2023 Financial Samurai Goals: Back To Easy Living

Happy New Year everyone! I’ve made goals publicly for over ten years because it helps keep me accountable. Making goals also makes the year more exciting and challenging. Hence, here are my goals for 2023.

Once again, I’ve divided the goals into five categories: Health, Wealth, Family, Financial Samurai, and X-Factor. My goal is to achieve 70% of my goals.

Health Goals For 2023: Maintenance Mode

1) Stay the same weight

Instead of a weight loss goal, my goal is to play tennis or pickleball four times a week on average all year. Better fitness and mental health will naturally come with regular activity.

I will stay the same weight of between 167-168 pounds all of 2023. The ideal weight chart says I should be between 151 – 163 pounds at 5’10”. But screw that! I’m not a teenager any longer.

2) Stay injury free

At 45, my mind is often stronger than my body. I think I can play five days a week but I really can’t without pain or a heightened risk of injury. Everything from my heels to my hips to my shoulders aches after playing sports.

I will stretch for five minutes before and after every match. A foam roller will be my new best friend. Every off day I will soak in the hot tub. Finally, I will use elastic bands to strengthen my shoulders four times a week.

Getting injured would also prevent me from playing with my children and I can’t let that happen at their current ages of 3 and 5. We play “fly” where I pick them up and they pretend to be birds or planes. Then we play “jumpy jump” where I help them jump really high on the sofa. Healthy shoulders and knees are a must for these activities.

Wealth Goals For 2023: Flat Is The New Up

1) Follow the first rule of financial independence: never lose money

I think we’ll be lucky (~40% chance) if the S&P 500 closes the year in the 4,000 – 4,250 range. I expect a 60% chance the S&P 500 will go down another 10% at some point in 2023, i.e. <3,500 for S&P 500. Here are the 2023 Wall Street forecasts.

With ~30% of my net worth in public equities, a 10% decline will drag down my net worth by 3%. The Fed seems determined to cause another recession, despite all signs clearly pointing to declining inflation.

I expect the national median home price to decline by about 8% in 2023. This will result in a 4% drag on my net worth given real estate counts for about 50% of my net worth. However, I’ve already priced my real estate portfolio about 10% below market prices. Here are the 2023 housing price forecasts.

Based on the above expectations, my realistic downside scenario is a 7% decline in net worth.

A realistic upside scenario is that stocks close up 5% – 10% to 4,000 – 4,235, resulting in a net worth increase of 1.5% – 3%. Meanwhile, I think the realistic best-case scenario is for housing prices to stay flat. As a result, my best-case realistic upside scenario is a 3% increase in net worth.

Based on the blended assumptions, I expect my net worth to be down about 3% in 2023. As a result, I need to generate enough after-tax income to cover the shortfall.

I should have a 95%+ chance of generating enough online income to make up for a 3% net worth decline without extra effort. If not, I’ll just work harder to not violate the first rule of financial independence. There are so many ways to make money online. Consulting is also another option.

2) Increase passive income by 5% to $400,000

I expect CPI to go below 5% by year-end, if not by July. Hence, my real passive income goal is to beat the average inflation rate for 2023.

The rise in interest rates helped boost our passive income by 10% to ~$380,000 in 2022. As interest rates come down and my Treasury bonds mature in 2023, I’ll need to find new ways to generate more passive income.

My hope is that by mid-2023, there will be more private real estate deals at lower valuations and higher yields. If so, I will roll hundreds of thousands of dollars into private real estate funds and deals from my expiring short-term Treasury bonds and buy.

Given there is more risk involved with real estate, I expect a higher rate of return than the 4.2% – 4.7% risk-free from Treasuries. 8-10% returns seem reasonable but are obviously not guaranteed.

In addition to boosting investment yields through real estate, my plan is to reinvest 80%+ of all online income into stocks, real estate, and private investments.

Once again, cash flow is more important than net worth. It is cash flow that funds your lifestyle. If you have a lifetime pension that can pay for all your living expenses, rejoice! Your pension is worth more than you realize.

3) Boost spending by 20%

We spent about $240,000 a year after taxes in 2022, which is equivalent to about $320,000 a year in passive income. Therefore, we plan to boost spending by $48,000 to $288,000. $288,000 equals $384,000 in gross passive income. In other words, we plan to spend all of our annual passive income in 2023.

Although we are happy with our current spending, I’ve started my decumulation phase given I’ll be 46 in mid-2023. Some ideas for spending an additional $48,000 include:

  • $5,000 donation to the Pomeroy Rehabilitation & Recreation Center for disabled children and adults
  • $12,000 more on yummier foods
  • $10,000 on nicer flights for my parents and in-laws to come visit
  • $12,000 on family vacations
  • $5,000 on childcare
  • $4,000 gifts

Losing lots of money in the stock market in 2022 has made spending more money in 2023 easier. Given I expect another difficult year, I’d much rather spend my money than lose it. .

If I manage to keep our net worth flat in 2023, then we should really increase our spending by 50% – 100% to reduce our net worth. But this dramatic of an increase is tough to implement.

If we upgrade to a more expensive forever home decumulation will be easier. But not now.

4) Beat back real estate FOMO

If my expectations are correct, there will be more housing deals by mid-2023. By then, prices could be down 10% and mortgage rates could be back down to 5% for the average 30-year fixed. The temptation to upgrade to a nicer home will be great!

But just like how eating a fifth slice of key lime pie is bad for your physique, buying a fifth property in San Francisco is bad for my sanity. Being a landlord decreases the quality of my life. Something always comes up. Plus, my wife doesn’t want to move and I need to appreciate what we have.

Besides, I’d rather diversify toward the heartland rather than have more concentration risk in San Francisco. Heartland real estate is a multi-decade trend I can’t miss.

Family Goals For 2023

1) Give as much attention to my daughter as I did to my son

My intensity towards childcare has waned. Part of the reason is that I’ve already read all the books, watched all the videos, and know what to expect. Another reason is due to an increase in laziness.

When my son regularly gave me the cold shoulder between ages 1.5 – 3, I tried harder to create a bond. When my daughter displayed similar behavior at that age, I found myself giving up more easily. From experience, I believe sooner or later she’ll come to appreciate her dad always being there for her.

Now that our daughter is three, it’s time to focus and make maximum again! Her memories will form and I’ve noticed, just like our son, she now wants to spend more time with me. As a result, I’m going to do just that.

To be specific, my goal is to spend two hours in the morning with her, two hours in the afternoon, and one hour in the evening. She will be attending preschool two days a week.

The average time a college-educated mother spends with their child in America is two hours a day. Hence, my goal is to spend at least double the amount of time on average until she no longer wants to spend time with me.

Average amount of time a mother and father spends with their children a day by country

2) See my parents twice

It sounds kind of sad to have a goal of seeing my parents only twice a year. But they live in Honolulu and I live in San Francisco. They made a big effort to visit us in 2022. I hope to convince them to visit for a week again in 2023.

I will also fly out to visit them for a week at least once this year, either by myself or with family. We still haven’t taken the kids on an airplane yet. But maybe we will this summer!

3) Teach my boy how to swim.

I looked into private lessons and they cost $80 for 20 minutes! WTF. The swim school said it will take a child roughly 24-48, 20-minute lessons to learn how to swim. Hence, we’re talking $1,920 to $3,840. Actually, adding up the total cost doesn’t sound as bad as the 20-minute rate.

Given we don’t have a pool and I can’t seem to ever get a spot at the much cheaper group lessons, I may have to go this expensive route. Regardless, I will definitely give my boy lessons when we go up to Lake Tahoe.

4) Be better aligned on parenting styles.

Although I think I’m nice, I’m sure my wife would say I have a more “tough love” type of parenting style. She, on the other hand, has a more gentle parenting style. I’d like for us to narrow the gap.

Example: Son slips and falls after being told five times not to run on a wet sidewalk. He is crying.

Me: “Embrace the pain. If you did not want to feel pain, you would not have run.”

She: “Are you OK? I’m sorry you are hurt. We told you to not run. Please listen next time.”

Oh, snap! Maybe I am being too militant!

One of my greatest fears is raising soft kids who cannot launch as adults. In my neighborhood, there are at least five sons between the ages of 26 – 34 still living at home with their parents. Then there are the people online who get upset at the littlest things. What happened?

If we coddle our children too much, they may become weak. If a perpetual safety net removes their fear of failure, they might end up always being dependent on us.

Struggle is a privilege! The satisfaction of overcoming a difficult challenge is wonderful.

Financial Samurai Goals For 2023

1) Publish three times a week on average, not four times

I said I’ve published three times a week on average since 2009. But in reality, I’ve averaged closer to four times a week due to my free weekly newsletter.

My newsletter usually comes out on Sunday morning, which means I often spend Friday night, Saturday morning, or Sunday morning writing it. This also means I can never fully take the weekend off. This will change in 2023.

I will either publish two posts a week and one newsletter or publish a bi-weekly newsletter going forward.

For my 14th year operating Financial Samurai, I need to take things down to rejuvenate the mind. My eyes are also getting more easily fatigued, which means less screen time.

2) Write 25% shorter posts

Thanks to social media, fewer people read great personal finance books and long-form content online. Hence, as a writer, I should evolve with the times if I want to attract a younger audience.

Writing shorter posts also reduces my workload, as well as my father’s and wife’s workloads as editors. I will get to the point quicker.

3) Record at least 30 more podcast episodes

In December 2022, I came up with the practice of recording podcast episodes in my car after dropping off my son at school. The acoustics are good enough and my thoughts are fresh. I also wanted to be productive before playing sports.

Releasing podcasts is a fun way to connect with readers and share nuanced thoughts about my latest posts. I often incorporate reader feedback, which comes in the comments section after posts are published.

The years of recording podcasts also helped me become a better interviewee when I was on my three-month book tour for Buy This, Not That. Finally, I want to record a large archive of episodes for my kids in case I die prematurely.

X-Factor Goals For 2023

An X-factor is something out of the ordinary that can bring you joy, meaning, and/or income.

1) Become a 4.5-level pickleball player

I’m addicted to pickleball. It is a sport I see myself playing through my 70s, if I live that long. After several winning years at 4.0 tennis, I got bumped up to 4.5. Then at the age of 39, I got bumped up to 5.0 and stayed there for five years until 2022. The progress was exhilarating! I’d like to do the same with pickleball.

I’ve already played against and with 4.5 players and did fine. Therefore, all I need to do is get my official DUPR rating and play in some tournaments. A 4.5-level pickleball player is a top 6% player.

By 2027, I want to get to 5.0 and win at least $1,000 a year playing professional tournaments. 2027 is when I turn 50 and get to compete on the senior tour! Oh, how time flies.

2) Write another book

Although writing a traditionally published book is extremely hard, I’d like to do it again. My first book, an ebook entitled, How To Engineer Your Layoff, has helped thousands of people negotiate a severance. Being able to walk away from a job you no longer like with money in your pocket feels like winning the lottery.

My second book, a traditionally published book entitled, Buy This, Not That, went on to become a Wall Street Journal bestseller. I think it has a good chance to become a classic personal finance book that will stand the test of time.

Publishing a physical book with a reputable publisher has given me a tremendous amount of unanticipated satisfaction. My children are proud to see my work. I realized having some status is nicer than being a nobody. Helping readers gain financial courage is gratifying. Finally, it’s always wonderful to create something from nothing.

Now I just need to hammer out a new book deal.

3) Make one good new friend

Making friends seems to get harder as an adult. However, I’d like to make at least one good new friend from my son’s school or through sports.

Pre-pandemic, I used to go to a lot of fintech and startup meetups. Pre-kids, I used to go to conferences domestically and internationally. I’m not lonely, but I would like a better social life to make up for 2020-2021.

A Simple Life For 2023

With potentially another difficult year for our investments, I will focus more of my time on family, friends, and personal endeavors. Early retirement and minimalism go perfectly together.

If you can afford to, an economic downturn is the time to have more fun. The return on effort (ROE) to make more money is lower. Can you imagine working 60 hours a week only to see your company’s share price go down 60%? What a waste of time!

I’ve embraced the Fed’s desire to hurt the livelihood of millions so we can save money at the grocery store. Personally, I’d rather eat all the food I buy to save money, instead of waste 25% like the average American. But that would be too logical. Fighting the Fed is futile.

If green shoots begin to sprout once more, I’ll be ready to capture some of the economic upside. But for now, I plan to enjoy a more relaxing 2023.

Reader Questions And Recommendations

Readers, what are some of your goals for 2023? What are some of your expectations for this year?

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