Given the huge variation in the price of gold over the years, I don’t understand how it is any better a measure than dollars. Had I measured it against 1980 at $750+/ oz, or ‘83 or ‘87 or even last March, would I be satisfied with a comparison at the current $850 valuation today?

Might there be a better marker of real value in the market? I don’t think gold is necessarily it.

DAvid

DAvid

Thanks for the link. I have been doing some reading on this site and it seems to be the best way (DRIP and SPP investing) to get started with dividend income!

Mark

To clarify, my spouse and I earn a decent income and every year, we need to put ~$4,000 away each in RRSPs to avoid paying income taxes.

Given that we’d rather “pay ourselves first’, we need to contribute, again this year, another $4,000-$4,500 each in our RRSPs to avoid paying additional taxes in the spring.

I know this goal may be modest and easily achieved for some in this blog, but given our other goals of putting an additional ~ $10 K on our mortgage, putting a few K into our emergency fund and starting the dividend income investing journey, that will keep us plenty busy and focused.

Honestly, FT, I think the problem with this goal is simply one of “asking the wrong questions”.

I mean, what if the TSE jumped 30% and you made 20%? Technically, you beat your goal, even if it’s obvious that you didn’t really get what you wanted. By the same measure, what if you made 15% but inflation was particularly high that year? (instead of the 3-4% we’ve seen in the last decade) Maybe you made 15% in nominal gains but you could only buy 4% more “stuff” with those gains.

The fundamental issue here is that your number (+12-15%) isn’t really “tied down” to anything. It’s just a number.

Your actual goal is something like “increase net purchasing power by 15%” or “increase quality of life to 1 massage / month” or “own 10 more ounces of gold”.

If I were to re-write this for the current year, I would set a more stable target. For example, try measuring your investments in gold or silver (or loaves of bread or barrels of oil or some other commodity). Heck measure it in all four.

Here’s the way I see it, if I start the year with $2000 and end the year with $2300 dollars (i.e.: I made 15%) that doesn’t necessarily mean that I’ve gone anywhere. Heck maybe last year’s $2000 TVs now cost $2400 due to inflation’s effect on the price. But if I can say that I started the year with about 20 ounces of gold in investments and ended the year with about 23 ounces, then I’ve made some form of real progress. It’s like measuring your retirement savings in “years of current income” rather than in straight dollars.

It’s really all about context. To whit, the US government is in the process of printing some $1,000,000,000,000. They’re not actually “making more stuff”, just “printing” a dollar amount greater than the Canadian Federal Debt (and quite possibly the Canadian GDP by the end of 2009). Being up 15% next year could be meaningless.

I use the DRIP & SPP method. No fees and all Canadian companies except one US pharma. Go to http://www.dripinvesting.org for more info on how to do this.

Please explain how you expect to accomplish THIS goal, given you can contribute about 18% of your gross income to an RRSP.

DAvid

The problem is my site just needs to be more prominent, not enough people know about it, even though it has some great content for investors.

Either way, it’s impressive what you have done with this site, and what you have done for yourself financially. Good Luck!

I am 27 years old and just starting on my ‘journey’ and your site and visitors are very encouraging. You offer a framework for my financial goals and provide helpful articles in the process.

I am thankful for this little ‘community’ (well, not so little with over 4000 RSS!)

Here’s to a great 2009 for MDJ and for everyone else who participates on this site.

David

FT: Congrats on the goals and the monthly cash flow!
Very nice! I’m not quite there…

My goals for 2009 are simple, but aggressive:
1. Put approx. $10,000 worth of lump-sum payments on our mortgage
2. Put $5,000 into our emergency fund
3. Contribute enough to RRSPs to avoid paying any income tax
4. Start dividend income investing

Good luck to you savvy investors in 2009!!

That’s great. If you don’t mind MDJ, could you breakdown those into your rental:dividend:blog amounts.

As for my 2008 accomplishments, I achieved 2 of the 3.
1. Get my mortgage below $35K. Yes
2. Increase my emergency fund to $5500. Yes
3. Increase my dividend income to $1000/year. Close but no cigar.

This year will be:
1. Pay off the remainer of my mortgage.
2. Increase emergency fund to $10K.
3. Increase my dividend income to $1100/year.

Good luck!! Hope you succeed.

But, that should make 2009 a banner year! Congratulations to you, FT, for doing as well as you did.