Visions for the Next Decade
Decades are precious. Most of us don’t get more than nine, if we’re lucky. Reflecting on the last ten years, I have a lot to be proud of. But I also left a lot on the table.
I have the luxury of chalking the last decade up to youth – 18 to 27. Maybe you have the same luxury. But if you’re reading this, you won’t have that opportunity again.
Don’t let another decade slide by in sloth. Don’t reach December 31, 2029 and wonder what happened to another ten years.
As Amos Tversky once said, “You waste years by not being able to waste hours.”
So my recommendation is to sit down and waste a few hours. Or go for a walk. Do it alone or with your partner. Spend most of the time in silence, thinking about how you want the next ten years to play out.
Come up with a few major themes. Write them down. Then work backwards.
Break your ten-year plan into one-year pieces. Break your one-year pieces into quarterly steps. Finally, break your quarterly steps into weekly (and possibly daily) actions you need to take to move toward the end you want to accomplish.
I’m going to walk through some of my ten-year visions for two reasons:
If you’re not sure where to start, it’s helpful to see somebody else do it.
Putting my visions on paper in a public place helps to hold me accountable.
Here we go.
More Consistency
This vision lays the groundwork for everything that follows.
My uncle recently told me about a presentation he gave to a group of high school students. He gave them a simple path to becoming a millionaire.
Start mowing lawns at 14 years old.
Mow 20 lawns at $25 each for 12 weeks per year.
Save all the money ($6,000 per year).
Do this for four summers.
Invest all the money ($24,000) into a low cost index fund. At this point the student is 18.
Add $100 per month until age 65.
Assuming an 8% annual return, four summers of mowing lawns plus a little extra every month turns into $1.4 million by age 65.
I didn’t understand the importance of compounding and consistency at 18. Even if I did, I probably wouldn’t have taken advantage of it.
With the advantage of youth comes the disadvantage of stupidity.
After spending the last ten years learning about compounding and consistency, and spending the last few years seeing it in action, it’s a top priority for my next decade visions.
It works for more than just money. And it can work in the wrong direction if you’re not careful. I can’t wait to use it as a superpower over the next ten years.
More Fitness
Ten-year vision: I will be in the top 1% of 37 year old men (excluding professional athletes).
This is a subjective goal. There’s not a good way for me to measure my fitness in relation to the entire population. But here’s the subjective way I plan to measure my subjective vision:
When I’m standing against the fence at my kid’s little league game, do I look younger than all the other dads?
Am I proud to take my shirt off at the beach?
Can I outsprint, outlift, and out endure the younger guys I’m exercising with?
At the company holiday party, how do I look compared to my co-workers?
Are all the numbers at my annual physical within the healthiest range possible (cholesterol, blood pressure, heart rate, etc.)?
One-year pieces: In January of every year, I’ll take measurements across the following metrics:
One rep max on bench, squat, and deadlift.
Max reps for push-ups and pull-ups.
Times for one mile and five-mile runs.
Times for 40 yard and 100-yard sprints.
Body fat percentage.
The goal is to be better every year than I was the year before.
Quarterly steps: I will revisit my workout plan once per quarter. Consistency is key for achieving progress, so changing a workout plan more than quarterly is counterproductive. But every three months, I’ll figure out where I need to adjust my workout plan to adapt for weaknesses and plateaus.
I will also revisit my diet on a quarterly basis with the sole purpose of eliminating things I’m overindulging (cookies, pizza, ice cream, etc.).
Weekly actions: I will exercise five to six times per week, as outlined by my workout plan.
More Risks
I recently had a conversation with a friend who recommended taking big risks with ten percent of your net worth. He’s more than a decade older than me and has done well financially, so I’m following his lead.
My risky investments currently make up about ten percent of my net worth, but that’s purely coincidence. In the next decade, I’m going to develop a consistent pipeline of risky opportunities to systematize my risk taking.
I define risky investments as those with higher upside potential but also the possibility of losing most or all of my money. Some examples of risky investments include individual stocks, starting a business, investing in someone else’s early stage business, peer to peer lending, cryptocurrencies, or many other things.
Taking big risks is the only way to increase your net worth a large amount in a short period of time. The ten percent method has a couple benefits:
You can never lose more than ten percent of your net worth. In other words, no investment would be fatal.
Even if you lose the full ten percent, you’ll walk away learning valuable lessons to apply to future investments. It’s almost like paying for an MBA without the lost time and wages.
Ten-year vision: Consistently take financial risks that account for ten percent of my net worth.
If I’m consistently taking risks with a small portion of my net worth, I’ll probably lose a lot of money. But over a ten-year horizon, I can make outsized returns if I’m right on one or two of my risks.
This strategy will help with the other ten-year visions I’ll discuss below relating to net worth and philanthropy.
One-year pieces: I haven’t worked out the exact timeline yet, but I think big risks are more appropriate to take every two years. At that pace, I plan to take five big financial risks in the next ten years.
Every year, I’ll evaluate my “risk-designated” cash holdings and decide if I want to allocate some of them to my less risky risks. Right now, I’m holding shares of Netflix as one of my less risky risks. I can add more to this holding at any time if I need to rebalance.
Quarterly steps: I’ll have at least one extended conversation on a quarterly basis with someone who is an expert in a risky investment I’m considering. Ideally this will be a face to face, extended (one hour plus) conversation to understand the benefits, pitfalls, potential returns, level of involvement required, etc.
These conversations will help me determine which big risk I want to take every two years.
Weekly actions: I will continue saving on a bi-weekly basis, but I’ll open a specific Ally savings account designated for building my reservoir of risk-taking capital.
I will also read broadly several times each month about unique investment opportunities. This reading will help me identify the types of risky investments I want to learn more about so I can identify people for my quarterly conversations.
More Money
Ten-year vision: This is the decade in which I’ll become financially independent. I’m targeting a net worth of $2 million by age 37, but I understand that net worth targets are largely dictated by market returns.
While $2 million is the goal, the bigger focus is building a good process. I’ll be happy with any result as long as I execute properly, since the final number is partially out of my control.
One-year pieces: A major component of hitting my ten-year net worth target is generating passive income. By the end of the decade, I’m targeting $5,000 per month in passive income.
This income will be in many forms, some of which I’ve yet to realize. But some forms may include real estate, dividends, subscription income from blogcastr, affiliate income from my website, and equity in other companies/small businesses.
Each year, my goal is to add another passive stream of income or increase the total income from a current stream.
Every two years, my goal is to add another $1,000 per month to my passive income. For example, in year two, I’ll have $1,000 per month in passive income. In year four, I’ll have $2,000. And by year ten, I’ll have $5,000.
I think $5,000 per month is a low goal for a ten-year vision. But I understand that passive income growth may not be linear. I could go from $3,000 per month in year eight to $8,000 per month in year 11. By leaving myself some room to overshoot the goal, I prevent myself from deploying capital prematurely and missing subsequent larger opportunities.
Quarterly steps: I will revisit my investments at least once per quarter. This includes the amount I’m saving, the amount I’m investing, and the balance of my investments.
For example, in the first quarter of 2020, I’ll be reducing my 401k contributions to the employer match level and re-balancing the difference into after tax investments. The reasoning is that I can’t touch 401k money until age 59.5, and I’ve already built a sizable base that will compound. Now I want to build a base of money I can use before traditional retirement age.
Another potential quarterly change might be the amounts I’m investing into different funds or even the amount I’m putting into the market versus saving for investments outside the stock market.
One of my priorities in 2020 is to start investing into VEMAX, a low cost Vanguard emerging markets fund.
Weekly actions: I have automatic transfers set up on a bi-weekly basis into both savings and investment accounts. I will continue this and likely increase these amounts aggressively over the course of the decade.
Reducing friction is key for building good habits, especially when it comes to money. Automation is one of the best ways to reduce friction. When building wealth, you shouldn’t be fiddling with the dials at the micro level on a regular basis. So for this ten year vision, my weekly actions are already established and (almost) immune to behavioral errors.
More Philanthropy
In 2018, I donated $1,000 to my high school library program. That was basically the only charitable thing I did last decade.
I didn’t donate a single dollar in 2019.
I don’t want to tie my giving to my income. I want to build a system that continues giving after I stop making money and long after I’m gone.
The way I view philanthropy is that it’s better on the back end. Let me explain.
I could donate $5,000 per year for the next ten years for a total of $50,000 donated. Or I could invest $5,000 per year for the next ten years.
That $5,000 annual investment would turn into roughly $69,000 by year ten (assuming seven percent annual returns). So in the tenth year, I could donate nearly 40 percent more than if I had donated every year.
Or I could start donating $2,760 per year after year ten, which is four percent of $69,000. Assuming 7 percent annual interest, I could keep donating $2,760 per year, and my $69,000 would continue growing by about 3 percent annually.
Through this strategy, in just ten years, I’ve created a perpetual donation machine that will continue growing and throwing off annual donations – with no additional contributions – for the rest of my life. It can even continue giving after my death.
Assuming I live to 90, my initial $50,000 investment will grow to about $330,000, even while donating 4 percent per year. At that point, four percent would equal an annual donation of $13,200 – and it would continue growing forever.
Ten-year vision: By the end of the decade, my vision is to have a “perpetual donation machine” made up of ten percent of my net worth. If things go according to plan, that will be $200,000.
Starting at the beginning of the next decade, I’ll start my perpetual giving machine in motion, giving four percent per year in perpetuity.
Again assuming I live to age 90, when I die, my perpetual donation machine will be worth about $960,000.
It will be donating about $38,000 annually.
And it will continue donating forever.
I don’t have one year pieces, quarterly steps, or weekly actions to accomplish this ten-year vision. I’ll accomplish the vision by executing on my net worth and risk taking visions I outlined above.
But in the absence of giving money over the next ten years, I will give a little bit of my time. I commit to spending one afternoon per quarter volunteering in some capacity. This feels tiny and inconsequential, but I feel the need to be selfish, so it’s all I’ll commit to right now.
In the next decade, I’ll lay out the specific actions to execute the giving phase of my perpetual giving machine. I envision targeted giving that may take the form of scholarships or grants awarded through an application process.
The giving will be very specifically directed to achieve specific goals and solve specific problems. Financial independence will give me more time to focus on the specifics of my perpetual giving machine.
More Readers
In keeping with the plan to hit financial independence this decade, I want meaningful work I can do when I get there.
In the past year, I’ve built a small audience by writing consistently, learning about email lists, search engine optimization, and what makes online writing attractive.
If I can continue this trajectory over ten years, my progress will compound to an audience I can leverage in many ways.
Ten-year vision: By the end of the decade, I plan to have an email list with at least 50,000 recipients.
One-year pieces: I’ll evaluate my progress at the end of every year to determine if I’m making the progress I need to make. If so, I’ll double down on what I’m doing. If not, I’ll experiment with other methods.
My quarterly steps and weekly actions are subject to change based on my annual reviews.
Quarterly steps: The biggest boost I’ve seen in subscribers to date was after I published this curation piece on Morgan Housel.
I started writing selfishly. I wanted to clarify my thinking, improve my writing, and get some ideas out of my head.
As I’ve started to check those boxes, I also want to help others. Curation pieces can be super helpful. And when you provide value, people pay attention.
As part of my audience building strategy, I’ll publish a quarterly curation on a person or topic I’ve been studying.
Distributing my ideas in more than one medium is also important for building my audience. My favorite way to do this is through podcast appearances.
I love sitting down with intelligent people and discussing the topics I write about. In 2019, I recorded three podcasts. In this decade, I want to appear as a podcast guest at least once per quarter. This will create a powerful network effect, and it will also help me tighten my thinking even more since I find speaking much harder than writing.
Weekly actions: In 2019, I published one article every week. I’m not sure this is the right cadence to produce the best quality content, but it helped me build a powerful habit. I want to continue that habit in a similar way.
I think I’ll keep publishing two to four articles per month, but I’ll let that be determined by the type of project I’m working on. What I’m committing to is a weekly email.
I’ll send a weekly newsletter every week for the entire decade. The first edition of The Lake Street Journal will go out on January 3rd, 2020.
The Lake Street Journal will be my way of sharing the cool things I found, keeping readers informed of the projects I’m working on, and continuing a short form publication habit.
Consistency is key.
I’m excited to send the first issue of The Lake Street Journal to 166 faithful subscribers. With a little bit of luck, ten years from now, I’ll be drafting the 520th issue and queueing it up to send to more than 50,000 of you.
Conclusion
I’m excited for the next ten years. I’m excited to look back at this article and see how much my priorities and opinions change.
My ten-year visions are heavily focused on money. At 27, I see most of my decisions in dollars and cents. I think it’s because I’m building the base for the rest of my life.
I want financial security for my future family, and I want options for myself. The last ten years prepared me to realize that vision. The next ten years will determine if I can reach it as early as I want to.
I expect my ten-year visions for the 2030s to be wildly different from these. But I don’t think I’ll look back at my 2020s visions with embarrassment or regret.
Time will tell.
I won’t let it pass me by.
I’ll be working hard to make the best of it.
