Sunday, January 2, 2011

Financial Resolutions for 2011

It is the time of the year again to make new financial resolutions.  But before I start, this is my current financial health at the end of 2010.


1. Achieve almost $200/month of dividends


2. Expenditure of $1, 000/month


3. Cash savings of $6, 000




I try to make my resolutions as "SMART" as possible, meaning "Specific", "Achievable", "Measurable", "Relevant" and "Timed". The following are my new Financial Resolutions for 2011.


1. Achieve $350/mth of dividends by Dec 2011 -----> Increase Income
This year, I aim to increase my passive income flow to $350 per month. Base on my current dividends portfolio, I did some calculations. The projected total dividends I will be receiving (if I dun alter my portfolio much) is roughly $4, 200. At the same time, I hope to maintain the overall yield of my dividends portfolio at around 7%. This will enable me to beat the average inflation rate of 3% - 4% in Singapore. 


2. Maintain Expenditure at $1, 300/mth -----> Maintain Spending
In 2010, I spend $1,300 per month on average. This is a breakdown of my "fixed" expenditure per month.

  • Allowance to parents: $600
  • Handphone bill: $20
  • Broadband (Shared wif my bro): $27
  • Utility bill (Shared wif my bro): $50
  • Groceries (Shared wif my bro): $50
  • Transport: $50
  • Food: $50 
  • Entertainment: $200
  • Insurance: $300

After looking through my expenditure, I really could not reduce my spending significantly on any components except "Entertainment". However, I feel $200 per month on entertainment is reasonable. Movies, good food and chilling out wif friends over the weekends is important to me. So, my spending should remain at the same level. 


3. Accumulate $36, 000 cash savings by Dec 2011 -----> Increase Savings
My monthly take-home pay is about $3,500. After deducting my expenditure, I will have $2,200 left for saving per month. This will add up to about $36,000 at the end of 2011.




That's all for my financial resolutions 2011.


Short and Sweet ^^






So, wads your financial resolutions in the year 2011? Feel free to share by commenting below ^^


Peace Out,
Dividends Warrior

15 comments:

Evolution said...

Just curious , how to manage $50 expenditure on food ? that is only <$2 per day

Dividends Warrior said...

Hi Evolution,

I usually have my breakfast and dinner at home. I spend on groceries too. My brother chip in with the groceries costs.

I usually have my 3 meals at home over the weekends. Unless I decided to hang out wif my friends and colleagues, which will fall under entertainment costs.

Anonymous said...

hi how do u spend $50 on transport ?

Dividends Warrior said...

Hi Anonymous,

My workplace is rather close to my house. I will usually take the feeder service bus. Sometimes, if the weather is good and I have the energy, I cycle to work, mainly on a Friday bcos can rest over the weekend. ^^

Anonymous said...

hi any books or information to recommend about investments for beginners/noob/greenhorn.

Paul said...

DW

You should relook at your insurance expenditure. That's >20% of your expenditure. If you have committed into a life insurance, you might consider taking the hit and surrender the policy.

A term insurance is probably just as good and you can channel the saving in premium towards your investment (which you are doing probably better than your insurance company anyway)

< P A U L>

Anonymous said...

I personally think your insurance allocation of 300 is still okie. I would probably use yearly premuim (300x12=3.6k) to gross income and not monthly expenditure. (Take home 3.5k, Gross is abt 4.4k& or 52.8 per annum).

3.6k/52.8k = 6.8%. As a rule of thumb, you should keep it below 10% of your gross yearly income inorder not to be over-insured.

I agree with Paul of taking a term insurance & invest the rest strategy but it really depends on your needs overall. I have both term & wholelife plan (i want to use this as part of my savings tool as it has cash value)

COntinue to invest & accumulate your wealth! i am also doing the same now at age 27. Jia You!

my 2 cents

JW said...

Hi DW,

first of all, congrats on your UOB Kay Hian with today's mega run up!

I would think $300/mth is too much for insurance. Ask yourself why you buy the insurance in the first place. I shall copy and paste what d.o.g. mentioned in valuebuddies forum:



************************************************

Remember that with term life plans, the policy expiry date has nothing to do with the insured person, and everything to do with the liability to be covered.

If you are 25 and you want to provide for your newborn child until he/she is 25, buy a 25-year policy. It will expire when you are 50 (and your child is 25). Likewise if you are 45 and your child is 10, buy a 15-year policy. It expires when you are 60 and the child is 25. In neither case should you buy a plan that expires when you are 65, because the determining factor is when the liability expires (i.e. the child is 25), not your age.

Notice that you DO NOT need a term plan that covers you until age 99. You only need such a plan if the child will be 25 when you are 99 i.e. you are 74 and your child is newborn, or you are 85 and your child is 11 etc. You can see how rare such a situation would be. People who promote term plans that provide coverage to age 99 have no clue about how to use insurance properly.


************************************************


Personally, I paid $500 for term insurance for 2010. I will be reviewing it with my agent later today...

Dividends Warrior said...

Hi everyone,

Thanks for all the advice on insurance.

I will be meeting with my agent next month.

I agree $300/month is a little too much. Well, I bought the plans when I was in Uni. Young and naive back then. lol

Anyway, one of the plans is an investment-linked insurance plan that will mature in 2013. So, after 2013, my insurance cost will be slightly above $200/month.

Dividends Warrior said...

Hi JW,

Thanks for the well wishes. My faith in UOB Kayhian is rewarded at last ^^ after a month.

income investor said...

Hi D.W.

Glad to see your forward-looking plan for this year. I guess we have about the same monthly dividend target for this year to achieve. All the best to your investment!! :=)

Best regards,
PassiveReturns (income investor)

Dividends Warrior said...

Hi PassiveReturns,

Thanks for the encouragement. Same to u too.

It is always reassuring to have someone with similar goals. ^^

Anonymous said...

At your stage in life, you are doing very well. Congratulation, keep it up.

Anonymous said...

Can a handphone bill only cost S$20?? amazing ... Mine average S$70...OMG

Dividends Warrior said...

Hi Anonymous,

Actually, my handphone bill fluctuates between $20 - $25. ^^
Good to know that ur average is $70.

On behalf of the telco you subscribe to , I thank u.

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