Hello again everyone!

Well. Here we are…January 23rd. Statistically, the most depressing day of the year according to scientists who bother to spend time tracking this sort of thing! I’d have to say that had I not gotten back on track financially by reviewing my finances and committing to stay on top of them, I would probably be feeling the full brunt of that statistic today.

Last time I mentioned I would talk about my financial goals for 2006, so here they are:

1. To return to regular financial review and money management (this means to review my bank account and expenses once per week [or at minimum twice per month on each payday] before I withdraw money from the bank. This means no more “oh, looks like there’s enough money, I’ll just take out $60 now and figure it out later…”

2 To start my own business and benefit from the tax advantages of small business ownership, as well as earning a second income.

3 To research passive income opportunities and find three possibilities which can be developed (one primary, plus two back-ups in the event 1st/2nd choices are not viable).

4 To research property ownership (where, how much I can spend) to have a mid-term goal to save toward.

5 To be able to re-invest in RRSPs this year, ideally by way of my second/passive income source.

I set these goals to really help push myself to the next level in my financial management process. The first goal about financial review is really my foundation, without knowing the state of my finances I can’t improve them! Good or bad, it’s very empowering knowing where things stand because it allows informed decisions to flow from that starting point.

Starting a small business and then separately developing a passive income source have been on my list of priorities for over a year now and I’m finally at a point where I feel capable of taking these steps. Passive income source means a business in which I do not have to be involved in the day-to-day running in order to earn money from it. Some examples of these are things like a owning coin-operated laundromat, a parking lot, real estate.

I’m still in the early stages of learning so I don’t know what a viable option for me is, hence the research. I have no cash available at present for a down payment, so ideally I need to look for an option which doesn’t require initial large sums to get started (isn’t everybody looking for that opportunity?). I also know I don’t want to do a network marketing business, which is a popular option with little start up cost associated, so it will be a while before I find what’s right for me. But I know I want the benefit of money being made while I do other things! Additionally, having a small business (offering my facilitating/teaching services on contract) will allow me to write off associated expenses, helping to lower the amount of tax I will pay this year and ultimately leaving more money in my pocket. Last year I learned a statistic that said that the average small business (whether part or full-time) saves the business owner about $4000 in taxes! If that’s true, that’s a LOT of cash!

This year my Christmas holiday away on an island at my friend’s rustic cabin reinforced my desire to have my own piece of green space. She has done exactly what I hope to do…found a little piece of property, undeveloped, which she used to camp on for the first several years and then over time she built the cabin when she was financially ready. That plan works very well for me. It’s more feasible for me to find a little undeveloped property to afford than to try and purchase a waterfront lot with full amenities and cabin ready to go. Her property has already quintupled in value in the 12 years she’s owned it!

Lastly, I was buying RRSPs monthly before my career change. As previously mentioned, I took a significant pay cut to move into this line of work so RRSPs have not been an option until now. Getting my debt load down and accumulating a couple of raises has finally allowed a shift that should mean I can buy RRSPs on my current salary, even absent a second income. Although it would be nice to use a second income to be devoted to RRSPs exclusively, without needing my primary income. This is beneficial not only for my future but also for tax purposes. Whatever advantages are offered to me to avoid paying tax legally, I plan to use them!

Depending on where you’re at, these goals may look very different from yours. My goals are much bigger (for me) this year than they were last year. That is because I have made significant strides and am ready to tackle bigger goals. Initially my goals looked similar to Jeffrey’s. I found (am still finding!) tons of small ways to make changes that really add up in the long run. As I wrote out my goals this year I realized it’s also important to have a vision for the long-term, so I can visualize the big picture and keep my sights set on the things I would like to achieve. I really wanna “Go for the Gold!” (Literally and figuratively!)

Until next time, I wish you good health, financial and otherwise!
Kat