Wednesday 4 January 2012

10 Resolutions for 2012

The start of a new year gives a reason to review your lifestyle and expenditure, to see whether there is anything that is no longer essential. It is also a good time to review and fine-tune your strategy for saving and investment.

Naturally, I would encourage you to explore DIY Income Investing (if you are not already a convert). Having said that, here are my 10 financial resolutions for 2012 with links to the relevant level of the DIY Income Investor Income Pyramid.

1) Make my money work harder: by reviewing returns (interest rates and yields) and getting the best income, consistent with safety of capital. For example, moving cash out of an easy access account into a a higher rate fixed-interest account (Level 3).

2) Continue to reduce regular expenditure: now pretty much down to discretionary expenditure, such as eating out at Mama Dumpling or the Noodle Shop, buying books (from Charity/Thrift shops) and buying DVDs (e.g. ex-rental from Blockbuster) (Level 1).

3) Review my long-term financial plan: for example, my pensions and my children's future University costs) - I have a spreadsheet that looks forward over decades.

4) Continue to develop alternative income streams: in particular my Hannibal Barca website and blog ('something completely different', as Monty Python might say).

5) Hunt out the best utility and insurance deals: an annual task nowadays - loyalty does not seem to pay any more and it usually pays to switch providers (Level 1).

6) Make the most of the available tax breaks: by paying the full allocation into my UK ISA and my spouse's ISA and SiPP.

7) Investigate new fixed-income investments: such as Preference Shares and PIBS (Level 7).

8) Refine my selection process for high-yield dividend shares: to avoid disasters like Cable & Wireless Worldwide (Level 6).

9) Rebalance my portfolio: towards more fixed income and less dividend shares (which have not performed as well as hoped).

10) Invest in my health: by getting more exercise and reducing weight - to maximise the time I will be able to enjoy the financial benefits of being a DIY Income Investor.

So, plenty to do over the coming 12 months!

I am not a financial advisor and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

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