2014: Review of Major Financial Decisions

On the last day of 2014, I thought this would be a good time review the major financial decisions and accomplishments for 2014, and see how many of the 2014 goals we were able to hit.
As with the 2013 review, I have broken the post into four major categories,
  • Stock Investment – stocks, mutual funds, stock options, restricted stock units, etc.
  • Financial Protection – life insurance, living trust
  • Real estate – deal with all things related to our primary residence, investment properties etc.
  • Major purchase – big ticket items

For each item, I try to give an objective rating on how we did in standard letter grade scale.    For this year, the focus was on investment and financial protection, so we will start with these.


Our investments is spread over stock/mutual fund, rental properties and company stock options and restricted stocks units (RSU).  I’ll discuss each subcategory below.

Stock option and restricted stock units (B)

stock bond mutual fund portfolioMy basic philosophy is to diversify and liquidate quickly after stock options or Restricted Stocks Unit (RSU) are vested.   It’s not that I’m not confident about the company I’m working for, I am.  it’s about diversification.  Think about it, we already have so much invested in the company we work for, salary, bonus, benefits, 401k etc. are all tied in with the company.  Definitely overweigh in the investment allocation.  I don’t worry much about tax consequences, I’m sure there are people who will disagree with me.   In personal experience, the ups and downs of stock market could easily wipe out any tax saving.  I haven’t been very good about sticking with this practice and worse after I liquidate I have just left the money in the account in cash.

This year, I have been pretty disciplined with liquidating and reinvest the proceeds.

Stock/mutual fund portfolio (B)

In the beginning of the year, i listened to a ton of books around investing in the stock market, asset allocation, portfolio construction etc.  After listening to the diverging views, i decided to go with the simple route of buy and hold index fund.  No fancy options, shorts, timing of the market type of trades.
I’ve spend quite a bit of time to consolidate all of our accounts to have better visibility on our finance state.
Here are some resources that was really useful
With the revised asset allocation, the annual return is just shy of the S&P 500, not bad for very little work and good amount of risk control.   All in all, in the stock investment category, I did pretty well and met all the goals I had set out in the beginning of the year.     Next year, it’s about maintaining.  On the stock investment side, it’s mostly on auto-piloting, I spend just a couple of hours a month monitoring and reviewing the statements.

Financial Protection

Living Trust (A)

Alas, we have a living trust in place, most of the major assets have been moved into the trust.  With ARAG‘s coverage, I paid about $1000 out of pocket to set up a AB revocable trust plus the will, medical directives etc.

Umbrella insurance (In progress)

MH900384380With more rental properties and bigger asset base, I wanted to get umbrella insurance to cover our bases.  With rental properties out of state, this has proven to be a challenge.  I called a number of insurance companies, some gave outrageous quote, some didn’t offer the coverage for both rental and personal property, some limits the number of rental you could include, some didn’t cover out of state rentals.  Anyways, long story short, I ended up with Liberty Mutual who offer a policy that met all my requirements, I’m in the process of finalizing it.

Real Estate

Investment properties (B)

I purchased two condos as investment properties out of state.  Not great deal, decent deals given the market condition.  Did some minor renovation for each property before renting them out, now both fully rented.  On one of my existing properties, had to do major renovation to remodel just about everything, that pretty ate up the profit for the next two year, bummer.
I have done a lot more reading and thinking around investment properties, and spending more time on biggerpockets.com to network local real estate investors.  Now I feel much more prepared to buy more investment properties, and know what to look for.  Unfortunately, the current market condition in the bay area is not so conducive for purchasing investment properties, for now, it’s keeping my eyes on the market and continue to build out the network. Next year, depends on how the market goes, it could be another slow year.

Primary residence (N/a)

No change to our primary residence, still love it.  Still enjoying the low 2.125% 5/1 loan, though I have started to track the refinance market to see when it maybe a suitable time to refinance into the 30 year loan as we have no plans to move anytime soon.

Major Purchases

We didn’t make many major purchases other than lots of vacation this year.  The one major purchase we did make was still related to vacation.  

Purchased a Timeshare from Hilton Grand Vacation (B)

hilton vacation clubFirst of all, I would start by saying timeshare is not a good investment, it’s lifestyle choice.  Since the kids, for vacations, we have preferred to stay at 2 bedroom condo style properties over standard hotel room for the added convenience.  We have stayed at the Marriott vacation properties, Starwood vacation properties and Hilton vacation properties.  These vacation clubs are pretty comparable in price, and amenities.  All offer nicely appointed studio, 1, 2, 3 bedroom condo style properties with full kitchen.  Unlike the traditional timeshare unit where you purchased a specific week at a specific unit, these are points based program.  In the points based program, you are given x points per year where you could use on any of the hotel’s vacation properties and/or associated hotels etc.   You pay for a upfront fee for the deed and a yearly maintenance fee.  We ended up going with Hilton because my brother also has a timeshare with Hilton, this makes it easier family reunion planning.   If readers are interested to know more, drop me a comment below and I will write a dedicated post for it.

Closing thoughts

This has been a good year over all.  I ticked off a lot of the goals I set out in the beginning of the year.

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