My financial goals for 2021

I’m all for setting goals.

In fact, my last post here on #leofinance was about how, sometimes at least, goal setting can lead to undesirable outcomes.

But I love a financial goal. And always set these. In reality, my financial goals are rarely oriented towards a yearly target. I tend to set financial goals as required and work towards them.

But the timing of @theycallmedan’s recent post where he encourages #leofinance users to post their 2021 goals is perfect.

I finished 2020 on a bit of a financial high where I hit a few financial targets and even beat my original targets quite significantly. My 2020 goals were to:

finish paying off my business debts, which amounted to roughly $145,000 2 years ago; and
commence saving for a house deposit.

By July 2020 I had, surprisingly, paid off all of my business debt and had even purchased a house for my wife and I to live in. The sense of achievement and relief at achieving both of these goals was amazing. And the fact that I had pulled this off in such a short period of time (6 months early to be precise) was incredibly surprising. And, if I’m honest, took a little financial creativity which I won’t go into in this post. I documented my financial journey over the past couple of years to some extent on Hive if you want to sift through my historic posts.

So for the remainder of 2020 I simply saved some money and even splurged a little. The image below is my most recent splurge. You’re looking at my new baby. Or as my wife calls it, my second wife.

So what’s in store for 2021?

I’ve been pondering what I want to work towards throughout 2021 for a few weeks now. And generally come back to the same goals.

I have a discretionary trust that was set up to house my business. Given that my business is no more (refer to my past posts for details on what happened here) my trust has been sitting idle for some time now. And as my business was a failure, I have a large amount of losses recorded in the trust. Thankfully these losses can be used to offset any income that my trust may earn in the future (essentially, any income earned will be tax free until the losses are used up).

So in late 2020 I set up a share trading account in the trust’s name and funnelled savings into this account over the proceeding months.

So far, I have made a small number of successful and not so successful trades. And the profits here will be tax free.

And this leads me to what I plan to achieve this year:

grow my trading account to $50,000 - $75,000; and
purchase an investment property under my trust.

My plan is to create a passive income stream within my trust. And ultimately grow the assets within my trust to a level where I can commence investing in commercial property. Buying commercial property is extremely expensive but the yields can be quite decent in comparison to residential property. The only issue is that good commercial properties can cost upwards of $1,000,000. So it will most likely take a number of years before I can buy the type of commercial property that I have my eyes on. So to start with, I’ll settle on a residential apartment or small house that may cost somewhere around $300,000.

My long term goal for my trust is to create an income stream that is large enough to fund my retirement. This may take some time, but I believe that it is achievable.

I am not someone who wants to rely on superannuation in retirement. And I certainly have no intention of taking a government funded pension. I decided many years ago that I will never accept government “support”.

I also want to create something that I can pass on to either my children (if we ever have any) or to my nieces and nephews once I “bite the big one”.

So a trust that generates a largely passive income is the perfect vehicle to fund my retirement and also to hand on to others once I am no longer around to make use of it.

And the short to medium term positive here is that the income generated within the trust for the next few years will be tax free. And this will help me accelerate the growth of the trust.

But what about cryptocurrencies?

I’m well aware that many of the posts in @theycallmedan’s competition will centre around crypto related goals and that these posts will typically perform well.

The only reason that I don’t have any crypto related goals in my 2021 plans is that I simply don’t know what to expect in the crypto space for the coming year.

I certainly plan to direct some funds into crypto but am unsure what this will look like at this stage. If we see BTC take a significant dive as we did after the previous bull run then you’ll most certainly see me take a decent position.

I also haven’t been monitoring the price of Hive in recent months. But I would like to increase my holdings here. But as with anything, you need to properly understand your investments before directing money into them. And, unfortunately, I haven’t spent enough time here on Hive over the past 12 months to really understand where we are heading as of yet.

I’ve been posting on Steem/Hive since around 2016/2017 so have seen how volatile the crypto space can be. And given the time and energy that I put into creating content here over the years, these platforms have been very good for me. In fact, my Steem and Hive holdings paid off 2 credit cards at a time where I was under extreme financial pressure.

So I certainly can see the potential of platforms such as Hive. But until I have monitored how Hive performs over the coming months I will not set any targets as to what my holding will look like by the end of 2021.

The big unanswered question - how do I grow my investments?

Aside from buying stocks that ideally grow in value, and generating income from existing real estate investments, I have been fortunate enough to gain a relatively stable and well paying role in the mining sector.

This role has enabled me to set aside slightly more than half of my income for investing in things that I believe are worthy of investment.

I’m very conscious of how fortunate I have been in the past couple of years after going from losing thousands of dollars per month to being employed in the amazing role that I now have. So I feel slightly uncomfortable when discussing exactly how I invest and grow my holdings.

So all I will say is this:

I direct as much money as possible towards appreciating assets (good quality stocks and real estate are my primary choices); and
I spend a considerable amount of time understanding what my expenses are and reduce these where-ever I can.

And while maximising the amount of money that I can direct towards my investments is ideal. Enjoying life is also very important. So from time to time a splurge is worthwhile. Such as buying that bike that you’ve had your eye on for months on end.

Happy investing!

@mazzle

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