Last Post of 2024

How to make 2025 your most successful year financially yet

Another year is wrapping up. Hopefully you made progress towards your goals this year. If not, this post will cover the things you need to do for 2025 to finally get your financial situation moving in the right direction. (And even if 2024 was a good financial year, this will be a good refresher for you going into next year.

First things first, hopefully you didn’t go too crazy during the holidays. Now I absolutely love the Christmas season and as a father of a big clan of little F’ers (plus marrying into a large extended family), Christmas is a big expense no matter what.

But the Christmas season is where a lot of people fall off the financial discipline bandwagon. It is easy to get caught up in buying the newest things and having a big memorable day. Every relative seems to want to be the one who wants to buy THE gift that is the favorite of the season.

So don’t take this next part as being a Grinch, but gift buying is one of the biggest net-losers for a family. As explored in a previous post, there is a huge deadweight loss to gift giving. In short, if I thought a particular item was valuable enough that I was willing to exchange $ for it, then I would have already purchased it. But by not purchasing the gift yet, I am saying I prefer my $ to the cost of the item.

Once you see the net loss, you start viewing the gift giving part of the holiday different (the spending time with family, meals, and celebrating is still tremendous and you should consider yourself blessed if you have that).

This goes nicely with my strong preference for family and friends to gift kids ‘college money’ to a 529 account. I figure at least 1 of the many lil F’ers will go to college and can use the money. Since 529 accounts are transferable between kids, that means it is a pool of future dollars they can use.

Then, to make it even better, the changes in SECURE Act 2.0 (free post- and the changes impact a LOT of retirement stuff, not just 529s) made it so a sizable amount of 529s can be transferred to Roth IRAs for the children. Meaning that all the lil F’ers may potentially start off their adult lives with a very nice Roth IRA balance that they never have to pay taxes on.

Before we get to the paywall and lay out the big items to hit on next year, I did want to continue the tradition of just some review on my own net worth since I started it last year. This will just be some bullet points instead of a full post. For many of you, especially those following, you should see similar stories:

• Assets had a nice 2024 so far with stocks up 20%+ and crypto on an absolute tear

  • Large caps killed it early in the year which is ~1/3 of my 401k allocation, but later in the year small caps made up ground which helped both my ~45% 401k allocation and my personal accounts (taxable, Trad IRA, and Roth IRA) since most of the individual names I buy are in the small cap index

  • Out of the money option selling was very nice this year as assets were volatile and trended up, but each month tended to only be a few % move which resulted in a lot of options expiring worthless. I added an additional 10% to my personal account returns on top of a buy and hold from selling options.

  • I don’t include my primary home in net worth, but for those who stubbornly still choose to, home prices were up

  • I purposely positioned to get my job eliminated early this year to get a severance and double dip with a higher-level external role and rolled my pension into a qualified RILA. Since those funds are invested in 1 year segments, I’ll have to wait till the middle of next year to see how that did, but that is a not immaterial amount of net worth.

    • Note - a big part of this was that the pension was earning 3% and it is a qualified pre-tax account, so I was looking for another qualified account that was not super high-risk but should beat 3% over the long-term. RILA isn’t right for everyone.

  • Lastly, we are looking to put an addition onto the house now that the family outgrew our primary and the home is in the perfect location for us right now (minus a high-cost of living state), so I have a very oversized cash allocation right now and earning 4%+ on that made it less painful.

• Liabilities consist of mortgage, car loan, and student loan which have APRs between 2.25%-2.75%. In a 2nd HYSA, different from my home addition account, I have enough cash to pay off the car and student loan and just autopay the 2 from the account. It is free money to earn 4.15% while paying 2.5%

  • Assuming high-yield savings account rates stay above 3.5%, I will continue to just let this play out in 2025 and early 2026 till all non-mortgage debt is paid off.

Net-net, between good asset growth, a nice bonus severance package, good yields on cash, and a gradual paydown of liabilities, 2024 shaped up to be a very strong year for net worth.

In a week when you update your net worth tracker for the quarter (you are tracking your net worth quarterly right Anon?), if you see anything less than a 15% increase in your net worth for the year, you should seriously re-examine your strategy. The stock market + crypto market alone should have you well over 15% even if you didn’t save a dime.

If you were following the advice here to invest & save at least 25% of your income, then you should be well over 15% growth for the year.

And if you like this, check out the full e-book I wrote that goes into an even more comprehensive and detailed breakdown of fixing your finances. This book will bring you from Zero to Some wealth by getting out of debt and growing your wealth.

Which leads us to the top things you should focus on in 2025 to make it a better financial year for you…