ep.012 – “the contented FI spreadsheet”…

Welcome to episode 12, the last episode before Christmas and with me talking about perspective in the previous episode I have made the decision that this will be the last episode for the year. You see, outside of my main job, I do a lot of side projects including this podcast and it is time to spend some real quality time with my family for the next couple of weeks. This actually ties in nicely to that new spreadsheet I told you I wanted to develop.

What really got me thinking about this recently was believe it our not changing life insurance providers. We are now with AIA and they offer a programme called Vitality which tracks your health choices and gives you points for various things like getting medical and dental check-ups, answering quizzes about your health, and also tracking your daily activities and sleep patterns. In return for achieving a level of points, you get weekly benefits like $5 vouchers for various things and at the end of the year a certain level of discount depending on your final tally of points. From a business perspective, this seems like a genius idea as the more motivated AIA customers are to improve their health by getting bonuses and discounts the less likely they are to make a claim.

From a customer point of view, there are caveats to look out for like a monthly cost to join the programme and a decrease in discount over time if you don?t hit the higher end of the points tally ? but regardless it gave me a huge focus on my health. Of course, I have always known that looking after my health is extremely important, probably the most important as without truly looking after our health to the best of our ability we can?t focus truly on the things that make us and the people around us the happiest or most content.

The thing that really moved the dial, was the purchase of a smartwatch to track my activities, including steps, heart rate and sleep patterns. What is interesting is that a few weeks ago I saw a Facebook post from someone in the Mustachians community seeking encouragement from others to avoid the temptation of going out and making a frivolous purchase on a fitness tracker. In many respects I understand this thinking as I am now so far down the FI journey that I feel guilty for every dollar I spend that is not completely essential, and it could be argued that fitness tracking technology is not essential to keep fit. But that said we all know that improving our health to the best of our ability is one of the most if not the most important things to do, yet in reality, for many of us it actually ends up way down the list. So as I handed over $314.99 for my new smartwatch, and even though $87.44 of this was made up of reward points I still felt guilty but that guilt has quickly worn away. Ok so I haven?t even had this watch for a week yet, but I truly believe it is one of the best investments I have made, certainly this year and maybe for quite some time beyond that.

As famously said by business management guru Peter Drucker, ?What gets measured, gets managed? ? and this is so true for me. Having a constant reminder on my wrist of how many steps I have completed today, the calories I have burned and how much sleep I had the night before provides so much motivation to make sure I stay on the right track, and as a Brucey Bonus, I get to earn my Vitality Points! So now in a dedicated app on my phone and information locked to my wrist, I can spot trends and make the necessary calls to action to improve my health and general well being and I honestly feel so much better for it. Improvements in my activity and sleep provide better focus throughout the day and the ability to make better life and work choices. So now my health is neatly measured with the use of the latest technologies I can now go back to my trusty spreadsheet and work on the measuring the other aspects of my life that bring happiness and contentment.

Well, I made a start on this spreadsheet a few days ago, and similar to the initial FIRE exercise all members should carry out whereby you list the most important things in your life I noted down all these things as higher-level categories of things that are important to me on a week by week basis. These are the things that are most important to me right now in terms of pure happiness/contentment but they also take into account things I also need to concentrate on the FI journey to achieve our FI goals. So I think I have a good balance here to enjoy the FI journey, without be purely being obsessed by the FI destination.

Although all of these things are important to me, there are still some that are more important to me than others. So I applied weightings to each category (scored as 1, 2 or 3), with 3 being the highest priority. These things can be grouped into very simple categories, looking after my health, spending time with my immediate family both in New Zealand and in the UK, nurturing our home environment, and the final two categories are linked directly to our FI journey and these are engaging with my main job and thoroughly managing our costs.

So where I wanted to get to was similar to the way my health is now tracked, I want to be able to spot trends and have the necessary calls to action to improve happiness and contentment along the FI journey. To do this next to the weighting applied to each category I also scored from 1-5 how much effort I am applying to each category, with 5 being the most effort. As my health is now tracked in a neat software package judging what number should be applied for the health category is relatively straight forward as I can already visually see how well I am progressing. For the other categories it is more subjective and down to a gut feel ? but it is important, to be honest with myself to get the most value out of this process as I need to work more on the areas that are not getting as much attention so I can enjoy a more rounded life.

The maths in the spreadsheet is simple, the weighting multiplied by the effort score provides a weighted effort score. Which basically ensures that the categories I have prioritised the highest provide more points than the lower priorities. A weighted effort percentage can then be determined by dividing the weighted effort score by what the maximum weighted effort score could be. For example, as the highest priorities have a weighting of 3 and a maximum effort score of 5, 3 multiplied by 5 gives a maximum total of 15. So if I have an effort score of 4 out of 5 this equates to 80% weighted effort score for this one category, leaving 20% potential improvement. But the weighting comes in when group categories that may have subcategories with different weight. For example, at the moment I have 4 very high-level categories to easily track which are Finances, New Zealand, UK and Work/Hobbies.

Not surprising, the Finances high-level category (containing management of costs and income generation) scores the best as I am still guilty of focussing a lot on the FI journey and I can see more effort is needed around engagement with hobbies, work and containing family and friends more in the UK, whilst referring to the Highest Priority bar chart clearly shows I need to make more effort on the subcategories of contacting my sister and brother in law, spending more time with Leish and Stella and engaging even more at work. It is great to see that effort associated with Health is up there joint first with other categories and I can guarantee this would have been very low on this scale had I implemented this spreadsheet just a couple of weeks earlier. And this is exactly where the power of this process is, remember what Pete said, ?What gets measured, gets managed?. So I have now got my FIRE spreadsheet tracking annual spend, prior to the recent mortgage paydown, what the budget should be in 2020 and finally what the FI Goal budget should be, and IO can now use this alongside the contented FI journey spreadsheet, a name I have just come up with, to track, measure and manage my life on my way to our families FI goal. I am still developing the spreadsheet and making the tweaks where necessary but as I said I will be having a break from podcasts for the next couple of weeks I will have the time to pop these spreadsheets on the happyfiday.com website before episode 13, so that will be my little Christmas present to you.

I have said before, a couple of times, that as human beings we all seemed to be wired to drive towards goals, however, we all seem to be different about how we get there and what really motivates us to get there. If, like me, you are motivated by tracking what has been measured please, please get involved in this process but importantly don?t just solely track the key performance indicators to get you to your FI goal but track all the things that truly make you and those around you happy and content along this journey as without managing these aspects of your life your FI goal may not be as rosy as you thought it would be. As Gary Vee says there are a lot of miserable millionaires out there and you should rather be happy in your Toyota than crying in your Ferrari! So please, please don?t neglect what really matters on your journey to FI as these sub-categories are actually the things you are working towards enjoying the most once, you?re are Financially Independent ? so it makes no sense to ignore them along the way? so until next time, Happy Christmas and New Year and happy fiday!

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