The start of the calendar year brings with it the risks and opportunities as I seek to achieve a return beating inflation for 2012. In 2011, total inflation hovers around the 5.7% figure so if my investible net worth portfolio was to beat this 5.7% figure, I would have to rely on dividend income plus some tactical punts to achieve that returns.

My net realised returns for 2011 was about 4.7% which barely kept up with total inflation. However, it did beat my internal benchmark of 2 x fixed deposits (12 months banks FD rate) interest rate of 0.4%.

Targets for 2012

Thinking ahead for 2012, I believe inflation will still hover around the 5% region, hence I would have to seek to grow my investible networth by 5% for calendar year 2012 just to keep the purchasing power of my networth portfolio intact.

Thus, my target for 2012 will be to achieve an 8% return, i.e. to beat inflation by 3%. Having a stretch target could provide some psychological impetus to seek new ways of new approaches to investing to yield that return. Increasingly, I realise growing my means rather than to rely on passive income would be key because realistic returns adjusted for capital risks would only barely keep up with inflation as my own experience seems to indicate.

I am currently 40 going onto 41 and my theme for 2012 is really on health and wealth. I.e. to keep healthy and to invest more time and energy in exercise and proper diet so as to provide me with the energy and strength to think out of the box to grow my means. I also want to keep up with my daughter who is coming to 4 years in a few months’ time.

I am exploring more on how I can be a semi-active business owner rather than a passive portfolio investor because I simply need to gear up to grow my net worth at a faster rate. A 4-5% portfolio return would need an investible net worth of about $1,000,000 in order to generate $40,000 to $50,000 passive income cash flows.

Tracking my progress online

Some finance bloggers like Musicwhiz post their portfolio online. I won’t be doing that but will start to post month end short statistics on realised investment and semi-passive (blogging) income gains on a % basis to help spur on my efforts to grow my passive and semi-passive income.

This should help provide some accountability and tracking as I would be conscious of the fact that monthly self-examination and accounting is something I would do on this blog.

What are some of your financial goals for 2012?

Share with Panzer in the comments section.

Be well and prosper.

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