2021 Financial Strategery
By: Asian Lady On Fire
Tags: Financial Planning, Retirement Planning, Financial Freedom, Retireearly, Financial Goals

FIRE = Financial Independence, Retire Early

To Be on Fire = Performing better, faster and stronger, exceptionally cool or great

As I write this, it’s been 14 days since I posted my last blog. Turns out, I may have been a tiny bit arrogant while working through my “unresolved issues” (my spouse’s words, not mine) with 2020. Since I posted my last blog:

Identity Thief: And not the fun kind with Jason Bateman and Melissa McCarthy. Someone is using my SSN to collect unemployment. I had to file a claim with my state’s department of labor and employment, file a police report and put a freeze and fraud alert on my credit with all 3 credit bureaus along with my spouse’s and 4 children. Side Note: There are probably some other reasons I shouldn’t have had 4 kids but this might top the list because it took me 4 times as long vs. if I only had 1 kid.

There are probably some other reasons I shouldn’t have had 4 kids but this might top the list because it took me 4 times as long vs. if I only had 1 kid. Leaky Roof: When my daughter yelled down from her room that there was a leak, I chuckled and mumbled to myself, “Well, of course there is.”

COVID-19: Both my in-laws tested positive, father-in-law is at the hospital for COVID and pneumonia and my entire family had to go into quarantine. Current Status: Everyone is holding steady and okay.

So instead of moonwalking my way toward the new year, while giving the double bird salute to 2020, I spent the two last weeks crawling towards the new year while 2020 kicked me in the face a couple more times.

What has 2020 taught me?

Expect the unexpected — all kinds of craziness can happen

A lot of things are out of my control — be angry, be sad, accept it and keep moving forward

Be prepared — eliminate the stressors I am in control of

Crying during business meetings sometimes can’t be avoided — anyone else…just me?

With these lessons in mind I’m working on my 2021 financial strategies.

Emergency cash — We will keep 9 months of expenses in cash. Historically we have kept 6 months of reserves. Even this is pretty conservative since our income stream is diversified across multiple rental properties and a dozen clients.

Keep investing in the stock market — Just because the market is up and down and some are predicting a collapse, investing for me is a long term strategy. I’m a ride or die kind of bitch, so I leave my money in the market for the long haul. I expect the market will drop significantly at least once this year and when it does we will put in extra money that month. This is another reason to have more cash on hand than usual.

Pay down debt — This was a tough one because there is an urge to take on more debt since it is so cheap. I really, really, really wanted to buy a Model Y; to get the full state tax credit and the super low interest rate of 2.49% and I always want to buy properties. The other reason this was tough is because the debt we want to terminate has low interest rates; student loans (2%), car loan (3.64%) and rental property (3.375%). Because we are in our early/mid 40’s and want to retire by our mid 50’s, I’m prioritizing paying off debt. For now I’ll ride around on my Ebike.

Refinance primary home — After some of the debt, mentioned above, is paid off AND if we can get a better rate than our current rate (3.5%) we will try for a 30 year fixed to lower our monthly obligation. My eye is on a vacation property in the future, so we need to make room for another mortgage.

Get to Hawaii — Not traveling this year, gave me time to get clear about where I want to visit. And the political/racial upheaval, made me think about the community I want to live in. The desire to visit Oahu and explore buying a vacation home there only grew stronger. This is yet another reason having extra cash on hand doesn’t hurt. At some point, I will decide we don’t need 9 months of reserves in cash, which I can then use towards this purchase.

I’m hoping for magic in 2021, but there are no guarantees that it will be better than 2020. My financial strategies for this year are similar to past years but with a little more caution and ambition. Years ago, I couldn’t even envision that buying a vacation home in Hawaii could be a possibility. But as I said, 2020 taught me all kinds of craziness can happen, so why not a vacation home?