Goodbye 2017, and welcome 2018! I hope everyone is have a great start to the new year. Now that the fourth quarter has come and gone, it’s time to review our portfolio’s performance during the last three months of the year. We’ll also take a look at our finances for the entire year and check out some of the goals we set for 2017.
Not much has changed in regards to our portfolio. We remain invested primarily in index funds with a side collection of individual stocks. In terms of our asset allocation, here’s where we stand:
- Overall: 77% stocks, 23% bonds (target 75/25)
- International: 21% of stocks (target 20%-30%)
- Small cap value: 3% of portfolio (target 5%)
- REIT: 5% of portfolio (target 5%)
We’re starting to veer away from our desired stock-to-bond allocation. Given how equities performed last year, this isn’t all that surprising. Things are okay for now, but I may have to rebalance this year if stocks continue to do well.
2017 Fourth Quarter Performance
The last quarter of the year was a great one for our portfolio, which saw a return of 6%. Not too bad for investments that are essentially on autopilot.
Some other tidbits for the past quarter:
- Our international holdings had another solid quarter with returns of 4.2%
- Small cap value showed gains of 4.6%
- REITs were a bit lackluster at 1.4%
- Our portfolio saw a quarter over quarter growth of 9.2%
2017 Financial Year in Review
Our investments had a great year with a return of 17% and an overall growth of 40%. As for our 2017 financial goals, let’s take a closer look.
Pay Off My Student Loans by December – WIN!
I officially paid off my student loans in October, beating my goal by two months. In total, I was able to pay off over $400,000 in student loan debt in a little over three years. I haven’t gone into the specifics of my loan payoff strategy. But we were essentially living on half of our household income as I was putting my entire paycheck toward my loans. Now that they are off the books, we have a lot more cash flow available for other financial endeavors.
Continue to Fully Our Tax-Advantaged Accounts – WIN!
This was pretty straightforward as contributions to our 401k and my HSA are on autopilot. Additionally, we fully funded our Backdoor Roth’s in January.
Continue to Fund Little Random Guy’s 529 – WIN!
LRG’s college savings plan just keeps chugging along. We actually surpassed our annual savings goal thanks to a nice birthday gift from the grandparents.
Be More Consistent With Our Taxable Account Investments – Meh.
As with 2016, we were a bit inconsistent with our investments. Looking back at our records, we purchased investments just four times during the year (February, March, April, November). What’s more, we contributed less to our taxable account in 2017 as compared to the previous year. Paying off my student loans aggressively did factor into, but not having a specific investment plan didn’t help either.
Set Up a Living Trust – FAIL!
Yeah, that didn’t go well at all. I actually have a book about estate planning sitting on my desk at this very moment. Obviously in pristine, minimally read condition. To be honest, I don’t find estate planning all that interesting. But it is an important aspect of personal finance that should not be overlooked.
Plans for 2018
Make Consistent Taxable Account Investments, Part 2
Let’s try this again, but this time I’m going to be specific so you guys can hold me accountable. My goal will be to put $1,000 into our taxable account on a monthly basis.
Set Up A Living Trust, Part 2
I guess the theme for 2018 will be “second chances”. That being said, my goal will be to not only start (and finish) that estate planning book collecting dust on my desk, but to set up a revocable living trust by the end of the year.
Invest in Other Asset Classes
Specifically, I want to branch out and invest in real estate. I don’t see us purchasing a rental property any time soon, so the next best option I think would be crowdfunding real estate platforms. This will be the year that I dive head first into RealtyShares.
2017 was a great year financially for the SRGO household. Our investments performed well, and our portfolio grew by a sizable amount. Most importantly, we were able to get rid of one of our biggest financial liabilities – my student loans. While I did miss on some of the goals I set, all in all I’m happy with how things turned out. Thanks for stopping by, and may 2018 be a great year for all of us!
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