Money Mage plans for 2019By Money Mage · · Reflection
After the first few weeks of the new year, I always take a look back over what’s been and what’s to come with a fresh pair of eyes.
The end of January is a good time. Things have settled after the new year return to hell-work. The first paycheck is often in. False New Year resolutions have failed, and habits that are going to continue are continuing.
As it’s just gone Burns Night:
“But, Mousie, thou art no thy-lane
In proving foresight may be vain;
The best-laid schemes o’ mice an’ men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!“
The Bard’s words remind us: unexpected things happen. Plans and schemes go wrong.
“Plans are worthless, but planning is everything … the very definition of “emergency” is that it is unexpected, therefore it is not going to happen the way you are planning” - Eisenhower
I also apply systems thinking and continuous improvement to most activities. Inspired by the brilliant book The Toyota Toyota Way*.
Continuous improvement comes from reflection on what has occurred. How could events have proceeded differently? What incremental changes will avoid repeating the mistakes of the past? Inspect and Adapt.
So in the spirit of Burns, Ohno and Toyoda, let’s reflect on 2018 and plan for 2019. Knowing that plans are worthless but planning is everything.
2018 In Review
Health & Wellbeing
Health and wellbeing I struggled with in 2018. I drank too much, ate too much, and didn’t run enough. Weight was pretty stagnant hovering around 78-80kg (BMI, 26.1 overweight). By the end of the year and a gorging Christmas, weight was up to 86kg (BMI, 28 overweight). Not great.
Through 2018 I had a plan to cut my alcohol consumption. Not only was I drinking too much as a crutch, it was costing too much. I was up to 28 units/week at the start of the year and the doctors were telling me to cut down. I cut down. In late August I had a bad blowout and decided it was time to stop.
I’ve been teetotal since 27 August 2018 and feeling much better for it. Wallet, mind, sharpness.
Exercise wise was sporadic for most of the year. October through December was zero. I had a lot of travel which meant some runs in Central Park & London. but other than a good August and September quite an irregular year and not a stable habit.
2018 was a very stressful year. I’ve had an issue with long-distance looking after family members. Stress with closing a large contract at work with other’s jobs dependent upon it. And general hell-work-stress. Doctors say ‘suck it up’. I’d tried meditating, relaxing, but I wasn’t forming a habit. By the end of the year, I’d given up.
Habit building is something I was not great at in 2018.
I worked too much at hell-work in 2018. Pulling 50-60 hour weeks for most of the year. This meant reduced time for what I needed to do. Running, time with friends & family, and headspace for other activities. A continual problem with hell-work.
Continuing the trend of four holidays per year, this worked out well. One overseas to Paris. One stay-cation on the beautiful Moray coast. One awesome Christmas with the other-MM. And one at-home holiday. Trying to spread these once per quarter for a deserved break. Will do again in 2019. All in all, holidays cost no more than £1K.
We bought Castle Money Mage in 2013. It needed work, and the work continued into 2018. We replaced the two bathrooms on 0% finance, so the money is growing elsewhere. Being an old student property the two previous bathrooms were not great.
It’s been a night-and-day change, and like the kitchen a few years prior it’s changed how we live and feel about home. Completely worth it.
Savings rate including pension contributions year on year was up from 46.65 to 56.72% in 2018. Huge improvement and the MM household is well happy.
MM household net worth including property equity increased 13.77% in 2018. Excluding property equity 14.59%. Very happy with this and on track. 15x in 10 years.
Plans for 2019
So some aspects of 2018 went well, and others not so well. Unexpected family issues caused some further stress and headaches. So here is MM’s plans for 2019
Health & Wellbeing
After a bad end to 2018, weight through January is already back under control. I’m back down to 80kg (BMI, 26.1 overweight) from 86kg (BMI, 28 overweight) on New Year’s day. This has been from healthier eating and back to running. Next goal is to get down to 76kg which is my healthy weight. This is an incremental goal, with a view to 74kg.
Running, I’m back on Strava and out and about at least twice a week. January has been good for easing back in. I’m not quite back to my usual pace. Have done over 26km since Christmas. I’m aiming to do another 10k in February. The Strava goal will help me actually do it. More important than time or distance is habit building. I want to maintain 2 or 3 runs per week of at least 30mins each.
I struggle with stress. 2018 was particularly bad. I’m making a change with Headspace. Trying to build a habit. I have over 400 minutes clocked up now. I’m aiming for a 15-minute session every night. Before bed as that’s when I find it helps most. The current run streak is 14. I’d like to double that by mid-February. If I achieve that I’ll continue into mid double digits before it all falls down. We’ll see.
A major negative loop in my life is overworking. It always has been.
Stephen Covey talks about your centre, and how you need to be principle-centred. I am very work-centred and money-centred. I am principled, but end up reacting to work-pressure.
Overwork due to work-centeredness hurts my state of mind. In 2019 I am going to cut down to nearer my contracted hours. Any overworking tallied up and taken back through flexitime.
We’ll continue with 4 holidays a year. The first is already booked for the end of March, to a dark-skies zone in the Scottish Borders. I may even take the scope and camera.
Second is a holiday somewhere we’ve never been. We’ll do it but haven’t chosen where yet.
The final stage of Castle-MM is upon us. It’s been 5 years since we moved in and each year has been one room. This year is the final space, the hallways, landings, and stairs. It’s a three storey house, so it’s a space I am apprehensive about doing. Planning on no ladder fails!
The bannisters are a bit knackered, so they are getting sanded, filled, and refurbished.
We have renovated every other room in the house. The hallway and stairs are the last of ‘old house’. I’ll do a post or small series on how it goes, what it looks like and how much it cost to DIY.
Net worth should increase again this year. With the mortgage gone, I am sacrificing more salary into a pension. We need to plan the next stage of investments. Hoping to see an above-linear increase in net worth this year and beat last years 13%
The MM household is already pretty frugal. We put away 56% last year. We don’t believe in being miserly to the point of not enjoying life (though others may disagree). Single digit percentage increase to 60% would be nice, but so would staying around the same.
I’m not a natural reader. My head is often too busy elsewhere. I’ve fallen out of the reading habit. 2019 is going to be an every-night-read-night before bed, to wind down.
Fiction and non-fiction it doesn’t matter. I’m going to throw in a couple of must-reads.
The RE of Fire
I don’t have any significant aspirations to retire early at the moment. It’s more about wealth building to give that option. As it stands today, I’d work until 55. Things may change though, and my health, job, or circumstances may change, or so might the other-MMs.
So I’ve taken a look at the reality of the RE bit in FIRE. It doesn’t work for a little while longer.
To retire today, to our liquid fund retirement pot we are 32% of the way there.
In our pension pot for drawdown at 55 we are around 28% of the way there.
This is assuming a £12K living costs per annum and drawdown between 3% and 5%. £12K sounds a bit low, so it’d be above this.
So in summary, we’re about 33% of the way there. Including house equity, this goes up to around 57% of the way there.
It still feels like a long way off to me.
Given that the RE feels like a long way away, a major goal of 2019 is to increase wealth growth. Not just from contributions but from growth. This is something we’re not great at. Our year on year growth is in the low single digits, and we need to increase it to make RE more of a reality.
With the mortgage gone, we need to think long and hard about investing the surplus income. Where is the best stable long term growth?
Some habits in 2018 were hard to break. Drinking. Eating. Not exercising.
2019 is going to be about building more healthy patterns and outlooks. Starting with this blog and regular Headspace. I’d like to end the year tending towards 0 alcohol, pocketing all the savings!
Less Dependant on Hell-work
Finally, as mentioned my work-centeredness needs to change. So I am going to start ways of being less focussed and less dependant on hell-work.
I see this dependency in two ways.
First is the attention. As I am work-centred, work draws my attention. This blog I am already finding a great distraction from over-thinking work-things. I’m spending more time with the other-MM. Walking the dog.
Second is income. I am looking for other sources of income, to ease and then cut the financial. This blog won’t be that blogs are a terrible idea to make money. The days I’ve sunk so far I could have freelanced for thousands. But I have other ideas, and being an engineer I can make them real. So let’s see what happens!
What are your plans for 2019?