Financial Goals For 2023: Increase Wealth And Income

What are the top New Year’s Resolutions for Americans in 2023?

According to Statista Global Consumer Survey, to live a healthier life is the top of mind for Americans making New Year’s Resolutions in 2023.

Excise more, eat healthier, and lose weight are the top 3 most common New Year’s resolutions.

Physical and mental health is important. It is great most Americans recognize this and want to improve their physical health.

But what about financial health?

#4 on the New Year’s resolution list is to save more money.

Nice that Americans are also thinking about their financial health as well.

My Own Financial Goals For 2023: Increase Net Worth And Increase Cash Flow

Saving more money is also at the top of my financial goals for 2023.

I always strive for 2 things each year when it comes to my personal finances:

Increase my net worth;
Increase my cash flow.

When it comes to increasing my net worth – I want to make sure I track to the top 1%.

At the end of the day, wealth is relative. When everyone else is getting 20% richer, it doesn’t feel great to only grow by 10%.

I want to make sure that I am keeping pace with the people on top.

Ideally, I will be able to perform better than the top 1%.

When it comes to increasing my cash flow – I want to make sure at the minimum my investment cash flow can support my current lifestyle.

My cash flow from my rentals can cover all my current living expenses. Therefore, I want at the minimum to have my cash flow keep up with inflation.

Ensuring my investment cash flow can keep up with inflation wasn’t a hard task when inflation was hovering around 2%.

Now, with inflation at such a high rate, I better spend more time optimizing my investment cash flow.

I recently got back from a 1 week vacation with the family. Even the taxi cab ride from JFK to Manhattan costs $100 now after a 20% tip.

To achieve an increase in net worth and cash flow, I want to be able to accomplish 7 financial priorities for this year.

My 7 Financial Priorities To Help Increase My Net Worth And Cash Flow In 2023

Financial Priority #1: Stay More On Top Of Rental Properties

I started building my rental portfolio over 15 years ago.

The financial goal at the time was to generate passive income so that one day I can be financially free.

15 years later, I have accomplished that goal.

My rental properties generate enough net rental income to cover my expenses.

However, rental income is not 100% passive income, at least not for me.

I own several rental buildings in Brooklyn which are near my home in Manhattan. I wanted to be close to my rental properties so I can check in whenever there are problems.

I do not have a management company handling the day-to-day because I didn’t think the level of work warrants the 5% to 10% of gross rent they take in management fees.

The goal this year is to stay more on top of my rental properties whereas, in prior years, I have been more hands-off.

Action Item To Achieve Financial Priority: Review Expenses And See If There Are Ways To Cut Down On Costs

Inflation is making it more expensive to run rental properties.

My utility bills, insurance premiums, the cost of cleaning supplies, and real estate taxes have all gone up.

One of my action items is to examine closely where I am spending money on my rental properties and see if I can reduce those expenses.

Action Item: Understand When Rental Terms End

Having an empty unit is another hit to my cash flow.

I need to keep better track of lease terms for all my rental units and reach out to the tenants close to 2 months in advance to see if they are interested in renewing.

That way, the tenants have some time to think about it. And if the tenant decides to not renew, then I have time to ask a listing agent to show the unit a month before the lease ends.

This should help me reduce my vacancy rate.

In the past, I’ve gotten bitten before when I wasn’t on top of lease end terms. Several tenants informed me that they are not renewing a week before the end of the lease, which left me with little time to show the place.

Action Item: Review Rents During Lease Renewals To See If They Can Be Higher

Rents have gone up nicely over the past few years in Brooklyn, where my rental properties are located.

I’ve been slow in the past in raising rents. I figure if I have a good tenant, why disrupt the relationship over a few dollars?

However, given the significant increase in rent recently, it is time for me to revisit what the market rent is for my units.

I don’t necessarily need to obtain market rent in order to keep a good tenant, but I should at least adjust my rent to a reasonable level. Otherwise, I will be leaving too much money on the table.

Financial Priority #2: Try Living Off Rental Income Exclusively

Action Item: Keep Track Of Rental Income And Household Expenses Using One Bank Account

All the numbers I have tell me that my rental income should cover all my expenses.

But my household expenses are not as straightforward given the various credit cards, bank accounts, and cash accounts my wife and I have individually and jointly.

To really test if the rental income can cover all my household expenses, my wife and I will run all our expenses going forward through one bank account.

All credit card payments, cash needs, and bank account checks and wires will be taken out from one account.

Additionally, all our rental income will be channeled to that same bank account.

Other income such as work income, interest payments, and dividends will not touch that account.

This will really show us if our lifestyle can be sustained with only our rental income.

Financial Priority #3: Start An Online Business To Generate Revenue

I am a big fan of having several income streams. If one income stream disappears, I don’t want to be left worrying about how to make my mortgage payment or put food on the table.

Having multiple income streams provide a great level of comfort.

We already have work income, rental income, and investment income including dividend payments, interest payments, and private equity distributions.

It is time to add another stream in the form of income from an online business.

After all, based on an 18-question quiz I’ve taken, I do have the right mindset to start a million dollar business.

Action Item: Identify A Product To Sell

I’ve already gathered information on how to start an online e-commerce business.

The next part is to figure out what product to sell.

I want to get the business off the ground during the 1^st quarter of this year.

Financial Priority #4: Continue To Write On My Blog

In the vein of expanding my income streams, I want to continue to focus on building out this blog because I think it can be an income generator one day.

Blogging isn’t a quick way to earn a buck.

But I believe if I am persistent in adding content to the blog over an extended period, I will be able to generate some cash flow from this blog.

The key is to continue to produce quality content for this blog.

Action Item: Write Two Blog Posts Per Week

My target is to write two blog posts per week.

I’ve been trying to keep to that routine for the past 3 months.

Overall, I’ve been able to hit that target except for the last two weeks in December.

I took a hiatus from blogging then to travel and spend more time with family.

Action Item: Produce At Least Two Databases That Can Serve As Useful Resources To My Audience

In addition to posting 2 blog posts per week, I want to produce at least 2 databases of financial information my audience will find useful.

I already have them in mind and just need to spend extra time in gathering the information, and then figuring out the best way to offer that information to the audience of this website.

Financial Priority #5: Put My Money To Work

The stock market and crypto market had a tough 2022.

The real estate market looks to be next if mortgage rates stay at an elevated level from a year ago, and if the economy gets worse.

I have been busy stacking cash hoping to put that cash to work at some point in the near future.

My belief is that the stock market and crypto market will go down some more creating a great entry point for a long term investor like me.

Action Item: Come Up With Good Entry Points In Stocks And Crypto

The key for me in putting my money to work is to come up with good entry points on when to deploy cash into stocks and cryptos.

I want to lay out my investment strategy in advance and script out my entry points so that I am not influenced by market sentiments or my own emotions when the time comes to put money to work.

Financial Priority #6: Be More On Top Of My Taxes

Income taxes are my number 1 expense.

There are many benefits to living in New York City.

Unfortunately, as a New Yorker, we have to pay for those benefits.

New York City has both state and city income taxes in addition to federal income taxes.

The top tax bracket runs north of 50% when Federal, State, and City income taxes are all taken into consideration.

Therefore, it makes sense for me to be more on top of my income taxes.

Action Item: Review Tax Returns

I currently use a tax accountant to file my tax returns.

My tax accountant historically has sent my tax returns to me very late in the game.

Therefore, I never feel like I have sufficient time to review my tax returns thoroughly.

I want to change this for this year.

I am going to stay more on top of my accountants to provide my draft tax returns to me earlier.

In addition, I will go back to my prior year’s tax returns and take a thorough look through them to better prepare me for this year’s review.

Action Item: Learn About New Tax Laws

I need to remain on top of changing tax laws and new programs that can help reduce taxes.

Once again, income taxes are the number 1 expense for my household.

Reducing the income tax burden by 10% can result in significant financial savings for us.

Financial Priority #7: Get A New Credit Card That Has Better Benefits

This is the lowest of my financial priorities for the year.

I’ve been using the same credit card since college.

At this point, I want to add another credit card to the mix that can provide me with better rewards than the card I’ve been using.

Credit cards are great for their rewards and that is why I like using credit cards for all my expenses.

I always pay my credit card balance in full and never carry a balance over to the next pay cycle. The interest rate charged on a credit card is not for me.

Action Item: Review Reward Plans Of Various Credit Cards And Apply For A New Credit Card

Now I need to spend time reviewing which credit card provides the best reward.

Why should I settle for 1% back if I can get a credit card that pays me 2% back?

That might mean the difference between $1,000 back a year versus $2,000.

If I can get an extra $1,000 back annually just by doing an hour or two of research, then that is time well spent.

Summary

It is the start of the new year and time to plan out our financial goals for this year.

My overarching financial goals are to increase my net worth and to increase cash flow.

I want my net worth to track the top 1% at the minimum.

I can increase my cash flow by focusing on my 7 financial priorities.

Those 7 financial priorities include establishing more income streams, lowering expenses, and generating a better return on my cash.

To The Audience: What are your financial goals for the new year? How did you do on your financial goals from last year? Do you believe in New Year’s Resolutions?