In 2018 I completed my 1st SWOT financial analysis focusing on my financial strengths, weaknesses, opportunities, and threats. As mentioned in my first post, this is inspired by my day job and also a blog post I came across a while back. Investopedia has a good overview of what this is in the context of why a company would complete such an analysis. I also know of entrepreneurs who want to start a business and end up completing a SWOT market analysis as part of their business plan.
Cash Money Life took the SWOT analysis a bit further and added the financial spin to it.
Here is my second attempt and updated Financial SWOT analysis.
My financial mission statement – I am currently in my later 30s and I started this financial journey very late in my late 20s. Several years ago, I set to change my financial mindset. In 2018, I said “I aim to retire by age 55.” I am now revising this to, I aim to retire by age 52. I currently make 6 figures and am very satisfied in my current full time role as a VP, Mobile Marketing. I recently received a promotion and this is exactly what I need. Money is great, but at this point in my career, I need to be able to continue learning and make a difference in the company. I also want to build my side hustles to be able to not only use this money to increase my investments, but to help my parents financially. My retirement will not only cover myself, but I hope my finances covers my parents.
Helpful questions: What are the strong areas of your finances? Do you have a positive monthly cash flow? Are you paying extra on your debts? Are you debt free? Did your income recently increase?
My financial strength is that I have a full time job that pays well.
I no longer have the student loan debt like I did in 2018. I paid off $77,000 in student loan debt to become debt free.
I continue my side income businesses but with more focus. I have anchored on buying and selling mostly sports cards, starting a subscription business that is growing rapidly (hopefully not just because of the November and December holidays), and increasing my focus on real estate investing (both rentals and fix and flips).
Ask yourself these, and similar questions: Have you maxed out your income potential in your current job? Are you in debt? Are you upside down on a car or house loan? Are you living paycheck to paycheck?
I am debt free. Student loans all gone.
The new leased car I had in 2018 officially came to an end and I bought out the car in cash rather than return the lease and get into another new car lease like I have done since 2005.
I have credit card debt, but I pay off my balance in full every month to avoid interest charges. Remember you pay the statement balance in full every single month to avoid interest charges unless you are using a cash advance in which the interest accrues daily.
I made the decision to forego an MBA degree for a couple reasons. I did not want to go into more debt because the programs I wanted to attend were higher than the amount my company would pay. I also dreaded the idea of studying and generally speaking going to classes.
I have bought real estate investment properties and have learned so much from the feeling burnt out of over analyzing to checking dozens of properties every month to shopping mortgage rates to understanding rehab costs.
Opportunities are actions that you haven’t yet taken, or at least haven’t yet maximized. There are almost always opportunities if you look for them, though sometimes they may not appear evident at first glance. Financial opportunities come in many flavors, including income opportunities, debt reduction, investments, reducing interest or fees, and more.
I make a good annual salary and I also get an annual bonus. I am still a Vice President, but received a promotion with a higher salary. The new role produces new challenges, brings new critical experiences, and enables me to act as an owner of an enterprise capability while giving the opportunity to grow a team.
I started to focus more on certain side income businesses.
External factors to consider: Are you in danger of losing your job? Is your mortgage rate about to reset to a higher APR? What are the current economic factors that may affect your job/investments/income streams?
Obviously this year has been trying for all of us and unfortunate in many ways. However, I have refused to be pessimistic and dedicated this year to being my best year ever. Our company, like many others, went through a round of layoffs and fortunately, our department remained in tact. That said I continue to believe that you never know what might happen at any time. I have an emergency fund to cover these situations and my parents live in the same state if the worst comes to worst.
My biggest foreseeable threat continues to be with real estate only because of the big investments I put into each property as both down payments and rehab costs. I have yet do complete a cash out refinance so the money I invested is still stuck with these properties. More to come on my real estate journey as I look to do more real estate transactions.
What does your financial SWOT look like? If you have a similar SWOT analysis, please comment and share.