I’ve already posted a monthly update here but would like to provide a 2012 yearly update as well.
I started this blog in March of 2012 and that is basically when I started following a DG strategy. I built up my portfolio from a value of $34,000 in April to a value of over $94,000 today. Some of this was due to share price appreciation but mostly was due to new purchaes.
All of my purchases can be found by following the “Buys” label here.
My top purchases were:
Buying 300 shares of BBVA at a cost of $6.45 /share ; they now trade at about $9.50/share (up 47.3%)
Buying 68 WAG at 28.99/share ; they now trade at about $38/share (up 31%)
These are unrealized gains and the whole point of my DG strategy is to receive increasing dividend income so the only position I may sell is BBVA as it’s more speculative. I plan to hold WAG long-term.
Neither of these were mentioned on my blog because I had a separate portfolio with a different broker that I was calling my “income” portfolio. It’s now combined together. However I sold both of these positions at the end of the year to claim the tax writeoffs. I might buy them back after 30 days to avoid the wash sale rule. At this point EXC is purely a value play.
I bought EXC @ 39.03/share and sold at 29.77/share , I collected $142.93 in dividends (loss of 20%)
I bought APL @ 37.93/share and sold at 31.12/share, I collected $113 in dividends (loss of 15%)
I only had 1 losing trade out of 21 trades for a profit of $2719 before commissions.
I already posted a full yearly review of my options trades. You can find that post here.
My total for the year was $1791.55. My expected future 12 months of dividend income has increased to $3954.05. I’ve updated my dividend income on my Dividends tab.
Here is what my dividend income and future projections look like. I like how much smoother the graph is of the projected future 12-month income.
My original goal was to hit $2000 in forward 12-month dividends by the end of the year when I started this blog. My original goals post from March can be found here.
I blew plast this number and hit the mark of $3954.05 in forward dividends. I mentioned this in my monthly review.
I’ve set more aggressively dividend goals going forward. These can be found on the Goals tab.
My new dividend goal for 2013 is $6500 in forward dividends by the end of the year.
In order to hit this mark I will need to contribute $67,892 in new capital purchasing stocks that will yield on average 3.75%. This is an average contribution of $5657.67 per month. I think this will be achievable.
I’ve been overpaying about 8K/month for the last 5 months to pay off a second lien on my primary residence. I will have this completely paid off by the second week in February eliminating a $380.35 monthly payment. The main reason I did this was that the second lien had a much higher interest rate of over 6%.
I also plan to refinance my primary residence if rates are at 3% around the summer. My 1st lien on my primary residence is at 4.25%. I plan to start overpaying to reduce the loan balance so that it’s a conforming loan. Basically I have to bring the loan balance to $417k ( I need to overpay about $20k to do this) so I don’t need a Jumbo loan. By doing this I’ll have over 20% equity into my home and I’ll be able to get the best rates possible. At 3% conforming vs my 4.25% loan now I’d be saving another $407/month P&I.
My next plan would be to pay off the condo that’s at 4.5%. However, I would not start doing this until I have my DG portfolio at the same size as the equity I have in real estate. I have apporximately 150k but will have 170k in equity once I refinance my primary residence. I’ll need to bring my DG portfolio up over 70k in value. So this may not happen until 2014.
I underestimated my contributions but have adjusted my new dividend goals. I plan to aggressively add to my DG portfolio until the value equals the value I have in real estate equity. My plan is to earn half of my income from real estate and half from equities.
I’ve taken a huge step this year in the direction of FI. I sacrificed about 2 years of making next to nothing to start my business. I haven’t mentioned this before but in 2008 I quit my job in sales making around 100k to start my own business. This happened to coincide with the Great Recession. I lost money the first year and I barley broke even the second and made about 50k the third. This obviously ate into my savings. Since then I’ve more than doubled my income every year. While I don’t think it will continue at that pace, I would expect growth of at least 20% a year.
I also plan to take a better look at my finances. I will be looking into mint.com to track expenses and may add a new tab for “Net Worth.” I want to get better at budgeting my money and eliminating unneeded expenses. The first four months of this year will be slower with purchases since I’ll have to save some money for a tax bill due in April.
I hope everyone meets and exceeds their goals for 2013!