2019 – Drop the resolutions!

Yes, you read right. The new year started but we don’t do the resolution stuff. We start the year with serious targets.

Today is the 6th of January, so the 1st week is almost gone. This means that we have roughly another 51 weeks to meet our own, ambitious but still realistic expectations on 2019. What can be done in 51 weeks? Here are my targets:

  1. Improve on time management. As you all know, and as the sub-headline of this blog indicates it: It’s all not about money, it’s about time. Time is our most precious resource and it needs to be managed well. A day has 24 hours. After deducting those 6-7 hours that are necessary to re-charge our batteries, plenty of things can be achieved each and every single day, if we allocate the remaining time efficiently. I would rate myself rather poor on this skill so far, as I still spend way too much time with my phone, while I could allocate more time to this blog, to my side hustle, to stock analysis, and to my workout routine. I will start slowly by:
    • trying to leave work on time,
    • delete useless apps from my phone and
    • to schedule my workout routine a little earlier throughout the day (so far I was always exercising after 10 pm)
  2. Increase side hustle earning by 50%. Right now I am writing about 1 article a week on average. I will try to increase this to 6 articles a month to curb my side-hustle income and to have more cash available for investments.
  3. Increase my dividend income by at least 10%. That’s right. While this should be not a problem, I put it on my target list. Most of my stocks will increase the dividend throughout this year anywhere between 2% up to 25%. However, I can also increase my dividend output by buying more stocks of companies which I already owe and which had been dragged down throughout 2018. This will cost-average down the stock-price in my portfolio and thus increase my average yield on cost per stock.
  4. Prepare for a larger market crash by saving up enough cash to be equivalent of 50% of my current stock portfolio volume. That’s the biggest and most difficult one, because this would require me to really try to achieve my savings target of 40% of my total annual income. Not impossible, but a tough one.
  5. Find a new job and re-negotiate my base salary by at least +20%. As mentioned in the last post, it should be possible due to my current situation, but I will aim even significantly higher. With perks and benefits, the total value increase should be at around 35%.
  6. Take a break for 1 month in between jobs. Yes, I put this in my target list also. I need time to recover and re-charge after my current assignment. I have now worked almost 2 years with a 6-day workweek, spending on average roughly 65 hours a week in my hotel. This does not include my side-hustle activities, my family time and my exercise routines (which takes 1,5 hours per day). So yes, to ensure I get no heart-attack before time, taking a break for a month will be commendable.
  7. Visit Japan and/or Korea this year. Indeed, it is about time. I haven’t gone to Korea and Japan since 2012 which is a real shame. I know my parents want to see my daughter and want us to go to Europe, but Japan and Korea is the reason why I moved to Asia in the first place and I seriously need to visit this beautiful places once again. On top, I have promised my wife this trip for a very long time.
  8. Exercise routine annual target:
    • 36,500 push-ups (100 per day),
    • 18,250 burpees (50 per day or 150 every 3 days),
    • 18,250 squats (50 per day or 150 every 3 days),
    • 3,650 pull-ups (10 per day),
    • Fresh-up of all my martial arts / kata routines
  9. Actively teaching German and English to my 3 year old daughter for 30 min a day
  10. Actively involve my daughter in my exercise routine to practice with me. She already started to sit on my head when I do squats or push-ups and loves to hang on to me when I try to do pull-ups, but this can be fostered more

So yeah, many things to do and 51 weeks is actually a short time. The older we get, the more we realise how precious time is. Let’s make the most of it.

And no, you really don’t need 8 hours sleep. The day is just too short to spend 1/3 of it with doing nothing.

This year, I also intend to write more about individual stocks and my investments. So just to give a brief heads-up, here a list of stocks which will be discussed and possibly purchased sometime in 2019:

Monthly dividend paying stocks:

  • Gladstone Investment
  • Main Street Capital
  • Realty Income
  • Apple Hospitality

Regular Stocks:

  • Ares Capital
  • Cisco Systems
  • Starbucks
  • Microsoft
  • McDonalds
  • Coca Cola
  • Merck
  • Pfizer
  • Iron Mountain
  • Tesla
  • Bayer
  • BASF
  • Aumann
  • DÜRR
  • GlaxoSmithKline
  • Royal Dutch Shell (B)
  • Baozun
  • Alibaba
  • QQQ

ETF:

  • iShares MDAX UCITS ETF

Disclosure: Some of those stocks I already owe, some I had in my portfolio in the past but sold them with a profit and plan to buy again when prices drop.

So get ready for a furious, active and hopefully rewarding 2019!

Why a beautiful office matters

I have been working abroad, in developing countries, for a couple of years now. All the hotels I worked at were luxurious 5 star properties, and only my current hotel is in a slightly lower 4 star category. But almost all the hotels had (and still have) one thing in common. Their back-office areas tend to be disastrous.

As a matter of fact, this is valid not only for developing countries, but in general hotels tend to put a lower emphasise on their employee areas. While the situation is not super-bad in Europe, it certainly lacks behind the development of office cultures that young start-ups and established bigger players turned to in recent years.

My current hotel is probably the worst in those terms that I ever worked at. Constantly broken and clogged toilets, holes in walls, water-leaks whenever it rains, hell, I even got electrocuted by our copy-machine as it was not properly earthed. Luckily it was a low voltage. The canteen has plastic chairs, aluminium cutlery, and broken tables. It’s full of mosquitos that will fall upon me as soon as I take a seat. Not an amazing experience for an area that is regularly plagued by dengue fever. For the first few months, it was difficult to have paper towels and soap in all team toilets present at all times and you might guess it, there was not even one plant or picture anywhere in plain sight.

While during my first year here I tried to fix as many of those issues as possible, and was partly successful, for the majority of the problems I found only little understanding from the hotel owners, and surprisingly, not much appreciation from my employees as well. While this kind of experiences can be frustrating, I am trying to not get discouraged and fight for a better office culture.

A managers office is his home

It really is. I spend 6 days a week in my office and tend to be there from 8:30 am until 7:30 pm. I spend more time in my office than I spend with my family. I spend more time talking to my employees than I talk to my daughter, my wife, my parents and my best friends – combined. I stare at my laptop and work on excel sheets, websites, social media, guest requests, corporate systems, restaurant menus, budgets, cocktail recipes, event preparations, staff evaluations and permanent requests from hotel owners. I talk with suppliers, have normal meetings, skype meetings, webinars and got to visit occasional events to keep myself informed about the market and upcoming challenges that the world is constantly throwing at us from every corner of the world.

Doing all this and spending so much time at work, it really matters how you feel in your office. It is not your second home. You just have to admit to yourself that your office is your first home.

A new office culture

Just a few months back in July, I went back to Europe to visit my parents, and as I am planning to stop the rat race in a very foreseeable future (just reading the previous paragraph is actually giving me an energy blast to really keep working on my plan), I have visited a few co-working spaces in Berlin.

Why did I do that? Well, frankly, I am pretty sure that I can’t stop working. I love to work and I love to be kept busy. I love to meet people and I love to try to do my part to help improve this world for someone else a little bit every day. I am just pretty sure that I don’t want to do it with such a work-load as I am having now. Thus, escaping the rate race will mean for me to work on my own terms, far less and most probably on a freelance basis. But more on this another time.

So, I visited this co-working offices – and I was truly amazed. Beautiful offices with open plan spaces that looked rather like brushed up Starbucks shops than an office. Then, there were also neat and smart modular offices for small teams or individuals, fully equipped with everything one would need to get things done. And on top of that, they were all kept in warm earth-tones, in beautiful locations around parks or with amazing city views. To top the cake with a cherry, all the offices had free soft-drinks, coffee, daily fresh fruits, some were pet friendly, had showers for people who like to jogg or come on a bicycle to work AND many were accessible 24/7. Free high speed wi-fi, electric sockets with international plugs and electric / power protection were obviously standard.

That’s when it occurred to me. People are tired of ugly offices, and yes, I am not alone out there.

Spread the word

So, why am I writing all this? I would really like to encourage all the employees out there to spread the word. Don’t accept ugly offices. Don’t accept broken toilets and water leaks. Don’t accept lacks of hygiene, health and safety. I am going to leave my hotel in 7 months from now, as my contract is about to expire, and I will keep trying to fix and improve more of this until the last day. But it’s important that people really talk about this. Only then business owners and managers, such as myself, will receive not only the pressure but also the support that is necessary to drive change.

The whole world is talking about the next big disruption. Well, I don’t need a disruption. I just want a nice office.

It can get lonely at the top

One day, I was sitting alone at one of my restaurants in the hotel and having lunch. It was a beautiful day: We had a very solid hotel occupancy of 85%, the sun was shining, the ocean was calm, a fresh breeze was swirling through the entire garden and pool area and I had not a single complaint from any guest.

So, I was having lunch and thinking about the next beverage promotion that we should introduce in 1 or 2 weeks when one of our regular guests approached me. He was actually just passing by, picking up a cocktail from the bar, but when he saw me, sitting there alone diving deep in thoughts, he came closer and said: “It can get lonely at the top, isn’t it?”.

It can indeed.

Over the last 10 years, I have pushed myself to get to the point that I can be in charge of a hotel and take on the responsibility that comes with it. As a rank & file employee, I was always full of ideas and dreams of how I would like to put my stamp on the business I work at. I was learning, studying and gathering ideas and doing online-courses how to improve all kinds of procedures. How we could manage guest expectations better, how to improve our workplace, which IT solutions offer the best benefits, what facilities can help us and our guest to have the best possible stay. Design & architecture related topics, food styling and decorations, … the list is endless.

But what I never really did, was to spend a thought on, what it actually means to be at a top position.

It turns out, that I really underestimated the pressure that comes with it. While I got the chance to put many of my ideas and thoughts into practice, the job of a hotel General Manager is actually frighteningly time-consuming. And the largest chunk of my time, I am actually not spending with guests or hotel improvements. The biggest part of it is the team management.

It is truly fascinating, how tables turn once you move up into management. Suddenly you are not the one questioning a single guy at the top, but instead, you have 150 other persons questioning you. Observing you. Interpreting every word, eye-blink and every move of you. It took me a while to learn how to handle the pressure and also, I had to change my behavior. Truth is, it doesn’t matter who you are, if you want to take responsibility for and lead others, you have to learn how to serve them, while at the same time pushing your agenda. People will only believe in you if you believe also in them.

And this brings me to the recent break-down of Teslas CEO Elon Musk. 

I am certainly in no position to judge or even to start to begin to imagine, what kind of huge pressure he took on when taking care simultaneously of Tesla, SpaceX, The Boring Company and his AI venture. I am not a billionaire (not even close) and I don’t have 25.000 employees and billions of dollars from investors to be pressured by. But I think I am in a position to give a single advice:

Elon, get some sleep. Do some exercise. Take a vacation.
And learn to delegate.

Being alone at the top is a choice, not a given. The way we treat our colleagues, business partners and investors is what defines us and our business. The problems will never get less. The days will never get longer. Micro-management is not a healthy habit for any company and never works out well in the long run for anybody involved.

If you trust your team and find a supportive left and right hand to help you through thick and thin, then you can have a sit at a nice restaurant, enjoy the breeze, watch your guest/clients enjoying their time with your product and/or service. And when someone approaches you and says that it’s lonely at the top, you can smile back and respond:

“It’s a beautiful day”.

DISCLOSURE: I have no shares of Tesla.

Have a plan

It’s funny how humans deal with their own aspirations, and I don’t mean it in an entertaining way. One would assume that having an exciting goal or target ahead of us would already offer enough inspiration and motivation to do everything possible to get there. But for most parts, people tend to keep dreaming rather than actively working on achieving their targets.

A goal without a plan is just a wish
– Antoine de Saint-Exupéry 

No matter what you would like to achieve in your life, having a plan is surely helpful. You may pray for luck or good fortune, and it may even indeed come true. But your odds increase greatly if you actively work towards it and to set up a plan is the first part of doing so. This could not be truer when it comes to financial independence.

Investing can be a gamble. There are hundreds of companies out there that can create or destroy wealth within the trading time of just one day. But if you think that your odds of winning the lottery are not good, then there is no need to go for a similar approach with the stock market. It makes much more sense to set up a solid strategy and to execute it step by step. Following this simple rule will help you not only to “sleep well at night” (SWAN), but also increase your chances for a comfortable, and possibly even early retirement.

Setting up a budget and a target

Everything starts with understanding the situation you are in and for this, you need to create your first budget. The word “budget” alone makes some people shiver, but for the sake of just start things rolling, keep it as simple as it gets:

+ Total income per month
– Total expenses per month
= Available cash to save/invest

Congratulations, now you know what you are dealing with. If the available cash to save is any positive amount, then you are ready to set your first financial target. For each month, and for the total year.

If the available cash is not a positive number, then it would be advisable to expand your budget slightly to see where the problem is. You might want to break it down like this:

  • +Income
    +Salary / Wages
    +Other Income
  • -Expenses
    -Housing
    -Utilities
    -Mobile/Internet
    -Food & Drinks
    -Other
  • =Available cash to save/invest

There are only 3 possible options: Either your income is too low, your expenses are too high or both. Playing with those numbers and finding ways to optimize your expenses or to increase your income (revenues) is basic budgeting and an essential part to reach your target of financial independence.

The deeper you dig into the numbers, the more details you add and the more accurately you start tracking all your money movements, the more experienced and professional you will become. You will develop a sense of understanding of where your money goes, how it comes in and what you need to do to really reach your target. All without a lottery and without prayers in dark church corners.

Your first target must be to have cash available by the end of each month.

This is the part where your commitment has to start and it needs to begin without any compromise. No matter what happens, but you need to ensure having enough cash on hand by the end of each and every month. There are few points that need to be prepared before you start investing, but to get there, you need to have cash available – every – single – month. Reaching aspirational and challenging long-term goals is all about commitment, consistency, and dedication to the plan. Of course, there must be some flexibility in certain circumstances, but this one single point is non-negotiable.

You might have to start small with as little as 25 EUR per month. That’s equivalent to only 4 packs of cigarettes or 3 cocktails in an average bar in Berlin. But this will already open up your first door towards your long-term target.

As mentioned in the beginning, one needs a lot of motivation to get started and motivation comes from inspiration. While I will seldom quote actors or wrestling stars, nobody could say it better than The Rock – Dwayne Johnson:

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Many of us dream about spending their retirement traveling, spending time with our children or grandchildren and catching up on all those things that we missed when sitting in an office to hit some KPI targets that someone else in another office considers important for life to keep rolling.

I got to be brutally honest with you: When the time comes that you can actually retire, you may find that your health deteriorated, and your social security alone won’t suffice to pay for these simple pleasures. This is not to scare you, but for many, this is already a reality and the trend is not turning to the better for future generations of retirees.

Investing is a first step to dodge this bullet. The sooner you start, the more relaxed you will live towards your retirement. What other inspiration do you truly need?

Career Planning

It can’t be emphasized enough: Developing your career is still the best and most promising way to secure your financial future.

We all know the mantra that parents, banks and insurance agencies try to feed us: Start saving early and utilize the power of compound interest to your advantage. The sooner you start saving even small amounts, the sooner you will reach your target.

Theoretically, it makes sense and it is probably one (out of many) ways to start your journey. But I am not a big fan of it. Let me explain.

The first time when I opened a mutual fund saving account I was just 20 years old. The bank convinced me at that time that saving 50 EUR a month would make me rich by the time I retire and the numbers seemed to support it:

  • 50 EUR x 12 = 600 EUR per year.
  • Considering 45 years, that’s a down payment of 27.000 EUR.
  • With compounding interest and re-investments of all generated profits at an average market return of 8% a year, this would indeed translate into solid 250.000 EUR when I reach the age of 65.

A lot of money. Only problem: As a student 50 EUR was already a lot of money to me and I wasn’t always able to come up with it. It didn’t take long and after a year I canceled the account as I was forced to make a downpayment for a student apartment and I simply didn’t have enough cash on hand.

Looking at the calculation at that time from today’s point of view, I see things a little differently.

  • Saving 600 EUR per year would equal 3.000 EUR after 5 years and with a friendly market return of 8%, it would have generated a profit of 801,56 EUR. My account would, therefore, have a value of 3.801,56 EUR.

Here is the catch: As an employee in a managerial role, I could probably save up the same amount every 1 or 2 months.

So instead of living as a student on the brink of extinction for 5 years, it makes so much more sense to me to try to push up my career the best I can and to get to a salary level that will make up for those 5 years in as little as a month. Is it possible? Absolutely and in fact, I did just that, and it worked. In my first 3 years as a manager, I saved and invested more than I would be able to collect in 22 years of my original investment plan with the 50 EUR a month mutual fund.

I admit, not everyone can do this and the stock market has been very friendly for a long time. Also having a solid, permanent income is only one side of the coin. Another important point that has an effect on our ability to save and invest is the lifestyle we chose. I prefer a minimalistic lifestyle and buy only things that I truly need. During this 3 years, I traveled around in Asia as a hotel manager and all my possessions were in a carry-on with 7kg of weight. This increased to 12 kg after some time, but despite having a family now (which requires some adjustments to my strategy and consideration for my family’s needs), I am trying to stick to the same basic idea that allowed me to pursue my target of financial independence in the first place: Appreciation for simple life and maintaining a low cost of living.

Having a solid income and keeping your living expenses low is the perfect formula to ensure that you become financially independent in a much shorter period of time.

Don’t punish yourself when you are young, but don’t get lazy as you get older. Work on your career, try to increase your income and remain humble with spending. There is no reason to wait until 65 to be able to follow your dreams. Doing the right things at the right time, chances are that you can reach your target much earlier.