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. I made my goal a couple months ago, but believe that it’s a worthwhile exercise to continue with my financial updates until the end of 1500 Days, so I continue.
It’s time to take a look back at July. First, allow me to ponder Pokemon.
I’m a little too old for the Pokemon Party. The original Pokemon came out when I was in my 20s, after my video game years were in the past. When the Pokemon Go game came out recently, I couldn’t stop hearing about it. I mistakenly asked Mrs. 1500 for more information:
- Me: What the hell is a Pokemon?
- Wife: It’s a computer game. All the Millennials in my office are going nuts over it.
- Me: What is the object of the game?
- Wife: To catch em’ all!
- Me: Catch what, a Pokeman? Is that the singular of Pokemon?
- Wife: I don’t know. I just know that you catch them.
- Me: And then what?
- Wife: Well, you put them in a room and make them do things.
- Me: Do things? What things? Is this still a game suitable for children? Are there Pokewomen?
- Wife: Dunno.
- Me: I’m glad I consulted an expert.
- Wife: Shut up!!!
(Mrs. 1500 note: Mr. 1500’s recollection of this conversation is about 19% accurate. I don’t think I said you put them in a room and make them do things. He does call them poke-man instead of pokay-mon, though…)
(Mr. 1500 rebuttal: Perhaps I was confusing Pokeman with my real life where Mrs. 1500 often commands me to a room with orders: “Scrub the toilets!” “Unload the dishwasher!!” “Vacuum!!!”)
My Pokemon knowledge has not progressed much since that conversation. However, there is one thing that completely intrigues me about the bits that I have learned; the game uses augmented reality.
Augmented Reality: A live direct or indirect view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics or GPS data. –Wikipedia
The Pokemon game is a primitive version of augmented reality. The Pokemon (Pokemen?) are displayed on the phone screen, but set in the real world:
In the future, augmented reality will be implemented with glasses that project images directly onto your retina. Your real world will coexist with the virtual world.
The applications for this technology are amazing and limitless:
- Children will watch Abraham Lincoln deliver the Gettysburg address in their classroom.
- Gamers will be able to play first person games in real life. Imagine DOOM, but in your backyard.
- You’ll be able to see a dinosaur walking down the middle of your street.
- Imagine attending a dinner party or conference and having everyone’s name float above their head. No more awkwardness.
Magic Leap is the leader in developing this technology. Here is an amazing demo of what this technology can do:
Why am I on the soapbox talking about AR? I’ll tell you in a moment. First, let’s get to the performance update.
Performance Update: July
July was one of the best performing months ever. My portfolio went from $1,131,764 to $1,200,350 for a gain of $68,586. The gains were mostly stock portfolio. The earnings of Apple, Facebook, Google and Amazon pleased Mr. Market.
Here are what my numbers looked like on 7/30/2016:
- Days elapsed: 201
- Days remaining: 154
- 2016 gains: $142,389 (including 401(k) and some after tax contributions)
- 2016 401(k) contributions: $51,000****
Since the start (1/1/2013)
- Days elapsed: 1306
- Days remaining: 194
- Gains since 1/1/2013: $614,307
- Needed to quit work ($1,120,000 in investments): Mission accomplished!
- Net worth*****: $1,450,350
Stocks, stocks, stocks
I’m primarily an index investor now. Indexing is a rational and sound way to invest that is very difficult to beat.
However, I just told you that my huge gains this month were due to stocks. A month doesn’t mean much of anything, but it’s also true that much of my long term gains are due to stocks as well. Buying Google (2004), Apple (2007) Facebook, Amazon and Tesla (all 2012) have made my portfolio a market beater.
It took me a long time to reconcile my stock picking ways with index investing. I don’t think it has to be a Harry Potter-Voldemort situation:
Neither can live while the other survives. -One of the Harry Potter books (too tired to remember which one now)
Anyway, I have a lot more to say about it, but I’ll save that for another day.
Back to Augmented Reality (and the Future)
I’ve now had the opportunity to try AR’s cousin, virtual reality (VR), a couple times and it’s completely amazing. As cool as it it, AR’s applications are far greater. It will change the way we interface with the world. Apple is investing heavily in it. So is Google who invested $500,000,000 in Magic Leap.
I love thinking about the future and the technologies which will improve our lives. Other trends which interest me are:
- Autonomous cars (Google, Tesla, Apple, Uber): Fully autonomous taxi fleets will eliminate car ownership for many of us. Getting from point A to B will be cheaper, more efficient and safer.
- Drones: Amazon will soon be delivering packages with them. Police forces will use them to monitor public places and track criminals. Insurance companies will use drones for damage inspection. Farmers are already using them to monitor crops. Cell phone companies are inspecting towers with them.
- Lithium based batteries: Tesla’s Gigafactory will bring down the cost of storing energy which will enable new technologies and products. You’ll be able to buy a personal, electric jet by 2020. (Mrs. 1500 note: No, Mr. 1500, you can’t have one.)
- Electric cars: An internal combustion engine has 200 parts and must have a sophisticated computer to manage fuel injection, engine timing and emissions systems. An electric motor has about 10 parts and produces no emissions. It’s an elegant and simple solution that has only been held back by battery technology.
- Cultured meat: It takes tremendous energy and resources to produce meat. Creating it in a lab will go a long way to solving pressing environmental issues. Plus, cows will be totally happy about it.
And one more thing
In July, my portfolio officially doubled. I started off in January 2013 with $586,043 and now sit pretty at $1,200,000. About $150,000 is from my own contributions while the rest is appreciation.
None of this has sunk in. It probably never will. I still feel like the broke college student or kid growing up in a crappy suburb. While I’m a happier person deep down ($$$ = security), nothing has changed otherwise. Including my very limited knowledge of Pokemen, Pokewomen and everything else Pokerelated.
*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 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.
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****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.
*****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
- My crazy kid pictures!: I try to do fun things with my children. They are mostly happy, but you wouldn’t know it from the pictures:
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