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Includes airfare, two-night hotel, tickets to the show, plus $1,000 in spending cash. For official rules and entry information, visit iheartradio.com/smallbusiness. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insights, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less.

My name is Joshua Sheets. I'm your host. And today, I'm going to kick off a series where we talk about how to wind down a year and how to plan for the next one. Over the next couple of weeks, I'm going to bring you a series of shows where we talk about how to finish one year and then interesting things you can do to plan and prepare for the next year.

Now, I don't know what you like to do at the end of the year, but I'll share what I like to do and hopefully there's some tips in here that are helpful for you. One of the things that's most important for me is always to trigger off my planning, usually before December, but at the very least by December.

So as we start this series here in the beginning of December, I encourage you follow along with me in some of what I have to share with you. I think one mistake many people make in their annual planning is they wait too long to plan. Me personally, I enjoy taking time off from work.

I enjoy being totally free and disconnected from my business life, and I really enjoy the holidays. Thanksgiving is my favorite holiday, but of course Christmas and New Year's are really nice as well. And one of my markers of wealth, one of the things that I consider that it means to live rich, for me personally, is to genuinely have time off around the holidays.

For me, that's a marker of luxury. I can remember when I was a kid, we often went camping at Christmas time, and I can remember when I was a kid, we would go off a New Year's weekend, and we'd go to a campground, and we'd have a great time, the campground would be totally full, and then there'd be that last day and all of a sudden it's just gone, 80% is gone.

And I always thought, someday, someday I'm going to be the kind of guy who doesn't have to leave on January 1, but I can just stay till January 4 just because I can, because I don't have to report back to somebody for work on January 2. And so that's one of those little personal indicators for me of, "Hey, I've made it, I don't have to worry about January 2, I can start on whatever day that I want to start on." So I hope you have your own list of those things, maybe it's, you know, another one of mine is not having an alarm clock, maybe they're just things that make you feel rich, things that make you feel successful, when you hit these goals and live your life the way that you pictured that it would be.

And so I like to do my planning, if I haven't done it before Thanksgiving, and I've been thinking about it, right, during the month of November, trying to knock out all my goals before the end of the year. But I like to do my planning during the first couple weeks of December, and then be done, be done in December 15, and then off for the rest of the year, and then come back in January and see.

And so I'm going to share with you some ideas, some of these are going to be kind of just life, life design, lifestyle design, I guess, business, productivity, kind of just goal setting, but then also some financial tips and suggestions as well. So as I consider it, the very first step of finishing a year strong is to reflect.

That's what I want to share with you today, to reflect, to spend time reflecting and considering the experience that you have just gone through. I observe that many people go through experiences that could be wonderful learning experiences for them, but they often don't take the time to reflect on what's actually happening.

And I think one of the core skills that all of us can develop, maintain, strengthen, is the skill of paying attention, paying attention to life, paying attention to input, and then reflecting, spending time just to consider what the input that we receive actually means. I have a favorite saying that I repeat often to myself, "Sometimes you win and sometimes you learn." Sometimes you win, sometimes you learn.

Sometimes you win, sometimes you learn. But sometimes you win and sometimes you learn only if you actually pay attention to what just happened. I used to think that everybody did this. I've now discovered that not everybody does it. You watch people that go through painful experiences again and again and again and again and again and again.

You think, aren't you going to pay attention and learn your lesson at some point? Do you have to go through this another eight times before you might finally pay attention? It just seems like a foolish way for me to live, to go through hardship again and again and again.

Why not pay attention and realize, "Hey, this didn't work," or, "What do I do differently in order to get different results?" To do the same thing over and over again and expect to get different results is insane. You know that, I know that. And yet, how many times do we just simply do the same thing over and over again?

And if we would just stop and reflect and say, "Hey, that worked. Let me keep doing more of that," or, "That didn't work. Let me stop doing some of that and try something different." A lot of times just trying something, anything, even if you don't know what to do, would make all the difference in the world.

And in my opinion, this applies on both sides of the success spectrum. Sometimes we do something that makes us really successful and then we just stop doing it. I'm as guilty as you are. Not preaching to you today, preaching with you, preaching it myself. I'm as guilty of this as you are.

So many times over the years, I've seen this in sales, right? You're involved, we used to do these weekly meetings, sales meetings, and everyone goes around the room and reports on the week that they just had. And you'll see someone and you'll see yourself. You'll do a certain series of actions that lead to all these great results.

And then you just stop. And you ask each other, "Why did you stop doing that?" "Well, because it worked." And you think, "Come on, am I going to get it? I've done this in so many areas of my life. I still do it." So pay attention and pay attention to what works and then make sure that you reflect on it so that you can keep doing it.

One of the things that's most valuable is paying attention to the things that lead to success so that you can know how to keep them going in the future. You know, there are some things that if you just push them forward, it'll keep everything going. But if you let them go, everything falls apart.

So you need to know what are those things that work for you, out there, foundation. What can you not let go of? I think it was just the analogy of drive, right? Fly the plane. If you're flying an airplane and everything's falling apart, fly the plane. Focus on whatever you got to do to fly the plane.

And then while you're flying the plane, try to fix the other stuff. But if you got to, if everything else is going apart, wrong, fly the plane. Focus on what's most important and always keep those things going forward. And if you do that, you can deal with the problems that result.

So focus on what is going well and understand, reflect on it, so that you understand why does this work? Why is what I'm doing in this area of my life, why does it work? Why am I getting good results? Why is what I'm doing in this area of my business, why is it working?

And to the best of your ability, reflect on it so that you understand, so that you can imprint that lesson on yourself and not stop doing what works just because it worked. Now on the flip side, let's say you're analyzing something that didn't go well. Why is what you're analyzing, why didn't it go well?

What's not going well and why? When you're dealing with something that's not working, again, a lot of times we look at it and say, hey, what I'm doing is not working, but we don't know what to do. Well, at least reflect on what you are doing and then try something different.

Best if you can choose intelligently what that something is, but hey, if you don't know, just try something different, anything different, and then observe and reflect on that. Again, how many times do you see a friend of yours doing the same thing, getting the same bad results and you want to shake them and say, dude, stop.

This clearly isn't working. Do you not get it? It's not working. Now, a couple of coaching questions that for me have often been really valuable. And this first set of questions, as I reflect on something, this first set of questions, I like because it keeps us in a position of focusing on the positive.

Here are the questions that I often ask myself after an experience. I learned these years ago from Brian Tracy. I used to do this when I was a salesman. After every sales call, I would keep a checklist and I would record a series of notes. And after every appointment, I would always ask myself these two questions.

The question is this, what did I do well? And the second question, what would I do differently next time? What did I do well? And what would I do differently next time? I find these questions to be really, really powerful to help reflect. Now, I'd like to say that I always sit down with my journal and I have a leather-bound journal and I take out my fountain pen at the close of every experience of my life.

I sit down and I create this elaborate journal entry and I ask myself, Joshua, what did you do well? Joshua, what would you do differently next time? But that's a bunch of baloney. I don't do that. I wish I did. Sometimes I do write this stuff down. I try to.

I think it's valuable to do it. But a lot of times you just think about it. If you're leaving an experiment, if you're leaving, sorry, leaving an experience, ask yourself, what did I do well? Or what went well? And what would I do differently next time? And if you just get used to asking yourself that question and reflecting on experiences that you have in your life, then you can coach yourself towards better and better circumstances.

And again, I genuinely mean in the most mundane of circumstances. If I go somewhere with my children and we have a car trip somewhere, then I ask myself, what did I do well? And what would I do differently? I do this every day at bath time. You know, what did I do well?

What did I do differently? And again, it sounds silly, but what I mean is how can I make this whole thing smoother, right? I'm bathing all these children. I got four children in and out of the tub. So how can I lay things out smoother and I have a whole routine?

And then I put the toothbrushes here and I make it such to get it in and out of baths in very in short order. But it just comes from reflecting on what's going well. What would I do differently? Who needs to go in what order so that we have the smoothest possible bath time?

Who dawdles, who doesn't? And it's just a matter of optimizing. So it's the simple mundane thing of life that I can do bath time with four children in under 10 minutes because of how can I streamline and smooth this whole process up. Then up to the big things. You do a big event in your business.

You ask yourself, what went well? And what would we do differently? You finish a workout. What did I do well? What did I do differently? You reflect on a month. What did I do well? What went well? What would I do differently next time? And the nice thing about it is it's a very positive way of framing it.

You're not saying what did I do well and what did I screw up? You're just reflecting on the fact that you're human. There's no judgment needed. What did I do? What would I do? Well, what went well? And what would we do differently? Just finish the family vacation. Hey guys, what did you love about this vacation?

Let's notice and reflect on the things that are going well so we can have more of them in the future. And then what would we do differently next time? How would we optimize things in the future? If you'll train yourself to ask yourself those questions about experiences and just think about them.

Again, write them down. Great. If you're that guy with a leather journal and the fountain pen as I aspire to be, but I never seem to actually get there, awesome. But just train yourself to think this way and you're forever noticing. It helps you to tune in and to observe.

Because if you're going to have something to say to yourself when you ask that question, you got to pay attention. What did I do well? What would I do differently? What's going well? What would I like to go differently? However you want to reflect on it and adjust it.

The other reason I like these questions and I find them very useful in my life is that allows me to actually take time and rejoice in some of my wins. Many high achieving people share this common problem. We often don't take enough time to rejoice in what was going well.

I was reflecting on 2020 and I go through most of my days intensely conscious of how I wish I could get more done. As with like most entrepreneurs, I'm aware of more easily aware of the things that I'm not doing than I am of the things that I am doing.

And so I try, I've tried to build in the habit of focusing on my wins, but I'm still weak at it. It's a good area for me to focus on doing that differently, to just focus on my wins every day. Because it's very easy for me to go day after day after day after day and just for me to be conscious of the things I would like to change, the things that are not going well.

But then when I reflect back at the end of a year and I see the progress in a year, wow, I actually did make progress. I missed all these goals that I had set out for myself, all these little daily targets that I wanted to hit. But look at the overall plan.

Look at how much progress I made over the year. That's great. And it puts you in a totally different frame of mind. That's why it's so important to rejoice in your wins and focus on them. So focus on, pay attention, focus carefully on your wins and train yourself to reflect on them.

It's going to be a priority for me this year, especially, is to really focus in on those wins. And a year or so ago, I started doing this with my family where we'd go around the dinner table and talk about our wins for the day and say, you know, how did you win today?

It didn't really work because my children were too young. But as my children get older, this is one of those things that I want to inculcate into our family culture, that at the dinner table, we have dinner every night, we go around, we talk about our wins, just so we're focused on them.

What did you do well? Because it puts you in a dramatically different emotional state. You know, right now today, because I've been reflecting back on the year that was 2020, I feel strong, powerful, right? I feel awesome because I've been thinking about all my wins. It's been great. And yet I want to harvest more of that feeling on a daily basis.

So that's one of my targets, me personally going forward, is what did I do well, right? Well, I did a lot of good things. What would I do differently? I would focus on those wins on a daily basis and enjoy more of this emotion, this euphoria, these good feelings of, "Look at the progress I'm making.

I'm going to rejoice over this little thing that went well." Because I want to harvest that emotion and experience that on a regular basis. Rejoice in your wins. Pay attention to your lessons. Pay attention to your lessons. The lessons are there to serve us, right? Pain. What is pain in your body?

Well, it's your body saying, "Pay attention to me." Why do you experience pain? Your body is trying to slow you down and teach you something. And so when you're experiencing pain in your circumstances, this is a lesson. I'm convinced that this is one of the things that God has established in the universe, is that we experience sanctions in our life, pain, when things don't go well.

Which is why I think when working with people, how often I'm careful to be thoughtful about, "Am I removing pain?" Think about my children, right? If my child is experiencing something difficult, they're experiencing, you know, they didn't do their work, and so now they're not able to go to the fun outing because they didn't do their work.

This is pain. But this is a tool that I use in their lives to pay attention to building the things that are going to lead them to be successful. So you need to pay attention to the pain, pay attention to the lessons, and learn from them. So to focus on that and reflect.

Now, with that general introduction, let's talk about some things that you can think about as you're reflecting on your year. First of all, thankfully I've made it 16 minutes in and haven't talked about the year that is 2020. There's a very common theme, I think, that a lot of people are saying, that, "Man, we're just going to be glad to get 2020 behind us." "2020 is going to be one of those years." Well, maybe.

Maybe? I'm not so sure. I don't see any reason why you should just automatically parrot this idea that, "2020 was just such a rough year, but 2021 is going to be so much better." There's no question that we've faced some very significant challenges throughout this year of 2020. And there's no reason that 2021 might not be catastrophically worse.

I wasn't sure whether I should go with, you know, "way, way better" or "catastrophically worse" because both are equally possible. But I decided to go with "worse." So, Merry Christmas. There's no reason why 2021 might not be a fantastic year and there's no reason why 2021 might not be a catastrophically worse year.

There's just no reason, right? We don't know. We don't know what the future has in store. What I would caution you about is I would caution you about adding some kind of massive existential meaning to 2020, the year that was. Because I think that, in many regards, 2020 was a pretty just normal year, mundane year.

Now, you say, "Joshua, how do you say that? Don't you know that we're fighting a global COVID pandemic?" Yes, I do know that. And don't you know that there are pandemics quite regularly throughout human history and that, on the grand scale, the COVID pandemic, depending on how we measure it and what numbers, the COVID pandemic, I won't say it's insignificant because it's not insignificant, but it's another pandemic.

It was something that was visible in advance, it was predictable, and the results of it, fairly predictable. And, in my opinion, we've dodged the worst of the catastrophic disasters. It's not going to be when the history books are finally closed on it some, what, 200 years from now, the 2020 coronavirus pandemic is not going to be a huge, you know, earth-changing scenario.

If you think it is, I would say it's probably more of a failure of your imagination and historical knowledge than it is actually accurate diagnosis. That's my opinion anyway. You say, "Well, what about, I don't know, political turmoil? Don't you know that we had the President Trump/President Biden election?" Yeah, but throughout history, political turmoil is fairly constant.

So, maybe there are other things, right? Maybe you've had a loved one die, maybe from coronavirus, and so you say, "Joshua, that's tone deaf." I just say that these things are fairly ordinary, right? People die. People die tragically at the worst of times. That happens. And so, a good thing to pay attention to is not to get into this mindset of, "Oh, 2020 is just a, God, what a rough year.

It's a rough year and I can't wait for 2021 because anything's got to be better than 2020." 2021 might be a lot worse, speaking generally. The more important thing is for you to analyze and say, "How did I do during 2020? How resilient was I? How did I do in the face of circumstance?

How did I do in the face of challenge? How is my family doing through the loss of our loved one? How are we doing? What's going well? And what would we like to do differently in the future?" Because now we can be focused on, "How am I responding to it?" Don't be scared to be proud of the progress that you have made and the hard work that you have done to weather difficult circumstances.

I say that because my sense from talking to a significant number from the audience, my sense is that the majority of the Radical Personal Finance audience has done pretty well this year. It's not been without challenges, but I think most of us have done pretty well this year. And yet, I'll tell you what, that's not something I go out and trumpet publicly.

I don't pull out my Facebook profile and say, "This has been the best year ever," because there's so many people who are locked into this mindset of doom and gloom and who are facing genuinely difficult circumstances all around the world that it's tone deaf to--it comes across as tone deaf at the very least.

It is tone deaf a lot of times just to focus on that. Now, should we be reticent or not? I don't know. I don't know. Maybe I should very proudly say--pull up my Twitter account and say, "Hey, it's been a great year for me, and I can't believe that--I'm awesome." Maybe I should.

That's not my personality. I wouldn't do that. But it's important to reflect on because there's a lot of us who've done a lot of hard work to prepare for difficult times, and you do it wondering if you're sane. You do it wondering if it's the right thing to do.

And I think that when you go through it, you realize that--you probably come to realize that it was the right thing to do. I've worked with a couple of my clients. We're doing some year-end planning with some of my private clients. In some regards, it's been--for several clients, it's been an incredible year, right?

Even just business-wise, people getting out of business, opportunities to buy assets all across the board. When there's blood in the streets, it's a great time to invest. And so if you're prepared for it, you can do it. And there are opportunities right now. It doesn't seem like there's as much blood in the streets as there was, but there are opportunities.

And yet, there's also just good lessons to learn by the opportunities that you took advantage of and that you didn't take advantage of. I was talking with one of my clients, and I said--we were both reflecting-- "It's been a pretty good year for me, for Joshua. It's been a pretty good year." I haven't enjoyed the lockdowns.

There's a lot of things I haven't enjoyed, but I've had more personal freedom than a lot of people, which I've appreciated. I've been very blessed and fortunate for that. But a lot of it has come just from putting in place insurance policies, both, of course, actual policies and contracts with insurance companies, and just, in other ways, the concept of insurance.

And as I was sharing with my client, I said, "In life, you can't be so focused on insurance that you forget to actually swing the bat when the ball comes." I apologize for mixing all the metaphors, but I think it works. So you can't be so focused all the time on not striking out that you never actually swing the bat.

You've got to actually swing the bat at a ball sometimes. You've got to actually go for an opportunity. You're not sure if it's going to work, but you've got to go for it. Sitting around and being well-insured for everything, being totally broke, that stinks. Yes, you want to be insured, but you don't want to be broke.

So you need to actually go out and go for some opportunities, even though the insurance might not work. You might not be insured. You might lose. Go for it. But once you start to experience some success in life, once you start to get off of that first base, once you start to get off of zero and you start to build some wealth in your life, well, now insurance starts to make a whole lot more sense.

And you insure progressively against even less and less likely things because you know that, "Hey, I'll feel better if I can weather my way through this than if not." A number of years ago, I was young. I had rented a car from--I was in Costa Rica. I was in college.

And I rented a car from a car rental agency. And I took some friends out in this car, and we were out driving around the back roads of Costa Rica in this rental car. And I was driving too fast. I came around a corner, and I drove off the road into the ditch.

Now, in most cases, I wasn't driving that fast. I just slid off the dirt road into the ditch. But in this particular circumstance, there was a very unfortunate rock, about a foot and a half high right in front of me. And unfortunately, that rock hit my front left tire.

And next thing you know, I'm hanging from my seatbelt, and my car is on the side. Now, it wasn't going to be life-threatening, but it certainly was damaging to the property. So my friends, everyone was fine. No one was even scratched or hurt. It was more just a surprise.

It was almost like a stunt car, where they drive those stunt cars up a ramp, and they put the car up over on its side. That was basically how it worked. And it was very unfortunate, but there I am. So I wasn't exactly sure what to do, so we pushed the car back over onto its wheels and tried to get it down off the mountain before it eventually died, and we weren't able to go any farther.

So I called the car rental agency. And the good news about this bad experience was that before renting the car, I knew that the roads in Costa Rica were really bad. And so I had gone ahead and just decided to opt for the full insurance coverage. I had just bought the whole package.

It didn't cost that much to go ahead and get the full insurance package and not try to rely on the insurance on my credit card or anything like that. I just bought the whole package from the rental car agency, and I felt good about it. Now, I'm a safe driver.

Prior to that time, I'd never gotten in an accident, never had a problem. And so I thought everything was going to be fine. But I went ahead and got it because I knew that, well, the roads were rough. And in this particular circumstance, it actually turned out to be a really big blessing because the rental car was going to come out from--we were in La Fortuna in Costa Rica.

The rental car was coming all the way out from San Jose with a replacement car on this tow truck. So we went down, and we went to the hot springs and hung out in the hot springs while we waited for the tow truck. And we just sat there, hung out, and then when the tow truck came, they picked me up.

We went and swapped out the cars, and we went on our way the next day with a brand new rental car. And it didn't wind up--because I had the full insurance package--it didn't wind up costing me anything out of pocket. And so it was a real blessing. Of course, thankfully, no one got hurt, and the property damage was handled by the insurance contract.

But I thought about that a lot of times. And, of course, it was a big experience in my life. It was the first time I'd ever put a car on its side--first and only time, and I haven't done it since. But I thought about it a lot of times, and I realized it was almost the perfect picture of what a good insurance policy can do.

When you have a good insurance policy, you can take this really bad circumstance-- totally catastrophic damage to a car, potentially a very dangerous circumstance-- and it can turn it into something fun. My friends, I wasn't sitting around sweating bullets about, "Oh, no, I'm going to have to replace a $30,000 car." I hadn't skimped out on the insurance.

We just went down, and we hung out in the hot springs, and then I got a new rental car, and we finished our trip the next day. And it was basically a non-event, even though it was a very significant event. The insurance made it a non-event. And as I reflected on that over the years, I've just realized more and more how as your wealth grows, as your positions grow, that insurance makes you feel good.

And it takes things that are crises in some people's lives, and it turns them into minor inconveniences, hopefully, or possibly even non-events. And you can get there fairly quickly. For example, there are millions of people around the world for whom a flat tire, a shredded tire, is a major disaster.

But you can very quickly get there with a little bit of savings. You can get there with proper insurance policies on your stuff, on your life, etc. You can get there with more diverse kinds of insurance policies, whether it's food in your pantry or a second passport or whatever you're working on.

You can just turn something that's catastrophic into a minor nuisance or an annoyance. You can also do this mentally. You can do this by training your brain to filter things into problems or facts. That's one method of analysis I use. I often ask myself, "Is this a problem, or is this a fact?

What do I mean?" Well, a problem is something that you can affect. This is a problem. A problem might be, "I'm broke." That's a problem. It's not a fact. Yes, I'm broke, but it's something I can change. A fact might be, "I have no legs." "My legs were amputated.

I have no legs." Well, that's a fact. So maybe those aren't the best examples, but ask yourself, "Is this a problem or is it a fact?" A problem is something that can be solved. A fact is something to be accepted. Problems work for solutions. Facts work towards acceptance. A lot of times, once something happens, it becomes a fact, and you can just simply accept it.

And another thing that I try to do as I reflect on things is I try to distinguish money problems from almost any other problem. Because I heard the saying, I don't know who to attribute it to, but it's always rung true for me, that if your problems can be solved by money, they're probably not really problems.

Again, depending on the crowd, that might not go over very well. But there's no limit to the amount of money that's available in the world. There's tons of money. There's no limit on the amount of money. There's no limit on the amount of money that you can have. And so maybe I screwed up and I lost all kinds of money.

Maybe I went bankrupt. Whatever. It's all right. It's just money. And for me, teaching myself and saying again and again, it's only money, it puts things in a proper perspective. Now, I care about money. I care about how I handle money. Money has a lot of meaning, but at the end of the day, it's only money.

And so money problems, they're really not even worth worrying too much about. Money is ultimately solvable. Other things are much more long-lasting. You know, got a parking -- my wife got a parking ticket a week or so ago. Crazy cops cited her for sitting in a running vehicle. She's sitting in the driver's seat in a loading zone and got cited for it.

And man, that annoyed me. You know, instead of just saying, "Hey, move along," or something like that, just write her a ticket immediately. And it took me a few minutes, but it's the kind of thing where it's like, "Hey, this is a fact. It happened." Right? Once it happened, it happened.

And it's just money. So no big deal. Just money. Move on. And for me, trying to cultivate that kind of thinking, "Don't need money. Yeah, bad thing happened. It's all right. It's not permanent. It's just money," helps. Helps. So pay attention and try to, as you're reflecting, don't give too much attention and too much importance to things.

Yes, ask yourself, "What's going well? What would I do differently?" Think about it. Reflect about it. Pay attention to your wins. Pay attention to your lessons. But at the end of the day, don't give too much power to things like money. Ask yourself, "Is this a problem or is this a fact?" And if it's a money thing, chances are there's a good way out of it.

A good way out of it fairly quick. So don't get too bogged down. If you went bankrupt this year, you're going bankrupt because your business has collapsed, the government shut you down, you ran out of money, a bunch of debt, whatever it is, okay. Learn from it. Pay attention.

But don't let it go any deeper. Just money. There's no limit to the amount of money that's out there. You'll learn from these lessons and you'll do it differently next time. No big deal. No big deal. So reflect on the year that was and be proud of what has gone well.

For me, 2020 has been a pretty good year. There have been some annoyances, but I'm pretty happy with that, with even some of the annoyances. I was surprised by some things. I didn't expect to see the massive levels of lockdowns that some people are living in. I didn't avoid living in a big city because I was thinking about a lockdown during a pandemic.

I have always determined that if I did live in it, if I needed to at some point live in a big city, I would make sure that I had another place, a bug out location, a little cabin or something out of the city. I think we could see with coronavirus cities can be rough, rough places because those are the places where the government authorities can be very, very heavy handed.

But thankfully, I don't live in one of those. And so for us, the lockdown is not that big a deal. We already lived kind of an at-home lifestyle. Financially, I was thankful to have a resilient business, working with people. One of the great things about some businesses is that when times are good, you do well.

When times are bad, you do better because the need is there. So things in finances, the needs are there even more. I'm trying to go through all of my analysis, but I'll share a few of these things because I think they do matter. One of the things that I have learned that works very well is I've learned it wasn't my intention when I started Radical Personal Finance, but I have learned that I serve the rich.

And one of the nice things about serving the rich is that the rich generally have money. And the impact of the day-to-day circumstances for a rich person are generally less. And this wasn't an accident. Years ago, I learned this from Tom Stanley's books. And in his book, I think it was The Millionaire Mind, he talks about how many wealthy people encourage their children to go into service businesses for the wealthy, to work as accountants or insurance agents or lawyers or whatnot to serve the rich because the rich have money.

And I learned that really makes a difference for me and has helped over time, that serving wealthy people means that there's always a market. And so it really pays off, and my business has done well this year, really well. I think there are some good lessons there. I think it's also been interesting to think about essential services and non-essential services.

I've reflected a lot on these lists of things that are called essential and non-essential. And I thought, "Man, where are the lessons? How can I harvest these lessons to make sure that I'm essential no matter what?" I've observed this year some major lessons that we can all learn with diversification, having businesses and business interests that are diversified.

I've observed how big of a risk it is if you have one restaurant under one mayor, and that mayor decides we're going to shut down the city versus having multiple restaurants in multiple jurisdictions. I've been amazed at how vulnerable so many of us are to some of these really oppressive lockdowns.

And I've realized the need to have diversified lines of income. One of the things that I'm increasingly convinced of in working with my clients is how can we take – always have your core business, yes, but then how around the edge can we take and build some other lines of income?

Multiple streams of income actually is really useful so that if one thing gets shut down, you have other lines of income as well. As we look at some of the economic devastation that's been around on all sides, there have been ways through it, and I've been grateful to see some of those things.

So reflect on your finances. Reflect on your financial systems and understand what has gone well, everything from the source of your income. Do you continue to like it? Do you like how you make money? How much money have you made? Was it a good year, bad year? Why? If it was a good year, great.

What made it a good year? Could it get better next year? If it was a bad year, okay, what happened? Is it going to keep being bad or do you need to pivot in another direction? Reflect on everything related to your financial management. Do you need to change your bookkeeping system?

Do you need to adjust something? I've made some dramatic difference changes in my own bookkeeping systems, and how can I streamline everything that I'm doing? Because what served me before doesn't serve me now, and so you have to let go of the old and move on. It's one thing to start budgeting on a legal pad when you have no money, but there's no reason that you do that same kind of financial analysis when you're a millionaire.

You need to change. You need to grow. You need to grow up and change what you're doing, so reflect and say, "What's working? What's not working? Do I need to hire a bookkeeper? Do I need to adjust my spending to a credit card? What do I do?" So reflect on these things.

Reflect on your expenses. Reflect on the expenses that you get value from. Do you continue to value what you're doing? Are you continuing to make the best decisions? I'm giving just an example. One of the things that I have realized for me over the last couple of years is that I don't value being hyper frugal the way that I once was, and this has been kind of a slow transition.

I've always admired people who were just hardcore, really always admired that. I've always admired people who were really good at their craft, basically, and that's what I – the hardcore savage. I admire people who are really good at their craft, and when I admire someone, I'm often drawn towards them.

I'm often drawn in their direction. And so over the years, when I was working jobs that I didn't like, I was deeply attracted to extreme savings as the pathway towards financial independence. And I still love extreme saving. I still love the fact that somebody who's working in an ordinary job who doesn't have a high income can achieve financial independence very quickly by becoming hyper frugal.

The classic Amy Decision path, one of my favorite books, The Tightwad Gazette by Amy Decision. It's a wonderful path because it's so accessible. And I often feel bad when talking to people because I realize that not everybody has the capability to make a million dollars a year. Not everybody has it.

But as I've done it over the years, I've been pretty hardcore frugal at different times, and I'm grateful to have done it. I don't ever want to be the kind of person who just always has to have the finest of everything, only the finest of everything. I want to cultivate my inner asceticism from time to time.

I want to demonstrate to myself and never be in a position where I have to have nice things. I consider that to be one of the biggest traps when people are so non-resilient. They just have to have the finest of everything, and if not, they fall apart. I think it's valuable to sleep on the floor from time to time, on the hard floor, so that you know, "I could do this and be fine." So I value that.

But on the other hand, what I've realized is that I also value other things and that I like other lifestyles. I enjoy nicer things. I enjoy nicer places. And what happens is it makes me better. It makes me more productive. A number of years ago, when I was in business, I was on a business trip, and I was being hyper frugal, and I stayed at this cheapest hotel that I could stay at because I needed to stay there.

And I was trying to save money. And I remember it was just so awful. I could sleep well, but I couldn't do anything else. The bed was fine. I slept well, but there was no place for me to work. I couldn't set up and work comfortably. And I said, "That's it.

From now on, I'm done. I'm never going to stay in one of these hotels, at least not on a business trip. I'm going to stay at a standard business class hotel because I need to be able to work." And so more and more as I've gotten older and more established and my business has become more successful, I've tried to intentionally loosen up and spend more money and try to do it intentionally.

Now, I do still think you need to save money, right? So the ratios matter. But I've walked away from extreme frugality. I've walked away from the extreme saving and extreme frugality because I don't want to live that way. It's not for me. It's much more fun to make a lot more money, and then you can spend a lot and save a lot than it is to just focus on extreme savings and hyper frugality.

So reflect on your expenses over the years and ask yourself, "What areas do I value? Where do I want to spend more money?" and make a plan to do it intentionally, to make a plan so that, "Hey, next year we're going to spend even more money on these things that we care about." Now, there's still things that I don't care about, things I do care about, but we should adjust and change.

The mentality that served you well at 25 is probably not going to be the same mentality that serves you well at 35, not going to be the same one that serves you well at 45. Go on. You should be growing. You should be changing. That's a sign of a healthy maturity is the fact that you're growing and changing.

So reflect on your expenses and go across the board. A couple of years ago I did a show on different categories, and I went through all the categories of your budget and showed you there are some expenses that you want to minimize. There are some expenses that you want to maximize, and there are some that you just want to observe and observe how they're going.

So reflect. Reflect on the other areas of your life, though, that lead to a rich life. A man who only has a lot of money is not a rich man. He's a man with a lot of money. A man who's rich in freedom, who's rich in relationships, who's rich in time, and who's rich in money, that's a man who's wealthy.

And so you want all of those freedoms to be expanding. If you just have more and more financial freedom but not more time freedom, you're doing it wrong. If you just have more and more financial freedom but not more relationship freedom, you're doing it wrong. You want all of your freedoms to be expanding steadily and continually so that you can enjoy every year a freer and freer lifestyle.

So reflect on the quality of your relationships. Reflect on whether you can spend money on those relationships in some quality way. This year, instead of putting another $20,000 in your 401(k), can you spend $20,000 and take your family around the world? Maybe it's not 20. Maybe it's, I don't know, $50,000.

Maybe it's $100,000. Who knows? But can you invest into relationships? My hope at the beginning of 2020 when all the lockdowns came out was that more and more people would invest in relationships. I bet you about 20% of people have relationships with their children. I bet you 20% of parents have said, "You know what?

This has been awesome. Our relationship with our children is never better. This is fantastic. How can we keep this up and deepen our love one for another?" And my guess is that 80% probably haven't. But 20% probably have. And that's what we want to see more and more of.

So how can you do that? How can you take this? Hey, if your children are already locked out of, you know, they can't go to school, they're already going to school online, you know, travel freedoms are starting to open up, maybe you just go ahead and buy that round-the-world plane ticket, buy that RV or whatever it is that you're going to do.

Why not? Take the good things and make them better. So reflect on the relationships. Reflect on your health. For me, it's been an ups and down year with health. I had phenomenal success with my weight loss earlier this year, and then I've put the pounds back on, which is the endless, horrifying reality that so many of us who are fat have gone through again and again and again.

But, you know, I'm not overwhelmed by it. Okay, what worked? What didn't work? Where were the triggers? And I think it's healthy to reflect and say, "Okay, what works? What doesn't work?" One of the things I have been doing well, I've walked more this year. It's been wonderful getting out, being in the sunshine, walking.

I've learned a lot. I've listened to a lot. I've listened to a lot of audio books and whatnot. So it's been a really good year from that perspective where I'm very healthy in terms of my activity levels. Just got to figure out how to adjust my food intake again to get more weight off.

And so adjust what's working, what's not working. With your intellect, with your intellectual growth, how did you get smarter this year? Think about it. Did you get smarter? If you're not getting smarter, you're probably getting dumber. So how did you get started? How did you get smarter? What's gone well?

What hasn't gone well? It's been a good year for me. I've read a lot. I learned a new language, which is good. The last couple of months I've read about a million words in French. It's taken my French from probably an A1 or so up to, I don't know, probably B1, maybe B2, which I'm pretty happy with, and I did it all through extensive reading.

So that's really exciting for me. And what I've done, what I've tried to do is get more juice out of it, if you're interested in becoming smarter, is what I've tried to do is I've just taken a lot of the intellectual books that I read, productivity books or business books, etc., and I've just tried to take those in in foreign languages.

So instead of reading, I don't know, the Encherto in English, I'm reading it in French, and things like that that you can do. So think about how you're going to get smarter this next year. What are you going to learn? What new skill can you develop? What are you interested in?

What's gone well? What's not gone well? And then think about your freedom. Are you freer today than you were at the beginning of the year? If not, why not? Maybe you need to move. As I've said throughout this whole thing, the biggest opportunity of the coronavirus pandemic for most of us has been opening up our geographic freedom that now so many of us, hey, we're working online most of the time.

I can commute into work. I've worked with a bunch of people who've been able to make massive changes, some of them across town, some of them across the state, many of them several states away, and some people around the world, because of this opportunity. It's a tremendous opportunity for freedom.

And even if you look at the lockdowns, it's been evident that the quality of your life under the various lockdowns has been largely driven by the governor of your state. And so there have been places where things have been very livable, and there have been places where things have been very non-livable.

And you can adjust how you want to do that. There are countries that are completely open because there's no coronavirus in the whole country. There are countries that are completely open because they don't care about coronavirus. So adjust it. But your personal freedom, how have you made progress? I've made tremendous progress this year with my internationalization plans, finished a couple of new residency programs.

It's just been a good year all around. And so reflect, reflect. Reflect on your wins. Reflect on your lessons. I've got a long list of lessons as well, and I try not to make this show all about me, and I also try to keep some of my stuff personal.

But reflect, reflect. Spend some time and give yourself the gift of reflection. Do it however you like to do it. I enjoy a good cigar. This gives me an hour. Sit out on the porch, quiet evening. If you're a notebook guy, sit down and write in your notebook, maybe make some audio notes.

Just sit and stare at the sunset and think. But spend some time and sit and reflect and enjoy and think about what has gone well and think about what you would do differently next time. Because you know what? December is a brand new month. Tomorrow is a brand new year--sorry, tomorrow is a brand new day.

Before you know it, a brand new year is here. And at any point in time, you can turn the page on the past, throw the book away, and start absolutely fresh. The past does not exist. It's something in our minds that we make up, something that we create. It doesn't exist.

The person you were before doesn't matter. It's the person that you are now and the person that you're becoming, that's what matters. So no matter how bad the past was, you can leave it behind with a decision. And you can press forward, living today, looking forward, and planning for the future.

I can bet you that as you're reflecting on 2020, there are a whole bunch of good things that you can put down on your list. It's not goofy to just genuinely look and say, "You know what? Schools were closed, but we got a lot of chance to spend time with our children." That's a good thing.

It's not goofy to recognize that stuff. It's good. But if 2020 for you just, man, it was awful, it's alright. Reflect on it and just say, "That sucked." Try to learn some lessons from it. Try to figure out what you would do differently. Close the book, throw it away, and start doing things differently.

Most inspirational quote of my life. I repeat it to myself probably every few days. "Yesterday ended last night. Today is a brand new day. It's mine." Yesterday really is gone. And it will never, ever appear again. Today is a brand new day. This moment is a brand new moment.

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