Every year I conduct an annual review (or few). 2019 was quite the doozy, and I’m only getting this out to you in February of the following year! There was a lot to reflect on, and it took me a bit to get to a point of really diving deep with myself.
Based on feedback from last year’s review, I’m posting two versions. In this version, I’ll focus on my financial life, as that’s the focus of this blog. I will post the full version with more personal details soon. Either way, I hope you can take some useful lessons away from my experiences!
Like last year, I’ll follow this format:
- What went well?
- What didn’t go well?
- What did I learn?
What went well in 2019
Investments
First off, we saved a ton of money. Despite Mrs. Wallet not working for most of the year, we increased our net worth by nearly 50%! Depending on which plan we go with (more on this later*) we’re either 80% or 40% of the way to our retirement number (in dollars as opposed to time**).
The stock market went on an absolute tear, increasing by nearly 30%. Given that the average is somewhere around 7-10% depending on how you look at it, this was an incredible year. Cryptocurrencies, which I also have a decent position in through a basket of coins, also did pretty well. So, it was a great year for investments.
New jobs
Mrs. Wallet started a new job toward the end of 2019. So far, it has been a great move for her. In the past, she worked mostly for law firms with extremely toxic work environments. Now, she actually looks forward to going to work on Mondays, which is unprecedented for her. While she’s not making quite as much as before, this is definitely a win. Being in such a toxic environment for 40+hours every week takes a toll on your mind, body, and spirit and was negatively affecting many other areas of her life. Despite wanting to maximize income during the accumulation phase of our life, it’s not worth anything if you’re unhappy and unhealthy. I’m not against some eustress, which can be good for you, but this was beyond the pale.
I also started a new role as a data scientist at my company, and I am significantly happier. I get to do more of what I love (programming and playing with data), and the environment is much healthier. The new role challenges me, which is keeping things fresh and pushing my growth.
Vacation
Mrs. Wallet and I went on several great vacations, especially toward the end of the year. In the past couple-few months, we spent a week in Mexico, Florida, and Costa Rica. We had a personal trip, a family trip, and a yoga trip with friends, so it was a great mix and we were able to take advantage of Mrs. Wallet not having a job a little bit. Naturally, we didn’t pay a dime for flights due to travel hacking! Even though traveling regularly while we’re in the accumulation phase is an important part of our plan, I hadn’t realized how badly I needed a vacation. My baseline level of stress had snuck too high.
Adventures in homeownership
2019 marked our first year of homeownership. During that time we learned a lot. Mrs. Wallet and I built a fence with a friend, refinanced our home, completed a major plumbing renovation, discovered a termite infestation, had solar installed, painted and decorated, renovated our garage apartment, and got our first taste of being landlords. We even ended up having to deal with tenants refusing to pay and then not leaving on time. We’ve learned a lot from our experiment in homeownership so far, and despite its ups and downs, it’s been extremely rewarding. It just feels good to do things for yourself and create.
Financially, it’s a bit more difficult to tell how things are playing out midstream. I know I’ve added some value by spending thousands of dollars and countless hours on renovations, but I won’t know how much until later! It’s even possible that market forces and depreciation or appreciation could have a larger effect. It’s in some senses a longer game, and I’m interested to see how it plays out.
Food4Wallet
Even though I ended up feeling I hadn’t done as much as I’d hoped to, looking back, 2019 was a banner year for this site! I published more content this year than ever before: over 80,000 words across 19 posts. The site also attracted its first organic subscribers! While I’m still working on driving more traffic to the site, becoming a better writer, and publishing even more, higher quality content, the writing I’ve done has been extremely rewarding, and I’ve learned a lot.
What didn’t go well in 2019
Extensive loss
While it isn’t “financial”, there’s no avoiding the fact that we experienced an unprecedented amount of loss in our lives in 2019. This impacted every part of our lives and being, weighing heavily upon us throughout the year.
The year started off with losing my mom, which I’m still processing and integrating. We got more time than expected given her diagnosis (cholangiocarcinoma – a rare and extremely aggressive form of cancer), so in some sense, it was expected. The way it happened was sudden and unexpected. Either way, nothing can prepare you for a loss like this, and losing Mum was the first major loss of someone so deeply close to me in my life. This was followed up with Mrs. Wallet’s grandfather suffering a major stroke and having to relearn how to swallow and walk, having to make tough decisions leading up to the loss of my great uncle, Louis, with whom we were extremely close, and finally the loss of my grandfather (Mum’s dad) to close out the year.
I’m extremely grateful for the time I got with each of these amazing souls. I’m lucky that I made it so far in life before having to grapple with loss like this and that I have the tools in place to try to work through it. I can’t imagine trying to deal with this at only 15 like my younger brothers. Each of those who passed shaped who I am deeply, both before and after their passing (especially Mum). I am eternally grateful.
Whew! That was heavy! Here’s a picture of our dog and cat cuddling to cheer things up. Luckily, the rest of this will be much more light-hearted!
Poor execution
There were several examples in 2019 where I failed to take advantage of solid opportunities or didn’t execute properly on them, leaving what ultimately amounts to tens of thousands of dollars on the table. I attribute much of this to some minor underlying depression, lots of major life changes, and a lack of focus with everything going on. Let’s break a few of the biggest down.
The first opportunity I failed to take advantage of was capital gain harvesting, which is where you sell accumulated assets (like stocks or mutual funds) to lock in your gains. Ideally, when you are in a low or zero-tax bracket and immediately repurchase them. By doing this, you avoid paying unnecessary taxes.
I knew that we would be in the unique situation of having much lower income in 2019, which created tax-free room for either capital gain harvesting or Roth IRA conversions. While I didn’t know how much room there would be or how long Mrs. Wallet wouldn’t be working at the beginning of the year, I certainly knew it by the end! I simply failed to act, which resulted in at least $20-30,000 not being sheltered from taxes. Note to self: take care of tax moves prior to December!
Second, I didn’t max out our IRAs at the beginning of the year. I knew for sure we would be able to contribute to traditional IRAs due to our lower income, but for some reason, I waited and pumped more money into lower return investments. In some cases, the cash just sat around, which is completely against my modus operandi! I’ve harped on this a bit, but this especially hurt given the 30% return on the market. The $12,000 I’m putting in now could be roughly $16,000 already! That being said, there was uncertainty about our income, returns, and other factors. Hindsight is 20/20.
My third missed opportunity involved trading crypto sentiments. There was a big drop one day, which I was confident was an overreaction, potentially yielding a 20+% gain. I usually don’t trade and just invest for the long term, but I went ahead and bought in. The price did exactly what I expected it to, and I should have sold and gotten out within a day. Unfortunately, this happened while I was sleeping and I hadn’t put in the order to sell at my strike price automatically yet! Then the price dropped again, eventually passing below my purchase price. I still made my target, but it took months instead of hours. Lesson learned.
The final example I’ll share had to do with credit cards. I barely did any travel hacking in 2019. While our stockpile of points managed to pay for every trip we took (and there were several), I didn’t sign up for a single new card and hardly did any manufactured spending. This was even on my review last year! Time to rebuild the war chest!
What I learned in 2019
Small distractions over time lead to a large loss in focus
After Mum passed and with everything else going on, I gave in to a lot more distractions than I had in the past. I also had more trouble focusing at work. While I’d understood the importance of focus from a positive perspective in the past, 2019 really highlighted the negative end of it for me.
I also realized that focus and productivity are only part of the picture; it’s even more important to enjoy the ride, and what you focus on matters tremendously. Being able to filter out the noise and maintain focus on the most valuable opportunities will catapult you past most people in today’s attention economy.
Double down on your strengths
This goes hand in hand with the previous lesson. In the past, I’ve spread myself too thin, trying to patch up perceived weaknesses and spreading into other areas. I’ve learned it’s far more valuable to execute excellently on the biggest opportunities where you have strength than to be good at many things. Getting ahead is all about leverage. Leverage your strengths by focusing on yours. Leverage other’s strengths by letting them lean into their strength where you are weak.
In an age of infinite leverage, judgement is the most important skill.
Naval Ravikant
Improved communication
2019 involved a huge upgrade to my communication skills. This was surprising to me, as I’ve prided myself on my communication and believe it’s an important part of why I’ve been as successful as I have. That being said, I made huge strides last year. One of the big takeaways is how much room there is for growth.
I made new friends in the Authentic Relating community, and they showed me a whole new layer of awareness and communication. Unsurprisingly, this had ramifications in all areas of my life. While I certainly upgraded my professional and social communication, one of the areas I felt it most was emotionally. I was given new tools for communicating about my emotions just as I needed them. This helped me process massive loss and grief and facilitate the same with loved ones.
Despite being extremely open by most standards, I struggled with communicating certain thoughts, feelings, and ideas in my relationship with Mrs. Wallet. We’ve made huge strides in our communication, and I am constantly taken back by how much we learn and grow each year.
In terms of this blog, I also learned that I can’t focus solely on content, even if I’d like to. So far, the readership of this blog is still pretty humble. I’m sure there’s plenty of room for improvement in my writing, but I have to get it in front of an audience regardless. Getting to know you better and how we can help each other is one of the best parts of the journey.
I don’t know what the future holds, but I’m excited to see where this year takes us!
Much Love,
(Your) Wallet
Footnotes:
* We could either go with building our net worth to the full amount required to support us in retirement, or we could build up to a smaller amount (like 50%) and earn the rest through entrepreneurial endeavors.
** Due to the nature of investment, growth follows an exponential function, not a linear one. So by the time you’re 50% of the way to your goal in dollars, you should be much further than 50% of the way there in time.
