Just before the holidays, I wrote about the elements of good financial planning. As a follow up to this post, here are my 2008 financial goals.

First- what is the entire point of personal finance goal setting? Money for money’s sake is a soul-less pursuit and, quite frankly, never reachable. If all we are doing is chasing dollars, we will never have enough. Financial security should be to pursue some greater goal or vision- some larger life goal.

My life goal is the following- one day, in the not too distant future, I want to teach myself to be an architect (at 10, I wanted to be an architect but these dreams were smashed against the reality known as calculus) and, with other like-minded people, build stylish affordable housing. Affordable housing is very much the poor step-sibling of the architectural world- we spend $200 million on an addition to the Royal Ontario Museum that most people hate (museums are not really meant to be designed to poke someone’s eye out if you walk too close to the building and, donuts to dollars, this type of building will not last too many Canadian winters before it leaks- the sister building in Denver has already leaked) but we don’t spend any money on designing shelter? My life-goal is to merge my love of architecture with helping people (I am a big believer in space influencing behavior; if we build good affordable housing and it can inspire people living in it to be great).

In order to do this, I will need some passive income streams; I am, at heart, a realist and designing affordable housing doesn’t exactly have large profit margins. Thus, my goals primarily are driven by the fact I will need a sufficient passive income source to pursue my dreams.

Having said that, my #1 goal focuses more on the “personal” part of “personal finance” than finance. You can lose money on investments many times over but you can’t lose your body even once. Personal health is key.

GOAL #1: GET HEALTHY

As I mentioned this week, people are calling me rolly-polly and given what has occurred this week, it reinforces the importance of personal health. I define getting healthy in three ways

(a) do three sets of 10 chin-ups by year’s end (why 10? when I was in shape I could do 10 chin-ups)
(b) learn to swim- a great form of exercise (yes, yours truly is land-locked ); someone has volunteered to teach me (best of luck to you; all my body weight is in my legs which means I sink like a rock)- the goal is to swim two lengths of the pool by year end
(c) run a 9:00 mile by year’s end (currently I can do about a 12:00 mile with a real struggle).
GOAL #2 INCREASE PASSIVE INCOME TO PAY FOR TWO MONTHS OF MORTGAGE PAYMENTS

90% of my current passive income is tax-free dividend income which pays for 1 month of mortgage payments (the remainder is interest income). In order to double this, I need to do the following:

(a) sell U.S. dividend stock (GE) outside my RSP (which is tax inefficient because it is subject to with-holding tax and taxed as income) and convert it to Canadian dividend yielding stock as soon as possible (I can’t put a time-frame on this one because the stock price fluctuates so much)
(b) Double holdings in Power Financial (PWF) by June 30 (assuming the price falls to the low $39.00 range; PWF has shown some downward pressure lately); continue current share purchase plan in Manulife (MFC) (no further action required) and look to buy Rothmans (ROC) (yes, I understand the irony of wanting to save the world with architecture and then buying a tobacco company; on some cosmic scale, I have probably gone one step forward and then one step back. I’ll probably need to adopt an orphan that Angelina Jolie didn’t adopt to redeem myself on ROC- unless someone has a better suggestion of a dividend yielding stock which is not a financial stock?)

GOAL #3 INCREASE NET WORTH BY 7%

This is my annual target- it is not so crazy that I take unnecessary risks but above the inflationary rate. For calculation purposes, I value my house at book value/cost of acquisition and not market value and my car at red book value so increases in net worth are due to real money invested and not subjective value of my house worth. Given that 2008 is going to be a rocky year in the market, my ability to reach this goal will have to do more with decreasing debt than any stock market gains so:

(a) make 3 extra payments on mortgage on March 31, June 30 and Sept. 30 (I do not put in year end since spending pressures are quite high that time of year)
(b) increase savings rate from 22% to 25%
(c) subgoal 3(b) is reached by greater cost control. My cell phone bill have been unbelievably high since I am on the wrong plan. If I increase my minutes, I can save at least $100/month given current cell patterns. I am also returning a HDPVR cable box I rarely used, saving $15.00 month

In terms of reaching these goals, I have mentioned some people who want to help me get in shape. Goal #2 is mapped out and is a matter of timing stock purchase/sale. Goal #3 will be hard but I am going to put on pre-payments on the mortgage months in advance so its automatic and up my monthly MFC share purchase contribution to increase savings rate from 22% to 25%. Spending control is always a work in progress. But what I am doing is either making the goals automatic or dragging out some poor soul to help me out.

That’s it- wish me luck. Anyone have any goals they wish to share?

Have a great weekend.