2011 Financial Goals

This is where the rubber meets the road. What do I hope to accomplish in 2011, and what are my goals?  I’ve already talked about my 2011 investment strategy last year, and briefly touched on my goals for 2011.  It seems I got a head start on some of these goals even before 2011 rolled around.  The theme this year is doing the same as we’ve done previously.  Slow and steady wins the race.  We avoided the massive tax increase because Congress finally got off their ass and extended the Bush tax cuts.   With that scare behind us, I’ve decided to always maximize our tax deferment or legally avoid paying taxes whenever possible.  You never know when some government tax rebate, tax different, or program will disappear.  Previous years I foolishly did not do this and learned my lesson.  I missed the great deal on US I Bonds in the late 90’s and early 00′ and am kicking myself now.  I Bonds were decreased from $35,000/year to $5,000/year in a matter of two months with no advanced warning.  According to a WSJ article, many of the tax laws are for five years or less, and it is becoming increasing harder for long term tax planning.

I briefly mentioned them here last year, but here they are again in more detail:

  • Follow my tax efficient investments strategy.
    • This means maxing out my wife’s 403B and our Roth IRA accounts.  The Roth IRA accounts are already maxed out for 2011.
    • Maxing our children’s 529 accounts to maximize the NY state tax deduction.
  • Invest based upon my asset allocation.  Since we experienced a 20% gain on our portfolio, some of my allocation is out of whack.  I will need to readjust the portfolio.  I will revisit if I need to adjust my overall asset allocation, butI don’t think so based upon previous performance and my research.
  • Purchase more dividend stocks, but add them in our Roth IRA accounts.  Most likely it will be one or two dividend aristocrats.  I will create a post specifying the stocks I pick and with the details why.  My goal is to create a sizable (specific amount yet to be determined) annual dividend that grows tax free. It’s safe to assume when we retire the current 15% dividend rate will be a thing of the past.  So putting them into a Roth IRA account makes the most sense.
  • Research and pick investments for my WTF Fund.  As mentioned before, this will take some time. I haven’t found any investments that scream “buy me!”  I”m also looking for ideas from my TV viewing and reading.
  • Consult an attorney to create a will and trust for our family.  We need to protect our assets from the government, tax man, and any possible legal disputes in the future.
  • Revisit and research into the real estate market in the NY area. Last year I determined it wasn’t a good time, and I’m not sure yet this year will be any better.  I have thought about purchasing real estate outside of the tri-state area, but I don’t like the idea of being a distant landlord.  It’s possible that I will invest in REITs instead.  Unfortunately, because of their tax inefficiencies, REITs are best placed in retirement accounts.
  • Decrease my salary through my corporation and pay off remaining debt within my corporation. I hope to have most of it paid off before the end of the first quarter 2011.
  • Research into creating a single 401k or SEP IRA account for my business.  This will not only help increase our retirement accounts but also reduce our tax load.
  • Have an overall saving rate of 30%.
  • From my active businesses, increase the total amount of income generated 30% from last year.  Last year while we didn’t have a bad year, our income decreased 15%.  This is primarily because of customer attrition and not focusing on new sales.
  • Start another web site/business.  I have one idea I need to work on, but I didn’t have the time at the end of 2010.
  • Increase the automation of our bill paying and savings.
  • I currently manage the household finances.  I need to educate my wife on the details of what we are doing so if ever needed she knows where everything is located.
  • Reduce the amount of paperwork that flows into the household to just junk mail.  We are almost there already, but I want to make it 100%.  There is no need to receive paper bills anymore.  For a paperless office I certainly still have to file a lot of paper.

Most of my time will be focused on picking stocks for my WTF Fund, selecting Lending Club notes, and my active businesses.  Late last year, I experienced various personal issues that affected the amount of time I could devote to my business.  I hope these items remain off my plate this year so I can focus on more productive and enjoyable things.  Off to the races!

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Reader Comments

  1. says

    Excellent Goals! I reduced the paper that I receive by going paperless this year. I consolidated my investments to Vanguard to simplify my life. Good luck and happy New Year.

  2. says

    As I read about your REITs bullet point I thought I hope he has as a SEP set up….and boom 2 bullet points later.

    oh and GET A WILL!