This time of year I like to look back over the last twelve months and reflect. For me, life is about making mistakes–mentors have told me that if you don’t make any mistakes, you aren’t moving fast enough. This year has been a whirlwind, so I must have made some real doozies!
While it certainly can be difficult, I try not to dwell on my missteps as long as I learn from them. At this time of year, I also like to learn from events and the mistakes of others. There are five that I think are well worth reflecting on before we march into 2012:
1) Don’t Wait on Government…In Fact, Don’t Wait.
Politics seemed to enter our life more than ever this year, with Republicans and Democrats waiting to the last minute before passing legislation in several key areas, including funding to keep the government open!
I’ve met people who’ve said that they can’t do any long-range planning because they’re unsure what measures the government is about to pass, or they aren’t sure if the tax structure is going to change, or they want to wait and see who the next president is.
Most artisans work on a 1099 income basis, so some important areas such as health care and small business taxes can have a big impact on your bottom line.
….but does this mean you should wait?
Waiting on the government doesn’t make any sense to me. Is it better to have a plan in place that you may need to adjust or to have no plan at all? I’d always prefer to revisit my plan when the government finally decides their actions, than be held hostage to whatever political problems crop up.
The Bottom line: Plan now and adjust as events occur.
2) Nobody Cares About Your Money More Than You
We should have learned this from Bernie Madoff a few years ago and all of the mutual fund problems back in the early decade. But if you’re still hoping someone else will take your money and make you rich while you do something else….all you had to do was read the newspaper to find more evidence that financial education is the key to keeping your money safe.
A money management firm called MF Global reportedly has “lost” over $1.2 billion dollars of client money. Discovered in October, this firm’s oversight process is now in question, and there’s sure to be lots of finger pointing over the next few weeks.
I know that you may be much more interested in your craft than in money management. I also know that if you’d held money at MF Global, there would have been no way to know that funds were slipping out the back door.
However, through goal setting, proper diversification and reviewing your investments, you can minimize the damage that so-called “pros” like MF Global can have on your portfolio.
The Bottom Line: Whether you want to or not, learning good money management skills can avoid financial disasters.
3) Education Doesn’t Buy You a Job
Whether you agree with the Occupy Movement or not, these protesters illuminated an important fact: having a college degree doesn’t ensure that you’ll gain high-paying employment. The government scrambled to try and pass predatory lending reform measures this year after many protesters complained about student loans.
As I mentioned earlier, you shouldn’t wait for the government. If you’re going to use debt to pay for school, have a plan beyond “I’m going to get paid enough to justify this later.” Whenever you take out debt, have a concrete plan to pay the debt back.
The Bottom Line: Evaluate ANY debt carefully before signing on the dotted line.
4) Bigger Doesn’t Always Equal Better With Banks
Until bloggers and consumer advocacy groups raised concerns, Bank of America was prepared to introduce a new annual debit card fee this year. Had they succeeded in charging the fee, other big banks would have surely followed suit, much like airlines raise rates as soon as one carrier takes the initiative.
In 2011 we learned that you should re-evaluate your bank to make sure the fee structure and benefits still make sense for your situation. Why stop at your bank? Any professional relationship you have to help you pay taxes, buy insurance, manage investments, or write contracts should be reviewed on a consistent basis.
The Bottom Line: Your craft is your calling. Don’t let bad professional relationships hold you back from success.
5) The World is Becoming Smaller
We can’t finish any discussion about 2011 without remembering that for some people, it was a disastrous year. In places like Fukushima, Japan; Tuscaloosa, Alabama and Joplin, Missouri, we learned that events beyond our control can affect not just our day or our art, but can change the course of our life. I can’t believe how quickly the world saw graphic pictures of these disasters. Even though I don’t live anywhere near any of these places, these pictures and videos helped me realize how small our world is becoming.
We hear about these incidents, and while we often send our prayers and our money, we think that they can’t (or won’t) happen to us. However, I know that in 2012 there will continue to be natural disasters. There will be events beyond our control. Even if they are far away, we’ll be increasingly affected by these events.
The Bottom Line: Think about contingency plans. If some emergency strikes, what is your back up plan?
I hope you are having a warm, happy holiday season! We’ll write again with goal-setting tips in early 2012. Until then, I wish you a truly happy New Year!