Performance Update 40/50: Dumpster Fire Edition

My main goal is to build a portfolio of $1,120,000 in 1500 days*, starting from 1/1/2013 and ending in February of 2017. Every month, I provide an update on my status. It’s time to take a look at April.

Urban Dictionary, tell the readers what a Dumpster Fire is (Caution: naughty words ahead):

Screen Shot 2016-05-11 at 8.17.14 AM

Urban Dictionary never fails to amuse my juvenile sense of humor

So yeah, my stock portfolio has been a dumpster fire lately. Not good.

Screen Shot 2016-05-17 at 4.20.41 PM

Apple: The iPhone, Apple’s cash cow, has probably peaked. It is somewhat reassuring that one of Warren Buffett’s lieutenants (Ted Weschler or Todd Combs) just bought a billion dollars in shares for Berkshire Hathaway.
Dumpster Fire Rating:  Mostly smoke. This one isn’t going to burn the portfolio down.

Lending Club: The CEO was caught up in some naughty, naughty business. So far, it isn’t looking good for him.
Dumpster Fire Rating: Small inferno. Keep back people. This one could get worse…

Solar City: This company issued crappy guidance and is burning through loads of cash in it’s very own dumpster fire. Mr. Market is not impressed.
Dumpster Fire Rating: Not as hot as the Sun, but getting there. This fire will either be extinguished or this company’s story will flame out in blaze of gory dumpster fire glory.

Tesla Motors: Mr. Market doubts Elon Musk’s ability to produce the Model 3 in mass quantity. Musk hasn’t always been on target with his dates, but I have a feeling he’s going to pull this one off. Don’t bet against Musk. The dude lands rockets after all.
Dumpster Fire Rating: Nowhere near as hot as a lithium ion battery fire.

These dumpster fires are precisely why I don’t do much stock picking any more. Almost all invested money since I started this blog has gone into index funds. Simple, easy and effective. If I want to play, I buy sector specific funds like VGT.

Dumpster Fire Update: April!

April was a down month. My investment portfolio started at $1,111,360 and ended the month at $1,102,113:

Screen Shot 2016-05-02 at 7.26.31 AM

Chart from Personal Capital**. <— Click now or you’ll regret it forever!!!

It wasn’t all bad news though. In the middle of the month, I made my big money goal***. I can now retire! I haven’t yet, but think about it often. Stay tuned…

2016

  • Days elapsed: 121
  • Days remaining: 245
  • 2016 gains: $44,151 (including 401(k) and some after tax contributions)
  • 2016 401(k) contributions: $29,750****

Since the start (1/1/2013)

  • Days elapsed: 1215
  • Days remaining: 285
  • Gains since 1/1/2013: $516,070
  • Needed to quit work ($1,120,000 in investments): Mission accomplished!
  • Net worth*****: $1,352,113******

1500Days, now with 50% more Dumpster Fires!

Here are some other random Dumpster Fires in the 1500 household:

  • Screen Shot 2016-05-17 at 5.14.04 PM

    A recreation of Mrs. 1500’s auto exploits

    Crash: I hate insurance and usually sign up for the absolute minimum. A month ago, I realized that we were signed up for all kinds of crazy things with our auto insurance (car rental allowance? windshield repair?? low deductibles???). I immediately cut off all of the fat. Neither Mrs. 1500 nor I have had an accident since we’ve been married. Can you see where this is going? On Monday, Mrs. 1500 decided to change lanes. The problem was that someone was already in the next lane. Ooops! Everyone is fine and the damage is minimal, but wife, couldn’t you have at least waited a month? Too soon, too soon! (Mrs. 1500 note: This accident was entirely MR. 1500’s fault. HE was the one who changed the insurance limits. Coincidence? I think not…)

  • P90x:I went to Chicago and then to Omaha for the Berkshire meeting. My 10 day layoff from exercise turned into 20+ days. Not good. Lucky you though; no pictures of my naked torso this month.
  • Recovery shake meets the Macbook: I like Apple stuff. It lasts forever. Unless you’re stupid. I blew $2,000 on a fancy 15″ Macbook Pro in 2015. A couple weeks ago, I was typing away after my workout. Next to my Macbook was a recovery exercise shake. My clumsy ass hit the cup and dumped it all over the newish computer. Very bad words came out of my mouth. Before I could hit the power button to shut it down, the screen went black. More very, very bad words. Anyway, I dried the thing out and it is behaving normally. This dumpster fire may just have a happy ending. (Mrs. 1500 note: If Mr. 1500 had been successful in wiping out this computer, it would have been far more costly that my dent in the front quarter panel of an old Cavalier…)

For all of my whining, life is pretty good, so I’ll stop yapping and let you get back to your day.

In the meantime, stay away from those dumpster fires.

 

*My original goal was $1,000,000 and no debt, I later raised the goal by $120,000 to $1,120,000 because I will have debt in the form of a mortgage which I firmly believe in not paying it off. My compromise is to have enough money put away to cover the mortgage at the time of retirement. So, to retire today, I would need about $1,120,000.

**This is an affiliate link. If you sign up, the blog (me) makes some cold, hard cash. Personal Capital is a totally free and awesome way to keep watch over your investments. It’s worth it for the fee analyzer alone. I would never recommend anything that I don’t personally use and completely believe in, so give it a try. If you’ve already signed up through the link, please know that I am eternally grateful.

***My goal isn’t to have $1,120,000 at the end of 1500 days, but at any time before the day count was up. Why? It all goes back to the 4% Rule. Remember that our little friend, Mr. 4%, is nothing more than the most conservative safe withdrawal rate. So, if I were to quit my job now, I could spend about $44,000 in my first year of retirement. I’d stick very close to that number too because market valuations are ambitious. Let’s say that Mr. Market caught a cold tomorrow and my portfolio dropped down to $800,000. No big deal. This would mean I’d be safer stretching my spending a little north of 4%.

****My 401(k) contributions include my own, Mrs. 15oo’s, and the contributions from my corporation. Self-employment with a solo 401(k) is a very powerful savings tool. I should have done this years ago.

IMG_20160517_170051930*****The numbers on the right side of the page only reflect my investments and cash. Net worth includes, but is not limited to:

  • Home equity
  • Cars
  • Bicycles
  • Immense paint collection: We don’t have a basement and it gets cold here in the Colorado winter, so anything that can be damaged by freezing has to be stored in the house. Currently, all our paint is stored in the guest bedroom right next to the bed. Our house is like 5 different colors, but somehow, we ended up with about 50 different colors of paint. How did this happen?

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44 Responses to Performance Update 40/50: Dumpster Fire Edition

  1. Glad you got the fires under control on the home don’t. Apples are solid machines, my current computer is my first apple notebook, and it has been a great purchase. Did you guys enjoy the trip to visit the oracle of Omaha? I have a picture I took with buffet whilst I was in Medical school a while back.

  2. TheMoneyMine says:

    Buffett investing in Apple was quite a surprise, but that’s probably a positive sign for Apple investors. I also feel like this is a positive sign for BRK investors to know that Buffett isn’t allergic to technology companies.
    In a way, I feel like Apple’s stock drop was more positive than not.
    Congrats on the paint collection, it is indeed quite impressive! 😉
    TheMoneyMine recently posted…Should We Trust the Stock Markets to Always Go Up?My Profile

    • But isn’t it interesting that it was one of his lieutenants who made the buy decision and not Buffett himself?
      The Green Swan recently posted…Win at Money Guest PostMy Profile

      • 1500 says:

        Agreed. Buffett didn’t have anything to do with the purchase. The interesting thing is how much leeway he gives Weschler and Combs.

        As an Apple and Berkshire shareholder, I hope it works out!

  3. Believe Fire says:

    Nice update Mr. 1500. Glad to see you’re avoiding most dumpster fires. Obviously, shareholders of LC are feeling some pain. Do you think this scandal will have any effect on lender returns?
    Believe Fire recently posted…Vanguard: Mutual Funds or ETFs, Which is Better?My Profile

    • 1500 says:

      Lenders don’t have anything to be worried about. LC is now being investigated by the Feds though…

  4. Considering all the dumpster fires, your net worth is still holding up well so that’s fantastic! I’m curious, are you planning to repair the cavalier, drive it around dented, or replace entirely? Glad to hear nobody was hurt, the changing lanes crashes can be scary.
    The Green Swan recently posted…Win at Money Guest PostMy Profile

  5. Glad your MBPro survived!

    On paying off your mortgage debt, I gotta say, IT FEELS GREAT doing so! I paid off one rental last year and don’t regret it. 3.375% mortgage be gone. And now the tenants gave their 30 day notice, and I’m like… cool, maybe I’ll sell, or maybe i’ll leave it empty for a while. Who cares? No mortgage!

    I say pay down some of the mortgage here and there. It feels great, and will be gone before you know it.

    Sam

    • 1500 says:

      Yeah, I know it would feel great, but interest rates are sooooo low. I’d rather keep the money on hand for who-knows-what.

      The thing I think about is this: What happens if the Feds raise rates a quarter point 8 times in the next 4 years. If that happens, my cash will be earning the same rate as my mortgage (free money!). No one knows how aggressive rates will raise, but surely they will go up.

      • I keep going back and forth on this one. It would be awesome to pay off the mortgage but my money is earning better returns by NOT doing so. I’m trying to stay as leveraged as I can right now due to my age and investment goals – but I’m looking forward to paying off the mortgages.
        PatientWealthBuilder recently posted…Asking for MoneyMy Profile

      • Rae says:

        I paid off my mortgage years ago, and it gave me so much freedom. I knew then – and now – that the math works out in favor of keeping money in the bank, but like JD Roth says “Money is more than math.”

  6. Considering all the swirling news, this looks more like a camp fire, than a dumpster fire. Still solidly in the double comma club.

    Glad to hear the MBPro survived, and the car, well you could have kinda predicted that. Even heard of that guy Murphy?
    Brian @ debt discipline recently posted…Freelancers and TaxesMy Profile

    • 1500 says:

      Ha ha, Murphy indeed!

      And yeah, I have nothing to complain about. My other holding (Facebook, Google and Amazon) are all killing it. Life is good.

  7. Freedom40 says:

    Too bad about all the poor stock performance, but it sounds like you’ve been able to begin some effective diversification since starting this blog and focusing on index funds. I’m very much in the same boat. In my earlier days, I was focused on individual stocks, some of which worked out, but many of which proved to be complete nuclear dumpster fire disasters.
    Freedom40 recently posted…Wise Banyan Review – Free Robo AdvisorMy Profile

    • 1500 says:

      Yeah, I think over 60% of my holdings are now index funds and it goes up a little every month. I’ll always play around a little in stocks, but having them sit at less than 20% of my portfolio would allow me to sleep better at night.

  8. QCI says:

    You think that paint collection is bad, wait until you become a landlord. 🙂

  9. 2 things that attracted my attention in this post

    1) Mrs. 1500 note: This accident was entirely MR. 1500’s fault. HE was the one who changed the insurance limits. Coincidence? I think not…

    I absolutely agree with her 😛

    2) Our house is like 5 different colors, but somehow, we ended up with about 50 different colors of paint. How did this happen?

    We all want to know, how did you manage to make this happen 😛

    Good to know that you had a great month… Cheers! 🙂
    Vivek @ LifeAfterFI recently posted…Favorite 5, out of the 63 blogs that we read!!My Profile

  10. Aww man sorry to hear about your stocks and that mac of yours. That is a bummer. I totally agree with you on index funds though. That is more the approach I would consider for future stock investing.
    Alexander @ Cash Flow Diaries recently posted…The Day Has Finally Come… I Got Married!!My Profile

  11. Tawcan says:

    I was quite surprised to see Buffett investing in Apple, knowing that he typically doesn’t invest in technology stocks. Heard it was one of his lieutenants’ call. Maybe one of these lieutenants will take over the Buffett’s position one day?

    Your net worth is holding well given all the dumpster fires. I know you were talking about selling some AAPL stocks, have you managed to do that prior to the price drop? The thing with holding these “growth” stocks that you mentioned above is that you can see crazy jumps in the stock price but crazy declines as well.

    Lucky that your MacBook still works OK. It would have been a costly repair. 🙁
    Tawcan recently posted…Are you focusing on the wrong thingsMy Profile

    • 1500 says:

      Yep, I actually sold out of 30% of my Apple position earlier this year. I think the company will be OK, but their growth days are over and I’m not a dividend guy.

  12. Gwen says:

    Hey don’t forget you ran the 5k in Omaha (and walked everywhere) so that helps balance against the no P90x thing!
    Gwen recently posted…Rant n Rave: Credit EditionMy Profile

  13. Funny, it feels like we were *just* talking about the long term value of Apple…then Todd or Tedd goes and buys shares….

    I’m not sure how you can call the portfolio a dumpster fire – you’re only down $9k. That’s not bad at all.
    Mr. Tako @ Mr. Tako Escapes recently posted…Avoiding The Housing TrapMy Profile

  14. Pingback: The Church of FI – Welcome The Jolly Ledger! | The Jolly Ledger

  15. ZJ Thorne says:

    I am far too risk averse for individual stocks at this point. Those dumpster fires are too much to handle with what other ventures I have up in the air.
    ZJ Thorne recently posted…It’s Not Work If You Don’t Pay MeMy Profile

  16. Daniel says:

    I have the same problem with paint too. Whenever my wife wants to paint a room, I always reply with “I don’t want to be in the paint buying business”. It has been a few months since we donated to Lowes/Home Depot for paint, but, your article gave me flashbacks.

    I believe the market is fairly to overvalued, but, where else to get a return? Random walk I suppose…

    • 1500 says:

      Flashbacks, ha! Want some more paint!? Are you in the area? I’ll be over shortly.

      Agreed on the valuations. For the first time in my life, I bought bonds this year. I swore I’d never do it. Only 30K, but still. If the market corrects down 20% or so, I’ll convert it back to stocks.

  17. Team CF says:

    “A recreation of Mrs. 1500’s auto exploits”, too funny, especially considering it was only a small mishap in the front quarter panel.

    All these dumpster fires still suck though. We hope that May will be better for the 1500 household.
    Team CF recently posted…Dutch Taxes – Part 6: Real EstateMy Profile

  18. just a thought says:

    Here is an idea for all the paint you accumulate…

    My wife and her friend are into painting, so they took all the various samples, left over paint and even bought a couple more samples of colors and made Jackson Pollock-ish paintings.

    If you, the Mrs or kids aren’t into painting, I am sure there are lots of starving artists you could donate it to (bonus: if 501c3, then you get a tax write off)

    RE: Berkshire buying AAPL, not surprised as AAPL pays an ok dividend with upside potential. What I don’t get is that Berkshire refuses to pay dividends (I have read Warren’s reasoning and agree with some of it), but will happily buy companies that pay dividends to Berkshire and hang on to the cash.

    • 1500 says:

      Pollock! Maybe I’ll let the kids do that to our ugly garage door! There are advantages of not living in an HOA neighborhood.

      It would surprise me if Buffett bought Apple, however it was probably Todd Combs. That makes a lot more sense. Buffett obviously gives Ted and Todd no boundaries over their combined $18,000,000,000. Hands off.

  19. Mrs PoP says:

    If you think about it, your April portfolio performance is pretty dang good considering what has been happening with those companies! The news on Lending Club has been kindof crazy…
    Mrs PoP recently posted…Which Is The More Financially Wise* Old Car?My Profile

    • 1500 says:

      Yeah, nothing to complain about. Agreed that the Lending Club thing is a fiasco. It’s a shame because I’ve followed Renaud closely and he seemed to be a man of integrity.

  20. Sounds like a perfect example of Murphy’s Law 🙂 Glad Mrs 1500 is okay.

    My wife has a Macbook that’s 5 years old. I’ve replaced the battery, the hard drive with a solid state drive, replaced the internal hard drive connector twice, and fixed a sticky track pad that wouldn’t left or right click. I’ve yet to deal with a Macbook covered shake and hope I never have to!

    • 1500 says:

      Whoah, I hope that Macbook gets its act together. I’ve had such good luck with all of my Apple products…

  21. Rae says:

    Yikes! I’m glad that no one is hurt – that’s what matters most. And you are cultivating a good attitude about these little misfortunes 🙂

    I’m having an unexpectedly expensive month, after two … um, expectedly expensive months, which annoys me to no end. After a 10 hour work day, I just want something to be simple! Well, I want a really long hot shower more than that, but the next priority after shower is something simple, for sure, lol.

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