Happy New Year everyone! It’s an exciting time around the Go Finance Yourself household. A great 2016 is in the books. Last year saw lots of exciting changes come about. I enjoyed looking back on 2016 over the past week, but we cannot rest on our laurels. There is a lot to accomplish in the new year. So now, let’s turn our focus towards 2017!
Seeing how 2016 ended has me really excited for 2017! There’s a lot I want to achieve in 2017. I’ve broken my goals down into three categories for 2017: financial, business, and personal. Let’s start off by looking at my financial goals. Such goals are always at the forefront of my mind. And, well, this is a personal financial blog after all.
1) Invest $45,000 in taxable accounts.
In last week’s post, I discussed where I invest my after-tax money. Building an after-tax investment portfolio is key in being able to retire early. In total, I opened five new accounts to invest after-tax dollars in 2016. To help me achieve my goal, I’ve set up automatic transfers to my Wealthfront account twice a month. These contributions, which will be invested in index funds, will amount to $30,000 in 2017.
During the first half of the year, I will be focusing on expanding my investments in real estate through Fundrise. I plan to invest $10,000 with Fundrise in the first six months of 2017. This, however, is contingent upon finding investment options that I like. I invested $1,000 in the Growth eREIT to get started back in November. That investment is now closed. The other investments available at this time have a strategy that is partly focused on growth and partly focused on income. I would much rather have an investment with a higher upside, than one that provides a steady income. At this point in my investing life, I don’t need my investments to produce income. So if I don’t find an investment on Fundrise worth putting my money in, I will allocate it elsewhere.
Finally, I will be looking to double my investment in peer to peer lending through Lending Club. Like real estate investing with Fundrise, this is a higher risk, higher reward investment. As I’m still in the early stages with P2P lending, I will be keeping my investment small. During the second half of 2017, I will be investing another $5,000 in Lending Club which will double my original investment. I’m looking forward to providing a more comprehensive review of Lending Club later this year. At this point, my portfolio is not very seasoned at just over four months old. I’m excited to see how this experiment pans out in 2017, and look forward to sharing it with you.
2) Reduce investment fees further.
Back in December, I wrote about the negative consequences of investing in funds with high fees. Several years ago when my wife left her first job, we rolled over her 401k into an IRA with an advisor my dad used for some of his investments. The account has always performed well. I knew what funds the money was invested in, but I never thought too much about the fees since returns were good.
As you can see in the chart below, my wife’s IRA account has slightly outperformed the S&P 500 since inception in August 2009. Since the time this account was set up, I’ve left a job I was at for nine years where I accumulated a sizable balance in my 401k. Now that this IRA account is much larger, and as I’ve become more focused on controlling my financial future, I’m more concerned with fees and the funds I’m investing in. Think how much better my returns would be if I had moved out of the expensive and underperforming (2016 return 1.37%…ugh!) American Funds New Economy Fund (ANFCX) earlier!
For 2017, my attention now turns to my 401k at my current employer. Our plan is through American Funds, which does have some decent funds to choose from, but fees are on the high side. In our plan, only the R-2 funds are available. These all have higher expense ratios that range from 1.36%-1.84%. This would be fine if the funds outperformed their category index. Unfortunately, as we all know, the market is hard to beat.
I’m currently invested in five funds in my 401k that have an average expense ratio of 1.47%. That’s high! Using Personal Capital’s fee analyzer, this can cost me a full year of retirement. That number will only grow as I continue to max out my 401k every year. Recently, I realized in a face palm moment that I should be checking out my wife’s options for a 403b plan. She is a teacher and contributes to a pension fund, but also has an option to invest in a 403b fund, which is the public sector’s version of a 401k. Why had I not thought of this earlier?! Dumb.
Fees costing me a full year of retirement
In 2017 I plan to contribute the minimum to earn the full employer match in my 401k and move the rest to a new 403b plan set up for my wife. We’re still working with the school district to get it set up. I haven’t yet seen the investment options in the plan but read they have expense ratios as low as 0.03%. So I’m guessing they have some low-cost ETFs to invest in. My goal is to get this accomplished by the end of January, so I can stop throwing away so much money on needless fees!
3) Create a will.
This is long, long, long overdue. No matter if you have kids or not, you should have a will. Don’t leave it up to intestacy laws of your state to determine how your assets will be divided up when you die. I’ve had good intentions to set up a will for several years now. I even got to the point of installing software to draw up a simple will, only to get to the part where you have to decide what you want your family to do in the case you become a vegetable and are hanging out brain dead on life support. That’s not very fun to think about, and it ended my good intentions that day.
So, I am declaring that 2017 will finally be the year where I get a will in place. My goal is to have one in place by the end of February. I have no idea if the will writer software I have is updatable. If not, I’ll download a simple version from Amazon and knock it out from there.
4) Diversify my investments.
My portfolio is heavily concentrated in stocks. Very heavily concentrated. This isn’t a terrible thing, as I’m well diversified within my stock portfolios and don’t invest in any high-risk individual stocks. I also have a high risk tolerance and can withstand the inevitable ebb and flow of the stock market. Still, I want to expand my investing horizons. Real estate is a great place to start, but being a landlord is not appealing to me. Hiring a property manager is always an option, but that eats into your returns. Who knows, I may decide to rent out my current house when we move several years down the line. But right now, it’s off the table.
I’ve already written about expanding my investment in real estate through Fundrise. Diversification into this area is going to be slow until I get a better handle on Fundrise itself. I’ve also talked about furthering my investment in P2P lending. Again, keeping it a relatively small investment until my portfolio becomes more seasoned and I can evaluate results. So yes, this goal goes hand in hand with my first financial goal, but I also want to learn about as many other investment classes as possible this year. Readers, please share other investments that you like and what your goals for these investments are in 2017.
1) Increase my salary by 15% in 2017.
Strong personal finance is a two-way street. Spending less than you earn is a big part of it. But there are limits to this as you can only save so much. Taken to the extreme, you can live in a shack, eat ramen noodles and walk to work every day. You’ll be able to save a lot of money doing this, but you’ll reach a point where you can’t save any more. At that point, the only way to increase your savings and shorten your timeline to financial independence is to earn more money.
In 2016, I increased my salary by 20%. I implemented several productivity changes during the year that allowed me to get more done, and thus create more value for my company, and for myself as well. There’s no better feeling than creating value and getting paid for it! I’m really excited to write more about this in a future post.
In 2017, I aim to do the same. We are our biggest asset, and therefore everyone should seek to maximize their value and increase earnings. My goal is to increase my salary by 15% in 2017. To do this, I will create a plan for what I want to accomplish in 2017 and how it adds value to my company, just as I did in 2016. This will be a year-long effort and will likely come incrementally throughout the year. Nothing brings about more job satisfaction in my book than having control over your career and how much you earn. Being an entrepreneur or side hustling is one way to accomplish this. But don’t forget about your day job. Show the value you are creating and ask to be paid what you are worth!
2) Publish 100 blog posts in 2017
Go Finance Yourself was born in October 2016. This blog is still in its infancy, and it’s been a blast to build thus far. As I mentioned above, I am the happiest when I am creating or achieving something. It makes me feel like I have control over my life, be it on a professional or personal level.
In 2017, I’ve set a goal to publish 100 posts. This is an average of two per week. I intend to stick to a schedule of Monday and Wednesday, with possibly a Friday thrown in every now and again if I’m feeling crazy enough. I’ve found that in the three short months I’ve been doing this, there’s not much better feeling than creating a post and sharing it with the online world. This first week of the year has been an exciting one as I’ve come back from a short hiatus over the holidays and gotten back to a regular posting schedule. Traffic has been steadily increasing. Week one of 2017 was my best so far as traffic increased by over 60% from my previous top week.
The biggest key to success in any new venture is sticking to it. That’s exactly what I aim to do in 2017 by posting on a regular schedule and creating value along the way.
3) Become a better speaker.
By nature, I’m more of a written communicator than a verbal one. However, my current position requires me to constantly present to the rest of our management team as well as our board of directors. I’ll admit that this is my least favorite part of the job. I’m an introspective person who prefers to communicate with people on a one on one level as opposed to in a group. That said, it’s a part of the job and something that I want to improve.
For me, part of becoming a better speaker is better preparation. In 2017, my goal is to spend more time prepping before my presentations. I’m someone that needs to map out what I want to say. Otherwise, it comes out in a jumbled mess during my presentation. A year ago, I gave a best man speech at my best friend’s wedding. I was dreading this for months. Being both funny and sentimental in one speech was a tall task, and I wanted to give a great speech. I must have practiced that speech a thousand times in my head, out loud in front of a mirror, and in front of my wife. Come wedding day I knocked it out of the park! All because I prepared really hard for it.
It may not be feasible to put that much work into every presentation I give. Still, preparing even a fraction of the amount I did for my best man speech will help me get a little better each time. So in 2017 I’m going to increase my preparation for each presentation and also work with our CEO who is a fantastic presenter. If I aim to improve just a little bit each time, the compounded effect will be significant by the end of the year.
1) Lower my golf handicap into single digits.
Improving my golf game has been a long time goal for me. The problem is it has always been more of a want than something I actively pursue. This will change in 2017. There are no more excuses as the 10th green of my club is literally 300 yards away from my office. For 2017, I’m going to be putting in a specific practice plan for my game. Last Christmas, I received The Practice Manual: The Ultimate Guide for Golfers by Adam Young. I’ve been wanting to get this book for a while but just hadn’t pulled the trigger. I’m about three-quarters of the way through the book and it is, without a doubt, one of the best golf books I have read.
There is no technical advice in the book. It’s all about how we learn and the most impactful ways to practice. If you’re a golfer and struggle with consistency (is there any other kind?), you need to get this book. We’ve had one decent weather day since Christmas where I’ve gotten out to the range to implement some of the topics of the book. With just one range session, I can already see a change. There’s a long way to go to transition this to the actual course, but I’m really excited to implement these ideas in 2017.
2) Home improvement.
I have two big goals to improve our house in 2017. The first is to improve our landscaping. Specifically, I’d like to grow some grass in our backyard. This has always been a challenge as our yard is shaded by huge trees and we receive very little sunlight. Additionally, we have two dogs who make it a point to kill anything that grows back there.
Step 1 to fix this is to get our trees trimmed to allow more sunlight in. Our front trees were done in December (winter discount!), and our tree guy will be back in January to clean up the backyard trees. There’s not a lot we can do about the dogs, but I plan on fencing off a portion of the yard to grow some grass this spring.
We must get as much dirt on us as possible!
The second plan is to renovate our bathroom. This will be a challenge since we live in a one bathroom house. I also have no experience in bathroom renovation. Nothing can go wrong with this plan! We’re planning a very simple (in theory) renovation that consists of just replacing the tile floor and vanity, and a fresh coat of paint. Tub and toilet will stay put, although the toilet will have to come up for a bit to complete the floor.
These are some much-needed projects that need to get done if we ever plan to sell our house. Which we do…someday. Knocking them out a few at a time will make it a lot easier than going at it all at once.
3) Be more active
In my early-middle years, I’ve become much less active than I once was. I sit at a desk for 50+ hours a week. When I get home, and it’s cold out like right now, I’m back to sitting. I have a gym membership that is about two minutes from my office. That makes it easy to go over lunch, but when work gets busy, I find excuses not to go.
In 2017, my goal is to make it to the gym three times a week. I have no illusions of becoming a body builder but would like to be able to walk 18 holes without being gassed at the end. Additionally, I joined a racquetball league. I love to play but haven’t played much since college when I won the All University Championship (humble brag). I even had this listed on my resume coming out of college. Ah, the days of trying to fill a page with achievements and leadership positions that would attract an employer.
I’m really excited for the league, even though I’ll probably get my butt kicked after not playing for over ten years. But hey, the only way to get better is to challenge yourself, right?!
Wow, that was a lot. Congrats and thanks to those of you who made it all the way through to the end. As you can tell, I’m excited for what’s in store in 2017. So many fun goals to shoot for and achieve. That’s what makes this part of the year so fun. It’s like spring training. Everyone is optimistic that their team will win this year! Now it’s time to go out and make it happen!
Readers, what are your goals for 2017? Are you excited for what’s to come in 2017 or do you have a more cautious outlook? I’d love to hear what’s in store for you this year!