In keeping with the start of the new year, Heartland Boy decided to set some financial resolutions for 2017. He believes in a dual pronged approach of growing both his income and minimizing his expenses. He truly identifies with the article written by Cheerful Egg, and would like to set in place several systems to achieve his financial goals in 2017. Here are some ways and tips he intends to achieve his financial goals.
To achieve his financial goals, he intends to both grow his income and decrease his expenses in the following ways:
1. Outperform The STI By 10%
As revealed in the article about his investment performance, Heartland Boy managed to outperform the STI for 2 consecutive years. However, he still failed his target of beating the STI by 10% p.a. He believes that this goal is still within his reach; he just needs to be more disciplined in implementing Adam Khoo’s strategy. By the way, the bar has already been raised very high with STI’s explosive start to the year.
He would like to implement a system of rigourously researching 2 stocks per month. This is equivalent to 24 stocks in 2017, which is fairly manageable. Heartland Boy has already revealed some of the stocks that he had analyzed on InvestingNote. Unfortunately, they are overpriced at the moment and offer little margin of safety.
2. Continue To Transfer CPF OA To SA
Heartland Boy has previously written about the merits of transferring excess funds from his Ordinary Account to Special Account. This allows him to earn higher interest rate so that he meets the Full Retirement Sum quickly. Using the compound interest to reach the Full Retirement Sum is an important element in the Heartland Couple’s plans to transit into early retirement.
While transferring CPF OA to SA is a good system to adopt, he recently discussed with Heartland Girl that they should not get too carried away with this. That is because they have to ensure that their funds in the Ordinary Accounts are at least sufficient to pay off 15% of their BTO’s purchase value. This gives the Heartland Couple the flexibility to use their CPF OA to pay the downpayment should they decide to take up a bank loan.
3. Sell 10% Of His Personal Belongings On Carousell
When Heartland Boy shifted all his belongings from his parents’ place to his in-laws places, it dawned on him that he simply has too many clothes. It was such a difficult task trying to squeeze everything into Heartland Girl’s room. He cannot imagine the eventual day when he returns to Singapore from Jakarta. Those belongings in Jakarta are virtually a ticking time bomb. The in-laws must never know of them.
Unfortunately, it’s not like his stuff on Carousell are selling like hotcakes. Either they are really down-trodden or the photographs are not appealing. Well, Heartland Girl has a pretty handy tip. She taught Heartland Boy the L4L (Like For Like) strategy. It basically works on the principle of reciprocity. Getting more likes means that your items get refreshed to the top of the categories and have a higher chance of being seen. Therefore, Heartland Boy shall execute the L4L strategy daily. Hopefully, this will help him sell his belongings to achieve his financial resolutions for 2017. Of course, it goes without saying that he shall resist buying any new clothes unless he has sold off his old clothes. Should he be fortunate to reach that stage, he shall purchase online via Shopback.
4. Grow A New Passive Income Stream
This is perhaps the most challenging goal. Heartland Boy has some vague ideas- write a book, start a family, friends and fools’ investment fund etc. Of course, the system to get this done is to start talking to friends who have already published their own books or have experiences working in funds. Frankly, Heartland Boy needs to subdue those internal demons first. Perhaps, he can take a leaf from Heartland Girl’s powerful positive habits.
5. Reduce Dining Expenditure
Heartland Boy has designed a good system to help him reduce his dining expenditure. For instance, dining at fanciful restaurants should only be restricted to special occasions. Meanwhile, casual dining out should only be restricted to weekends. Even then, Heartland Boy would make a conscious effort to further reduce his dining expenses. He shall continue to utilize credit cards with cashback on dining or take advantage of 50% promotions on Eatigo. Finally, to the delight of Heartland Girl, he will also order more vegetables than meat. That is a good way to keep both the dining budget and the waistline down.
6. Reduce Income Tax
A clear system with easily identifiable limits has also been put in place to help Heartland Boy save on his income taxes for 2017.
- Top up his parents’ CPF as long as their CPF balances are below the Full Retirement Sum and that they have no urgency for cash
- Top up his SRS whenever STI dips 10% from current high. That would signal a good time to purchase STI with his SRS funds.
- Top up his Special Account to the maximum $7000 for no more than 10 consecutive years to enjoy further tax relief.
It is often inevitable that one’s expenses increase in tandem with one’s income. To achieve his financial goals in 2017, Heartland Boy would finally try to break free of lifestyle inflation. He wants to avoid falling into this trap as it would negate all the efforts aforementioned. It will be awesome to achieve these financials goals before turning 30 next year!