Looking towards 2014
Ever since I discovered NetworthIQ, I’ve religiously tracked my numbers every month. Sometimes I’ll browse through the profiles to see how others are doing, but mostly I keep track of my numbers for myself and for this blog. From the time I started up until today (8 years), my net worth has increased by over $110,000 (an average of approx. $14,000/year).
Now, that’s pretty good considering I have never been a high income earner. Before this year, my average gross annual salary (not including freelance/side income) for the last 8 years was around $45,000. And even when you factor in the freelance/side income, my average gross annual salary only increases to $53,000. 2011 was my best year when I earned just over $82,000. This year, I’ll hover between $75-80,000 when you add up my salary with my freelance income. That’s a comfortable amount to live on… but it’s not life changing.
My net worth hasn’t increased enough for me to feel satisfied, and that’s mainly due to my retirement savings. In 2011, I had a consultation with a fee-only financial advisor (provided by the Toronto Star), who informed me that if I want to retire by my goal age of 55-57, I need to be saving a lot more aggressively than I have been. Unfortunately last year, I barely saved anything, and this year it’s been a struggle to get back on track. I’m earning less money than I did in 2011, so is early retirement still my number one goal? If so, then every other financial decision I make needs to reflect that fact. And if it isn’t my number one goal anymore, then what is?
This is what I need to figure out before I start tackling what I want to achieve for next year. I see next year as a pivot point to my finances (and my life). I’m finally settled down in Vancouver. I have a home and a steady job, and at my advancing age (yep, I said it) I don’t see myself dropping everything and moving abroad again or doing anything drastic anytime soon. Travel will always be a big part of my life, but I’ve already acknowledged the fact that I need to scale back. Even this year (where I was supposed to really slow down) was a bit excessive.
Right now I’m saving 10% of my gross annual income for retirement. It’s not enough. Based on my calculations, I need to be saving 18-20% of my gross if I want to hit my early age goal (without counting on CPP, OAS, or property). Since that doesn’t include other savings goals, this will mean making significant lifestyle changes, or increasing my income somehow. Likely both.
A lot to ponder over the next few weeks, that’s for sure.
Have you started thinking about your goals for next year?
Author: Krystal Yee
I’m a writer, personal finance blogger, and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, playing field hockey, or plotting my next adventure.