First, taking a cue from Steve Pavlina, I’ve divided my life up into 13 areas. I usually do a yearly review where I list out each area, write down how I did in that area in the past year, what the current state is, what a perfect state would be like and what I want to do with this area this year, and break that down into specific projects. I also define my roles and responsibilities in that area, and just brainstorm anything related to that area. I do this in a mind-map format, using MindManager because it just looks better. I also don’t follow any of these boxes too closely, and skip some boxes whenever I feel like it. You’ll find raw thoughts here, too, and something that would belong in a journal. As an example:
- Past Year: I did pretty good in this area, doubling my income from the previous year. I started to use Quicken to manage my money and I really like it. I also try to use debit card to pay for as many things as I can so that I can just download the transactions and Quicken can figure out what I bought and where. I do this about every two weeks. Easy and simple. I also setup an automatic transfer near the end of the year, of a certain amount (about 20%) of my paycheque to be transfered to my savings account right after my pay is deposited into my account. This is what The Automatic Millionaire is about. I spent an inordinate amount of money on eating out, so I’ve limited myself to ten dollars a week of eating out money. This isn’t going so well, but I am bringing more and healthier food from home.
- Current: Things are pretty good right now. I’ve got a good mix of income sources which keeps things interesting (mostly by having different jobs). My savings rate is between 20-30% which isn’t bad, although I would like to be higher.
- Future-Perfect: I want to make at least $5000/month passively, through very little time involvement and/or by doing something I really love, but can still leave well enough alone every once in a while and jet around the world. I want to feel free to spend upto a few hundred dollars without worrying, and I want to be able to decide to go somewhere in the morning and leave in the evening. I have a positive net worth, but as long as I’m getting income I don’t really care what it is.
- Projects: The way I’m doing things now is not really scalable. At my jobs, the only way to make more money is to put in more hours, and I have only so many hours. Alternatively, I can improve my marketable skills to the point where I can command a higher salary, however I don’t feel like its the optimal choice for me right now. I would rather put my energy towards finding more passive/less time-related means of income. That includes focusing on and monetizing this site (you might have noticed the increase in postings, almost one a day now, as well as the ad bar), as well as investing and any other way that comes up. I’m also looking up books like 4-Hour Work week, Multiple Streams of (Internet) Income to get more ideas from.
- Roles and Responsibilities: Monitoring cash flow and expenses, long and short-term financial planning, reducing expenses, finding ways to increase income, finding and applying for bursaries and scholarships, researching and making investments, exploring opportunities and learning and reading about these things.
This stuff is a little different from how PD advice generally is, which is to put in time frames. My Future-Perfect category would probably be a 5-year goal. As I’m just learning to plan things out for the long-term, I’m still learning what works well and what doesn’t. I also want to achieve that state before 5 years, and I think it is possible to. I also prevent procrastination by deliberately doing things badly the first few times. That way, if its bad, I can say, of course its bad, I meant it to be like that.