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Goals for 2013

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For 2012, I was able to meet most of my financial goals, which encourages me to do better and aim higher in 2013. This is Year 2 in my journey to early financial independence, and achieving success this year will go a long ways towards helping me reach my final destination – freedom. After taking two weeks off from work to rest and relax, I’m fully recharged and ready to rock n roll!

Challenges Ahead

At first glance, I am expecting 2013 to be a more challenging year. For one, the novelty of saving intensely and investing in real estate + dividend stocks has started to wear off. This is to be expected, of course, so the real test will be to determine whether or not I can stay consistent for another year. That is, I have to stick to my convictions and avoid lifestyle inflation! I have to continue to ignore friends and co-workers when I see them waste money, and encourage me to do the same.

By no means have I lost interest in investing and saving, as I thoroughly enjoy seeing the passive income stream grow on a monthly basis. 😉 I’m just pointing out the obvious fact that Year 1 is almost always easier, with regards to almost anything you choose to do. The path to early financial independence is no different.

Lastly, I expect my workload at my job to pickup drastically in 2013. The honeymoon period is over, and I will be expected to contribute much more this year. As such, I’m anticipating working many long hours, and “selling my soul” to the company. This year will be the year of the grind, for sure.


1) Acquire Rental Property #2

I am currently under contract on a short-sale property, which I won back in late October. At the time, my winning bid was for $285,000 for a 2/2 condominium in a prime location. Since then, the local real estate market has continued surging, and the estimated value of the home is now around $320,000.

The lender is currently reviewing my file and a decision is pending. If the purchase price is deemed too low (the lender will do their own appraisal to determine fair market value), I may be forced to increase my offer, or risk a rejection. In addition, there’s no guarantee that I will even be able to obtain a second loan, since I just purchased my first rental property last year.

There are a lot of variables and unknowns at this time, so I’m not counting my chickens before they hatch. Worst case, my offer is rejected and I have to continue my search. After all is said and done, though, my goal is to acquire another rental property in 2013. Plain and simple.

2) Passive Income of $1000/month

The current rental property is generating around $400/month or so in profits (after all expenses). If I can acquire another rental property, I should be able to add an additional $400/month. So, if the rental properties can generate $800/month, this means I will need my dividend portfolio to average $200/month.

Readers who have been following might think that I’m aiming a little low on the dividend side of the passive income stream. After all, my projected dividend income for 2013 was already calculated to be around $2300/year. This gives me an average that’s just under $200/month.

The reason for the lower projection? If I do indeed acquire rental property #2, I will be forced to sell some stocks in my dividend portfolio to fund the downpayment. There’s no other way around it, since I don’t have enough funds in cash to complete the transaction. By doing so, I expect the total value of the dividend portfolio to be reduced by 30% or so. After the transaction is complete, I will need to use the remainder of the year to rebuild my dividend portfolio. I really do detest the idea of having to part ways with some of my holdings (I’m a big believer in buy and hold/monitor), but it’s hard to have the best of both worlds, sometimes.

3) Max out Roth IRA for 2012 = $5000

I still haven’t gotten around to funding my Roth IRA for 2012, but I’ll have until April to complete this task. Since this only requires $5000, I’m confident I will be able to meet this goal.

4) Max out 401k for 2013 = $17,500

I’m holding off contributing to my 401k until the short-sale status is finalized. Once this is all sorted out, I will do my best to catch-up and fund my 401k. In the perfect world, I’ll be able to meet the max again for 2013.

5) 80% Savings Rate Average for Each Month

I’m going to challenge myself this year and aim to save 80% of my net income. Last year, I averaged just under 70%, coming in at 68.96%. If I can cut some costs here and there, and continue building my passive income streams, I believe this goal should be reachable.


I expect 2013 to be a challenging but fulfilling year. Work stress is anticipated to be at an all time high, which is undesirable, but hopefully this will just add more motivation for me to succeed in reaching my financial goals.

If I stay the course, and all goes to plan, my passive income streams will be generating over $1000/month by the end of the year. This progress would provide a tremendous boost, as it would put me 2/3’s of the way there towards reaching my final goal of $1500/month.

This would make for some exciting times, indeed. After all, my forecast for reaching early financial independence has been pulled in from 37.5 to 33! So, let’s get to work and make 2013 a most successful year! 🙂


What are your goals for 2013? What are some of the challenges you expect to face?

{ 18 comments… add one }
  • JC @ Passive-Income-PursuitNo Gravatar January 14, 2013, 7:40 am

    That’s some pretty nice goals. I hope you can get that second property that is currently under review and without having to raise your price. That way you can start getting your cash flow going from there. It’s a shame that you’ll have to sell some of your DG stocks, but if the right opportunity comes along then it’s worth it. I’m still not a big fan of trying to max out the 401k since it’s much tougher to have access to it before 59.5, but if you feel that’s best for you then you need to do it. I’m hoping to hit 80% as well, although that’s subject to be revised upward should I get my raise early enough in the year.

    Best of luck in 2013!

    • FI FighterNo Gravatar January 14, 2013, 8:36 pm


      Thanks! I also want to get the second property locked up and secured. The sooner the better. Once this is done, I can refocus my efforts towards building back up the dividend portfolio.

      Right now, I’m prioritizing the rental property over stocks since getting a loan is so painful these days. To be more specific, right now I have a decent job so I better take advantage of the low interest rates, and try and get a loan while I’m still qualified. Who knows what may happen in the future…

      Yeah, I was debating whether or not to stop the 401k contributions this year. To allow for a better safety of margin, I think it would be prudent to try and max out for at least one more year.

      I’m also shooting for 80% savings rate, just like you. Best of luck!

  • Dividend Growth InvestorNo Gravatar January 14, 2013, 7:56 am

    Actually, if your portfolio holdings are held in a margin account(s), you can withdraw money from it, and won’t have to sell your stocks. Of course you would be paying a high interest rate (something like 6% – 7%), and if your stocks decline too much you might be asked to add money to your portfolio by broker (margin call). But if you wanted to withdraw $15K form your 65K portfolio, that sounds doable. Also, the interest on the portfolio charged on your income portfolio can be offset against the dividend income you receive.

    • FI FighterNo Gravatar January 14, 2013, 8:38 pm


      Yeah, I don’t know too much about margins, but it’s nice to know that another option is available. Thanks for the insight!

      Right now, my plan is to try and keep things more on the simple side, and just sell some stocks.6-7% interest seems kind of high, and I’m not even sure if my stocks will generate that kind of return…

      Best wishes!

  • Jon @ MoneySmartGuidesNo Gravatar January 14, 2013, 5:43 pm

    Great list of goals! I wish you luck on saving 80% of your income. That is truly something to be proud of! One question about the short sale, if your offer gets rejected or you would have to up your bid and you decide not to, are you out any money? I’m not 100% clear on how the process works.

    • FI FighterNo Gravatar January 14, 2013, 8:40 pm


      Thanks! Yeah, saving 80% over a course of a year would be pretty sweet. I was a little disappointed I just missed 70% last year, so I’m going to try and do better this time around.

      If the short-sale offer falls apart, then I will collect back my $3000 deposit check that’s being held in escrow right now. So, no, I wouldn’t be out any money. Well, except for the fact that my $3000 deposit was held up for a few months earning 0% interest. But that’s the risk you take when you bid on short-sales. Hoping for the best.


  • The First Million is the HardestNo Gravatar January 14, 2013, 5:45 pm

    Nice goals, I’ll be really impressed if you hit them all! Personally, I’ll be trying to save 50% and trying to build up my dividend and passive income streams. Although I don’t have a specific $ amount in mind as I’m still getting started on it all this year.

    • FI FighterNo Gravatar January 14, 2013, 8:42 pm

      First Million,

      Thanks! I’m going to do my best to accomplish every last goal, and this blog will keep me honest 😉

      Good luck to you on your quest to building up passive income streams! I look forward to tracking your progress. Dividend investing is very addicting, I must say…

      Best wishes!

  • Dividend MantraNo Gravatar January 14, 2013, 6:15 pm

    FI Fighter,

    Man, that’s some set of goals! I really hope you’re able to achieve all of them. That would be simply phenomenal. That 80% savings rate goal is especially impressive.

    2013 is shaping up to be really great. Even if you only hit a 70% savings rate and fall short of your goal that still would be really awesome.

    That rental property is working out spectacularly. A second one would only compound the results you’ve already achieved.

    Best of luck with all that 2013 brings you.

    Best wishes.

    • FI FighterNo Gravatar January 14, 2013, 8:47 pm


      Thanks! Exactly, I’m going to aim high and try for 80%. If I fall short and can still reach 70%, I’ll still be more than thrilled with the results.

      Yeah, so far the rental property has been working out well. It’s a great feeling to know that my monthly rent is effectively slashed in half due to the incoming semi-passive income. By securing a second property, I can basically cross off rent and break even on that every month.

      If my dividend income can eventually cover my monthly grocery/take-out expenses, I will have eliminated the two most expensive, but necessary human expenses. One step closer to early FI 😉

      Take care!

  • LeighNo Gravatar January 14, 2013, 10:15 pm

    Sounds like we both have some pretty ambitious goals! Short sales are fun, but I hope it works out for you! When do you plan on maxing out your Roth IRA for 2013? You should do that this year as well 😉 80% saved of your net income is killer!! I can’t wait to see what you do this year!

    • FI FighterNo Gravatar January 17, 2013, 7:16 am


      Yep, let’s try and aim high this year! I’m hoping for the best too. Short sales provide a great opportunity to get good value in a rising market, but the time it takes for one to finalize leaves a lot of uncertainty. Patience is definitely needed for this type of endeavor. I probably won’t have the funds for the the 2013 ROTH IRA this year. I’ll put that off until next year. I’ll probably just always be a year behind (I’m funding 2012 in 2013).

      Take care!

  • Greg@ClubThriftyNo Gravatar January 15, 2013, 4:40 am

    Those are definitely some good goals. We have 2 rental properties at the moment, and are very glad that we bought them. Our goal is to continue paying on our debt! Good luck with yours!

    • FI FighterNo Gravatar January 17, 2013, 7:18 am


      Rental properties are generally a great investment. Glad to hear that the two rentals are working out well for you. I just got my first one last year and am grateful I was able to win. The semi-passive income it generates each month helps pay for half of my own rent. With one more property, I can go rent free moving forward 😉

      Best wishes!

  • Compounding IncomeNo Gravatar January 16, 2013, 3:53 am

    Wow man, those are some lofty goals! If you’re gonna aim, you might as well aim high.

    “the novelty of saving intensely and investing in real estate + dividend stocks has started to wear off.” Hehe I know what you mean. The excitement of seeing a dividend hit the account is long gone… I probably log into my brokerage account once a week or so unless I plan to make a purchase. I try to check every so often incase of identity theft, it’s something I worry about. I will never use a no-name brokerage for that very reason.

    • FI FighterNo Gravatar January 17, 2013, 7:20 am


      Exactly. I’d rather aim high and fall short than to aim too low and not really push myself.

      Yeah, like most things, after a period of time, the thrill is gone. When it comes to investing, this is actually a beautiful thing. This means you can just let the compounding do its thing and only check in periodically to make sure the machine is still running smoothly. I basically just completely ignore my retirement accounts, and only check in once a month, at most. It’s awesome to see all the progress they continue to make. And that’s why I love stocks. The passive income is really passive income. The same cannot be said for real estate (not considering REITs).


  • Brick By Brick Investing | MarvinNo Gravatar January 17, 2013, 10:59 am

    FI Fighter

    You’re absolutely killing it! I wish I had gotten into real estate while I was single. I marvel at your techniques and properties that you plan to acquire. Hopefully one day I will pull the trigger on investment real estate. I know it’s the quickest route to passive income!

    • FI FighterNo Gravatar January 18, 2013, 8:30 am


      I lucked out with the rental property last Summer. The market has picked up quite a bit since then, and there are too many all cash offers to allow for most small fish investors to compete. That’s another reason why I’m trying to win what I can now. The cash flow should make it easier to save for retirement and it will greatly help supplement the monthly dividends + work income.

      Take care!

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