Thursday, February 28, 2013

February 2013 update ($229,800 +$3,060 or +1%)

It has to be highlighted that the change is for the last 2 months, rather than one.

The portfolio changes:
Accumulate additional $7,000 as part of my annual savings plan ($42,000 a year or $3,500 a month)
Vanguard Energy ETF stocks are up $2,100
Vanguard Energy ETF 2012 dividends were $ 537 or $1.99 per share.  By default bank charged 10% income tax on the dividends, otherwise I would get $597.
↑ Emerging market mutual funds are up combined $450

Precisions metals lost $1,210
Company & Gazprom shares down combined $930 in spite of Q4 dividends reinvestment. Gazprom yet to pay dividends for 2012. Projected $0.23 per share - $4.34 or almost 5%.
GBP (£) lost to USD ($) almost 6% of its value. For me it presented a $4,700 loss.

Wednesday, February 20, 2013


One of the key strategies for successful financial independence is to keep right portfolio allocation and diversification.
What I have decided is my annual investment targets to be invested in mutual funds. This will provide less growth but less risk as well. Should I manage to accumulate any additional money for the investment, I can put them in individual equities, if I want to.
This is last two years and three scenario for this year (Do nothing and stay in cash, do partial investment or invest everything):

Wednesday, February 13, 2013

Key Performance Indicators (KPIs) for Financial Independence

From A to B and  how.
A - Knowing where you are (current net worth)
B - Where you want to be  (amount of money you need to achieve financial independence).
How – Family budgeting vs. Income –Savings and where to invest.

These are the financial independence basics. One would still need to have key performance indicators. For my plan and portfolio I want to choose following:
-         Absolute total return on invested cash. Expressed in dollars and percentage.
In 2012  the result was $5,4 K and 3%.
-         Relative total return (measured against S&P 500)
3% vs. 14% (S&P 500).
-         Inflation adjusted return.
       2012 inflation was 3%, hence adjusted return was 0%.
-         Cash accumulated to be invested (annual figure expressed in 2010 money).
$ 51 K vs. $ 40K planned.
-         Assets & currency allocation.
To be developed. Moving in the right direction.
-         Personal expectation.
After getting acquainted with inflation, I lowered my expectation of early retirement /financial independence.  However this is still a very important indicator.
Suppose market performed well, but you did not manage to accumulate as much money as planned – you still on target. Sometimes market was bearish or certain assets underperformed, but accumulated cash compensated for it.  You need to have your own understanding and aspirations.