A little less than a year ago, I mentioned that 2011 would be the year that everything changes. It’s a phrasing that I borrowed from Torchwood, but it was relevant for me as well as to the television program’s concept. I’ll have more to say about this year’s changes later.
At the time I created my goals for the year, it was difficult to predict how well my business, primarily the operation of Consumerism Commentary, would perform. I had just left my day job to work for myself full-time. It was a decision that I had been considering for several years, once I realized that running a website could be a profitable way to live. On reflection I should have made this change several years ago, as my business has long been able to sustain my finances. I first accepted this fact a few years ago when I moved the nicer apartment in which I live now. It’s not expensive, but it would have been unaffordable with just my day job income.
Even after this, it took several years for me to be comfortable with the idea of relying solely on that revenue. I knew I was in a risky business, and the ability to generate revenue from advertising was shown to be even riskier a few months later.
Without much warning, several other personal finance bloggers lost up to 80 percent of their revenue when the nature of the visitors to those websites changed. Some websites, on the other hand, were unharmed or even benefited, but the risk was never eliminated. When I created my goals and resolutions for 2011, I had risk in mind, but perhaps not as much risk as I should have. Nevertheless, looking back at the past year’s success, one might conclude I was much too conservative.
Income
At the end of last year, I remained conservative when planning for income changes in 2011. I would consider 2011 successful if I increased my income by $100,000 for the year. I exceeded this goal in 2011.
Net worth
I recognized net worth would be difficult to predict when I designed these goals last year. It would be far too dependent on my income, and to a lesser extent, the stock market. I ended the year with about $538,000 on my balance sheet. Calculated using the same method which includes the income generated by the business but does not include the value of the business, I was able increase this number beyond my goal. I will be more specific when I look at my end-of-year balance sheet. I far surpassed my conservative goal of increase my net worth by $275,000.
Investments
At the end of last year when I created these goals, I focused on retirement. As a business owner, it’s hard to know exactly what retirement may mean. When you work for a corporation, it’s easy to fall into the usual expectations for retirement, working for a set number of years until retirement age, leaving your work behind at that time to move to Florida and begin collecting benefits from the government and distributions from your retirement accounts. Working for myself, and particularly working in a business where the future could change at any moment, it’s harder to define what life would be like many years in advance.
Nevertheless, I set the conservative goal of saving 10 percent of my income for retirement. I was able to maximize my contribution to an Individual 401(k) throughout the year while investing regularly in a taxable investment account. Although, I spent only a small percentage of my income each month with no major purchases throughout the year, much of what I have saved is not necessarily designated for retirement, nor is it invested at all.
A couple weeks ago, I met with a Certified Financial Planner from Vanguard Flagship Services, and I have a strategy in place to invest for the medium and long term that’s appropriate for my particular financial situation.
Savings
As I mentioned above, having an aggressively increasing income paired with only modestly increasing expenses helped me build my net worth and my savings this year. With some aspects of my life in flux this year, I decided it was not yet a good time to settle down and purchase a house. This is a decision that is about more than finances. The decision to buy a house, for me, depends on long-term plans for family and career, and these are aspects of life I have not quite yet determined. When I renewed my lease on my apartment in central New Jersey this past summer, I paid for the option to break the lease without penalty at any time, thinking I might have other aspects of my life sorted out before it was again time to renew in 2012. There is still time left.
Savings goals other than a house still rely on other decisions in my life, including whether to have children.
Charity
Throughout the year, I’ve been contributing to my charitable gift fund, a donor-advised fund at Fidelity, that gives me the flexibility to grant gifts to non-profit organizations throughout the year. In the past, I’ve given to a program at my undergraduate university and the non-profit organization I used to work for. This year, I also added a local arts organization to my list.
Photography
As we get beyond the purely financial goals and resolutions, it’s easier to see where I’ve failed. I planned on finding ways to make photography a larger part of my life this year. I’ve enjoyed photography throughout my life, though it’s never been a core passion of mine. That has started to change over the past few years, and I’ve taken several classes to improve my craft. I wanted to dedicate some time every month to gaining more experience, particularly with portraiture. Unfortunately, the success of my business has come at the cost of not being able to dedicate as much time to this endeavor as I would have liked.
Professional photography is not the right choice for me. I would never want to photograph a wedding, and that seems to be the basic income-generating activity for most freelance photographers. I’d prefer to ignore the business aspect of photography completely and focus on creating images I would enjoy. While I didn’t have the time to dedicate to this in 2011, I’m looking at ways to restructure my life to make this more of a possibility in 2012.
Personal health
My health has been on my mind all year. Most likely a result of not having a large lunch in a corporate cafeteria almost every weekday, I’ve lost about five pounds this year. I’m not significantly overweight to start with, but I was definitely not at my ideal weight. I didn’t meet my goal of losing fifteen pounds, so I still have more to lose. The exercise I was getting one year ago was interrupted by a major snow storm from December into January, and it killed my momentum for some time. A few months ago, I joined a gym, and recently travel interrupted my progress.
Getting exercise seems to be more successful with assistance and motivation from a partner, and that’s something I just don’t have right now. All of the above are clearly excuses. The only motivation that matters comes from myself, and if I’m serious about getting into shape and losing weight, I just need to do it.
From a financial perspective, it would be hard to call 2011 anything but a success, but with a broader view I haven’t done much to change my life for the better this year. If 2011 was the year for focusing on my business, 2012 will be the year to focus on myself. In a few days, I’ll post a year-end look at my finances which will include numbers and other details, and after that, I’ll present my goals and resolutions for 2012.
Did you reach your goals and complete your resolutions for the year?
Published or updated December 26, 2011.
{ 13 comments… read them below or add one }
Congrats on hitting your financial goals. The personal goals always seem to be tough when running your own business because there seem to be a hundred other things to get done. At least that’s true in my case.
I made progress on my financial goals for this year. I paid down credit card debt, increased my credit score by 16-20 points, and was more proactive in planning for retirement. I still have a long way to go and I need to do better for my 2012 goals.
Always an inspiration. To set a goal of increasing by $100k and then beating it-love it!
My goals for 2011 were to:
1. Sell our house
2. Build a new house
3. Save $1,000 per month
4. Get a raise or promotion at work
5. Participate in more family activities
We sold our house in April and then started the house building process. After renting for a short time, we moved into our new home in mid-August. We we’re able to save nearly $2,000 per month, which we used to top-up our down payment and pay off the remainder of my wife’s student loan debt.
Unfortunately I did not get a raise or promotion at work, as we were faced with stiff budgetary concerns all year. I was able to make some extra money freelancing for a financial website, so I’m happy with how that turned out.
We did manage to find lots of time for family activities this year, and I hope that continues throughout the winter with a bit of skiing and skating.
I didn’t have a health-related goal, but since I switched jobs from the hotel industry to the public sector I’ve lost 25 pounds just from the simple fact that I’m not eating restaurant food every day.
Echo: Thanks for sharing! It sounds like you did well this year! The raise and promotion is going to be somewhat out of your control, so it’s hard to include that in goals. You could do everything right, make your bosses happy, still earn tons of money for your company, and not get rewarded. It’s a peril of being employed by a company. On the other hand, you’re employed, and there’s something to be said for that. :-)
It’s true, the stability and relatively low-stress work environment is a blessing and it allows me the time to pursue other business opportunities on the side. I have a really good balance between my day job and side business, which doesn’t take away too much time from my family.
What a great year you had!
My goal was to try to educate myself to understand options trading in stocks. The idea sat on the back burner and I did not realize that goal. It goes on the list again for this year. At least there was no weight gain!
If you need a partner for exercising, it’s actually not that hard to find one. Your significant other? Friend? Neighbor? Heck, using Twitter works, just to have others follow and motivate you.
You have just inspired me to write my goal post tonight. I am shocked you would say you aren’t “significantly overweight” b/c I wouldn’t consider you overweight AT ALL.
Notwithstanding watching your gains is so freaking inspiring please keep up the transparency.
I feel that I have came a long way in reaching my goal to be less negative but this will probably always be a struggle for me since I seem to have a natural pessimistic outlook. I have not done very well financially and will end 2011 no better off than I started. But I have had quite a few large purchases and some home repairs that account for the majority of the money spent. I have failed at my goal of getting healthier. But I will state that I do better when I start the New Year off with some defined goals and a few ways of accomplishing said goals. I will do better in 2012.
Man congrats on the net worth increase. I”m sure your website being acquired by Quin Street was quite a help. What a great time for the internet economy!
That’s not reflected in the net worth updates I’ve presented.