“People who labor all their lives but have no purpose to direct every thought and impulse toward are wasting their time—even when hard at work.” — Marcus Aurelius
At the end of each year, I like to pause and reflect on the past 12 months of successes, failures, challenges, and opportunities. Tim Ferris has a process for this called the ‘Past Year Review’.
I pair the PYR with a short list of habits that I would like to continue or create for the following year that support my values and Financial Purpose, then I identify the daily activities required to keep or create the habits and input them into an app called Way of Life. This creates a daily checklist that allows me to track my activities for the entire year, ensuring I don’t stray.
This process is simple and effective, a wonderful combination.
The process works so well that we have incorporated checklists into our financial planning process to ensure we’re covering all planning areas and taking proactive action. For example, this past year presented an incredible tax-loss harvesting opportunity for clients that hold investments in after-tax accounts. Our process includes a tax-loss harvesting review throughout the year (which we did multiple times in 2022) and we were able to harvest hundreds of thousands of dollars of tax benefit for our clients.
As our life and financial situation becomes more complicated it can be difficult to keep track of everything, let alone follow through to complete the task(s). This is what we do for our clients; we anticipate and execute for them, ensuring important opportunities don’t slip through the cracks.
I’ve included a checklist available to download below, that I have found to be helpful to review at the beginning of the year. Each item listed has a suggested action to take if answered “yes”.
Here are few examples of items included:
Do you need to assess the progress you made toward your goals last year?
Do you need to confirm you are adequately saving towards your goals?
Should you review your unrealized capital gains and losses from last year and create a harvesting strategy?
Do you need to rebalance your investment accounts to maintain your asset allocation?
Do you need to review your asset location, i.e. the types of accounts in which your investments are held or to which you are contributing?
Would a Roth conversion be beneficial this year?
Would a backdoor Roth contribution be beneficial?
Most people aren’t obsessing about whether a Roth conversion would be beneficial (if you are you may have a calling as a financial advisor), so keep this on hand as a reference throughout the year to make sure you’re not missing any opportunities.
Or, take advantage of our Free Financial Assessment to see if there are any areas that we might be able to add value to your financial situation. We would love to design a plan to ensure you are living out your Financial Purpose AND checking all the boxes.
If you found these thoughts to be interesting, helpful or entertaining, please feel free to share with a friend.
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