Don’t make a new year’s resolution, start a plan.

Financial Planning

One of my proudest personal accomplishments is being able to finish our basement with my own hands. It now comes with a full bathroom, laundry room, home theater, and an exercise area. I did almost all of the labor myself including the electrical and plumbing working mostly weekends with occasional help from my teenaged son and a “not-so-handy” handyman.

My wife would always tell everyone that my hands used to be the hands of a nobleman when we first dated. Now they’re the hands of a veteran dishwasher. Prior to this undertaking, the only home-improvement that I’ve probably done was painting a wall.

Since I knew nothing about home renovations, I relied mostly on watching YouTube videos before performing a task. It took me two years from conception to realization, but it was all worth it as I’ve acquired all the necessary skills needed to become a badass DIY homeowner. Even though halfway through the electrical project, I became too confident and almost got electrocuted.

What I did know beforehand was Computer-Aided Design as I’ve learned from my brothers who were experts in the field. So every nook and cranny had been modeled in 3D even before I started hitting the first nail with a hammer.


Had I not started a detailed plan, I would not have been able to finish the project (same is true had I actually been electrocuted).

Whether it’s for losing weight or growing your net worth, you too can benefit from creating a detailed plan to improve your life. A specific plan is way better than just making a new year’s resolution. And there’s no better time to do it than the start of the year.

Setting a smart plan

I’ve always been a huge believer in the value of planning. It reduces risk, increases efficiency and helps achieve objectives. You can list down your needs or wants in practical terms and then evaluate what it will take to satisfy them. Creating a specific plan will give you a better chance of meeting those goals.

When it comes to goals, make sure it’s S.M.A.R.T. I named this blog “Millionaire Before 50” because it’s Specific, Measurable, Achievable, Realistic, and Time-based. Being a millionaire by age of 50 is a realistic and achievable goal for most people.

For example, my short-term financial goal is to grow our net worth by no less than 20% by the end of 2018. I know it’s achievable because it grew by that amount, on average, over the last 13 years.

The next step is to list down a plan to meet that specific goal. Here’s an example:

  • Save more
    • Look into selling stuff on Ebay as a 2nd source of income
    • Replace all incandescent light bulbs with LEDs to conserve energy
    • Start buying frequently used grocery items in bulk. Buy the store brand.
    • Cancel cable subscription
    • Switch to a low-cost auto insurance provider
  • Invest wisely
    • Diversify into multiple asset classes (e.g. 70% stocks, 20% bonds, and 10% cash)
    • Rebalance portfolio every six months
    • Switch to index funds to minimize transaction fees
  • Minimize taxes
    • Increase my 401K retirement contribution by another 2%
    • Max out my HSA health spending account
    • Donate to charity
  • Protect
    • Review auto health insurance coverage (ensure adequate coverage)
    • Apply for umbrella insurance

Since the above are actual to-do items, you should set a specific date on each when applicable. In this way, the plan is more tangible and not a mere wish list.


Our modest deck


Sticking to the plan

Having a set of goals and a specific plan doesn’t necessarily mean that one is committed to achieving them. Most of us want to become wealthy, but most do not spend the time, energy or effort required to realize this goal. Even the best financial plans are ineffective if you don’t follow them.

So the next step is to learn how to stick with the plan. In a study published in the British Journal of Health Psychology, it has been concluded that motivation alone is not enough. Yes, you have to be motivated to be able to start a plan. But it is short-lived and doesn’t lead to consistent action. The good news is that the detailed plan that tells you how and when you’re going to execute them should help you focus and stick to your plan and ultimately achieve your goals.

Plan execution

Being able to follow a plan is one thing; being able to execute correctly is another. Follow best practices– stop listening to your broke co-worker, learn the habits of the rich instead. Build your competence. Know more about asset classes or financial instruments. Understand the difference between a mutual fund or an ETF, for example.

Do not invest in something that you have no clue about (e.g. Bitcoin). No, I’m not recommending cryptocurrencies. But you should know more about them if you do not understand how they work or how they’re used. Many people don’t understand email and the internet back in the 90s either. 

The “not-so-handy” handyman that I hired to help me finish my basement was incompetent. I asked him to build me a standard door frame with a height of 6’9″. I came home that night shocked seeing a midget 69″ door frame instead. Not only that, he didn’t lay the studs in the exact position as I had in my blueprint. It was off by many inches in spite of my meticulous planning. I had to tear it down. I ended up completing the rest of the project myself.

Plan adjustment

Mike Tyson was famously quoted as saying, “Everybody has a plan until they get punched in the mouth.” If it weren’t Tyson, they would have time to adjust– just run around in circles like Mayweather always does so as not to get hit again.

It’s equally important to have the flexibility to adjust. You should know when to reset your course when the thing that we call life happens: a new baby, a disastrous divorce, a job loss, or any other life-changing event that can take you on an unexpected personal or financial detour. You may need to re-evaluate both your goals and your plans for achieving them.

Investing takes time– you have to be committed and vigilant in adhering to your plan. And if you get sidetracked by a life event, chances are you can recover from it.

Start a plan, not a resolution this coming new year.

Wishing you a Happy New Year with the hope that you will achieve your goals.

I LOVE it… Don’t make resolutions, make goals. Resolutions are usually forgotten in the first 20 days of the years. But goals, goals are powerful.

I LOLed louder than I should after I read about 69″ door 🙂

Yes, but it took me a lot of time. Cost of labor is at a premium here in the states. The bright side is that quality construction tools and materials are relatively cheap. The cool weather is also conducive to construction work 🙂


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