2017 Goals: Mid-Year Checkpoint

As we pass the halfway mark of this year, it’s time to review the goals that I originally laid out in January.

Goal #1: Increase TFSA Contributions

My target for this year was to cut my TFSA contribution room in half. Going into this year, I had a little over $40,000 in contribution room, so to cut that in half meant I had to invest at least $20,000 into my TFSA. I’m happy to say that so far this year I have beaten that goal by 35%. Moreover, if I am able to maintain this pace, I will have completely used up all of my contribution room, meaning next year I would start with a fresh $5,500 limit.

Keep in mind that the funds transferred into my TFSA were not necessarily net new cash – much of it was moving holdings from my margin account to my TFSA to reduce my tax burden. Regardless of the source of money transferred in, the net result is that any gains from inside my TFSA will be tax free, forever.

Goal #2: Minimize Taxes

I’ve managed to completely eliminate about 98% of my margin account holdings, by moving all of my US investments into my RRSP, and all of my Canadian investments into my TFSA. One downside to doing this is that if I have any losers in my portfolio, I will no longer be able to use the capital losses to offset any capital gains. But, that shouldn’t matter…All investments in my TFSA are exempt from capital gains taxes, and any (capital) gains in my RRSP won’t be taxed until I retire years from now. So the loss of a tax write-off is more than made up for in the gain in no taxes.

Goal #3: Rebalance my Total Fund to my Target Allocation

I had intended on revisiting my IPS this year, but haven’t had a chance yet to do so. Sadly, I haven’t had a chance to do that yet, nor rebalance my portfolio. Luckily I still have six months to do so!

Goal #4: Increase Passive Income by 5%

One goal was to increase my passive income by at least 5%, and that could have been done organically (i.e. through dividend increases), or accretively (i.e. through purchasing of additional shares). At the end of last year, my projected annual passive income was over $6,000. As of June 30, 2017, my projected annual income is has gone up by 20.15%, or $7,400. The source of the gains was both organic and accretive: dividend increases accounted for 28.10% of the overall gain, and accretive gains (i.e. new investments) accounted for 71.91% of the gains.

But wait, it gets better.

Because all of my investments are now in tax advantaged accounts, I no longer pay taxes at the moment on any of those investments. Assuming a marginal tax rate of 35%, that means I am currently avoiding over $2,600 in taxes!

Goal #5: Update and Expand Investment Research

Finally, I wanted to increase my investment research, by researching at least four companies this year. To support this goal, I started writing articles on Seeking Alpha, along with articles on this site. To date, I have written 12 articles on this site, and 9 on Seeking Alpha:

I have certainly passed my target of 4 companies to research!

Summary

To summarize, so far this year I have completed 4 of my 5 goals:

  • Increase TFSA Contributions: Exceeded!
  • Minimize Taxes: Complete!
  • Rebalance: Not yet started.
  • Increase passive income: Exceeded!
  • Update and Expand Research: Exceeded!

The rest of the year will be spent on re-formalizing my IPS, and continued research.

What about you? How are your investment goals going?

Onwards and upwards!



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