Taking Small Steps Toward 2016 Goals

20 Feb 2016 13:49

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This week was fairly light in regards to trading as I switched gears to focus my energies on taking a couple more small steps toward my annual goals.

1. Transitioning my old 401K – In early February I started the process and moved 40% of my assets into an IRA. This week I’ve finally closed all of the remaining 401K assets which should take 3 to 4 days to settle and then another week or two to transfer. By early March all funds should be available to start the transition to a dividend growth portfolio.

The total transfer amount was a significant sum of money, normally I wouldn’t flinch at taking risks because I always had the three security blankets of time, steady income, and a company 401K match to compensate for losses. But something weird happened, I pretended to be a person retiring and I actually found myself hesitating to hit the sell button. I realized my three security blankets wouldn’t be there. If I make a bad investing choice now my retirement (and my wife’s) could be screwed! Wow, this put a new perspective on things.

In real life I still have my security blankets so the fear is reduced but now I have a new perspective and respect for those quitting their lifelong jobs and entering retirement. It is a lot scarier than I imagined.

2. Getting my taxes done – For the first time in a long time I will actually have my taxes filed with the IRS by February. This was a necessary step to achieve as early as possible so my daughter can continue with FASFA forms and scholarships for college. Scholarship money will be extremely important to meeting the goal of funding my daughters first year of college fully paid.

3. Planning out my next step – My next step will be towards reducing my overall debt by 20%. My wife and I will gather and organize every single account by amount, percentage rates and loan periods. To help the two of us with motivation I found this interesting article on tips for staying positive while reducing debt.

One of the tips I found extremely useful is to calculate your interest expense on a daily basis. I think this will be a serious eye opener but I also believe it will be a great measure of success. If we start off with say a daily interest of $10 and after making an extra payment it reduces to $9.95 will allow us to quickly see the progress we are making.

Additionally, a 20% reduction on $10 per day sounds more achievable than 20% reduction on $30,000 of debt. Of course it equates to the same amount but mentally it sounds more appealing. If it works to get me and my wife on the same page then I’m all for it.

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