My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

2006 Personal Finance Goals

Contributed by mm | March 4, 2006 4:06 PM PST

My personal finance journey is now in its fourth year. In the last two years, I always made public my yearly goals outright (2004 goals, 2005 goals). Having a clear goal to work toward is definitely important, but when I revisit my previous years' stated goals today, I feel I crammed too many different things before and I cannot say my 2004 and 2005 goals are really "clear."

One way to set clear goals is to keep things simple, and therefore I cut my 2006 goals to two:

Goal 1: Annual Net Worth Growth of $150,000 ($12,500/month)

Goal 2(*): Annual Investment Gains of $40,000 ($3,333/month)

(*) Excluding gains or losses from employee stock option plan.

If you compare the numbers against what's in my financial plan, both are a bit higher than the medium case ($145,100 net worth growth and $35,000 investment return) I projected. This is, of course, intentional -- setting goals that are easy to meet is another sin.

From now on, I'll include a section in my monthly report to compare against these two stated goals. Below is the comparison for February Year-To-Date:

YTD Net Worth Growth: $32,278 ($16,137/month, or 129% goal attainment)

Investment Return: $5,712 ($2,856/month, or 86% goal attainment)

More PFBlog Articles You Might Find Interesting ...


This Post Has Received 5 Comments. Share Your Opinions Too.


JC Commented on March 5, 2006

Seems to me like your goals should be focused on things within your power.

Annual investment gains don't fit that criteria (thus, neither does annual net worth growth).

I think goals should be about things we can accomplish on our own. In your case that might be to save $8000.00 per month. Now if you did indeed meet that savings goal but your diversified portfolio showed negative growth for the year, that should still be considered a success since you did what you set out to do.

On the other hand, if the market were unusually generous and your net worth grew by more than 150k, but your savings rate fell dismally short of what you planned, then I think that should be considered a failure.

Goals should be about what we can do, not dependent on fickle markets.

My 2 cents,

JC


raising4boys.com Commented on March 5, 2006

I tend to agree with JC on this one. It seems kind of odd to peg your goals to something that is almost completely outside of your control (I say almost, because you do have control over what you invest in, but no control over how the market overall performs).

--dad


Personal Finance Commented on March 5, 2006

JC: I understand your points. While I cannot predict how the market will go, I still feel I'm accountable for my portfolio performance. For example, I can easily get a risk-free 5% return but I choose not to do so, and I have to be accountable for the consequences (be it good or bad).


jerry maguire Commented on March 6, 2006

thanks for your great posts. i have decided to publicize my own ambitious journey to a million. your site has been the impetus behind it. thanks and good luck. looks like you are well on your way.


fatboy Commented on March 6, 2006

I agree with MM. The only problem I see is the goal in monthly gains is hard to achieve considering the unpredictability of the market in the short term. You will probably see 10 down months before you see a substantial gain that will still put you inline with your annual goal of 10% return.



Read More ... 139 Posts In The Same Category










This page was last rebuilt at January 27, 2014 07:38 AM PST.
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.

Error 500 - Internal server error

Error 500 - Internal server error

An internal server error has occured!
Please try again later.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)