At the start of 2018 I set a variety of goals for myself and posted quarterly updates on my progress. The rationale was that making my goals and progress public would keep me both motivated and accountable.
This did not turn out to be the case. I ended up failing to achieve almost all of my goals.
After some time to reflect, I believe this is because my goals were a bit too aspirational. I bit off more than I could chew. Some of the goals were just too difficult to achieve and some goals were more or less mutually exclusive. Looking back at my goal setting process in 2018 I realize that I was setting goals that were too ambitious, with the hope (dream?) that somehow writing my goals down would help them to manifest. Clearly this was not the case.
So, while I have many faults, one thing I can say about myself is that I learn from my mistakes, and I’ve definitely learned from my poor goal setting in 2018. My goals for 2019 are more achievable, better aligned with how I’d like my life to look, and better coordinated.
So without further ado, here are my goals for 2019:
Let’s break down the goals:
Financial
Goal 1: Generate passive income of more than $85,000 for the year
Last year the goal was to hit $70k in passive income (which we BARELY missed), so this is a 21.4% increase over last year. While that sounds like a huge increase, I think it’s achievable for a few reasons.
First, we have about $500k in cash. Putting this cash to work at a 3% rate of return would get us an additional $15k in income by itself. I don’t expect that we’ll be able to put all of that cash to work, but hopefully we will be able to put at least some of that cash to work.
Second, I expect to get a 6-7% return from organic growth – rental increases and dividend raises.
Third, our rental income was absolutely miserable last year. One of our properties was vacant for a few months AND needed thousands of dollars in repairs and upgrades to make it rentable. We’ve not experienced poor performance like that since we bought our first rental properties in 2012. A reversion to the mean would give us somewhere between $3k-$5k by itself.
Fourth, I expect that we’ll continue to save and invest money that I earn. If we are able to save $50k and receive a reasonable 3% yield we’ll pick up another $1,500 in passive income.
Q1 goal: $21,000
Q1 actual: $20,834
For Q1 we are pretty much on track. We missed our Q1 goal by .8%, which is pretty much a rounding error.
Status: On track
Goal 2: Net worth of $5.64M
Our long-term goal is to grow our net worth by 8% per year with the plan for me to retire (or at least be financially independent) when our net worth hits $10M. We started 2019 with a net worth of $5.22, which means we should hit our $10M goal in just under 9 years.
To create the quarterly “check points” I just assumed a simple (non-compounding) 2% growth per quarter.
Q1 goal: $5.32M
Q1 actual: $5.64M
Well, this is a welcome surprise. By the end of the first quarter we’ve already hit our net worth goal for the year! A combination of a healthy stock market and solid income at work has allowed our net worth to grow by 8% in just 3 months.
The big question is whether or not we’ll be able to maintain this net worth at the end of 2019.
Status: On track
Goal 3: Investigate additional real estate investment(s)
This is a goal I’d set for 2018 and completely failed on. Frankly, this should take very little work – I just need to do some research into the crowdsourced real estate options and decide if I want to go down that path or if I want to buy some more single family homes as rentals.
Q1 goal: Start research
Q1 actual: Research complete, rental properties identified
I’ve done my initial research and I’ve decide that, at this time, I’m going to stay away from the crowdsourced real estate investments. The reality is that the business models have not yet been proven. All of these companies (RealtyShares, FundRise, etc.) were created after the Great Recession. None of them have been tested in adverse conditions.
In addition, I don’t understand why a solid real estate investor with a proven track record and a solid identified investment would go the crowdsourced route. That sort of investor would either pursue “traditional” funding through a bank or through a private investor. As far as I can tell, going the crowdsourced route means the investor is giving up at least a portion of the potential upside of their investment. That makes no sense to me. The whole point of borrowing to purchase real estate is that you get to capture all of the upside, while still having the ability to walk away from the loan (and property) if it comes to that.
The reality is that it appears to me that the people (and deals) getting funded on crowdsourced real estate sites are not “first tier” investments, but people or projects that can’t get funding the traditional way.
So, after doing quite a bit of research over the course of Q1, I’ve decided that we’ll stick to the traditional real estate investment route and purchase some additional properties.
We’ve identified 2 properties in Houston, TX and I hope to close of them by the end of April.
Status: On track
Work
Goal 4: Income > $300,000
This is a reasonable goal, as our income (excluding the single large commission check I’ve received every 5 years) averages about $300,000/year. So, I just need to have an average year in 2019 to achieve this goal.
I’ve set the quarterly goals to be simple linear progression – I plan to earn 25% of my yearly income each quarter.
Q1 goal: $75,000
Q1 actual: $96,392
The first quarter has been great so far. I’m well ahead of the pace needed to hit $300k for the year. Unfortunately, the summer can be a bit slow from a commission standpoint (people are on vacation and less likely to start new projects), so it’s probably good that I’m getting a fast start.
Status: On track
Personal
Goal 5: Read 1.5 books per month
My goal in 2018 was to read 1 book per month, and I failed pretty miserably (I only read 4 books all year). Given that failure, why did I INCREASE my goal for 2019?
Simple – I read some great books at the end of 2018 and I remembered just how much I love sitting down and getting into a really good book. For the last few years I’ve kept a list on my phone of all the books that I wanted to read. Anytime I got a book recommendation from a friend I’d add it to the list. If I stumbled across a really positive book review I’d add that book to my list.
Unfortunately, I was adding books to my list but never reading any of them. So in early April I pulled up the webpage for our local library and went through the 65 books on my list to see which were available at the library. I was pleasantly surprised to learn that just over 40 of them could be checked out through the local library cooperative. I added all of those to a watch list at the library (making it dead easy to request any of the books).
So I put some books on hold, picked them up, put them on my nightstand, and something magical happened. At night, after the kids have been bathed/read to/put to bed, after the dishes are done, and after the mail has been sorted, I suddenly have a desire to sit down for a few hours and read rather than watch a movie or play on my iPad.
Looking at the list of books, about 80% of them are non-fiction (mostly books about finance/investing), and 20% are fiction or stories inspired by real life events.
How am I doing so far?
Q1 goal: 5
Q1 actual: 0
Ok, so the grand total of 0 books read in Q1 doesn’t exactly inspire confidence, but I didn’t start working through my “to read” list until April, and I’ve already read 2 books and I’m partially through 2 more.
This is a goal I’m absolutely convinced I will hit this year.
Status: NOT on track
Goal 6: Perform a muscle up
If you don’t know what a muscle up is, it’s basically a gymnastics movement that’s a combination of a pull-up with a dip. They can be performed on either a bar or using gymnastics rings. Here’s what a muscle up on a bar looks like:
And here’s what a muscle up on the rings look like:
Both of the above qualify as “strict” muscle ups. That is, there’s no body swing (or kip) used. Here’s an example of a kipping muscle up:
As you can probably guess, the kipping pull-ups are much easier than strict muscle ups.
For this goal I’m going to count any of the above muscle ups as a success.
I selected this goal because it’s a bodyweight exercise (which I’m generally good at because I’m on the skinny side), it looks impressive, and doing muscle ups is a great workout. In addition, it coordinates well with my goal of getting down to 10% body fat by the end of the year (lower body fat makes bodyweight exercises easier).
I expect that achieving this goal will require both strength work as well as skill work. You obviously need quite a bit of strength to perform a strict muscle up, whereas the kipping muscle up is much more about timing, coordination, and skill.
My plan to achieve this goal is to work on strength for the first half of the year, then start adding weekly muscle-up practice sessions for the second half of the year.
Q1 goal: Complete a pullup with bodyweight + 45 lbs
Q1 actual: Complete
The first step was easier than I thought it would be. I ended up being able to do 3 pull-ups with 45 lbs tied around my waist.
Status: On track
Goal 7: Do yoga once per week
Most of my workouts are either weightlifting or some sort of weightlifting/cardio combo (Crossfit-style workouts). While these workouts have kept me in pretty good shape, I still have some areas I need to work on.
Over the last 3-6 months I’ve been trying to get some more variety into my workout routine, so in December I hit a few yoga classes at our gym. The results were eye opening for me. After just 1 class it was clear to me that I have some major deficiencies in both flexibility and balance. I was clearly one of the least flexible people in the class, and any pose that required us to balance on one foot was very difficult for me.
To address these problems I’m going to try to get to a yoga class at least once a week, starting in Q2.
Goal 8: Body fat of 10%
As I mentioned above, I’ve been pretty thin my whole life. When I was on the wrestling team as a freshman in high school I was 6’0″ and I wrested in the 119 lb weight class. Now I’m 6’4″ and bounce around between 185-190 lbs.
While I’m thin, I’m not super lean. Mostly that’s because for the last ~30 years of my life I’ve been trying to GAIN weight. It’s amazing what weightlifting combined with constantly easting past the point of being full can do – I’m 65 lbs heaver than I was in high school.
However, this constant push to gain weight means I’ve never really “dieted” or tried to get really lean. Last year I had the goal of getting down to 10% body fat, but I realized it was at odds with my strength goals so I effectively gave up on this goal and concentrated on the strength goal.
I started the year at 12.7% body fat, so I only need to drop 2.7% of my bodyweight in fat. Given a weight of 185 lbs, that’s almost exactly 5 lbs of fat.
In 2019 I’m going to really work on eating lots of vegetable and only eating until I’m full. Given my body type and metabolism, and combined with a bit more “cardio”, I suspect this will result in me dropping enough fat to get down to 10% by the end of the year.
Q1 goal: 12%
Q1 actual: 12.9%
Hmmmm. My body fat % went the wrong way in Q1, but in my defense, I really only started my improved diet in April. I suspect that I’ll be on track by the end of Q2.
Status: NOT on track
Goal 9: Row 2,000 meters in 7 minutes and 20 seconds
In my opinion, rowing is the most awesome/awful cardio in the world. It works pretty much every muscle in your body, and it does so with no impact on your joints. I have a Concept 2, Model D, which uses a fan to provide resistance. This means that the harder you row, the more resistance you get. This makes the rowing machine perfect for sprints and interval work.
The Concept 2 Model D
Because rowing is such a good workout, and because it’s an exercise that fits well with my body type (I’m 6’4″, and being tall is a big advantage in rowing/crew), I’ve decided that I’m going to spend more time on the rowing machine this year. Of course, “more time” isn’t quantifiable, and I want to row with a specific but achievable goal in mind, so I’ve decided that I’m going to try to knock 20 seconds off my 2k rowing time (the 2k is the “standard” test for rowing).
I haven’t done a 2k time trial in a while, and my previous best was 7:47. That time is ok, but nothing special. My goal is to knock 27 seconds off that time and get down to 7:20 (with the possible goal of getting to 7:00 in 2020).
I like this goal because it dovetails nicely with some of the other physical goals (reducing body fat and being able to perform a muscle up).
Q1 goal: 7:38
Q1 actual: 7:35
I tried to hit the rowing machine 1-2x/week in Q1 either as part of or in addition to my other workouts. I did a variety of lengths – some sprints, some longer distances, some as part of a Crossfit style workout. I then did a single 2k row at the end of Q1 and was pleasantly surprised to have knocked a full 12 seconds off my 2018 best.
Status: On track
Blog goals
Goal 10: Post 1.5x/week
In 2018 I’d set the goal of posting 2x/week and I didn’t even get close to achieving that goal. I just don’t have the time to write 2 quality blog posts per week.
In addition, my inspiration seems to come in waves. I’ll go through a period where I’m getting lots of good ideas (usually from conversations with clients or due to something I’ve read). I tend to work on lots of different articles at once (right now I have something like 30 articles in some stage of being written, from just a title to an outline to nearly done), but I don’t always do a good job of pushing any given article all the way to being complete.
So, my goal for 2019 is to work harder on staying motivated and carving out 30-60 minutes per day to work on an article. If I can do that, I think it’s reasonable to be able to publish 6 interesting articles per month.
Q1 goal: 18 articles
Q1 actual: 8 article
Well, the year isn’t off to a very good start, but I’m pretty confident I can get back on track for the rest of the year.
Status: NOT on track
Conclusion
That’s a total of 10 goals that I think are achievable, measurable, and interesting (at least to me). Last year my goals were more aspirational than achievable, and many of them were mutually exclusive. I believe my goals for 2019 are better coordinated – losing body fat will make it easier to do a muscle up, finding a real estate investment for some of our cash will make it easier to achieve our passive income goal, etc.
Looking at the list, 5 of the 10 goals are personal goals, 3 are financial, while I only have 1 work goal and zero family goals. The reason for this is simple – I want my goals to be quantifiable, and I had a hard time setting quantifiable goals in these other areas.
I certainly have other work goals (and a number of family goals), but they don’t lend themselves to being tracked and measured (how do I quantify trying to be more attentive when I’m with my kids)?
So, for now, I’m focusing on the goals that can be tracked.
I agree totally with you about real estate crowdfunding. When numerous of these sites started popping up, I wondered why any seasoned successful real estate developer would have problems getting wealthy seasoned investor close friends to go into a good project with them. Like you, I suspect the offered projects on these crowd funding site are from either inexperienced/unsuccessfulI developers or the projects are not that great. I don’t plan to invest in any of these platforms at this time. I avoided investing in Peer to Peer lending and was waiting to see some history with them. Then I noticed all the bloggers who jumped into Peer to Peer lending were gradually getting out of it for verious reasons. I have a small group of trusted local friends I invest in real estate with and will continue to do so.
Frankly, I’m a bit surprised that so many financial bloggers have leaned so heavily into real estate crowdsourcing. I’m sure that many of these investments have turned out well, but that’s what you’d expect in a record-breaking bull market combined with one of the strongest job markets…ever.
The question is what happens to these investments (and these companies) when conditions worsen. The reality is that nobody knows. I suspect many of the investments and companies will fail.
The obviously follow-up question is why would an investor take the chance on these crowdsourced investments. They would make sense if the risk/rewand ratio was attractive, but since there’s no real way to measure the risk, there’s no way to determine the risk/reward ratio.
My advice to anybody who will listen – stay away from ANY investments (real estate, equity, debt, etc.) that hasn’t proven itself through at least one full market cycle.
Thanks for this blog. I really appreciate the transparency regarding finances and goals. I am a professional with a high income and have similar goals and have focused my retirement plan on funding it with passive income from real estate and a dividend portfolio.
I have a few specific questions for you:
1. Dividend Stock Portfolio – Would you be willing post your full list of individual stocks you have in your portfolio including share amounts? You have some listed in other reports but it would be helpful to see the full list on one post. As I am putting together my dividend portfolio, I like the see what other successful people have done to see if I missed anything.
2. Stock Picking Strategy – What is your strategy when picking individual stocks to hold long term (e.g, focus on yield, growth, etc.)
3. Stock Sector Allocation – Do you do do sector allocation on your stock portfolio? I like to do this as I like diversification.
4. Crowdfunding vs REITS – I agree with you on the crowdfunding. I would rather own the real estate directly than do crowdfunding. I am more focused on multi-family properties such as 4 plexes as I have owned SFH’s and having a 4-plex is less headache and my efforts are more concentrated. I do find that REITs help me to allocate part of my portfolio more with real estate that I cannot go and buy directly such as shopping centers, medical offices, etc.
5. P2P Lending – Have you thought about P2P lending? I have done some P2P lending with Lending Club and like it better than Prosper. I do find that Lending Club does take time in that I manually select the loans with criteria I have developed. There are hits and misses but overall I am getting a 16% return on my money so far.
6. Alternative Investments – Have you thought about buying any cryptocurrency? There is just too much money being invested into the Blockchain and cryptocurrency, tokens, etc. to ignore that we are moving to more of a cashless society. China is a good example of this with the almost exclusive use of WeChat. Also, what about Gold, Silver, and other precious metals? I like to have some Gold and Silver ETFs in my portfolio as a small percentage as a hedge.
Will be good getting your opinion.
Thanks.
Whew – there’s a lot to unpack in your comment. First, thanks for taking the time to leave such an in-depth comment. It’s awesome that a reader values my opinion enough to ask about a variety of topics. Let’s dig in:
1. Dividend stock portfolio – publishing my portfolio is a great idea. In fact, I’ve spent a few hours yesterday and today putting this together and I think I finally have it working. I am now publishing the contents of our brokerage accounts on a permanent page. You can find the page here or by going to Menu->About->The Money Commando Portfolio. The plan is to add our 401k/IRAs in the future, but those are a lot less “interesting” (they are entirely index funds).
2. Stock Picking Strategy – I try to strike a balance between growth and income. I could consider my investing style to be moderately conservative. That is while we have the vast majority of our investments in equities, the individual companies we are invested in are fairly conservative blue-chip companies. I tend to prefer companies that pay a dividend, as that’s one signal to me that the company has been successful enough that they are able to return real hard cash to their owners. I stay away from more speculative investments that are losing money. For example, I would never touch Netflix, Lyft, or other companies that are losing money hand over fist.
3. Stock Sector Allocation – to be honest, I pay this absolutely no attention. I don’t track what sectors our investments are categorized as, and I don’t worry if we are under or over allocated to any given area.
4. Crowdfunding vs. REITs – In addition to everything else you listed, another huge advantage of individual ownership of real estate is that you get to participate in all of the tax benefits of real estate. For example, we’ve owned rental properties since 2012 and we’ve enjoyed significant cash flow over the last 7 years, but I’ve yet to pay a single penny of taxes on our real estate income.
5. P2P Lending – I’ve largely stayed away from P2P lending for a few reasons. First, I don’t really like owning debt. The problem with lending money at, say, 10% interest is that the most you’ll ever make on the deal is 10% interest. The worst case is that the person defaults on the loan and you lose everything. This is in contrast to equity, where the downside is still the same (losing your entire investment), but the upside is unlimited. The question of course is how likely each scenario is, and the problem is that it’s impossible to calculate the possibility of loss in P2P lending because that business, like crowdfunded real estate, has not gone through a full business cycle. Given that these are all non-recourse loans, there’s really no incentive for somebody to repay the loan if/when the economy softens. I suspect that default rates in P2P lending will skyrocket during the next recession.
6. Alternative Investments – I’ve thought a lot about Bitcoin. So much so, in fact, that I did a blog post about it last year. The short answer is that I think that “investing” in Bitcoin is stupid. The underlying technology (blockchain) is pretty interesting and I predict it will have lots of great uses. But the individual implementations that everybody is excited about (Bitcoin, Etherium, etc.) are useless as investments. Frankly, I feel similarly but less strongly about gold and silver. At least the precious metals have legitimate industrial uses. The same can not be said for cryptocurrencies.
Hi – I’m reading your blog but playing catch-up, I’m back in mid 2016 and working forwards. Interesting reading, I’m 30 (going on 31 eek) so reading your blog is like looking into a crystal ball and seeing what might be achievable if I manage to win at life 🙂
On the flexibility goal – are you stetching after every workout? If not, that could be a way to gradually improve your flexibility. After every workout I stretch the relevant muscle group (e.g. legs, abs, upper body etc… and then hit the sauna to unwind and relax).
On the body at % goal – I’d also advocate drinking plenty of water (2 litres + a day minimum). I think that some scientific studies have shown this can help with shedding weight. When are you eating, how many meals a day and what’s the gap between (1) the last food and going to do sleep and (2) the last food and your first food the next day? How many hours a night are you sleeping and what’s the quality of the sleep? When I’ve been at my leanest the, seemingly, passive state of sleep has always played a big role. You have more physical and mental energy for your workout, your hunger hormones are kept in check, it can help to lower cortisol (reducing fat storage) and your body is inclined to use your fat as an energy source whilst you are a sleep.
Rowing goal – rather you than me! Definitely an awful(ly good) form of cardio. Back to back 1:45 500m splits would be a good goal to hit. I’ve always been more of a pleasure rower preferring say 10k holding the 500m split below 2:00 but allowing myself a quick 20-30s water break every 1k.
On quantification of goals – I’m not sure what the other work / family goals are so won’t speculate. On the example you give, can you create a framework to quantify attentiveness, nothing elaborate e.g. a few simple questions following an interaction would do the trick such as ‘was I present in the interaction ( i.e. not distracted and thinking about other things), can I recall details of the interaction? Etc… I think if you ask questions that have yes / no answers that should make the scoring and quantification of your progress with such goals easier to track.
HH
HH,
Thanks for the in-depth response. That’s cool that you’re reading my blog chronologically, with the goal of using some of my progress to predict your future.
Flexibility – I don’t stretch after every workout, or even after most of them. The problem is that I only have about an hour each day to work out, and I try to use that time lifting weights and getting in some cardio/metabolic conditioning. However, I do try to do my weightlifting through a complete range of motion (for example, on squats I go well below parallel). In fact, there’s only one area where a lack of flexibility actually hinders the performance of an exercise, and that’s my shoulder mobility when doing overhead squats and/or snatches. So, for now I’m working on doing shoulder stretches 2-3x/week and performing overhead squats or snatches at least once a week, and this has been helping me.
Body fat % – the good news is that I do get plenty of sleep. I usually sleep 7-8 hours a night, and I haven’t set an alarm in months. I tend to go to sleep around 9:30 – 10 pm each night and wake up somewhere between 5 and 5:30 every morning. I’m guessing by your meal timing questions you’re asking about (or implying) intermittent fasting, which is something I’ve gotten interested in over the last month or two (although more for the health benefits than body fat reasons). I tend to be done eating at 6:30 am and we usually have breakfast around 7:30 am the next morning.
Rowing – I both love and hate the rowing machine. It’s great because I don’t find that it interferes with my other workouts in the same way that running does (which often leaves me with sore muscles and/or joints). I just rowed a 5k this morning in 19:52, and using some rowing pace converters online this projects to a 7:30 2k row, so I think I’m on pace.