### Our Long-Term Financial Goals – Overview
**Investment Goals:**
**Debt Goals:**
**More Passive Income:**
Happy New Year, everyone! I hope you’re all safe and smoothly transitioning into this new start. This time of year is often filled with optimism as people see it as a chance to start fresh, whether it’s changing eating habits or quitting bad habits. For me, it’s a time to review our long-term financial goals and ensure our actions are aligned with where we want to be.
If you’re not familiar with my financial plan, or what I call my money design, you can get detailed information in my latest update. Our long-term financial goals mainly involve creating multiple investment “buckets,” categorized by when we can access them without tax penalties. If my money design is accurate, these investments should provide a sustainable income stream throughout our lives.
The IRS announcement about the increased 401k and IRA contribution limits was great news for us. We’re increasing our 401k contributions to meet the new annual maximum of $17,500. This ensures we maximize my employer’s 401k matching. From our post-tax income, we’ll also be maxing out our Roth IRA contributions at $5,500 each per year, which totals $916.66 monthly. Additionally, I’ll be adjusting my asset allocation with new picks for Vanguard mutual funds.
We won’t be maxing out our 403b due to its no matching, high fees, and poor performance. Instead, we’ll split those funds between the 403b and buying more dividend stocks. Part of this funding will come from our profit sharing and blog income.
First things first, there are always ways to lower monthly bills. I’m particularly looking at our cable bill, considering options like Apple TV or Google TV.
On bigger debts, I don’t plan to add any new expenses that could derail our long-term financial goals. We’ll maintain our three low-interest debts:
1. Mortgage (3.75% fixed rate)
2. Car payment (2.25% fixed rate)
3. Furniture credit card payment (0% fixed rate until 2015)
Some might wonder why we don’t pay off these debts and save the money monthly. While eliminating debt is smart, I’ve found that investing our money is a better strategy due to the difference between our debt interest rates and our potential investment returns. Therefore, we continue to invest rather than pay off these low-interest debts. We pay off our regular revolving credit cards in full each month, so they don’t incur interest.
I considered refinancing our home, but it’s not feasible since our home value is barely above what we owe.
One long-term goal I haven’t achieved yet is making this blog a source of truly passive income. We’ve only scratched the surface of its potential. 2012 was better than 2011, and I plan for 2013 to be even better by increasing the blog’s popularity, driving more traffic, and writing better content.
In 2012, I started investing in dividend stocks, but for 2013, I’m considering peer-to-peer (P2P) lending. It’s an appealing option because it offers passive income, higher interest rates, and the potential to get your principal back depending on the borrower.
What do you think? Has anyone tried P2P lending? How will the New Year impact your long-term financial goals? Are you starting any major investments or passive income projects?
