Goals for 2012 Review

Well, 2012 is basically over and in the books, so now is a good time to go over the goals. Back in late March, I put up my goals list.

Without further ado, let’s see how we did:


1) Total Value of Taxable Account = $60,000

As of market closing on December 28, 2012, my total portfolio value is $63,02.44. As I alluded to when setting this goal, I knew it wouldn’t be easy to meet. And it sure wasn’t! In order to just barely make it, I had to save aggressively throughout the year. My average savings rate (calculated up to November) was 68.65% of my monthly income.

What really helped to make all this possible was that I switched jobs in July. By doing so, I was able to claim a signing bonus of over $10,000, and pocket a yearly bonus of $8000, which I used to load up on dividend stocks in October. In addition, I had a lot of RSU’s that I obtained from my previous employer. I sold all my shares for a tidy profit, since tech stocks had a nice run-up during the early part of the year, and in September when QE Infinity was announced.

Had I been forced to rely on just my paychecks alone, no, I wouldn’t have been able to accomplish this goal. In fact, rental property #1 basically ate away at all my cash, forcing me to even burn through a large chunk of my emergency fund.

Although I am proud of this accomplishment, by no means am I satisfied. In order to really catapult my progress into early FI, I will aim to save 80% of net income in 2013. That’s right, if I aim for anything lower than that, I know I will be selling myself short. There are still plenty of things I can do to reduce my expenses. For instance, I will make it a goal to start biking to work in the Spring and Summer months. Further, I know I can make a more concentrated effort to eat out less and avoid the “daily latte”. Yes, I know, a $3 latte is just a drop in the bucket for most people, but in my case, I actually do spend a bit too much on coffee! And besides, they have free coffee at work, which isn’t as good, but it’ll get the job done. 😉

2) Beat the S&P 500 and Dividend Yield > 3.0%

The dividend yield goal is a decent idea, I guess, since it let’s me track just how much income my portfolio is producing, relative to how much money I put in, on a yearly basis. So far this year, I’ve received $1157 in dividends. Since I didn’t receive my first dividend payout until March, this only factors in 9 total months.

The easiest way for me to compute the yield, at this point, is to take the current shares and multiply with the current payout ratio for each company, projecting a constant payout over the next year (no dividend raises or special dividends are accounted for). Doing so, I would expect to receive about $2308 in dividends for 2013. Factoring in the cost basis, this gives me a forward dividend yield of 3.69%. So, although this is not the exact yield for 2012, I think it’s close enough (and a lot simpler for me to compute).

Beating the S&P 500 is actually not so important, as I’ve learned through my first year of dividend investing. When it comes down to it, it doesn’t matter if my portfolio beats an index, or not. What matters is the income stream, and whether or not it is sustainable. With that said, my portfolio greatly under-performed the S&P 500 this year. The S&P 500 is up about 10-11% this year, and my portfolio is actually negative, and in the red (from a capital gains perspective, not accounting for any re-invested dividends).

I am currently sitting on some heavy capital losses with Exelon (EXC) and Norfolk Southern (NSC), which are dragging down the total portfolio value. Long term, I’m not too worried as I have confidence in most of my holdings to keep paying and growing their dividend distributions. EXC is the only company that worries me, as a potential dividend cut may be in the works for 2013.

With that said, the under-performance of my portfolio has taught me a few lessons. Early on, I was a bit more of a risk taker, so I elected to invest in many companies that were struggling and “cheap”. I initiated positions in Transocean (RIG), BP (BP), and EXC, hoping to unearth value. I also rolled the dice with some high-yielders like SeaDrill (SDRL). Not surprisingly, those riskier investments that I made early on didn’t pan out. SDRL did perform well, though, so I was able to offset all of the losses I had in RIG. I sold both SDRL and RIG this past Fall, and exited out of these positions entirely.

Over the course of the year, I’ve learned that I value safety and security more than the potential for capital appreciation. As such, I’ve switched over to more solid, defensive holdings (e.g. MCD, ABT, SO, etc.). I’ll be sticking with this approach moving forward.

3) Fully fund Roth IRA = $5000

I haven’t met this goal yet, but I still have until the end of tax season (April 2013) to contribute to my Roth IRA for 2012. I anticipate that I will be able to meet this goal. The gains/dividends on a Roth IRA aren’t taxed, so I would hate to miss out on this.

4) Fully fund 401k = $17,000

I was doubtful I would be able to meet this goal, but surprisingly, somehow I managed to cap off the 401k contribution in November. The company that I am currently working for has a wonderful 401k matching policy, so it was extremely difficult to pass up on the free money.

For 2013, my current plan is to sit out the first half of the year, and not contribute to my 401k. I am trying to save up cash for a downpayment on a second rental property. Further, I still need to fund the Roth IRA for 2012, so any extra funds I can save is a plus. Although the new tax laws may make me rethink this decision. The 401k provides a nice tax buffer, so I’ll definitely miss out on that.

5) Pay Raise and Promotion

I was able to achieve this in July! I joined a new company and was promoted to a senior level engineering position. They are paying me an awesome salary with a lot of stock options, RSU’s, and yearly bonuses (although suspended for 2013 due to the anticipated slowdown in the economy). So, I have nothing to complain about here. In fact, I’m actually very content with my salary, and wouldn’t complain if I didn’t receive another boost for the rest of my career. I think I have what I need to help guide me to the final destination, early FI. I just need to grind it out for a few more years.

Oh, and I should probably let readers know that my target date for early FI has been pulled in – I’m now making a concentrated effort to check out by 33! 🙂 That’s right, I am hoping to check out either at the same time, or shortly after President Obama finishes his second term in Washington. Yes, I can!

Other Goals

And here are the non-investing goals for 2012:

1) Learn how to competently snowboard

I’m not sure about “competent”, but I did make a few trips out to the slopes in 2012. As such, I was able to improve drastically. I wouldn’t say that I am totally confident riding double black diamonds, but I’m much better than before. I have a 2013 season pass, so I’ll be spending even more time on the mountain building up my skills. I can’t wait to start making use of that pass in January!

2) Learn how to cook

This was a failure. I didn’t really learn how to cook anything this year. I just never made time for it, and stuck to cooking real simple, boring dishes. This goal may re-appear in the 2013 Goals List. I’m not so sure though, since I expect to be extremely busy with work, especially during the first half of the year. Looks like a lot more coffee, and carry-out for me!

3) Use my D-SLR camera a lot more

Again, another goal that went unfulfilled. I did make a trip out to Chicago and St. Louis in 2012, so I got to photograph “The Bean” and the “Gateway to the West”. So, although I didn’t use my D-SLR “a lot more”, I did make some use of it.

4) Travel more

I didn’t get to travel much this year. Outside of my vacation to Chicago and St. Louis, I really only made trips between the Bay Area and Orange County for work. I almost got sent to Korea to debug a problem for Samsung, but at the last minute, the company elected to send another co-worker instead. I didn’t object since I don’t really like long flights, but it would have been cool to get a sneak peak inside the Samsung building. Although I’m sure all the cool stuff would have been in the restricted areas…

5) Be more active

It’s a lot easier to be active when you are away from work. I’m writing this entry on a Friday, a day I have off from work. And it’s the best feeling in the world! I ran earlier this morning, and am thinking about going outside again for another jog. In fact, I think now would be a good time to take a break… the freedom of choice, I love it. Now to go and find that ipod…


What were your goals for 2012? Were you able to achieve them? What are you looking forward to accomplishing in 2013?

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JC @ PassiveIncomePursuit

Congrats on the progress! Moving your target FI date up to 33 is awesome. What was your original FI date goal? Mine is 40 right now but I think that’s going to move up a lot more as every year passes by. Like you I struggled some on my personal non-financial goals but I’m motivated to get started on those. Best of luck in 2013! I’ll be interested to see your goals for the year.

Compounding Income
7 years ago

Amazing year, what can I say? Please keep doing this, it’s great motivation for us readers. I didn’t know you snowboarded, that’s awesome. Before I enlisted in the Army I lived in Colorado and was an avid skier. I haven’t had the chance to go in years and I really miss it. Skiing/boarding is not FI friendly unfortunately. It’s pretty expensive buying lift tickets and having servicable gear (unless you’re like my dad and ski UP the mountain, he’s crazy). Skiing is my favorite leisure activity, no doubt about it! Don’t fret about not going to Korea. I’m there right… Read more »

7 years ago

Great job! Good luck with your 33 target goal and the next four years!

Dividend Mantra
7 years ago


Way to go! You had a phenomenal 2012! I certainly hope 2013 treats you even better.

Being able to reach FI by 33 years old would be fantastic. That would be up there with Jacob Fisker and Derek Foster. Pretty legendary stuff.

Keep up the great work. I didn’t do as well with my goals this year, as wandering off the path during the summer really dug my grave, but I still had a great 2012.

Looking forward to the new year and seeing what it brings us!

Best wishes.

Accumulating Assets
7 years ago

FI, great job on your goal setting and progress! I am very impressed with your plan.

4 more years to you reach your cross over point. That is an awesome goal!

Happy New Years!

5 years ago

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