2012 Goals

I haven't made New year resolutions in a very long time but 2012 is the year for which I am happy to set some goals. Isn't blogging great? 2011 was a great year. I achieved most of what I planned to do. I also started this blog in 2011 which I hope to work harder on in the coming year. I will have to review my progress every month quarter here. (OK I didn't).
Quarter 1: Never Done
Quarter 2: HERE...
Quarter 3: end September 2012
Quarter 4: end December 2012
New year 2012 goals below:

2012 PERSONAL FINANCE GOALS

1. Online income to R5000 per month by December 2012. This will take some work in my writing. I expect to spend at least 1 hour per day writing.
2. Maintain at least 12 months expenses worth of an Emergency Fund.
3. Spend an average of 50% of my net income or less.
4. Maintain giving of about 10% of income
5. Buy a new rental property
6. Remodel the duplex that we have put off the market. Prepare that property for rent by the end of 2012, when we no longer need to use it. Remodel the bathroom in a two bedroom property.
7. Push for 70% equity on our home by December
8. Get retirement accounts to 45% of the target
9. Get stocks to 55% of the current target. This is the most important personal finance goal for me. All my wealth growing energies are on this in 2012..

2012 HEALTH GOALS
I got a bit sick end 2011. I was diagnosed with PCOS which may have caused some insulin resistance. I put on a lot of weight in a short space of time. Health is the most critical area in my life in 2012. My target is to make time to exercise 3 times a week. I might join the gym, which is not necessary. I have to put my treadmill, stationary bike, zumba, and tons of DVDs into good use. I am so embarrassed to mention them by name. (LOST 12kg ALREADY - Sept progress)

2012 FAMILY GOALS

1. Holiday in the Mediteranean Europe with hubby in 2012. I just cant wait for this.
2. Spend great amount of time with my family. I spent the past two years in two cities/ countries. My properties kept me busy in one city whilst my business was in the other city.Looking forward to having more time with my family.
3. Visit my parents for at least 2 weeks.

CAREER GOALS
Get training in some media form. This can be online. It can be anything from writing to publishing, production to public relations. Anything at all.

HOBBIES, ETC

1. Read at least one book per month. I have to make time for this. I already have a good number of books that are not read.
2. Finish all my unfinished home and craft projects. I have lots of material. I don't even need to buy new stuff.
3. Do charity work as much as I can.

Have fun whilst doing it all.

Read More

Rental Income vs Capital Growth

Apartment Rental Income vs Capital Growth

Its Christmas almost yet I am here thinking of whether I should choose a higher rental income vs capital growth as a strategy for 2012. When you are in business, there is just no holiday season in your diary.

My strategy was to buy apartments in the apartment blocks where I own individual units. That way I can someday own the whole block of apartments. Sounds like a long shot, doesn't it? Anything is possible.

The apartments are close to the city center. The capital growth is not great but the return on investment is amazing when you rent the places out. The demand is great. I haven't had a vacancy since 2002 in one small apartment. All in all its a "buy-to-let" dream location. I own 3 apartments in the area to show for my confidence. Well, after a long inner planning session, I decided to go buy a few units in the suburbs to balance my real estate portfolio. In the suburbs the returns are lower but capital growth is great. I do have a feeling that I will want to sell some of my properties in a few years.

The Decision on Rental Income vs Capital Growth
My decision should be based on what I will do with the property. If I buy for speculation reasons, which happens to be a possibility, i would rather buy in the suburbs. If I buy for long term rental, I should go to the city. The problem is that I don't have an idea what I will do with the properties I want to buy in a few years time.

Whilst in the dilemma, a nice lady who lives in her apartment close to one of my apartments send me an email.
"Hi REG

I have decided to sell my apartment at a  20% discount. The agent fees will be extra if sold by an estate agent. I am putting my apartment on the market the first week of January.

Happy Xmas"

I was interested in buying this apartment even when it was 100% cost. At 80%, I am super interested but I havent decided whether I want a rental income boost or a quicker net worth growth in a few years. The properties closer to the city are relatively old and not so safe. The demand for rental units is high, but who knows what may happen in a few years. Suburbs offer stability and peace. All owners are usually investors who take great care of their investments. Which is which?

Lord please help me take a decision.

Read More

Monthly Spending and Budget Report Nov'11

My monthly spending and budget report is what keeps me focused. You may notice this is very late. I struggled to post it here because of my ridiculously high overspending. I helped my baby sister with her college fees. I like it when I do that but I never got an opportunity to see it in black and white in my report. Anyways tracking my income and spending has made me much better at taking care of my personal finances. Being conscious of my spending proved to be healthier than I ever imagined. I still hate drawing a budget but I am very aware of where my money comes from and where it goes.

My November 2011 monthly spending and budget report:

INCOME	% OF TOTAL	NOTES
Real Estate	54%	It helps that all (but one) mortgages are paid off.
Hubby Allowance	35%
Once off	0%
Online	11%	I made my target. Its still tiny but I'm not complaining.
Dividends	0%	This is not monthly YET. 2012 will be spent growing this

My income is back down to where it should be, it was a very normal month. My online income keeps growing (close to $50 increase for November). December is usually a bad month, I'm not holding my breath. 

ITEM	%OF INCOME	NOTES
Real Estate	35.9%	1 mortgage, gas & taxes/rates. I overpaid somewhere.
RA & Unit Trusts	7.3%	Fixed
Loan to Business	0%
Internet/ Phones	1%	I keep this very low.
Consumer	12.9%	Groceries and all that jazz.
Bank Fees	0.9%	Shocking
Giving	56.9%	My contribution to baby sister's college fee. Its not a loan.
To Invest	-14.9

We had a trip in November. Unlike in October where I had an extra 54% left over at the end of it all, November saw me 15% in deficit. There go my savings. The real estate assets are doing well, all my properties are fully let, no vacancy. My handyman disappointed me though, some small work still needs to be done in my one apartment.

Read More

Paying off Mortgage

Yes I know what I said in the past about not paying off mortgage and leverage and gearing and returns and alternative investments. Shoot a girl for trying to please a man in her life!
Before getting to this financial decision, let me disappoint you further with my holiday season spending news. The past few weeks of my less than perfect health lead me to "not so cool places" like gynecologists and even heavier names like endocrinologists. These overwhelming few weeks left me yearning for a holiday. I took a short trip with my son and I did spend quite a bit of my hard earned cash. My son scored new games and I even got me a nail grooming kit. Its promising to save me on salon manicure costs.  I guess after the illness you can get yourself into a state of "money disrespect". But at least I am now back only to plan another holiday to Swaziland for next week.

I vow to not overspend on this trip. It will be a lovely holiday for my family. I don't promise not to behave like a tourist though. I may get a few memento items.
On the mortgage news, we decided to just work on paying up our one mortgage. That's the only mortgage standing. After the hubby has begged and begged, and against my better judgement we are paying the darn mortgage up. Debt no more! This whole mortgage pay-up process is made exciting by the tier kind of interest we are charged. We are in the last and lowest interest rate tier. Our minimum mortgage installment has dropped remarkably and I couldn't be happier. This makes it even easier to kill and bury this debt faster.

The reasons I decided against my "never paying off mortgage" position are:

1. I am never going back to work. That means we will be having one salary and other income sources we created over the years. Paying up the mortgage will mean cutting down on our monthly expenses. That should be great news right? It also mean that the hubby can be able to decide to also have his job being optional. He doesn't hate having to have a job as much as I do though.
2. My hubby was nagging me all the time about paying off this debt. He hates it and I think its only fair to make him happy this once. Its not everyday that a girl gets married to a guy who is happy driving an old car and paying up all his debt. I love him again for that.
3. The most important reason is that we CAN. So why not?

I have a suspicion that I will keep thinking about what this extra mortgage payment would have translated to in alternative investment returns. I don't think I should worry about it though as the funeral of this debt will be as rewarding as having a winning lottery ticket. We will try to to have a "paying off mortgage" trip to the Mediterranean parts of Europe next year (2012). That will coincide with our 10 year marriage anniversary. Time flies dear friends. Its amazing how our marriage survived the worst of conditions including tons of relocations even across countries, renovations and more of those, two pregnancies and strong cravings and debates on whether to pay or not to pay debt off. What kept us so happy is having a common goal and values.

If you are a parent, remember that, investing in your health and spirituality is even more important than ensuring a better financial future for your kids. Our children don't need money but us alive for long.

Read More