7 Tactics To Financial Liberty – Tactic 5: Implementing Your Goals

MoneySense Magazine I read a pretty neat article called 11 Steps To Financial Freedom. Upon reading the article I thought it would be good to share my own results, but instead of going through 11 steps I condensed it down to what I call – 7 Tactics to Financial Liberty. You probably already realized that the article had 11 steps and I only have 7, but there are reasons for that which you will discover throughout the posts — in short these seven steps best suit me for my current life situation. I will post 1 to 2 tactics per week with the intention of not dragging it out for a long time and keeping it simple as possible.

Tactic # 5: Implementing Your Goals

Earlier this week I talked about Goal Setting - tactic #4, part of 7 tactics to Financial Liberty. Like I mentioned in the article – I love setting goals for my self. The goals I set for my self are simply guidelines for the journey along the way -hence why I stress to everyone to set their own goals. Once your goals are set and you know where you’re going, next comes creating a plan of how to get there or as I call it – Implementing Your Goals.

In the previous tactic I slightly touched upon how I plan to achieve my goals for the short and longterm. I will use this post to get further into detail of how I plan to achieve my goals. In case you forgot what my goals were, here they are:

1 Year Goals:

• Pay Off $2,200 Student Loan Debt
• Pay Off $5,000 LOC Debt
• Turn my commercial cleaning business into a corporation

3 Year Goal:

• Purchase a New (Used ) Car

5 Year Goal:

• Sell Condo and buy a bigger home

The best part of all my goals is that I am already working on them presently. While I continue to work towards my goals, I also continue to find ways to raise my income. I am pretty satisfied with my frugal side and have slashed my expenses to the bone.  Furthermore, I’m happy to say that I have a $900 surplus every month. And I will continue to find ways to increase my monthly income going forward. Since were here to talk about implementing goals, let’s get right into how I will implement my goals:

1. Student Loan Debt

Make two payments of $1,100 in the first three months of 2012. I do realize the amnount will be slightly less than $1,100, because I will continue to make monthly payments from December 2011-March 2012. After eliminating my school debt, it will leave me with $100 in extra cashflow per month. This will bring my total monthly cash surplus to $1000.

2. LOC Debt

Starting in January 2012, I plan to make payments of $416.67/month towards LOC debt. Hopefully (fingers crossed) I will have the full $5,000 owing paid off by the end of 2012. However, I will have to dishout an additional $225 over the year in interest cost.

In order to fully implement this strategy, I will be looking to bring in additional income and look to raise my monthly cash surplus to $1,500. Which means I will have to bring in an additional $600/month in income. In order to get a jump start on raising my monthly cash surplus, I am in negotiation with a few potential clients to secure new cleaning contracts. Furthermore, I plan to really dig deep and increase my online income by further building my online empire. More on this in the future.

3. Register Business as Corporation

There are many reasons for turning your business into a corporation. My reasons for turning my business into a corporation are as follows:

• I already make a good salary with my job and don’t need to be taxed anymore
• I plan to turn this into a serious business and keep it growing
• I want to seperate my business activities from my personal activties

Creating a corporation is a serious process, which has a expensive price tag attached to it. It will cost upwards to $1,000 to create a corporation (lawyer fees and corporation registration). Furtheremore, there are ongoing expenses. It will cost $500+ per year to have my accountant file my taxes. If I want advice or any bookkeeping, there is a price tag for that too. Typically around $200-$300/month for a good accountant.

Incorporating my business will send a serious message to my customers and potential customers that I am serious about my business. On top of it, my marginal tax rate will be at 19% (lower than my personal income tax rate).

4. Purchase a New (slightly-used) Vehicle

I will be need a new car at some point in the future. My goal is to pay half of the car cost in cash and finance the rest. I do have a high-interest savings account (TFSA) with ING Direct. I plan to use part of that  money to dip into investing once all the debt is paid off. However, I am looking to save even more.

In order to really get serious about saving cash for the car, I plan to open another high-interest savings account with Ally. I got the opportunity in September to meet the VP of Marketing of Ally Bank (forgot name of the dude) at the Financial Bloggers Conference 2011 in Chicago. Loved his presentation and I like the way Ally Bank conducts business with a customer first approach.

I don’t have a set amount of money I plan to set aside, but in order to get to $12,000 (50% of car purchase price) by the end of 2012, I will need to save $1000/month for the next year. I’ll be honest, it will be long stretch to reach that goal. Especially with paying back the student loan and LOC debts.

5. Six Week Europe Trip

This is a long stretch and not high on the priority list. However I do plan to fund the trip directly from my savings. If I save $200 per month for the next two years, by the time I start thinking about the trip I will have over $4,800 saved.

6. Buying a Bigger Home

I am not in a hurry to pay off my mortgage, simply because I have greater priorties and don’t have the extra cash to drop into the mortgage.  On my current mortgage term I have 2.5 years left, which expires in 2014. Hopefully by then the value of my current home will grow even further and with the paid down mortgage I should have around $45,000 (including home equity) to put towards a downpayment of a bigger home. In short, my only plan with this goal is to keep paying down my mortgage and keep my fingers crossed of a HOT Real-Estate market in 2014.

I do understand there will be obsticles along the way. Presently the biggest obsticle for me, is that there are a lot of goals for a single income. I am fortunate enough to have a monthly cash surplus and by eliminating more debt and brining in more income, it will fully allow me to turns the goals into reality faster.

Eddie