2013 - Moving forward

After celebrating a fantastic 2012, it's time to put the empty bottles of Bollinger in the recycling bin, sober up and start thinking about 2013.

1. Retirement: my employer has been informally notified that I will be retiring mid-year which means that the decision to retire is now locked in. The exact date will be fixed nearer the time and will depend on work needs at that time. This effectively defines and drives much of what I need/want to do in 2013.

2. Finances: even before the year end rally we were financially independent. The subsequent upsurge and the extension of paid employment to mid-2013 gives us an extra boost on the financial front. On a cautionary note, I do not and should not expect my investments to keep going up. There will be years when they go down - sometimes a lot. I can't prevent this from happening which makes the issue one of dealing with the market's fluctuations rather than attempting to avoid them. From a financial perspective, the main points are:

• don't do anything stupid. This primarily means, not buying into over priced markets, keeping my exposure to speculative stocks small and avoiding investments which benefit financial intermediaries more than they do me;
• keep looking for effective ways to achieve greater diversification with our investments. This is a perennial issue and one that I have only executed to a very limited extent;
• keep living expenses below 2012 levels. Given the blow out in the cost of our holidays, this should not be difficult. It might be better to rephrase with the objective of trying to limit the inflationary and other increases in our cost of living; 
• between me working for about six months and Mrs Traineeinvestor working part time, we should still generate some savings this year. A back of the envelope calculation suggests that the combination of salaries for part of 2013 and dividends/interest for 2013 and 2014 may meet our household budget for all of 2013 and 2014. If so, this is great news as it means that we will not need to touch principal or rely on capital gains for at least the next two years;
• one of our Hong Kong properties will become debt free in April 2013. If property prices were lower/yields more attractive, I would consider gearing up and buying another property. However, given the current state of the market, sitting back and watching the cash flow hitting the bank account seems more sensible;
• absent new investments, we will have a lot of cash by mid-year. Given the corrosive effects of inflation, finding suitable investments for this money is important but currently buoyant market conditions make it difficult. The idea of simply buying a property in New Zealand or some blue chip stocks as a long term store of value and generator of at least some cash is appealing even if valuations are not all that attractive at this time;
• while I would give some thought to alternative investments and am tempted to add a few cases of wine as an investment (or some other collectible), illiquid investments which do not produce cash flow will never make up a material part of the portfolio.

3. Lifestyle: the issue here is to successfully transition from a full time occupation where my days (and often my nights) are filled with things to do to not working where it is up to me to keep myself gainfully occupied. The main points:

• being pro-active in maintaining and expanding social contacts. Historically, most of my social activities have been linked to work and have happened with very little effort on my part. Going forward, I will need to be more pro-active in marinating theses contacts (and developing new ones). This is not a major concern - just something to monitor;
• follow through with the bucket-list. It's getting pretty long, which a good thing, so I really have no excuses for not keeping myself mentally stimulated;
• complete a first draft of the novel. Absent some major dislocation to my life, there should be no excuse for not achieving this;
• maintain the fitness regime. While it is unlikely that I will do another trailwalker, I'd like to keep doing an annual marathon for at least a few more years.

4. Miscellaneous: there are a handful of miscellaneous issues that need to be addressed:

• new will. My current will was drafted on the basis that there would be a payout under a life insurance policy should anything happen to me. As I will be cancelling the life insurance policy, I need to update my will;
• cancel my term life policy. By definition if there is enough money to support me and my family then there is enough money to support the family without me;
• move the family's medical policy from my employer sponsored scheme to my wife's employer's scheme.

And that's about it for the headline items.