After 20+ years of a career, several decades of marriage, and a frenzy of years trying to optimize your finances one ends up with quite a tangle of routines, accounts, and stuff. 80+ hour work weeks don’t leave a lot of time for sorting it out, even if you happen to notice it.
Fortunately, time and mental clarity are one of the great benefits of financial independence (and optional retirement!)
It makes perfect sense then that our theme for this year is:
Each year, we set aside a day in December for our annual review of our financial goals, and our dream-setting dinner. We spend the afternoon going through our spreadsheets checking our numbers, updating our net worth, and checking everything against potential futures. Then, in the evening we have a nice dinner and bottle of wine to discuss our happiness and changes we want to make in our future goals. We also talk about a general theme for the year ahead. It’s a consequential day.
This year? We determined we are exactly where we want to be. We’re enjoying optional retirement and working on what we choose. Our finances are in even better shape than we expected. There are no major shifts to our lifestyle design. It’s pretty incredible.
For the first time in a decade, we don’t feel the need to make any big moves this year. What does that leave?
Time to simplify.
2021 Financial Goals Review
Let me begin by acknowledging I’m late publishing this. We did our review and goal-setting in December of 2021. Part of my new simple life is a bit less structure, and I spent January and February on other projects. That said – financial goal setting and accountability has been a key part of our journey so I wouldn’t drop this section.
Instead of a long drawn out post, I’m going to keep this review simple.
These were our 2021 annual goals:
|Long Term Goal|
|Avoid drawdown of assets||On track|
|2021 Goal #1||$63,600 contribution to tax-advantaged investments||MET|
|2021 Goal #2||$20,000 Brokerage investments||DID NOT MEET ($3600)|
|2021 Goal #3||$12,000 Crypto investments||MET|
|2021 Goal #4||Establish/implement early retirement budget||MET|
We were able to meet our tax-advantaged goals using planned monthly contributions (set and forget) between the beginning of the year and my early retirement in July. Likewise, we made our $12,000 buy-in of cryptocurrency and now are holding with no other plans other than balancing should it become more than 2% of our portfolio.
We are now living on our planned early retirement budget and earning enough through our optional work to avoid any asset drawdown for the second half of the year. We’ll see how it goes in 2022.
Finally, we failed our brokerage investment goal. Badly.
This is our biggest miss since we started setting financial goals 7 years ago. It was always a stretch, but required home improvements derailed us completely. It was fine – we were able to pay for these from our planned contributions instead of our security fund. We are fortunate to be in a solid financial position where these things are minor adjustments instead of massive challenges.
Overall, it was a great year. After all – I went FIOR (financial independence optional retirement) and we still made financial progress. I’ll take that any year!
Simplify: Our 2022 Financial Goals
Our longterm goal remains the same: avoid drawing down our saved assets. This isn’t a necessary goal because we have enough saved and a healthy safety margin. However – if we succeed it gives us further options in retirement, and it helps keep my financial fears voice quiet.
So far, we’ve continued to engage in things we enjoy that pay us a little bit of money (about 25% of our previous income). If we choose activities that don’t provide income we can adjust easily. For now though, our passions and (a little) pay are aligned. Not a bad way to live!
That, plus our desire to simplify lead to the following annual goals:
Goal 1 – Tax advantaged contributions: $24,000
We’ll use our current income choices to maximize contributions to the most flexible accounts. Contributing to these makes sense when possible, even if we are withdrawing from elsewhere because of the changes in tax burden and our income. You can read more about this concept in Millionaire Educator’s Free Money posts.
TFI (my partner) is still employed by a school district and has access to a 457b – my favorite retirement account. Our goal is to contribute $18,000 there through averaged monthly contributions.
I’m earning income in different ways, but it will allow me to contribute to a Roth IRA (my second favorite account type). For the first time in a while, we’ll be able to do this easily without having to follow the backdoor Roth steps!
Goal 2 – 100% Debt Freedom
I completely understand the concept of good debt and bad debt. Not all debt is evil.
We’ve cleared almost all of our debt. The only debt left definitely falls in the “good debt” category by most standards. We share, with another couple we trust, a mortgage on a second home. We rent, and use, this second home. It virtually pays for itself.
Yet, it’s also a vestige of the time when our financial lives were out of control. I wrote about it in the Dream Purchase that Woke me to Reality. It’s what spurred my search for financial independence.
Also, as a child of poverty whose family was deeply impacted by debt, the idea of going fully zero debt is appealing. This is another area where we can simplify and improve our mental comfort. That’s a win!
As a result – our goal this year is to sell the shared property. This won’t significantly impact our net worth (since we include the investment property there at a reduced valuation.) It probably even lowers our long term upside a bit given how active the rental has been recently.
On the flipside, it significantly reduces our financial risk. We don’t have to worry about lawsuits, a rental market downturn, or an unlikely (but possible) falling out with our co-owners. Our required monthly expenses drop dramatically. Simple choice.
Goal 3 – Consolidate Financial Accounts
While the second home is an example of complexity from the financial disaster portion of our lives, there are plenty of examples even after we started pursuing FI.
I explored different investment options, chased bank account bonuses, and utilized work specific accounts that required use of specific financial platforms. The result? Checking our net worth or managing investments takes almost a dozen logins! I recently did my taxes and the number of 1099 entries was out of control.
My two preferred investment platforms are Vanguard and Fidelity. Our goal is to move everything possible to these two platforms. Of course, this will only be done when it makes sense. We’ll have to watch tax implications as well as ensuring same (or better) products would be available from the move.
A clear example? My HSA. That will be my first step, but we’ll review all accounts and make a plan for consolidation through withdrawals or transfers that minimize tax impact.
We have a number of open bank accounts that can be consolidated and closed as well. Fortunately, banks have gotten much better about allowing multiple accounts to allow us to have purposeful savings buckets.
It may not always be financially optimal, but simplifying is a form of time optimization. Lowering your mental burden and maximizing how you spend your time is a huge benefit of financial independence.
That’s it! Only three goals from a couple that has obsessively goal set in recent years?
Yes! It goes with our desire to simplify, and one of my favorite quotes: You win the game so you can stop playing the game.
Simplify – EducatorFI
As you may have noticed, I haven’t been great about keeping the site active lately. When I started EducatorFi, it was a passion project and learning experience for me personally – never a financial goal. Writing, designing, and publishing was a great distraction from a professional situation that was consuming.
The site’s growth was fed through our frenzied financial actions and my constant consumption of financial content. All of those have been significantly reduced. Suddenly, a project of love that was powered by constant attention and will, took a back burner. The result?
I’ve considered stepping away entirely, or finding someone else to take over the site.
Yet, I’m still honored by the tens of thousands of readers I get monthly, and grateful for the money the site generates for charity. Over $3000 was given to charity last year – thank you!
I also get frequent messages from readers about how something on the site helped them. I’ve had great conversations with educators from around the world. This aligns with my current passion of helping support educators in professional growth and leadership.
Therefore – I’m recommitting to EducatorFI with some changes. These changes are designed to, yes, simplify!
- Reduced (but regular) posting schedule – Over the past year, I’ve posted sporadically. Sometimes several posts in a month, other times going more than a month without a new or updated post. This isn’t systematic and is probably frustrating to readers. It certainly is to me.
Going forward, I will post an article on the first Monday of each month. Every month. From time to time there may be an article or updated post in between, but you can count on a post monthly.
- Elimination of email list – When I started the site, gathering readers’ emails was something “you should be doing.” So I did!
I’ve come to believe that the constant gathering of individual user information is one of the evils of our time. Our personal information is gathered, used for targeting us with marketing, and ripe for identity theft of all types. It clutters up our world and doesn’t add much.
I’ve gathered thousands of emails. People signed up for free books, helpful documents, or to follow my content. I don’t do anything with these and haven’t found an email strategy that I believe adds value to you as readers. The thought of using your information to market a product or sell something to you is horrifying to me.
So, the list is gone. At the end of March, I intend to delete the entire list and scrub any of your information that I’ve gathered. Simple!
This will also simplify the site and how people access some of the content. No more need to sign up for a pointless email list to get that information or document you really want. I’m trying to help readers, not frustrate or monetize them.
I’ll still actively respond to emails from readers – it’s one of my favorite parts of this work.
It will take me a bit to remove the sign-ups across the site, but look for these to disappear over time.
This decision feels great.
- Focus content – I’ll still continue with my three main areas of money, career, and solid decision-making. These have driven our personal progress and are ideal for professional educators looking to take control of their finances.
Early on, especially when I was following a weekly publication schedule, I published a lot of different things. I chased small ideas, searched for what connected with readers, and updated more often on my personal financial situation.
Now, I chase fewer financial angles. There are some clear ones that you all read and ask for more information on. I’ve also found that a lot of my professional content is highly read – and it’s consistent with what I’m spending my time on now.
To that end, I’m going to start eliminating the older mediocre content. I’ll clean up and improve the most read pieces. I’ll continue to publish my financial journey, but at a much-reduced rate. You’ll see more focus on the professional content.
I hope this resonates with you – feel free to let me know if there is anything else you’d like to see more of!
Oh – and I’ll continue to publish the Educator on FIOR interviews whenever one comes in. I know those resonate with individual readers who can find examples that work for them!
In the end, these shifts will make the site more regularly active and more useful for readers. Win! I can’t wait.
Look for these changes to take place over the coming month.
2021 was a year of big changes. I shifted to optional retirement and we started to figure out our post-FI life. Things are great!
In 2022, we’re going to focus on the opportunities financial independence provides by focusing on reducing complexity. You’ll see these changes in our financial goals and changes to EducatorFI.com.
This quote (from Lewis Hamilton) summarizes how we’re approaching this year:
“Everyone has complicated lives, but the more you can simplify it and make it work for you, the better it is going to be.”