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2007 is coming to a close and it is time to start making goals for 2008. New Years Resolutions are all over the place, but I think they are often forgotten by the time February rolls around. Luckily we have our finances planned out for the next nine years, making this task somewhat easier, and less forgettable.
Assuming we finish 2007 at or above the plan, which is a 1080% increase since January 2003, the 2008 goal is:
The long run goals that these incremental steps support are the following returns:
Achieving our dollar plan is ensuring our financial freedom to pursue whatever it might be that we are interested in. So far, it has provided us many opportunities, such as taking off long leaves from work when our children were born, working part-time, and building our new house.
Accomplishing this goal has two components:
While we can directly control our contribution levels, which are already set, the rate of return is partially out of our hands. We influence it through selection of the appropriate asset allocation for our risk tolerance and ages. When the return is lagging, we sometimes contribute more to still try to meet the goal.
It is somewhat hard to visualize total percentages, but I have chosen to track our net worth this way based on my observations in Millionaires in the Making: Pros and Cons.
Cash Money Life is giving away an iPod (I’m a sucker for giveaways) for sharing your 2008 financial resolution, as I did here. Head over and write down your own goal for a chance to win. The goal must fit the SMART Goal criteria: Specific, Measurable, Actionable, Realistic, and Timely.