It’s that time of year again. Personally I don’t set New Year’s resolutions—I set goals for the next year.
Before setting next year’s goals I like to review my progress towards the current year’s goals.
2018 financial goals in retrospect
My 2018 financial goals had a focus on three themes: saving / investing, learning, and simplifying aspects of my life.
Looking back on 2018, it’s been a good year both financially and personally. Here were my goals:
- Saving and investing – Contribute the maximum to my 401k and HSA accounts, as well as increase my emergency savings fund. Invest my 401k and HSA in a diversified portfolio for long-term growth.
- Learning – Further my knowledge about a variety of topics, including investing, by reading 10 books (at least 3 finance / investing related).
- Simplify my life so that I can enjoy the most important aspects of life – Reduce the time spent on managing bills by using more automated bill pay. Reduce the complexity of my investment portfolio to make it easier to manage.
How did I do in 2018?
- I’ve been able to stay on track with my savings and investing. By year end I will contribute the maximum amount to my 401k and HSA accounts. I have also been able to add to my emergency savings account.
- I’m on track to read 10 books by year end, and three of then investing related:
- I’ve also focused on improving the quality and simplicity of my money management in 3 areas:
- Portfolio management – 2018 was the year I decided to get my portfolio in order. I evaluated a number of different investment portfolios with backtesting. I also evaluated a variety of ETFs in different asset classes. Ultimately I developed a custom variation of the global asset portfolio for my retirement investments. The portfolio has a high sharpe ratio. This means it should perform well over time but also be well diversified for market downturns. I plan to rebalance twice a year.
- Automated even more bill payments through bank bill pay.
- Savings – with interest rates rising, I moved my emergency savings to a high yield savings account yielding almost 2%.
2019 financial goals
My 2019 goals are going to focus on two of the same themes as 2018: saving and learning. However my focus will change slightly as I plan a renewed emphasis on paying down student loans.
Student loans are an area where I have not focused recently as I have been more focused on investment returns. I have fairly low student interest rates. With current equity valuations (and lower expected returns going forward), paying down student loans is beginning to look more attractive. However, if a major market correction occurs I will re-evaluate this goal and will likely shift to investing in equities instead.
- Saving and investing
- Contribute the maximum amount to 401k and HSA accounts
- Increase the value of my emergency savings accountPay down additional principal on student loans
- Learning
- Read 10 books with 4 about investing. The first two on my list are Liar’s Poker by Michael Lewis and Black Swan by Nassim Nicholas Taleb.
I’m looking forward to working towards these goals in 2019 as they will bring me closer to financial independence and early retirement. What goals are you working towards in 2019?
