December is the time of the year where people make resolutions to be better for the next year. The Christmas and New Year festivities allow us to spend relaxing time with our family and friends, reflect on the past year’s achievements and shortfalls and shout out our resolutions for the new year.
Yes, the usual resolutions are to lose that extra 10 kg you have gained over the year or to stop smoking or even to be a better person by promising yourself to do a few good deeds a day; give up your seat in public transportation to the elderly, disabled and pregnant etc etc. All these are fine and good but let us change the theme for this year’s resolution.
How about setting a goal to retire young and rich? It is a lifetime goal and if you have set this goal then your next 5 years’ resolutions will be set for you. In fact, your new year resolutions are set for life as you now have a life long direction. Here are 5 I can think of on top of my head; maybe you have more to share……
Year 1: Where Your Money Goes?
Do a comparison of your Income versus Expenses and readjust to balance your personal finance. Your resolution should be to reduce your expenses after your splurging on this festive season.
Year 2: Pay Yourself First
Start looking at ways and means to save so that you can now apportion part of your income to a special account. Target at 10% and once you have achieved your target, reset your goal higher. Instead of spending your bonus money on a new car, use part of the money to open up a special account where you can continue to put in money monthly.
Year 3: Let Your Money Earn Money for you
Following your Year 2 resolution of paying yourself first, your 12-month savings will be earning money for you by now, even as little as earning fixed deposit income.
Year 4: Learn to Invest
Yes! With your new portfolio you will by now have enough to put your money into some kind of investment to earn bigger money. If you are new to investing you will have to start on the safer type like mutual funds and fundamentally sound stocks. Go easy here and advance as you improved in your investing skill.
Year 5: Invest in Yourself
Take lessons on how to earn money or to build a sound business. Read as much as you can on financial literacy. Teach yourself to be an expert in your field of work. Learn, learn and continue learning.