1. Pass CFA Level 1 Exam in June 2009.
2. Increase my net worth by S$150k this year.
3. Lose 8kg of (hopefully mostly) fat. 

“What are your New Year resolutions?”

Probably one of the most frequently asked questions between Dec 31 and Jan 15, year after year after year after year.

Which leads me to my next question to you, dear reader:

Can you name one friend, just ONE friend, who has managed to achieve what he/she was set to do in the beginning of 2008?

Because I cannot name one.

I heard many beautiful, grand, noble resolutions in January 2008. Hearing them in 2008, it was almost as if by now, in 2009, I would be surrounded almost exclusively by slim, trilingual, very fit, healthy, and not to mention wealthy friends.

Fast forward 12 months, to January 1, 2009. What did I get? Still the same bunch of friends. Still not reaching their ideal weight. Still not speaking the foreign language. Still so far away from their million-dollar targets. Still having credit card debts. (In case you’re wondering, I still love you, friends.)

Pot, kettle. Kettle, pot.

And let’s not do the pot calling kettle black thing. Did you achieve at least one thing that you planned to achieve in the beginning of 2008?

If you did, from the bottom of my heart, I salute you. Because I cannot name even one.

Here are some of my last year’s resolutions:

1. Bring down my body fat percentage to 15% — nope, went down to 18%, now hovering around 19% again.
2. Being able to do 100 pushups, 100 situps, and 100 squats – nope, except for the last one (the squats).
3. Read 50 books – nope, stopped at 30+.
4. Create a passive income stream of at least S$500/month – nope, business still not earning close to that.
5. Learn to write and read 500 Mandarin characters – nope, abandoned entirely for my CFA preparation.

And the horrible thing about this is that even a resolution breaker like me is already ahead compared to most of my friends. Because at least I still remember what the resolutions I broke are. Most people I ask don’t even remember!

Schmesolutions

Resolutions, schmesolutions. What’s the point of having New Year resolutions, then? 

I say not much.

Not when for most of us–at least for most people I know, including me–”New Year resolution” really means “Something I wish will happen this year, somehow, without any particular effort on my part”. 

Not when we don’t actually stick to it for the whole year, which is very easy if we don’t have any way to know how well (or badly) we’re doing.

Not when we pick resolutions that don’t really matter to us (if you say you want to lose 10kg but you don’t do anything about it for the whole year, let’s face it: losing 10kg doesn’t matter that much to you.)

Not when the end point of the resolution is so far from where we are right now that we have no idea whatsoever how to get from here to there.

Might as well don’t have any resolutions. At least we don’t have anything to feel bad about in January 2010.

Meta-Resolutions

Since I want to feel good in January 2010, here are my meta-resolutions for 2009:

1. I shall come up with no more than 3 SMART resolutions, only in matters that are REALLY important for me. Just 3, and no more.
2. I shall do a monthly review of those resolutions, on the 8th of every month.
3. I shall adjust the goals and approaches as necessary as I learn more about those goals. But I shall not break them.

The New Year resolutions themselves are in another post, coming up on the 8th of January. Meanwhile… Happy New Year!

(Images courtesy of Mimi Kat @ flickr and It’sGreg @ flickr in the order of appearance.)

The job

Whoah. What a year. The job cuts are coming, and seriously, nobody is safe. NOBODY is safe.

I thought “headcount reduction” was something that would happen to other teams, but not mine. My team handles a critical business function, and we have been doing really well despite the economy situation. Why let go anybody from such a team, right? 

Wrong. No such luck.

Last week, my peer was let go on the spot. I felt really sorry for him, especially since his wife was on her way to getting retrenched too, but at the same time I’d be lying if I say I wasn’t relieved that it wasn’t me. 

That made me add one important item to the Roadmap: do everything in my power to keep my job for now! This is important. 

The emergency fund

I’m quite happy to find out that I was able to reach my February 2009 target of S$80k early. Because of this, I’m raising my target to S$110k by February. 

The (non-existent) bonus & raise

With the number of jobs cuts happening in the market right now, I have given up my last sliver of hope of getting any salary increment or bonus for this year. Whatever I get, if any, will be a nice (and very welcome) extra.

The business

Is going slow, unfortunately. Most of my energy is spent navigating the storm in the workplace.

The wealth management

I cashed out all of my mutual funds, thereby realizing the paper loss and possibly missing the market bounce, if any. I believe that our current situation is a deep systemic problem and it’ll take more than just a few months to recover from. 

A nice extra is that I can shop around for lower commissions. My previous financial planner insisted on charging higher commission because of the advisory services, but look where it got me now. I might as well manage it myself, at least I know that it is my fault. 

I am looking into options as a strategic investment. Also I have found a place to put my cash that gives a reasonable interest rate, compared to other similar alternatives. 

The path to CFA Charter

As you must have seen, this blog has become a lot more CFA-ish recently. My study is going well and I am confident I will pass the exam in June 2009. 

Discussion with other would-be millionaires

It’s REALLY HARD to find a REAL millionaire who will have enough time, energy, and willingness to spend them for an extended discussion with a bunch of millionaire wannabes (like me).

I certainly don’t mean any disrespect when I say that any discussion with other wannabes like me is really just the blind leading the blind. It is not arrogance, it is fact when I say I can’t see how someone who has been at it for 10 years and still not being a millionaire can guide me in any way.

The December Roadmap

And finally, this is the updated roadmap:

IT WAS a trip around the world many dream about but few accomplish.

 

But foreign-exchange trader Grace Cheng and her husband did it – with a twist.

 

“We achieved our dream of travelling the world without missing a single day of work,” said the National University of Singapore marine-biology graduate, who has been trading currencies online for five years.

 

While travelling, she could manage her New York-based finance site, DailyMarkets.com, thanks to the Internet.

 

Cheng, 28, a Singaporean, and her Spanish husband, Mr Pedro Pla, 27, spent close to a year – from September last year to August this year – touring five continents and 14 countries.

THAT is what I’ve always wanted to do. Man, how awesome is that? Grace Cheng rocks. Read more about their travel here.

If we’re talking about living a good, comfortable life, sure, past a certain amount, it’s not about how much money you make, but more about what you do with that money, and managing your expectation. 

But if we’re talking about becoming a millionaire, then it’s a whole another discussion altogether. This whole “it’s not about how much money you make” thing just doesn’t cut it anymore when what we’re talking about is becoming a millionaire.

Becoming a millionaire means that we’re dealing with a hard, objectively measurable number, and with it comes the assumption that we’re talking about becoming a millionaire rather soon(ish).

Sure, we’ve all heard about personal finance authors doing the “save X% of your income for 40 years invested at Y%” thing. Hey, given 40 years, it doesn’t take a Warren Buffett to be a millionaire. And in 40 years, 1 million dollars will worth a lot less. (Try plugging in the value of 1 million in 1968 and see how much it’s worth today.) 

But if what we’re talking about is becoming a millionaire and retire in your 40s or 50s, this whole “what you earn doesn’t matter” bit is just wrong. Especially if you’re a 30-something like me, and only have about a decade or so to reach the status. 

It’s like this: if what you want to have is a nice, pleasant drive, what car you have probably doesn’t really matter as long as it’s decent, clean, well-maintained… whatever.

But if you’re racing to a defined finish line, saying “what you earn doesn’t matter, what matters is what you do with it” is like saying that in a race, it doesn’t matter whether you’re driving a Renault 4 or a Dodge Viper, because, after all, if the Dodge Viper is running with 3 flat tires, the Renault 4 will still do better… right? (If it sounds absurd and silly, it’s because it is.)

Let’s put it this way: if you are smart with your money and personal finance, making double of what you make now will bring you there twice as fast. As simple as that. And you don’t become suddenly stupid with your money just because your income doubles, correct?

(Image courtesy of Jeff Belmonte @ flickr)

1. The business has been going slowly unfortunately. Load at work has been unbelievable.
2. Thanks to the economy, I think it’s quite realistic to say that my target of getting a 6-month bonus for 2008 ain’t gonna happen
3. The market has been so volatile, I’ve decided to wait with some money ready on the side–taken from the safety net. I’m planning to build back the safety net to around 80k by February 2009.
4. I’ve registered myself for CFA Level 1 Exam in June 2009!
5. I’m in discussions for other potential income streams. Hoping they all go well and provide more security for my family in this uncertain times.

Uncertain times

Go ahead and read many other interesting facts about how the greatest athletes, musicians, dancers, actors/actresses, and even statesmen handled failures and kept going towards greatness anyway in But They Did Not Give Up.

I wish I had found this site before I wrote this post and this page, which, in retrospect, aren’t really accurate. After including my mortgage, my net worth isn’t really that big actually… it’s even negative! :-S I’m gonna update the net worth page tomorrow to point to my Networth IQ page instead.

(UPDATE: Wrong. My net worth is not negative. It’s actually way positive, because I didn’t include in the calculation the house I currently live in.)

It’s really inspiring to see how people in my age group and income bracket can have such high net worth. I’m hoping to learn a thing or two from them! 

And if you’re going there, please drop by and say hi! Here’s my public profile: http://www.networthiq.com/people/5m10y

1. I’ve started a business so I can claim deductions for my business-related expenditures
2. I’ve decided to dedicate my resources to learn Forex trading till the end of 2008. 
3. I’ve decided to try to save 80% of my salary every month till I’ve got a safety net to put aside.

But that’s beside the point, since to address that we need to concentrate more on wealth building. The question I’d like to address in this post is: given inflation, how much should I have when I really need to retire (ya know, when I’m getting real old)? Trent Hamm from The Simple Dollar answers this question in this money post. I won’t repeat the thumbnail estimating method that he uses there, but I’ll convert it to a formula so I can easily apply it to my goal:

Total $ you need = 300 * (monthly $ in retirement) * (inflation ^ years to retirement)

So plugging the following into the equation:

1. Having $5k every month (in today’s dollars) to spend when I’m retired
2. Inflation of 5% per year
3. 25 years to retirement 

So we have the total $ I need, which is 300 * 5000 * (1.05 ^ 25), or roughly 5 million dollars. Hey! Sounds familiar! That’s what I’m gonna have in 10 years!