Huzzah! It’s 2018 and we can start off with a clean slate. Actually, I did pretty well in 2017 and accomplished most of my New Year goals. I only missed a few and I’m happy with my accomplishment. However, many of those goals were a bit staid. I knew I could accomplish them and they weren’t challenging enough. This year I’m trying something new and setting more ambitious New Year goals. Read on if you’d like to see what an early retiree’s New Year goals look like.
In previous years, I had moderate expectations and set goals accordingly. This worked well because I was able to accomplish most of the things on my list. I find that setting high expectations doesn’t work for me because I can’t achieve them and then I become discouraged. My style is to go at a slow and steady pace. Shooting for the moon is probably better for younger folks, though. Here is my approach on setting New Year Goals.
- Set achievable goals– Don’t shoot for the moon unless you have a good record of high achievement. Most of us will just become discouraged and give up.
- Make the goals specific and measurable– Goals need to be very specific. Don’t set general goals like losing weight or saving more. A better goal would be lose 10 pounds or maxing out your 401(k) this year. You also need to figure out a way to get there. How will you lose 10 lbs? Will you increase your 401(k) contribution right away? You need a plan.
- Write them down and track your progress– Write down your goals and put them where you will see them. Personally, I put my goals here on Retire by 40 and update the status every month. This has been working really well over the last 7 years since I have a public audience and I made tremendous progress with our finances and personal life. I recommend starting a blog if you don’t already have one. It really helped me and it might help you, too.
For 2018, I’m going to be more ambitious and set more challenging goals. I’m sure I won’t be able to accomplish some of these, but let’s try it and see how it works out.
Last year, I started tracking my goals with this spreadsheet below. It really helped because I could schedule the goals throughout the year. I learned that I needed to schedule the goals in the first half of the year because I didn’t get much done in the 2nd half of the year. Summer was tough because RB40Jr was out of school. It was also impossible to get anything done in Q4 because of vacation, holidays, and starting a new school year. I really need to get things done early if possible.
Okay, it looks like everything got spread out more than I expected. Let’s go over these goals in detail.
Increase our real estate crowdfunding investment to $100,000
I’m optimistic about real estate crowdfunding and I’m putting my money where my mouth is. Last year, I invested $28,000 with RealtyShares and this year I plan to increase our investment to $100,000.
This will be tough because we don’t have $72,000 lying around. How will we do it?
- Savings from work (target $40,000) – We’ll continue to live a moderate lifestyle and channel our extra savings to real estate crowdfunding. Retirement accounts will still be the first priority, though.
- Dividend income ($10,000) – I’ll invest the income from our dividend portfolio here. The stock market is overvalued and I don’t want to invest more at this point unless I see a good deal.
- Reinvest from RealtyShares ($5,000) – I’ll reinvest the income from RealtyShares.
- Rental income ($10,000) – The rental income will go toward real estate crowdfunding. This one is iffy because rental income will depend on repair and maintenance. We’ll see how it goes.
- Cash savings ($7,000.) We did pretty well in 2017 and have some cash left. I can pull $7,000 from our savings.
There is a good chance that I won’t be able to achieve this goal by the end of the year. I’ll grade this one on the academic grading system. I’d be happy if I get an A- on this one (90%.)
You can sign up with RealtyShares to browse the various projects and see if real estate crowdfunding is a good match for you.
FI Ratio 100%
Amazingly, our FI ratio was 109% in 2017. So 2018 should be easy, right? I’m not so sure about that. Last year was much better than usual because our passive income was high and our expense low. That won’t be easy to duplicate this year. There are a lot of moving parts with passive income. In particular, the rental income could be volatile. If we have a big repair, it’ll make a deep cut into our passive income. I’ll try my best and we’ll see how it goes. You can see how I’m doing with passive income so far here.
*FI ratio = passive income / expense
Increase bond allocation to 30%
2017 was an awesome year for the stock market. I’m optimistic this year, but who knows what’s going to happen. I’m also nervous because the stock market valuation is approaching the irrational exuberance level of the Dot Com era. The market might do well in 2018, but sooner or later there will be a steep gut wrenching drop. I’d like to reallocate more money to bond before that happens.
Here is our current asset allocation, not counting physical properties.
- US stocks: 33%
- International stocks: 35%
- Bonds: 22%
- Alternatives: 8%
- Cash: 2%
I’ll need to cut back on US and international stocks, and then move the money into bonds. This is difficult to do when the stock market is doing so well. Nobody wants to sell when stock price is increasing. However, I’m getting more conservative as I get older so I’ll grit my teeth and do it. I’d like to get this done by June.
Travel hack 100,000 points
Last year, we visited Hawaii and Cancun, but didn’t spend that much money. Travel hacking paid for flights and some hotel rooms. It was awesome. However, Chase won’t let me sign up for any more cards so I’ll have to wait for a while. I’ll try again after the summer and see if I can get a new card. If that doesn’t work, then I’ll convince Mrs. RB40 to do it. This one should be relatively easy. The biggest issue will be meeting the spending threshold.
Minor redesign Retire by 40
Retire by 40 needs a little face lift. I had this same design for over 5 years now and it looks a little stale. I want to make it a little cleaner. Also, the technology has changed and I need to update to the latest versions of the software. I’m also thinking about a new logo and banner. I’ll try to work on these myself first. If I can’t do it, then I’ll hire it out.
Blog once per month at Fit by 40
Last year, my goal was to start a new fitness blog – Fit by 40. I did that, but posting frequency really dropped off once the summer break started. I didn’t go to the gym while RB40Jr was out of school so I didn’t blog about fitness at all. This year, the goal is to blog at least once per month. My fitness goals are over there and I need to keep on top of them too. For me, writing about fitness isn’t as fun as personal finance. I’m not passionate about it, but I should be able to do it once per month.
Blog income $100,000
This one is going to be very difficult. Last year, I made about $65,000 online, but I doubt it will increase much. This year, I added a Passive Income page and a Recommendations page to the top menu. Hopefully, those will make it easier for readers to see my affiliate partners.
I’ll also try to find new affiliate partners to work with. Recently, I added a credit card affiliate, but it doesn’t seem to work with our readers. I’ll need to find a product that is a better fit. Truthfully, I’d be happy with any increase in income. I’ll grade this one on the academic system too. Even a solid C would be really good here (75%.)
This is one of the goals I failed to complete last year. There is a club just a few blocks away from our home so the logistics isn’t the problem. I just need to contact them and show up. I’ll try to join up by February and tick this one off the list early.
Not paying for leaf removal
Check out my best rant in 2017 – Am I too cheap for doing yard work? I still think it is insane to pay $360 for leaf removal. This year, I plan to DIY and ask the neighbors to send me $360 instead. I’ll donate the money to the food bank. $360 can feed a family of 4 for more than three months. That price is ridiculous. It’d only take me a few hours to do it so it’s no problem.
Consolidate down to one property
I want to move into our rental duplex and sell our 2 condos. I’ll take profit and redeploy the money in real estate crowdfunding. Being a landlord isn’t bad, but I want to simplify my life a bit. Also, the Portland housing market is pretty expensive now and I’d rather invest elsewhere. Real estate crowdfunding enables me to invest in markets that aren’t too expensive yet.
This goal might take a few years to accomplish.
I need to read up on Iceland more and plan our summer vacation. We plan to visit for about 10 days in July or August. On this trip, I’d like to see the natural wonders of the island. I’m not sure if we’ll drive the ring road or just take in a segment. Let me know if you have any recommendations for Iceland.
2018 is going to be challenging
Oh man, I did it again. I set too many goals this year. However, some of these are really multi year goals. I’ll grade them on the academic grade, not pass/fail. Let’s see.
- Real estate crowdfunding $100,000 – I’d be happy to get A- (90%) on this one.
- FI ratio 100% – Ideally, we’d have another great year, but who knows. I’m hoping for an A on this one.
- Blog income $100,000 – It’d be great to make six figures, but even a C would be acceptable.
- Consolidate down to one property – I don’t know how long it would take to do this. Our tenants at the duplex aren’t sure when they’ll move out. I know they will move out at some point because they got married last year.
So those are my goals in 2018. Stay tuned and see if I can accomplish them this year.
What about you? Do you have any New Year resolutions for 2018? Remember, the key is to track your progress. If you don’t, then you’ll forget about your goals and probably won’t accomplish them. Also, get them done early if you can. Let’s do it!