Category: Superannuation

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2020 goals – with an eye on the decade ahead

Photo by cottonbro from Pexels

Much has been written everywhere about the decade that was and the decade  ahead. Ten years seem such a long time to wrap my head around, let alone plan for.

Maybe that is why I am having so much trouble deciding what to focus for this year 2020 only, when this whole decade seems to loom large ahead.

Thinking too far ahead causes me anxiety. I am paralysed instead of energised by all the possibilities. As a result, I tend to avoid thinking really long term as much as possible. I don’t want to set myself up to fail.

Except now that I have discovered FIRE (Financial Independence and Retire Early) concepts, I do think long term about my financial goals. My age has caught up with me anyway. In my late forties, retirement is only years away, not ages and ages away. I really have no choice but to think a bit long term financially.

I hope to transfer this financial long term planning to other areas of my life. And so I decide I should have goals for 2020, but with an eye on the decade ahead as well.

Goals for the decade

I am binge listening to Jillian Johnsrud on her new podcast Everyday Courage. In episode 4, she talks about how we don’t give ourselves enough time to achieve our goals, that we get disappointed and throw in the towel because we did not achieve them in a year. That is me!

She shares a quote attributed to Bill Gates – “People overestimate what they can accomplish in a year and underestimate what they can accomplish in 10 years.”

So for the first time ever, instead of having vague goals for the future, I will nail down three big dreams that excite me.

Drumroll please! My 3 goals for the decade are:

(1) Retire (end of 2026 or mid 2027 ie before I turn 56)

(2) Visit Antartica

(3) Run a marathon

Retire at 55

You will notice that only retiring has a timeline – that is because I already have a plan in place to retire at 55. It is so much easier to automate weekly deductions into retirement accounts than it is to automate daily exercise! 

Knowing that this next decade will signal retirement makes me feel excited and apprehensive at the same time.

Excited? Because I will have free time all the time when I retire, yay! All that sleeping in without any regard for alarm clocks. Staying up late just because I can – no need to get to bed earlyish so I can get up earlyish. Now that is heaven to me 🙂

Apprehensive? It is a HUGE change in lifestyle. What if I can’t get there in the time frame I want (ie within the next 7 years)? What if having all that free time is a drag?

Antartica

Visiting Antartica has been a dream for a long time. There is something about the starkness of the environment, the remoteness, the cold and the wildlife – penguins, in particular, that just ignite my imagination.

It cost A LOT though, so I need to budget for it within my retirement figures. Or visit within the next 7 years while I am still working. Saving up for this expense will give me time to research alternative methods of getting there, if there are any.

Run a marathon

Out of the above 3 goals, running a marathon will be the hardest. Why? Because I don’t like exercising.

But I need to exercise for my health – my cholesterol was the highest it had ever been last year. I have run 10km fun runs before. Running a marathon will be a massive personal challenge. I want a big goal to aim for and get excited about, when I am struggling to get out of bed to run in the mornings.

I also admire the grit and sheer mental strength it takes to complete a marathon.

This is definitely a stretch goal, haha.

So what about 2020?

In episode 9* of Everyday Courage, Jillian chats to David Cain from raptitude.com  They discuss David’s post ‘Go Deeper, Not Wider’ that he wrote in December 2017 (which received 58 000 shares!). It is about a ‘Depth’ year – a year where you don’t start anything new but explore more deeply the stuff you already have.

“No new hobbies, equipment, games, or books are allowed during this year. Instead, you have to find the value in what you already own or what you’ve already started. You improve skills rather than learning new ones. You consume media you’ve already stockpiled instead of acquiring more.”

This really speaks to me. I am someone for whom the thrills of something new always appeals. These days, it may not be new physical stuff but I am endlessly attracted to new ways of thinking, productivity hacks, how to be more efficient etc.  What can I say? I just have a short attention span and get bored easily.

So with Jillian’s and David’s combined wisdom, I want to do my own version of deeper, not wider in 2020.

How will I achieve my goals?

My favourite book of 2019 was James Clear’s Atomic Habits  (affiliate link) – I even wrote a review of it.

Habits is my word for 2020. And this is why – as articulated by James Clear on Twitter:

In 2020, I will build good habits in the areas I want to focus on, to take me through the decade ahead. I want to focus on consistency, not intensity. And I am done with motivation and will power (or lack thereof). I want to embrace the process, not focus on outcomes. In other words, I want to focus on the journey, not the destination.

So what are my 2020 goals?

(1) Exercise and stretch daily

Health is everything. And I would argue, perhaps more important than wealth. Without my health, I will not be able to enjoy my wealth to the fullest. I want to be able to use all that moolah!

My goal is to be consistent this year – run and/or walk everyday and stretch daily. I am notoriously bad at stretching. As a result, I see the osteopath for regular tune ups every 2-3 months. I can save this money if I make the effort to stretch my muscles daily.

I haven’t been motivated to run ever since I completed last year’s Run for the Kids fun run. There is just enough time to start training for this year’s event. The goal is to continue running after the event, through winter. Yuck!

This is where I need to create a new habit … or tell myself I am a runner, therefore I run.

(2) Journal daily

I started this well last year as I desperately needed to find clarity – writing helps me sort through my jumbled thoughts.

But I wasn’t very consistent.

So once again, I will use the lessons learnt in Atomic Habits to be consistent and incorporate it into my morning and night routines.

This is still a goal as living an intentional life is a perpetual goal and I need to be in touch with me to do that. For too many years, I lived a stress filled life and just survived day to day. I never want to go back to that way of life.

(3) Read more

This is not a new hobby.

I’d forgotten how much I enjoyed reading fiction. Since discovering FIRE, I have read mainly personal finance blogs and books.

During my time off after my extended family had gone home on New Year’s Day, I read (and listened) to 6 books, 2 of which were related to personal finance. I was astounded. I have got my reading mojo back!

My goal is to read 20 books this year.

(4) Be more sustainable

I installed solar panels at the end of 2018 and as a consequence, reduced my electricity bill significantly. I paid less than $150 in total in 2019. Some of my colleagues who installed their panels (albeit with slightly larger systems than mine) managed to pay nothing at all ie they produced more electricity than they needed.  So I can still improve in this area.

What I desperately need now is to reduce my water and gas consumption. While this will be good for the planet, it will have financial benefits too. Gas prices have doubled in the last 5 years.

And I will look at reducing my use of plastic, just starting small. For example, not buying any fresh fruit and vegetables wrapped in plastic and use a shampoo bar instead of shampoo and conditioner in plastic bottles.

(5) Declutter

This has defeated me every year. For many years.

Marie Kondo, Joshua Becker (Becoming Minimalist) etc – I just read, agree and then not take any action!

I considered not putting this as my goal this year but I decided that in this year of diving deeper, I will tackle it again. It ties in well with reducing plastic, having less stuff generally. I am pretty good about not introducing new stuff into my house but I can’t seem to part with the stuff I do have which I don’t use.

I will start small just by keeping my kitchen bench clutter free – this will be a huge effort as it is my ‘dumping ground’, haha.

This may be the year to learn how to sell stuff online. Or just donate them.

(6) Financial goals

My main goal is to retire at 55 – I have a 7 year timeline.

In order to achieve this goal, I need to:

(a) Invest $25000 annually into my shares portfolio 

This is a challenge this year as my salary is now reduced due to transitioning to a lower stress role since July 2019.

My focus is to find every bit of extra cash and throw at it. This is important because the majority of my net worth is tied up in my house and superannuation, neither of which I can use to sustain me from 55 to 60.

(b) Maintain salary sacrificing into superannuation (retirement account) until end of financial year in June then reduce the amount

My rationale is that based on existing fund balance, it will grow to the desired amount by the time I can access it at 60 years old, if the fund can maintain a growth rate of 7%. 2019 was an amazing year – not sure 2020 will come anywhere close. So I will review the balance at at the end of June and decide. I do need every spare cent to increase my shares portfolio.

(c) Aim for a savings rate of 50%

My overall savings rate was 40% (based on after tax pay) in 2019. I did not feel deprived in any way so I think I can still do better. And that was with 2 overseas trips.

This year, I will have one trip only –  to visit family in  London and attend a wedding Toronto. My challenge is to find less expensive accommodation especially in London. House sitting is not a good fit personally as I am not great with animals. I use my Qantas points for airfares so airfares will not blow the budget.

I am also hoping my utility bills should reduce as a result of reducing my water and gas consumption. This is part of my overall plan to reduce recurring costs such as home insurance and private health insurance.

I started a vegetable garden last year. The benefits were more than financial – the well being and relaxation from pottering around and watching plants grow then eating the fruits of your labour cannot be overstated. I will attempt to reduce costs this year by learning how to plant with seeds instead of buying seedlings.

And I have started to compost this year – this is an attempt to reduce my waste going to landfill plus I should save some money from not buying as much proprietary potting mixes, organic compost and the like.

And if I am successful in decluttering and learn how to sell stuff online, I just may be able to reach my aim of 50% savings rate. We’ll see.

Final thoughts

Phew! We come to the end, at last.

I will not be tackling the above goals with the same intensity all at once. Instead this year, I will ‘lean in’ to 3 goals every 3 months and as I develop the habits I need to succeed, I will move on to the next 3 goals. Thanks, Jillian – episode 10* of Everyday Courage.

So until the end of March, I will focus on exercising and stretching daily, journaling daily and becoming more sustainable. I will keep you up to date with my progress – it will give me an incentive to track my progress which I wasn’t so good at last year. So you can keep me accountable.

Deciding what to focus on in 2020 has taken most of my January! I am really looking forward to diving deeper into my 2020 with no new hobbies or philosophy.

How about you? Have you set goals for the decade ahead in addition to 2020? 

 

*A note on Everyday Courage podcast – a new episode is released every Monday and at the time of publishing this post, episodes 9 and 10 have not been released. I signed up to get the whole season plus a workbook so I could work through them  over 10 days or so.

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2019 – a year in reflection

I always think nothing much happens in my life.

Work, home and work some more.

I am also not one to set goals or track achievements – I would say I am a drifter though life, more than anything else. And I am contented and satisfied easily so I don’t push through to the next level.

But all that changed in 2019.

I discovered the FIRE movement in mid 2018 – the best thing I learned though wasn’t how to be frugal (that is important too) but to live an intentional life. After all, what is the point of saving and investing if we don’t know what it is all for?

So in January 2019, for the first time in my life I set some goals. I admit I did not do a very good job at tracking them through the year. But strangely, the fact that I made the effort to set some goals was enough to get the ball rolling.

To help me with thinking through all of this, I completed Montana Money Adventure’s Live with Intention series. In particular, answering the following 3 questions gave me clarity – What do you want to BE? What do you want to HAVE? and What do you want to DO? 

To recap, my overarching goals were to stop drifting through life and live with intention and purpose. I wanted to live a life that reflects a healthier me, mentally, physically and financially.

I was very stressed at the time, working in a demanding job with long hours. The priority was to find time each day and week to think and reflect.

So, this is my 2019 – a year in reflection.

I quit my stressful job

Spoiler alert – quitting my stressful job was the single, hands down, most significant ‘event’ in my life in 2019. And the most emotional as I felt I was letting everyone else down. But in the end, I had to choose me over everyone else.

It has been six months since I began another role with the same employer but at another site. This has singularly reduced the stress levels in my life. I am very proud that I finally took action here.

The transition took me longer than I expected. From having no time at all to having time is quite an adjustment. I was conscious of not squandering all this newly acquired free time but was equally conscious of not filling it all up with frenetic activities.

It is a work in progress – this knowing what to do with my time. I look forward to exploring this more in 2020.

I travelled and connected with family and friends

 

Travel is very important to me. It is a time where I am free to be me totally and indulge in what I enjoy most – eating good food, exploring the art and culture of a new environment. But if I am honest, travel has always been an escape from my job, a time where it is difficult for work to contact me. 

Travelling also allows me to reconnect with family and friends overseas. In 2019, this is what I focused on in my travels.

I attended the 60th anniversary of my high school in my hometown and went down memory lane with old school friends. I reconnected via WhatsApp with old boarding school mates whom I hadn’t seen for decades. Precious memories were made with my little niece on her home turf in London. Catching up with elderly relatives in South East Asia was poignant, making me realise that our time on Earth with loved ones is limited, that one day they will not be in our lives anymore.

Amongst visiting old haunts and familiar cities and towns, I managed to squeeze in visiting Prague and Budapest for the first time. I always feel fully alive when I am travelling, particularly to new places.  

Fisherman’s Bastion in Budapest at sunset

I started a veggie garden

In May, I bought a raised wicking garden bed (basically a self watering garden bed) and planted vegetables for the first time. I have always wanted a vegetable garden but ruled it out in the past as there were not any sunny spots in my garden.

When I mentioned it to my friend, she thought outside the square and suggested the front of my unit, which does get some sun exposure. And that is exactly where I situated the raised garden beds. It just goes to show that when we are open to ideas, even wacky ones such as a vegetable garden in FRONT of your house …

Through winter and spring, I harvested snow peas, lettuce, boy choy, carrots, beetroot, broccolini and cauliflower. And in summer, I planted zucchini, cucumber, eggplant, beans, tomatoes and more bok choy.

Besides quitting the stressful job, having this vegetable garden has contributed the most to my mental health. There is just something very satisfying about planting a seedling and watching it grow, then eating the fruit of your labours. The wicking bed made it easier in that I only need to replenish the water reservoir every 7 to 10 days during winter and every 4 to 5 days during summer. So really, the work has been minimal.

Summer vegetables in wicking bed

I fully funded my emergency fund

One of the first things I started doing when I first discovered the Barefoot Investor in 2018 was to build my emergency fund. In November 2018, I raided it to pay up front for solar panels installation. The government rebate (for nearly half the amount) did not arrive until April 2019.

As travelling is important to me, I have always had a Travel Fund and contribute to it weekly no matter what. I may adjust the amount up if travel is imminent or dial it down if there are more urgent priorities. But I always contribute, even if it’s $10 a week. As a consequence, my travel fund was very healthy, compared to my emergency fund.

The most adult thing I did this year was to swap my travel fund to my emergency fund ie I renamed my travel fund. I was getting a bit impatient that it was taking so long to fund 6 months of living expenses. So finally in October, I fully funded the emergency fund. The feeling of security and achievement is indescribable. I feel such a sense of relief that I can readily access this fund should anything untoward happens.

I contributed the maximum to my superannuation

In the financial year from July 2018 to June 2019, I salary sacrificed and contributed the maximum of $25000 (including employer contributions) into my superannuation (retirement account).

Since transitioning to my new role in July 2019, my pay has decreased as I no longer work so many overtime hours. This means that employer contribution to my superannuation has decreased. And if I want to achieve the maximum contribution, I therefore have to contribute more myself. It forced me to reassess whether I could afford to continue salary sacrificing.

My conclusion is that I cannot afford to stop contributing the maximum at the moment. So my take home pay has shrunk significantly as a result. I will reassess this contribution annually as I also need funds to contribute to my investments outside of super.

Savings rate

I started tracking my expenses in March 2018. So 2019 was the first full calendar year that I have been able to calculate an annual savings rate. Because I am lazy and really not a spreadsheet nerd, it is easier for me to calculate my savings rate based on my take home pay instead of gross income. (Knowing at the back of my mind that I have contributed the maximum to my superannuation)

I was aiming for a 50% savings rate but fell short at 40%. I am not too unhappy about this result, seeing that my take home pay is significantly reduced for the second 6 months of the year.

Net worth

Amazingly, my net worth increased by more than my gross annual wage, mainly due to the stellar performance of the stock market.  Investment within superannuation performed very well – not including the $25000 contribution, the return was 20%. My share portfolio outside of superannuation also grew by 19%.

The challenge is to continue to grow these investments in 2020 and beyond.

I now have a solid plan to retire at 55

What started me on the FI path was the realisation that I did not have enough to retire at the traditional age of 65. As I explained here, I now have a 3 phase plan to retire at 55, provided the stock market cooperates and nothing drastic happens in my life.

Having this plan in place gives me security and focus – I can see the light at the end of the tunnel. I just need to maintain my contributions steadfastly and fingers crossed, the stock market will do the rest.

What I didn’t do so well …

While I started the year off with an exercise regime, it soon fell to the wayside after I completed the Run for the Kids race in April. I gave myself some time off and never got back to running again for the rest of the year.

I started walking after work with my friend which was great but there were lots of times when work and family commitments interrupted our rhythm and we went off course.

Then I had a minor health scare after returning from my travels – my cholesterol was high and my liver enzymes were through the roof. I was given 3 months to ‘do something about it’ so this spurred me to get back to a healthy eating regime and walk daily.

Happily, my levels decreased significantly at the next blood test and I am given a reprieve from commencing medication. But I have to maintain a healthy diet and exercise more regularly from now on. This is a major challenge in 2020.

Final thoughts

I made huge improvements to my mental and financial health but did not do so well on my physical health.

My goal of creating time to think and reflect was met partly by my quitting the stressful job – my mental health has improved drastically as a result.

Financially, 2019 was about tracking expenses and getting some annual metrics so I can compare in later years. The increase in net worth was just a really great bonus.

How was your 2019? I would love to hear your wins and trials – please share in the comments below 

 

 

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