The last week of 2017 is upon us. Can you believe the year is over already? It has been quite a year for me. It feels actually a bit weird. I can literary divide the year into two half’s; six months each. My life had completely changed so much from the first 6 months of 2017 to the last 6 months of the year. It is like I lived in two different worlds with the month of June being the break with the old world and the start of a new world. Life is one giant roller coaster ride.
The first six months of 2017 were rough, frustrating, and terribly disheartening. These first 6 months were pretty much a continuation of the past 3 years of my life that I talk about more on my About page. The year 2017 started off in the shadow of the death of my grandfather who passed away in December of 2016 at the age of 92. Then two months into 2017 one of my two cats had passed away after illness. Shortly after that, my brother had found an apartment of his own and moved out. By March of 2017 I decided it was time for me to find a place as well.
I was living with my Aunt at the time in a large house with an equally large mortgage. With my grandfather gone, his pensions no longer paid out, and with my brother already moved out, it was consuming most of my salary (and my Aunts) just to pay the monthly bills. It was not a sustainable or happy way to live. It was time for me to go and my Aunt decided it was time for her to sell the house. Thus the clock was ticking for both of us; her to sell the house and me to find a place to live.
In the first six months of 2017 pretty much everything that could go wrong did go wrong. This seemed to accelerate in the months before June. From deaths in the family, the heat not working (in a freezing winter), to constant household dishevelment (we spend months throwing out a lifetimes worth of garbage), to dangerous major gas leaks in our pipes and boiler room (no hot water for a couple weeks), to basement floods, to an endless infestation of ants (everywhere), and then in the final 10 days over a weeks’ worth of my food spoiled in the refrigerator.
If you are familiar with the myth about the 10 Plagues of Egypt, I’d say this was a pretty close parallel. It was like something out of a horror movie. Words on here could not do justice to how I felt during that time. Needless to say, I could not wait to get out of that house quick enough.
I won’t go into details on everything here, but I will focus on the financial side. The search for an affordable place to live during those months was very frustrating. I was looking for a Co-op apartment that I could purchase with all cash (I wanted to avoid taking out a mortgage). Why a Co-op? Because I had lived in one for most of my life so I knew what they were like. And because the monthly fee would be MUCH lower ($500-$700 per month) then the cost to rent even the cheapest apartment in NYC ($1200-$2500 per month) in my area.
Co-ops are run by a board and in order to qualify to purchase a Co-op apartment you have to meet financial standards (every Co-op building is different). If the board rejects you then you cannot purchase the apartment. Basically, they mainly want to make sure that you have the finances to pay the monthly maintenance fee. The final part of the process is when you are interviewed by the Co-op board after they reviewed all your finances (from bank accounts to pay stubs to employment history). Here is an article that provides a good overview of the process of purchasing a Co-op.
The months of searching were frustrating. I did not want to pay more than $115,000 for a Co-op apartment (either a one bedroom or a studio). Nor did I want to pay more than $700 per month in maintenance (I wanted from $500 to $600 per month). I spoke to several real estate agents, half of which would not even give me a chance. I was told how most Co-op boards look for 3-5 years of steady income (I was employed full-time for only 3-4 months at the time). They look at credit history (I never owned a credit card so I had no credit score). It was not looking good for me.
But each Co-op board has different emphasizes in their financial requirements and I had a few things going for me financially. One of the two major selling points was that I had zero debt (some Co-ops emphasize your debt-to-income ratio in making decisions). The greater selling point was that I had ample financial assets. At the time, I had about $105,000 in my bank account and $130,000 in my investment account (plus dividend income). I just had to find the right place. This I did find, presented my financial package, got interviewed by the board (it wasn’t that bad, they were very nice) and got approval to purchase my Co-op apartment. I moved in on June 21 2017 and my Aunt completed the sale of her house one week later.
Financially, there was little activity in the first 6 months of 2017. I stopped purchasing stocks to focus on saving what I could to purchase a new place. The last 6 months of 2017 were a new world to me. I had purchased my own place and am living on my own for the first time. I am managing my own budget and all personal finances. My financial worries at the start of 2017 have all but faded by the end of 2017. Now I am able to save quite a bit each month. I am building up my savings and investments, thus growing my dividend income and net worth. Life has become a lot less stressful for me then anytime in the past several years.
The second half of 2017 was when I was much more financial active. It was 20 days after moving into my new apartment that I started My Dividend Dynasty! Two days after that, I make my first stock purchase for the year; buying 57 shares of GIS. Steadily, I began to experience the financial benefits of moving where I did. I am able to walk to my job everyday saving $1,320 per year ($110 per month) by no longer having to take public transportation to work. I am also saving money on my food and supply purchases due to convenience of the location and a strategy of buying items on sale. In addition, by changing my lunch habits and brown bagging my lunch every day, I am able to save $544 per year compared to the first half of 2017.
Then in October 2017 I crossed the $250,000 mark in net worth! Saving and investing really do work. That same month I also made a stock purchase of 70 shares of TGT. When I first started My Dividend Dynasty on July 9 2017 my dividend income stood at about $7,824 per year. As of this post my dividend income stands at $8,274 per year. Thus, in the last half of the year I managed to add two more stocks to my portfolio, grow my dividend income by a little over $400, and saved up enough to cross the $250K in net worth.
This nice finish to 2017 will be the spring board to a (hopefully) successful 2018! I noticed a lot of other members of the DGI community often set goals (short-term long term goals) for the future. I never set these kind of financial goals before. Now that we begin a new year, I would like to set a couple of yearly goals for myself. These goals will run from January 2018 to the end of January 2019 (wow, did I just mentioned 2019?!). That would be a full 12 months. So here are my financial goals:
1) Add a minimum of 3 to a maximum of 5 new stocks to my portfolio over the course of the year. For those who do not know, I normally let my funds build up quite a bit before I made a stock purchase. Usually, I wait until $4000 has been saved up from both my dividend income and from my working income. As a result, I usually only make one large purchase per quarter (occasionally two if I split the funds in two at $2000 each).
2) Break the $8800 mark in dividend income. I would say this is a more realistic goal for me over the next 12 months. Sure I could put a lot more money to the 9-10% high yielders I already have (or others) and break the goal much faster. But I want to diversify my portfolio across a variety of quality companies rather than just ones with super-high yield. I could happily settle for 3-4% yielders with strong financials and years of growing dividends.
So I have now set some financial goals for the new year of 2018. Only time will tell if I will accomplish these goals, but I remain optimistic. So have you set your yearly goals yet? Have you already accomplished your goals from the past year? To end this post, I want to wish you all the Merry Christmas and Happy Holidays! Thanks for reading. 🙂