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My Financial Review 2025 - The Financial Habits That Paid Off

As 2025 draws to a close, it’s a natural moment to look back on the year behind us and think ahead to what’s next. When it comes to personal finance, this annual reflection is more than a routine check-in—it’s a powerful habit that helps build long-term wealth and keeps life goals within reach.

My investment approach is firmly rooted in passive investing. I don’t chase excess returns, so my performance largely mirrors the broader market. Because of that, any single year’s return—good or bad—doesn’t carry much meaning on its own.

Instead of setting short-term return targets, I focus on savings goals tied to long-term investment objectives. Each year, I adjust my cash position, liabilities, and portfolio allocation to stay aligned with those goals rather than reacting to market noise.

2021–2023: Reflection and Course Correction

When I reviewed my net worth changes from 2021 to 2023, a few weaknesses became clear:

  • Financial asset accumulation was slower than expected
  • Cash and low-risk investments made up too large a share of assets
  • Large cash inflows weren’t invested promptly
  • Owner-occupied real estate dominated total assets
  • The financial market downturn in 2022 coincided with a surge in real estate
  • Overall debt levels were relatively high

In response, I set a three-year investment and wealth management plan for 2024–2026. After several steady years of execution, I’m happy to say that most of these goals were already achieved by 2025:

  • Savings rate above 50% 👌🏻
  • Stock-to-bond ratio above 40% 👌🏻 (25% → 52%)
  • Debt ratio below 35% 👌🏻 (42% → 35%)
  • Real estate below 50% of total assets 👌🏻 (60% → 45%)

These improvements didn’t come from dramatic changes, but from consistent, disciplined decisions made year after year.

New Year Resolutions for 2026

This year also brought a major life change—we welcomed a new family member. With higher expenses on the horizon, I plan to track spending more closely for a period of time to build more accurate budgets and set a realistic savings rate. As a result, my target savings rate has been adjusted slightly downward.

On the investment side, I’ll continue increasing exposure to higher-risk assets and gradually raise my stock-to-bond ratio. I also plan to introduce a small allocation to cryptocurrency. After reviewing my asset allocation and long-term goals, ChatGPT suggested keeping this exposure below 5%, which aligns well with my risk tolerance.

My 2026 Investment & Wealth Management Goals:

  • Track expenses in greater detail
  • Allocate less than 5% to cryptocurrency
  • Increase emergency fund savings (partially via money market funds)
  • Maintain a savings rate above 40%; save 50% of additional income
  • Raise the stock-to-bond ratio above 55%
  • Reduce the debt ratio below 30%

Happy saving, happy investing—and most importantly, happy living.