I Challenge You to be Awesome in 2016

Hidden GemPhoto: Josiah William Gordon

2015 comes to  a close and it is the first day to 2016. A new year always brings excitement and fear all at once.

I’m excited because a new year makes you think of new beginnings and letting go of the past. We start setting goals about getting stronger and eating healthier, and we all feel like we can get a jump start on the new year.

One thing is that only about 8% of people are successful in achieving their New Year’s Resolution. I feel that one of the reasons is that people who look to goal setting are really setting long term tasks to finish other than actually setting long term goals. What’s the difference between a long term task and a long term goal?

A long term task is something that you can give a breath of relief when it’s done. An example is paying off your credit card debt. Tasks are not motivating to your soul, and you don’t find any joy in the journey. You will ultimately find relief from completing the project.

A long term goal on another hand is something that you will always strive to achieve, and in the process it will give you joy while on the road to attaining it. For instance, instead of paying off your debt, the ultimate goal is to be financially free, or not having to worry about money in retirement. Goals are activities where it causes you to continually grow.

Margee Kerr Ph.D. wrote an article on Psychology today on “Forget New Year’s Resolutions” says that saying that you might want to focus on why you were awesome and what you feared in 2015 to jump start 2015.

Here is a list of questions from her article. I challenge you to be awesome this year.

Margee Kerr

The Gift of Review

aloha bonespc: alohabones

Those who cannot remember the past are condemned to repeat it – George Santayana

As the year comes to an end, it’s good to review the year to find out how well you have done. Not only financially, but also with all of your other goals. My pastor said over this weekend, that “we must learn from the things we have done in the past. We get older, but will we get wiser?” It’s up to us to make that decision to be wiser as we get older.

Looking to the Past

I can tell where I am going by how I have been setting myself up in the past. There are questions that help me look back at the year are:

1. What were the high points this year?

  • Starting this blog to get my ideas out to the world. This has allowed me to be creative and start to put my ideas down to start a financial program of paying back debt.
  • Understanding that my passion is to share the ideas I have on personal finance to help people learn from my mistakes and victories.
  • Being honest with my financial circumstances, and making the changes to correct my mistakes.
  • Helping my co-workers start the process of tracking their expenses.
  • Setting up the payment plan on my debt.

2. What experiences do you wish you could have changed?

  • Start the blog earlier because there is value in what I have to share.
  • Stop feeding the fears and worrying about what other people would think of my ideas
  • Going through with a balance transfer on a card that is currently in use. (such a bad idea)
  • I wish I didn’t take money out of my retirement account to pay off debt because the compounding effect in the future would have been more than the interest I would have paid on the debt.
  • Start reading books on the stock market earlier, and invest in Vanguard index funds

3. What advice would you give to yourself at the beginning of the year?

Don’t try to beat the system of paying back your debt. There is no magic bullet to pay off your debt faster with limited resources. The overall best ways best ways to pay off debt is the debt avalanche (paying debt off with the highest interest rate first). There are ways to save a little bit more interest, but sometimes taking that extra bit of effort or chance might not be worth it.

4. What were the three biggest lessons you learned in this past year?

1. Read more, and retain the information. There’s nothing wrong with reading a book for enjoyment, but if there’s a lesson to be learned, take notes. Spending 30 – 45 minutes a day reading is a good habit to cultivate better ideas for the future.

2. If you have a bad feeling about a situation, especially financially, don’t go through with the deal. My brother wanted to buy two sets of high end knives that would have cost me well over $4,000. He could purchase for 65% off of the Manufacturer’s suggested price and resell them.

I thought it was a good idea at first because the knife sets were going to be discontinued, but there were circumstances where it did’t make sense. (I’m also not very educated in how sales in knives work.) He was a bad communicator when it came to the sale of the knives, profit margins relied on too many factors to make a profit, and there didn’t seem to be that great of a demand for the knives. So overall, I didn’t go through with the deal, and I feel better about it.

3. Setting up an automatic repayment plan for your debts and saving is by far one of the greatest tools you can have to build wealth for the future. Once it’s in place, do your best not to change the payment. It forces you to keep the “promise” of payment to yourself or your creditor.

I hope that you find some of these insights interesting, and that you can learn by asking yourself these questions as well. Please like and share if you found this interesting. I’d love to hear from you as well.

Goal Setting 2016 – Part 3 Brain Storming Goals

SulepPhoto: Sherwin Ulep

In this series we’ve covered how to set goals and why you should set them. Where do you go from here? How do you know what goals to set? How do you even know what you even want?

This is where we get to pretend we’re in Disney’s movie Aladdin, and we get to have Genie as our own personal scoffer. You’ve just gotten out of the Cave of Wonders, and Carpet lands in the desert. You get a minute to look around, and you glance over at at Genie, you get your thoughts together, and you tell Genie, “You know, I kind of know what I want, but I’m embarrassed to tell you what I really want. I’m afraid of what other people will think of me.”

Genie tells you, “Well kiddo, Do you want the best things in your life? You better let me know what you really want because that’s the only thing holding you back. What I want you to do is to write down all of the things you want and all of the things you want to do for the rest of your life. It doesn’t matter what other people think because it’s your life, and it’s up to you to live it the way you wan to. I only have one rule. You have to write out all the things you might want in your life 3 minutes or less.”

He sets a timer and you start writing anything that comes to mind. As you begin to write Genie keeps telling you “Not enough, Still not enough! Think bigger!” Keep going until your time limit is up. (if this reference doesn’t make sense to you, go watch it on Netflix.)

Now go do it. Really, set a timer for 3 minutes and write down as many things as you want in life, the goals you want to achieve, the places you want to go, and even the things you wan to eat. After time is up you may have a long list or a small list. It doesn’t matter how long your list is, just as long as you have things on there that will excite you to get up out of bed to achieve. You won’t have to achieve everything the list and that’s alright. The exercise is for you to get out of your own way, and to let go of all of the thoughts that have been holding you back in your life.

A few of my goals

  • Have a positive net worth by December 2016
  • Find a blog / business mentor
  • Set 1-2 hour a night to creatively write and read between 7:30 PM and 9:30 PM
  • Go to Crossfit Monday, Wednesday, and Friday.
  • Become more educated on stocks by reading at least 1 new book a month
  • Have over $100,000 in investments and cash in 5 years. (Crazy at this point in time because i’m about $40,000 debt)

The goals follow the SMART criteria. Just as quick recap they are

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-Bound

I’ll go over breaking down your goals into specific categories and how to take action in the next post. See you then.

Part 1 SMART Goal Setting
Part 2 Why You Should Set Goals

Goal Setting 2016 – Part 2 Why You Should Set Goals

Turtle

Photo: jonahkalaikai

Goal setting gives you an idea of what you want to achieve in the future (as long as it aligns with your values, which is a whole different topic all together). It also allows you to create smaller goals to make sure that you’re on track to your overall goal. You want to see progress along the way. If you’re unable to see progress, you will no longer be motivated and stop reaching for your goal.

Mindtools.com says that “By setting sharp, clearly defined goals, you can measure and take pride in the achievement of those goals, and you’ll see forward progress in what might previously have seemed a long pointless grind. You will also raise your self-confidence Add to My Personal Learning Plan, as you recognize your own ability and competence in achieving the goals that you’ve set.”

A Caveat

You don’t want to have too many goals because you’ll run yourself ragged. There is only so much that your mind will able to handle. Essentially, starting a new goal is like starting a new habit. There has been research that says that your self control is an exhaustible resource and you will get tired from overexerting yourself mentally.

In the book Switch: How to Change Things When Change Is Hard by Dan Heath and Chip Heath, it says that “the bigger change you’re suggesting, the more it will sap people’s self control. And when people exhaust their self-control, what they’re exhausting are the mental muscles needed to think creatively, to focus, to inhibit their impulses, and to persist in the face of frustration or failure. In other words, they’re exhausting precisely the mental muscles needed to make a big change.”

 

 

Part 1: SMART Goal Setting

Goal Setting 2016 – Part 1 SMART Goal Setting

kapua5

Photo by Kapua

American philanthropist Elbert Hubbard realized that many people failed in their endeavors. They failed not because they lacked intelligence or courage, but because they did not organized their energies around a goal.

Goal setting can be complicated if you don’t know what you’re looking for in your life. One of the top reasons why people are unable to achieve their goals are listed at lifehack.org on the  “Top 10 Reasons Why People Don’t Reach Their Goals“, by Robert Chen, is creating vague goals.

A person doesn’t know what to achieve, if he doesn’t know what he is trying to achieve. This might be common sense at first, but try to think of a time when you wanted to become more fit. What exactly does that look like? What does the being fit mean to you? It rises it so many questions that you don’t know what you’re trying to achieve. Being fit is like saying I want to save more money in the future. What are the actions you can take now to save more money? Exactly how much do you want to save?

In my research of habits and goal setting, one of the easier acronyms to keep your goals actionable is using the SMART goal setting technique. I use this technique to make sure  that my goals don’t leave me in a direction where I cannot achieve them or have a gray area of what I’m looking to do.

SMART stands for

  • Specific: Pick a specific area for improvement.
  • Measurable: quantify, or at least suggest, an indicator of progress.
  • Attainable: Is the goal something that you can achieve?
  • Relevant: Is the goal going to fulfill you as an individual
  • Time Bound: When will you complete the goal?

Next post will be examples of what I will be planning for 2016. See you soon.

Personal Finance in Paradise – 3 Steps to Achieve Your Goals (which helped me pay off $35,000 in debt)

Stairway to Heaven  pc: @ricahyokoi

The New Year is coming around and about time when I personally start thinking about my goals for the the next year. I feel it’s always good to update yourself on how you are doing on your goals. Another good habit is to continually make new goals as you complete others that you have finished.

One of my goals is to go to the CrossFit box here in Honolulu at least 2 to 4 times a week. Sometimes I don’t go because I’m not motivated. It’s good for me, but at the same time we all go through the love-hate relationship at the gym.

My current financial goals are to payoff at least $10,000 of debt, which will also increase my net worth by $10,000.

In my studies and my own personal practice, there are practical ways to reach your goals, which are easy to do and also easy not to do. when I was able to pay off $35,000 of my debt, before I was married, I followed the following steps:

1. Define Your Goal

This is where you decide what you really want. My goal was to get rid of debt, and I had choices to make. Like I said above, my goal is to pay off $10,000 of debt. This is attainable and specific.

A good outline is using the SMART criteria for goal setting. It’s a good way for you to gather your thoughts, and to know the general idea of where you are going.

Specific – target a specific area for improvement.
Measurable – quantify or at least suggest an indicator of progress.
Assignable – specify who will do it.
Realistic – state what results can realistically be achieved, given available resources.
Time-related – specify when the result(s) can be achieved.

2. Plan what what small steps you’re going to take

Define the most important tasks that you can make so that you can get to your goal.

Be specific  with what actions you are going to take. Some people call this having a black-and-white goals, meaning that there will not be any gray area of what you can and cannot do.

For instance if you’re going to pay off a specific amount say $650 a month to your credit card bills. there is no gray area, it is a specific number and you know what you’re going to have to do.

3. Define your “Why”

Getting to your goal is easier when you know what you’re trying to achieve and why it is good for you. My why was getting to travel to Taiwan, and be able to fly around the country with friends.

This is the motivator for you and only you. There will be trials that you will go through reaching toward your goal. Getting on to the road of wealth creation is a marathon. Sometimes you just want to quit.

4. Take Action and Celebrate the Small Wins.

People find it more motivating to be partly finished with a longer journey than to be at the gate of a shorter one.

Once you start, you’re already that much closer to the finish line than you might have thought.

For your money this is where you track your expenses when you make them, and to enter it into a program like Quicken where you can see what you have done with your money. This allows you to have a history of what you’ve done, and it lets you know where you have spent your time.

It’s also writing down your expenses at the end of the day. It’s a transitional habit because you become more aware of what you are spending your money on, and you know you have to be accountable for tracking where every cent and dolalr goes.

While I’m Crossfit, and I’m looking at the countdown timer to see how much longer I have until the clock with hit 00:00 or counting the reps until I’m done with the workout, I celebrate the time passing by  doing another rep or seeing the clock tick away. I know that I’m almost done with the workout no matter how grueling it can be.

The steps are easy to do and also easy not to do. at least, for me, it gives you a framework of setting goals and achieving success.

Personal Finance in Paradise – Let Me Introduce Myself

Akaka Fallsjpg

My name is Mike

I’m the creator of Personal Finance in Paradise. The reason behind why I started this blog is because I hate debt.

Prior to getting into debt i had quite a bit of savings, and I used it all on trips and training in other parts of the country.

I’ve been in debt as far as $66,500 and having not much to show for it, and I felt that I needed to do something different with my life.

I looked and searched for all of the ways possible to get out of debt. I read online for specific tips and tricks, even paid for a program that said it would pay off $25,000 in debt be 24 months with an annual net income of $40,000. (Come to find out that program lied, and I believed the impossible). I continue to read both secular and non-secular ways of how people do with money.

I’ve been around the block. Making bad mistakes along the way, and trying to find out the best way possible to get out of debt.

A Few Examples of Bad Decisions

I cosigned two loans that the original payers defaulted on, and creditors came after me for that as well. I was able to fend off those creditors and point them into the right direction.

Creditors called me, and I was able to fend them off. They tried to subpoena me, and force me to tell them that I owed a debt that I didn’t own personally.

I’ve had an “a wide” set of experiences in my life. At the top that all off I do live in Hawaii. That’s one of the most expensive places in the world to live.

Sometimes you you may have seen that you get a two bedroom home here in Hawaii for the price that you would get a mansion out in Texas. The goal of this site is to keep not only myself accountable, but to also teach my experiences to help you get out of debt as well. My goal is to reach out to you who have been in my situation.

Some of this may sound not so “grammatically correct”, because I’m not a grammarian nor am I a grammar Nazi. I’m using a program called “Dragon Dictate” to record my voice  and put it down here on the website. So going to apologize ahead of time that this may not be completely grammatically correct.

I’ve heard it said that “smart people learn from their own experiences, and wise people learn from the experiences of others.” My goal is to help you to be wise.

I’m excited to hear from you, and I’m glad that were going on this journey together.