

I will not waste any time on instant gratification. It is what it is. I have written and spoken about it until I was blue in the face. Everyone wants everything and they want it now. They want a nice executive car and a new closet that matches it. And they want it all, NOW. Instant gratification is what stands between most people and their ability to create wealth. This can certainly be rectified by the change in the mind set.  Giving more value to long term goal versus the short term satisfaction. It is not easy but very doable.

Next to lack of patience is the negativity. Most people don’t believe that they can be better, wealthier, wiser, etc. We are ultimately what we believe. This reminds me of when I started my business last year. I got into it with faith that my business was going to get very big. I started behaving like I was running a huge business because I never doubted for a minute that, that is where I was herded. Thinking big commands respect. Whilst thinking small diverts one's focus from setting and working towards meaningful goals. When you believe that you can achieve, you just do. Try it.

The reason some people have the negative relationship with money is how they were raised. The only phrase they ever heard about money from their parents was negative.
"We don't have money"
"I am poor"
"Business is not for people like us"
Try and think of what your parents used to say about money. That could be where answers to your love hate relationship with money lie. When you do find the link between your own thoughts about wealth and your upbringing, fight that negativity every single day of your life.
I do not remember ever saying I do not have money to my kids. All I say is that, what they want is not in my budget, or that we have other priorities. My son was still attending preschool/ kindergarten when he asked "mama, what are priorities?" To this day, he knows that we prioritise, which is a more intelligent and positive message than not having money. Especially when you actually do have some.

Now that we have the negatives out of the way, let's look at how we can improve our relationship with money. Think about what will happen when you neglect anything in your life. It never grows, Right? That's exactly what happens when you neglect your financial affairs. Pay attention to where your money comes from and where it goes. One of the signs that you are not paying attention is that you find yourself having no idea what happened to the R1000 you withdrew. Red flag right there.

Paying attention to your money involves appropriate personal finance planning, budgeting and/ or tracking one's expenditure. Your financial health is as important as any other aspect of your life. As we should all know, a bad financial state has a potential to make one physically sick. Why then would someone only focus on their physical health and neglect their state of finances? That cannot make any sense at all.

Empowering yourself to know more about money should also be prioritised. Educate yourself, read, talk about money and learn from others. Learn from others' mistakes too.

Finally, draw a personal life road map. Know where you wish to be and how you plan to get there. I am reminded of a piece of reading that I recently came across. A guy who not only sets goals but frames and hangs them in his home office wall wrote about how that keeps him motivated. He is able to see his goals daily. I don't quite do that, but it seems to do wonders for the guy.
Goals should of course be challenging enough to push you where you are aiming to be. They should also be more specific and measurable. If you want to buy a house in two years, your goal should be to save XYZ amount for the down payment/ deposit, transfer and legal fees. You may even go further to break that amount to smaller deposits, like saving R2,600 per month over 12 months.

I hope you will join me and work towards improving your relationship with money daily. I am, as a matter of fact, aware that I am an impulsive spender. I need to check on myself often, otherwise I lose track. Everyone has a money weakness and needs to check on themselves often. Take a decision to be a better version of yourself. It is a lifetime commitment and a very worthy cause.

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2015 PROJECT PLAN 2

Remember my decision to document the projects I plan on undertaking this year to build onto my 2015 goals. The first project being a furnished rental, with the hope of doubling the income. That was my first of maybe five projects I will work on this year. I don't know about you, but setting and documenting goals pushes me to act on them. I just try to avoid failing to achieve what I promised myself to do. I fail or change my mind sometimes, because this is real life. That will never stop me. Well, the second planned project is a small development in a small town.

2015 Project Plan 2 - Small Town Property Development

I have a few posts about the deceased estate acquisition. The main reason I actually wanted us to buy this property was to develop it further. The land is not so small, at above 800m². I changed my mind several times about this development project. The small town figures are very low given the low rental amounts. You need huge quantities to see what you are doing. And I am definitely not a quantities kind of a girl. I try to reduce the management demand of an asset to the bare minimum. Now, with the high returns (low cost) from these kinds of developments, I decided to just throw myself at this project again. The other interesting part of this project is that I can develop it in phases. It may take a full year or longer. This is how things are done in the town of choice. And like the locals I won't take a loan for this project.

Unlike in my small town, we are quite strict in Gauteng on project time frames. Even building plans expire if one does not construct on set time after submission at the local municipality. Well, my small town gives more time because, I guess we don't really have that kind of money lying around. The idea of starting on this project is getting more exciting by the day. I have a hand drawn sketch of the development with six or eight bachelor flats. The target market is young professionals like teachers, nurses, policemen, young doctors, bank employees, etc.

The Development Project Plan
I am trying very hard to not over capitalise by trying to match the standards of the existing properties in the area. However, I will definitely pay attention to the quality and maintenance of the development. The rental will be based on the local market range. Screening the tenants will have to be done with caution to lower the cost of maintenance, vacancies and ensure the longer term occupancy. I generally like a lady with a school going child. They tend to occupy the place for a longer term. Seeing that these are bachelors, I will have to see how I get tenants that are promising to stay for long. I already have a manager who lives in the area to look after development, the tenants and the units.

Those who have followed this blog for a while will know that I like to keep my rental income as passive as possible. This means getting a property manager among other things. With the location of this property, it is even more important to have a manager that is easily accessible. My manager and myself have assessed the town and saw gaps in the current rental income properties. We are looking at low cost ways to make ours more attractive. One of said ways is having all units fitted with a shower which saves space and water. We also plan to have tiny L-shaped kitchenettes in each unit.

Some of the strengths of this development include: 

• The location of the property in question is within a walking distance of a very popular school and close to a big hospital. My manager has already done the market research and has a few tenants awaiting the project. Yeah I know; my manager is pretty amazing.

• Whilst the rental prices are low, the cost of the project is even lower in comparison to metro project costs. This ensures higher development yields.

• The prospective development meets my rental property acquisition rule. Even if it were to be financed by the bank, it would generate positive passive income from the first day of occupation.

If this works out as well as I hope it will, I will repeat the process in this same town or another town of similar size. I am planning to start with the project before March and complete the first two units in a couple of months (I think two). We will have to target completion of the first two bachelors by the end of June. I think this is the target implementation time for the first project too. This will be the busiest six months for me then. But busy is always a great thing.

There goes one of my projects for 2015. Do you have plans for the coming year? 
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WISHING YOU SUCCESS IN 2015

I am so grateful for an amazing 2014. It has been a successful year, judging by the messages I received throughout the year. I also thank you for sharing this humble blog on Facebook and Twitter. Here is to setting the bar even higher in 2015:

WISHING YOU SUCCESS IN 2015

I know I'm not the best graphic designer there is. I try hey! And my photos are not too shabby.

I am rolling my sleeves, ready to work even smarter in 2015. I know you are too. Keep the momentum and stick to your plan. The journey continues!

"There is only one success - to be able to spend your life in your own way." Christopher Morley

"I don't measure a man's success by how high he climbs but how high he bounces when he hits bottom." George S. Patton

"Whenever you see a successful person you only see the public glories, never the private sacrifices to reach them." Vaibhav Shah

"The ones who are crazy enough to think they can change the world, are the ones that do." Anonymous

"Do one thing every day that scares you." Anonymous

"Your problem isn't the problem. Your reaction is the problem." Anonymous

"They succeed, because they think they can." Virgil

"Success is the sum of small efforts, repeated day-in and day-out." Robert Collier

"All progress takes place outside the comfort zone." Michael John Bobak

"Diligence is the mother of good fortune." Benjamin Disraeli

Wishing you a Successful 2015.

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QUARTER 1 2015 GOALS

I am posting this passing through Kroonstad, Free State. My cousin and his fiancé are throwing a Thursday to Saturday wedding marathon in the Eastern Cape. It is a long drive. To readers from outside SA, our country is absolutely gorgeous!!!

Let me start with the review of my November 2014 goals. I actually followed through with a lot of what I planned.

On personal finance:
Net worth update and report - DONE.
Emergency Fund more than doubled in November - DONE.
We didn't reach the 10% of giving because we received money we did not expect. NOT DONE
In real estate we were to enforce security in our home. NOT DONE
Interest was minimal and dividends were low. DONE
Online income grew by 7% and not the 25% planned. NOT DONE
Enrolling for a short course. NOT DONE

Not impressive performance. I'm glad I tried.

QUARTER 1 2015 GOALS
NET WORTH: The overall plan is definitely to grow the net worth. The target is growing it by 2.5%
EMERGENCY FUND: I won't focus on this at all. I will set no targets. I will transfer money if I so wish. We have enough funds for emergencies. I can't live with myself having too much cash earning 5.25%.
STOCKS: We plan to up this by 25% by March 2015.
GIVING: We will maintain giving of more than 10% of income.
REAL ESTATE: Sell one unit as part of fundraising for the fast approaching commercial property development.
EXTRA INCOME: Working on taking my online income up by at least 55% by the end March 2015.

What are your personal finance plans for 2015?

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2015 PROJECT PLAN 1

I took a decision to document the projects I plan on undertaking in 2015 to build on my 2015 goals. The first one in my mind is the trial furnished letting.
I know a few bloggers who let small apartments or rooms in their homes and listing them at AirBNB. It is usually for short term stay from a few days to a week. I am warming up to the idea of a furnished rental. We've always loved staying in self catering apartments when we go for short holidays. However, with my lazy approach in mind, I would skip the daily rental option and go for a monthly rental. A more hands off approach suits my passive income approach more. This is my 2015 project plan 1 of probably 5. I would target to implement this particular one by mid-year.

2015 project plan 1 - the estate nature reserve

One of my properties which is a perfect fit for this kind of a project is in a gated residential estate. The picture above was taken from the exclusive nature reserve within the estate. Furnished, this unit could bring in double its current monthly rental. I would love to get a few years tenancy contract like the ones entered into with corporate clients. Especially if we assume that my tenant will be pretty decent and not break my furniture or scratch stuff. This unit pretty much ticks all the boxes for an up market furnished rental. Below is a list of what could attract my target tenant.

1. Security
The main selling point for this particular unit is security. Whilst I got over living in such an exaggerated security place, my tenants seem to love it. Security is costly but it pays you back. I've had the current family occupy the unit for more than three years. People feel safe in estates with controlled entry and exit.

2. Look and Feel
It doesn't matter how glamorous your place is, high paying tenants want to be in spectacular surroundings. Like your agent would say "LOCATION, LOCATION, LOCATION". Apart from the location, your furniture has to be of quality with a nicely landscaped garden. Most ridiculous but true is that, the neighbour has to also maintain the same look and feel standards. Everyone is forced to keep up with the Joneses in these estates. The whole estate is run like a well oiled machine. Roads for cars, walkways, bicycle and baby stroller pavements should be at their best look all the time. These are things you look for when shopping for an up market rental property.

2015 project plan 1 - the estate dam

In this particular estate, there is a nature reserve with a dam, nature breeding spots and lots of various water and land breeds of animals. This offers a tranquil walking, jogging and cycling trail. It is also a requirement that you keep your home neat and presentable at all times. Forcing your tenant's neighbours to be an ideal match for them. 

3. Lifestyle
The place is peaceful and relatively safe. One may jog, walk, cycle or picnic in the dam area with friends and family on weekends. This type of a tenant loves to have those options, even when they never use them. Noise levels are also controlled. That is a part of the controlled estate lifestyle that does not suit me and my family. Complaints I received over the past few years are that of my tenants' dog barking at night.

furnished property letting project

 4. Convenience
School buses collect school kids at the estate gate to local schools. There is a few well recommended private schools in the area. Wi-Fi is now being organised to be available throughout the estate. It is obviously cheaper to pay the telecoms service provider as a collective than as an individual.

All of the above sell a furnished property to the tenant. The subject unit is also a good size with 4 bedrooms and 3 living areas. That is a great size for an expatriate family on a contract employee with school going children. A good maintenance free garden comes with its own garden services. It is exciting just thinking about this project.

That is one of my projects for 2015. Do you have plans for the coming year?

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NOVEMBER 2014 GOALS

Since I went back to work I failed to document any of my quarterly goals. I am back to that. Recording things keeps me motivated. I know 2014 is already gone but I just cant keep this until January 2015.

PERSONAL FINANCE GOALS

NET WORTH: I will have to check the values of all the investments and real estate debt, add them up and re-calculate our net worth. More like the beginning.

EMERGENCY FUND: We did empty our EF whilst acquiring a property beginning of this year. I have to update you guys on that later. We are now slowly building this up again. Meanwhile, the new acquisition is still vacant bringing in no income as we are still working on it. We will keep the EF at 6 months worth of our household expenses. We are now at 14%. We will take it to 21% of the target. Growing it by a third (33%).

GIVING: We will maintain giving of more than 10% of income.

REAL ESTATE: Nothing major here. We will be working on extra security in our residence. December approaches and sadly with higher occurrences of burglaries.

STOCKS AND DIVIDENDS: Nothing planned here except for the normal ETFs.

EXTRA INCOME: Trying to take online income up by at least 25% by end of November.

Other Goals:
Enroll for a short course related to my work. I never thought I would have this goal especially at such a busy time at work. I really warmed up to work nicely. I like it.

Lets see End November if these actually fly. I also want to throw a no spend week challenge with interested readers from January.

Many Blessings,
SISA

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FOCUS ON WHAT YOU CAN CONTROL

The key to achieving personal finance goals is keeping the focus on what you can control. A cloud of temptation to set a bar high and getting a burnout along the way lingers on many newbies. Its not bad  being excited about taking charge of our finances, as long as we bear our limitations in mind.

Focus on What you can Control - image

In my previous post I documented My main goal this year as growing our net worth by 25%. I cant control anything about this goal as is. However, I can break it down into smaller parts that I can measure. The first and most important control piece is LIVING BELOW MY MEANS. I can fully control my expenditure and that's where my focus should be.

Most people shiver at the mention of the word "BUDGET". I, myself never sit down and plan my expenditure prior to the actual shopping trips. I am too lazy to do that. I track every cent I spend though. I no longer find that tedious. Keyword is "no longer" because it was not always easy to track and record every cent I spend. I no longer find it overwhelming, as I simplified my expenditure tracking system over the years. I also do this the old fashion excel spreadsheet way. I avoid withdrawing and using cash so as to keep the records in my internet banking statement. That way I don't have to keep individual receipts.

When I do withdraw, I never bother to record what I used cash for. I usually have some of that cash roll over to the following month when I actually do withdraw. I then use it for buying an odd burger, juice, tea, etc. My expenditure tracking system keeps me on my toes. I know that whatever I spend on is finally making its way to my spreadsheet and seeing it in black and white is always sure to raise my brow. When I do get to have bad months, like school fees months,  I am sure to have a much better spend month next. Its always in my head to improve after a bad month. In December I had to spend a lot of money to help boost my online business. It felt so bad to spend 102% of my income. This was followed by our holiday in January. And holiday months are usually the worst. But my December's overspend was singing a loud hum in my mind that I passed all the bold red "SALE" signs in the malls and focused on stationery shops. Budgeting can only make you better at this.

See how the BUDGET ties into our main goal of growing the net worth by at least 25 percent?
We will strive to live on at most 60% of our combined income. 40% will be invested to make more money. I know, 60% sounds high (or is it just me). All expenses on the rental properties, like rates, taxes, management and maintenance are part of our expenditure. I should look at keeping that separate in order to account for my own residential property separately. I might just do that. This 60:40 goal is easier to measure than the huge goal of building on net worth. Always remember to focus on what you can control and measure whilst you keep your overall goal in mind. That huge goal is just a driver to help you intensify on what you are measuring.

2013 is still as young as dawn. Its time to make a clean start. If you have some debt, focus on paying it up, one credit card at a time. Its easier than you think. It may be overwhelming at first but you get to find your rhythm. And when you do, there's no stopping you.

I wish you well this year. Whatever your goal. Just focus on what you can control.

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2013 GOALS

The 2013 Goals I am documenting this year will only be personal finance ones. I know its towards the end of January, but I wish you well this year. I am planning to set achievable goals this year. My 2012 goals were not very realistic, but I didn't do that bad either, I think.

PERSONAL FINANCE GOALS

MAIN GOAL:  2012 saw our net worth growing faster than I ever thought possible. This is all thanks to diversification. When interest rates were going down, the JSE covered up. In 2013 I plan to have our net worth grow by at least 25%. To achieve this, the following sub-goals will have be achieved:

1. BUDGETING: Live on at most 60% of my income and invest at least 40% of income.  
2. EMERGENCY FUND: 2012 ended on 130% of target (12 months) emergency fund. I am reducing that to 3 months worth of living expenses in the money market account. I will use the rest to acquire more stocks. 
3. GIVING: Maintain giving of more than 10% of income.
4. REAL ESTATE: Construct at least 4 flats in the small town property I am buying. Increase the rental income by 30% after the new flats are constructed.
5. REAL ESTATE: Pay up our home. Its the only debt we have.
6. STOCKS AND DIVIDENDS: Get at least R12,000 in dividends. Average earnings of R1000 per month. in dividends. Double the stocks we have.
7. EXTRA INCOME: Take online income to R8000 per month by December 2013.

2013 is the year I may actually hold a job again. I will give it a try. On one hand I am excited by that and on the other hand frightened. I enjoyed taking care of my family. Whatever I choose to do will have some positive impact. Going to work will fast track my investments whilst being at home may grow my online income and keep my calmness. I need the calmness a lot more. But I may stick to a permanent retirement in my early 40s. We'll see.

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