Now that we’re in mid-January, it’s that time of year where New Year’s Resolutions either sink or swim. 

Will we maintain healthier eating? Will we continue our new exercise routine? Will we get more organized? Will we save more money and work toward our financial goals? 

I’m an optimist, so I have every belief you have what it takes to maintain your resolutions. But what helps us stay the course is a support system. That’s why I’m writing today. Now that we’re well into 2025, let’s explore wealth-boosting financial resolutions for the new year and how to keep them going all year long.

Financial Resolution 1: Set a Savings Plan

A penny saved is a penny earned, as the saying goes. What it really means is that setting aside some money each month as part of a savings plan is a surefire way to generate long-term wealth. 

How can you set and maintain a strong savings plan? The more specific you can get with the goals of your savings plan, the better you’ll be able to achieve the life of your dreams. 

How specific am I talking here? You need to have a clear purpose or goal, a dollar amount to be saved, and a timeline. Those are the key ingredients. 

This is where savings plans become unique. One person’s purpose will be different from another. For many, the purpose is a retirement nest egg. They’ll define a specific dollar amount. The average American believes they’ll need 1.5 million dollars for retirement. And for the timeline, most are looking to hit that savings number when they are around 65. From this basic framework, you can change the details for your specific situation. 

For me, I wanted to work toward early retirement while also generating enough passive income to spend time with my family now. That meant being clear and specific about how much of my medical income I invested into passive real estate, the timeline it would take to build up monthly cash flow, and how much of my investmentment earnings went to new investments. That gave me the best of both worlds: saving to live in the moment while also saving for my future.  

For you, it could look completely different. In fact, many people have multiple timelines. Perhaps you want to save a specific amount this year and ten years from now. Keeping yourself on track with multiple deadlines is a great way to make sure a financial goal is achieved. 

Others have multiple savings plans to serve their multiple goals and purposes. Here is a short list of common savings goals to help you get started:

• Leveraging investments for wealth-building
• Building an emergency fund
• Annual vacations
• House down payment
• A new car
• College savings for the kids
• Early retirement

Regardless of your purpose, having one is crucial. By putting a name on it, you bring awareness to your why. It helps you be mindful of your spending and, in many cases, create a budget. 

Speaking of that…

Financial Resolution 2: Make a Budget

Budgeting is kind of the opposite of a savings plan, but the two go hand in hand. Instead of saving a specific amount at a regular interval, you’re setting a spending limit. 

Outside of investing, budgeting can be the best way to boost net worth in the long run. And they can help us keep our financial goals top of mind. But budgets can be hard to start and maintain. 

One way to get started is by tracking your spending. If you don’t know where your money is going, you won’t be able to make a budget. You can use a spreadsheet, such as Microsoft Excel or Google Spreadsheets. But there are online budgeting tools available, too. 

Using the spreadsheet, catalogue your monthly spending. That should include fixed expenses (regularly occurring bills like your phone, internet, insurance, mortgage, etc.), living expenses (food, clothes, charitable donations, entertainment, gifts, vacations, etc.), and emergency expenditures (non-routine car maintenance, hospital bills, etc.). 

With your monthly spending in front of you, you can compare whether or not it aligns with your financial and personal goals. From there, target areas to limit spending (and then save or invest that money). As you set these spending limits, your budget will take shape.

While making your budget, make sure you include big-ticket items that you foresee buying down the road. Are you buying a family car this year? Is there a house project on the horizon? College tuition? Whatever it may be, plan for it so that you know how you’re spending your money. 

Financial Resolution 3: Diversify Your Portfolio

For those of you who frequent the Passive Income MD community, you know that I’m always talking about hedging against risk. The most sure-fire way to protect yourself against risk is to diversify your portfolio.

Called the “Holy Grail of investing” by Ray Dalio, diversifying can also maximize your investment returns. 

Diversifying your portfolio means spreading your portfolio’s assets around. The idea is that if one asset class or investment type starts to lose value, everything else in your portfolio is maintaining a healthy, upward trajectory. It’s also important to diversify investments that behave differently. You might think you’re diversifying your portfolio by adding real estate, if you’re only investing in office buildings, that’s not diversity. Office buildings and short-term rentals, for example, have completely different markets.

Speak with a financial advisor to find the right mix of assets that work for you. But, generally speaking, most portfolios will be made up of US stocks, international stocks, real estate, bonds, commodities, alternative investments, and rocket investments. 

If you aren’t sure what your risk tolerance is, you’ll need to ask yourself some important questions. Are you looking for cash flow? What do you have saved? Is your income stable? Do you have any passive streams of income? What are your goals for retirement? There are other questions to ask, and working with a financial advisor will put you on the path to understanding what a diversified portfolio looks like for you. 

But once you set it, don’t forget it. Life changes. Revisit your portfolio at least once a quarter while working with your financial advisor. Make sure it reflects a diversification that aligns with your financial goals, and make changes where necessary. 

Financial Resolution 4: Plan for Retirement

The last financial resolution for the new year we’ll discuss today is planning for retirement. But in order to plan and maintain retirement goals, you need to know what type of retirement is right for you. 

That’s right. There’s more than one way to retire. But that’s not what we’re told, is it? We only get one version: traditional retirement. That’s when we work full-time between our twenties and sixties–while we’re still in good health. By the end of this working career, the idea is we’ll have enough money saved up to maintain our lifestyle during our twilight years. 

Don’t get me wrong, there is nothing wrong with traditional retirement. If that’s your goal, we here at Passive Income MD can help you work toward maximizing your retirement fund. But the reason why it doesn’t work for me is because when you retire with a nest egg, your net worth will decrease over time as you withdraw funds from your retirement account. 

Other forms of retirement ensure that you never run out of money, and they are supplemented by passive income. Let’s look at these alternative forms of retirement.

Early Retirement

When you supplement your income with passive income through real estate, you can leverage and compound your money. It helps you work toward financial freedom a lot faster than income from your day job. 

As your money continues to make you more money, you can eventually replace your regular income and retire early. Notice that, even though you stop working, you’re still making money. Passive income is still coming in. But now you aren’t trading your time for money through your day job. Instead, you get to spend your time—your most precious asset—how you want. Maybe you want to spend your time traveling, with family, exploring a hobby, or a combination of things. Regardless, your time becomes your own.  

If early retirement is a goal of yours, then you need to start planning for it now. Educate yourself on how to create passive streams of income. You can start by joining Passive Real Estate Academy or joining one of our many communities. Beyond education, our support systems help guide you, grant access to investment opportunities, and much more. 

Gradual Retirement

Many people I know, especially physicians, love their work. They are not interested in early retirement, but they are also suffering from burnout. The medical field can be a grind.

Gradual retirement through passive income, over time, allows you to work less and less until you find a work-life balance that makes you happy. Maybe you want to work fifteen days a month, one day a week, or whatever schedule is ideal for you. 

If you plan carefully and generate passive income, it’s actually possible to work on your own terms. And when you do choose to retire from work, the passive income you’ve built will continue to generate new wealth, sustaining your lifestyle without depleting your net worth. 

Mini-Retirement

A mini-retirement is taking an extended break from work whenever you want without fear of it ruining the value of your portfolio. Maybe you take a month off. Maybe a year. You get to set the goal. Regardless, a mini-retirement means that your finances are healthy enough for you to make that choice. 

This is made possible through additional income from side-hustles, entrepreneurship, and passive income. It’s a great way to live in the present moment while still planning for the future. 

Take Steps All Year Long

You could be reading about these wealth-boosting financial resolutions for the new year in January. But the truth is you can implement financial resolutions at any time of the year. No matter when you find yourself reading this, taking action will improve your financial well being.

Take it one step at a time. Don’t try to do everything all at once. Whether you’re making a savings plan, creating a budget, diversifying your portfolio, or planning for retirement, make that move to get a little bit closer to the life of your dreams. 

The good news is that you don’t have to do it by yourself. Find supportive communities of like-minded individuals. Learn from them to help guide you on the path toward financial freedom. Consider joining our Leverage and Growth Accelerator Community. There, we will help you uphold your financial New Year’s Resolutions and any other goals you may have. 

Thanks for stopping by today. Stay motivated, keep working to achieve your financial New Year’s Resolutions!

Peter Kim, MD is the founder of Passive Income MD, the creator of Passive Real Estate Academy, and offers weekly education through his Monday podcast, the Passive Income MD Podcast. Join our community at the Passive Income Doc Facebook Group.