2019 Financial Goals
As 2019 is already well underway, it's important to set my goals etched in stone (or web). As you've got your goals written down somewhere, you're more likely to follow it, rather than having it as a sticky mental note that could be lost in 2 days.
If you have debt, you definitely need to factor that in, including investment debt as leverage, mortgage, credit card and all that.
To avoid just chasing a yearly goal, which in itself is pretty nice, I have a mid-term goal that in a 8-year range. This is my ultimate goal now: to have a passive income enough to fund my current minimum lifestyle.
I define my minimum lifestyle at RM2,500 per month (I bump it up by a lot), So in a year it'd be RM2,500/month X 12 months = RM30,000 per year.
If I want the passive income to come solely from a portfolio of income-producing asset, with an average 5% yield from the total value, I need to build an asset of size
RM30,000 / 5% = RM600,000
Bear in mind that this RM600,000 has to be income-producing asset that produces cash flow, instead of only making capital appreciation. But the RM30,000 will not come solely come from RM600,000 either. Rather, I expect to have other passive income for example blogging, coaching or books. Which I will develop over the years.
So how do I do this in year #1? I go back to the ESI.
Earning
I expect to get a slight raise (nfortunately even with a valuable track record that I have, my industry is not known to pay a really high salary compared to oil and gas, IT or finance). I will re-examine my current career position. Additionally, I'll get some career-related technical training that will improve my marketability. Can't say much here.I also would not discount driving Grab this year to increase my earnings. Hey, it's still money! I'm also looking at other gig-economy activity. I haven't decided whether to include one-off selling of an asset this year in Earnings yet (some people won't do that as it's considered cheating).
I will build a financial website (and move contents from here). Just like this blogspot website, I plan to focus on my financial independence journey, and my journey about learning about finance and the equities market, in particular Bursa Malaysia. It will be completely amateurish in year #1 since I'm a noob in finance, and I want it to be able to aspire other people to take more interest in financial prudence and investment. I want people to understand that it is okay to learn even when you look completely silly. The blog will also serve as a reminder to myself so that I will continue to strive towards the goal of financial independence.
“If you will live like no one else, later you can live like no one else.”
Additionally, I want the website to promote listed Malaysian companies and their services to the World. I want the traffic to come from all over the World. I hope the website to produce decent income in 2 years. I plan to start on it in February or March, after finalizing the concepts.
Saving
I plan to continue saving at least 50% of my net take home income (after mandatory EPF, tax and SOCSO) as I've done previously – I've never gone below 20% since I've started working, and averaging around 30 - 40% the whole time. I will try to hit at least 60% in at least two months this year.Investing
4/5 of the saved monies will quickly go into the stock market, and 1/5 into EPF as own contribution. If you don't know yet, contributing to EPF on your own doesn't cost anything, not even the money transfer fee which is usually RM1. I approximate that this will increase my EPF contribution from 11% to 20%, on top of my employer contribution.So no more ASB or ASB2 investments for me as I will concentrate on the stock market. Most of the 4/5 portion will be directly into the dividend stocks, and a small amount will be in mutual funds. Most likely it will be ASN5 or its sisters, depending on their prevailing NAVs. For some reason I couldn't automate my EPF contribution from the online banking portal. idk why.
For direct stock investments, I concentrate on dividend stocks for now as I want to build confidence in dealing with the moody Mr Market (I've just started investing directly there last year). I also expect the RM30,000 of the yearly passive income to come mainly from dividends.
How about Spending?
It is still nebulous how I will spend (read: stimulate the economy LOL). I might purchase a property this year. Might. I will keep my holdings in ASB and ASB2 as it is, and reserve those for this purpose.
I also need to plan my spending around tax incentives. If you don't know it yet, the Government want to you spend according to what they want (to a certain degree), the reason they have these tax incentives. Also as a way not to look such a heartless Government in the first place.
Items or services to look for include books, Private Retirement Scheme contribution, taking care of Mum, health insurance contribution, EPF contribution not through salary deduction, and technical courses (especially IT-related courses).
In Short...
To sum it up: I want to earn more, save more, and invest even more. Remember Dave Ramsey:“If you will live like no one else, later you can live like no one else.”
Towards end of 1Q2019, I'll review my plans and adjust as necessary, especially since I'm not yet clear on the Spending part.
Till then, stay knowledgable. Stay invested.
XXXXX
ReplyDelete