Since developing my financial goals in 2006, it's taken a little over six years to achieve the ratio targets of 0.8 income/salary, 20X savings/salary, and 0 debt/salary all at the same time in a quarter. Although the income/salary ratio has been achieved for a number of quarters, it has not been demonstrated over a year yet. The savings/salary ratio was achieved only twice prior to Q4 2012. Zero debt/salary was achieve in May 2009 and maintained since then.
For the last two quarters, we have met all three target ratios. Two more quarters of similar or better numbers will deliver a year of meeting personal finance targets.
In retrospect, the path to achieving the target ratios has not been easy, since our strategies and plans required modification due to the great recession and the stock market decline. So the path to reaching our financial goals was neither clear nor straightforward, which has caused me to rethink the elements that helped us be successful.
My conclusion is that success requires using a critical mass of sound financial practices, especially those that were personal strength. How many and which ones are areas I will consider and evaluate for future posts.
For more on The Practice of Personal Finance, check back every Wednesday for a new segment.
This is not financial advice. Please consult a professional advisor.
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