I’ve written a lot of posts on this blog about how to achieve financial independence and the importance of setting goals, but I have not mentioned anything about my own long term goals.
I have 3 major long term financial goals:
- Have over $1 million in net worth by age 40. This should be achievable through diligent savings and disciplined investing. Why $1 million? By any measure, achieving a net worth of $1 million by age 40 or sooner is quite a feat in itself and many people see that as their magic number.
- Build a portfolio of quality dividend stocks that pay at least 25k in annual dividends. This is easier said than done. By regularly investing in dividend stocks and with some help from compounding this can be achieved in 10 years. As it stands now, I’m already about a fifth of the way there.
- Have a paid off home. No matter what, for most people being financially free is not possible until they own their own home. Those mortgage payments eat up a huge chunk of the monthly budget and once they’re done your expenses will be a whole lot less.
Those are my long term financial goals and my plan to get there will involve the following:
- I will commit to continuing to save a large proportion of my income (over 50%).
- Continue to invest that money in growth assets like quality dividend paying stocks.
- Continue to reject debt and to eliminate as much mortgage debt as possible (even when I purchase my final home and take on another mortgage).
- Not splurging on real estate. By buying just enough house so that my family can live comfortably. Nowadays many people get caught up in the hype around houses and treat their homes like status symbols. One thing I’ve learned is that it’s one thing to look rich and quite another to actually be rich. So I think I’ll stick to a more affordable home that suits my family and allows me to keep saving a large proportion of my paycheque.
- By continuing to set short term goals and meeting or exceeding them. I will continue to track and document my progress along the way through monthly net worth statements and dividend income updates.
Do you have a long term financial plan? What are some of your strategies for success?