2012 Performance Summary
I spent some time this weekend looking back at 2012. The number one statistic I evaluate is our net worth because that is what will be generating our retirement income when the time comes. Investment performance is also important but not as important to me as net worth. For example, our retirement portfolio could increase in value by 20% over the year but if we offset that with more debt or spending that depletes our cash, we really haven’t accomplished much. It’s about accumulation.
So here is a quick look at the numbers: Our net worth increased 7.6% in 2012. Only 0.1% of that occurred in the 4th quarter. Compared to the end of 2010, our net worth has increased 14.9%.
The increase is from a combination of maximum contributions to our retirement accounts, i.e., a 401(k) account and Health Savings Account, and our investment returns. (Yes a Health Savings Account is an awesome retirement investment vehicle!)
The bulk of our retirement investments are in my 401(k) account. My personal rate of return in that account for 2012 was 4.95%. I am happy with that considering how little risk we are taking in our investments. This includes a large CD ladder which I just extended.
Our best performer was LTPZ, a long bond TIPS fund. It was up 9.9% in 2012.
We have some investments in taxable accounts that I will be evaluating this first quarter. I want to simplify things there, just as I am trying to do in other parts of my life.
Our net worth growth could have been better if we hadn’t spent a chunk of change on our son’s wedding and an even larger chunk updating our master bath. But both of those expenditures were well worth it so we have no regrets there.
2013 should be a decent accumulation year because we refinanced the mortgage again and continue to cut recurring expenses. This frees up more cash to stash away for retirement.
How was your 2012?
FREE UPDATES: If you enjoy what you read here, please consider subscribing to receive free updates automatically by RSS feed or by email. (I promise that your email address will not be shared or used for any other purpose.)