the richest man in atherstone

As I mentioned in a previous post, I regret that at the beginning of last year, I didn't think about or write down my financial goals for the year. I feel that if I had, I could have achieved more. Without annual goals, it is very difficult to assess your progress at year-end and contributes to a loss of focus. If you are not aiming for something specific, it is hard to make the right decisions that will help you to hit your target. Before you make a journey, you need to know where you want to end up.

Consequently, this year I have made a list of financial goals that I want to achieve over the next 12 months as well as my long-term dream that I hope to have completed before I hit 50 years old - in 22 years time.

My Dream
My ultimate dream consists of four goals:

1. Retire at the age of 50 and be financially free to pursue whatever I desire for the remainder of my life.
2. Earn a residual income of £100'000 every year from savings and investments.
3. Have a net worth of around £6'000'000 (Six Million Pounds).
4. Own outright and live in a manor house (I've already done a rough sketch of the plans).

I have done a little research, and similar properties to my dream home can be bought for around £2'000'000. I may have it built to my exact specifications or buy something close to my desire. I estimate it will cost a further £1'000'000 to furnish it.

To earn an annual residual income £100'000, I would need a capital of around £3'000'000 earning between 3% and 4% of interest each year.

Hence, with a £3'000'000 home (including furnishings) and £3'000'000 "in the bank", I would have a net worth of £6'000'000.

Goals 2, 3 and 4 are really requirements that give me the freedom to achieve step 1, which is my Primary Aim. When I hit 50, I want to be free to do what I want when I want with few financial constraints. To have this freedom is my ultimate dream.

Despite the dizzy heights of my aspirations, I believe I can do it.

Annual Goals 2007
Coming back down to earth, but keeping my dream in the back of my mind I have set myself the following (much smaller) goals for 2007:

1. Save at least 12% of my salary (£3'000) to use in worthwhile investments.
2. Set up Savings Accounts for my children - They currently have poorly performing accounts and I have been putting off this task for years. This year, I will knuckle down and get it sorted out.
3. Choose a worthwhile charity that appeals to me and donate 1% of my gross income to it - I've done my figures and can afford a little philanthropy.
4. Set up and run at least one limited company - I feel that an important part of achieving my dream will be through running profitability business(es). This is something I've never done before, and so I need to learn many aspects of business (management, sales, marketing, book-keeping etc). By making myself a business owner, I will be forced to learn these essential skills.
5. Earn at least an additional £5'000 in income - There are many ways to earn money without being an employee and I plan to put great effort into learning some of them.
6. Invest at least £1'000 into assets that earn more than the best savings accounts can offer (currently around 4.3% after tax) - To reach my ultimate goals, I think I need to start looking for and finding opportunities that yield more than the banks.
7. Complete steps 9 to 16 of my doubling plan - This project is running separately to my personal financial plan, however if I manage to reach the end the £1 Million will be a welcome addition to my finances.

So, there you have it. I expect some will laugh when they see my long-term goals and think that I'll never achieve them. All I can say is that I'll never know unless I try.