Financial goals for 2022 — 7 financial goals for the new year. Personal financial goal-setting to acquire a property and continue building dividend income.
Each year around this time I set financial goals to set the tone for the new year.
In fact, I have published my financial goals on this blog since 2017 now.
Although I do not believe in waiting for the new year to enact change, it is a great time to refresh your goals in order to realign them with your ever-changing long-term vision.
In this post, I will reveal my financial goals for 2022.
Let’s dive in.
Financial Goals For 2022 Theme
When you are setting goals, the goals need to be in line with your long-term goals.
Of course, my main long-term goal is to become financially independent through dividend investing.
So, my goals are always going to be centred around that.
But there are a few new goals that have been added to the mix this year.
For example, I am interested in buying a home or condo instead of renting.
As such, the financial goals for 2022 are altered to accommodate purchasing a home or condo within a certain period of time.
The reason I am telling you this is because it will affect my ability to allocate capital to dividend investing. I will have to temporarily save less for investing to save more for a home.
Fortunately, my forward dividend income is already over $1,000 this year. I will be able to reinvest that plus I will still save a minimum percentage of my income for investing (retirement).
It will be an exciting challenge to simultaneously buy a house and grow my investment portfolio.
But I’m going for it because it fits in with my long-term plan.
As for my long-term plan, I want to live off dividends and pay my bills with dividends. I want one of those bills to be my mortgage.
In 10 years from now, I want to be in position to retire off dividends and investing or close to it.
If I can put myself in position to pay the rest of a small mortgage off with dividends, my monthly housing costs will turn into transferring one asset to another one instead of paying rent.
Obviously, there is a lot to consider for a big decision like this. After weighing buying vs renting I ultimately decided that it makes sense to buy.
If I can keep my housing costs relatively close to rent costs, I can add another asset to my investment portfolio and pay off the remainder of my mortgage with dividends.
Financial goals for 2022
Below are my 7 financial goals for 2022 to acquire a property and continue growing my dividend income and investment portfolio.
1. Save 15% Minimum For Retirement And Investing
Regardless of what’s happening, I always pay myself first a minimum amount of income for retirement.
Normally, I try to save between 35% to 50% of my net income because I want to become financially independent.
But since I will be saving for a house as well now, I am setting a minimum savings rate of 15% for 2022.
This way, I will still be able to grow my dividend income and save for retirement while I try to acquire a property.
Even though I will be forced to save less this year, it’s nice to know that my dividend income will contribute a four digit sum to reinvest.
Also, I plan to invest as much as possible again as soon as I acquire a house. Besides food and other necessary expenses, I will save as much as possible.
The difference will be that I will build equity instead of renting.
2. Earn $1,200 In Dividend Income
My goal for 2022 is to earn at least $1,200 in dividend income.
Based on how much dividend income will be earned in 2021, this would require a 47% year-over-year growth rate.
I believe it’s possible as forward dividend income is already projected at over $1,060 going into 2022.
As long as I continue to invest 15% of my net income and reinvest dividends, I expect to earn at least $1,200 in dividends in 2022.
If I can accomplish this goal, my portfolio would average $100 per month in dividends.
3. Grow Forward Dividend Income To $1,500 Annually
My goal by the end of 2022 is to have a portfolio that generates at least $1,500 per year in dividends.
To increase my dividend income in 2022, I will save and invest 15% of my income, and reinvest all dividend income.
Otherwise, dividend raises will contribute to my forward dividend income growth.
Based on this year’s performance, my forward dividend income increased by nearly $400 in 2021.
By reinvesting $1,200 worth of dividends, I should be able to add $48 worth of forward dividend income.
Dividend raises added around $60 in 2021. However, I do not see the bank increases being as high as they were in 2021. So, I would estimate another $40 of growth to come from dividend raises.
To get to $1,500, I just need to add another $200 through investing at least 15% of my net income.
This will put me in position to boost saving as crossover into $2,000 in 2023.
4. Lower Investment Fees
Now that I can invest commission-free with Wealthsimple, I want to keep my investment fees as low as possible.
Originally, my goal was to keep my investment fees to less than 0.25% or a quarter of a percent of my portfolio’s value. However, I decided to set an even loftier target – I want to spend zero dollars on commission fees in 2022.
To keep my investment fees as low as possible, I will invest with a zero-commission broker like Wealthsimple, and I will use my credit card points to get free trades in my RRSP.
Related article: Zero Commission Stock Trading Canada – My Goal To Be Commission Free In 2022
5. Reopen A Margin Account
I used to have a margin account with Questrade back in 2016.
I am considering reopening the account to have access to margin again.
In truth, I would rarely use it to invest or trade. I would only invest with it on very rare occasions.
But I am considering using margin to leverage some of my current assets to buy a home.
Of course, I would recommend consulting with an accountant and the appropriate people to make sure you can do this.
And I might not even need to do this. But I want to avoid selling my stocks to buy a home. So, I am considering borrowing against them at a low interest rate to have a larger down payment.
This way, my dividend stocks will pay off the interest and I can keep the stocks and get a house at the same time.
If I do this, I would only transfer one of my TFSAs over. My RRSP and another TFSA would stay where they are.
All of the stocks in the margin account would be Canadian dividend paying stocks.
6. Focus On The Best Stock Ideas
One of the investment ideas that I am considering this year is narrowing down and consolidating to only the best positions.
For the most part, I wouldn’t touch most of my stock positions.
Fortis, Royal Bank, Enbridge, Apple, Starbucks, Telus, Algonquin Power & Utilities, Park Lawn, Shopify, Palantir, and SmartCentres are basically my untouchables. In fact, I want to add to them.
There are I few other stocks I wouldn’t touch either. For example, Altria Group and AbbVie.
But some of my other REITs and positions may get moved into all of the above positions. I might cut down to only one or two REITs.
Ideally, I want to narrow down my portfolio to 10 to 15 larger positions that I read about a lot and understand well. Maybe 20 stocks max. I am in no rush to do this.
7. Buy A Condo Or House
Of course, one of my biggest goals of the year is to buy a property. I want to make this happen by the end of 2022 or early 2023.
Ultimately, I decide that it’s better to buy instead of rent at this point in my life.
It will add another asset to my portfolio and I can build equity instead of just renting and not getting anything back.
Also, I am a homebody deep down. I just want a place where I can be for the next decade to potentially forever.
I have been hesitant to buy a house because I didn’t want it to interfere with my plan to eventually live off dividends.
But I realized that it fits in with my plan to live off dividends because I will have to spend money on rent anyways.
If I can obtain a mortgage with a relatively similar payment as rent while simultaneously still building my dividend portfolio, I hope to be in position to pay my mortgage off with dividends in 10 to 15 years.
Financial Goals For 2022 – Final Thoughts
In summary, my financial goals for 2022 are the following:
- Save 15% of my income for retirement
- Earn $1,200 in dividends
- Grow forward dividend income to $1,500
- Lower commission fees to 0.25% of portfolio’s value
- Reopen a margin account
- Focus on the best stock ideas
- Buy a house or condo by end of 2022 or early 2023
Of course, there are a few smaller financial goals for 2022 I am working on.
But these are the primary 7 financial goals that I truly want to accomplish.
Now I would like to hear from you: what are your financial goals for 2022?
Related Articles On Personal Financial Goal-Setting
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Year End Review 2021 — Financial Accomplishments ( Dividend Investing | Blogging | Personal Finance)
