My main goal* was to build an investment and cash portfolio of $1,120,000* in 1500 days**, starting from 1/1/2013 and ending in February of 2017. I made my goal in 2016, my 1500 Days are over, and I’ve left my job. In the interest of openness, I’ll continue to share my numbers.
This Is Getting Ridiculous
The investment portfolio is up $66,341 in April and $204,157 in the first four months of the year. To put this in perspective, at my first real job, I made about $37,000 in year one. I earned that money putting in 2,000 hours of work. Add another 500 hours for the horrible commute. I was making about $14.80/hour.
Side note: Why the hell did I ever sign on for such a thing?
Fast forward to today. In 2019, my portfolio has appreciated $204,157 with almost no effort. I already did the work (saving and investing), so now I just sit back and watch those dollars do their thing. I’ve spent about 10 hours keeping records and overdosing on Personal Capital. $204,157 over 10 hours comes out to $20,415.70/hour.
Of course, you could argue that these are paper gains and I really haven’t made anything until I sell. You could also argue that I’m cherry-picking one very small period of time. Both points are correct. However, I’d argue that over the next 5 decades or so that I have left to live, my portfolio will grow ever bigger while I sit around, but not behind a desk reporting to a boss. And as compound interest continues to do its thing, future gains will dwarf current ones.
It’s pretty great. Never forget that it’s always better to let money work for you than the other way around.
April Spending: $4,504.41
We blew $4,504.41 in April. After our mortgage payment of $1427.12, our three biggest expenses were:
Groceries ($859.08): We mostly eat at home and we eat well. Also, our youngest child has the appetite of a T-rex.
Accountant ($300): Filing my taxes doesn’t excite me, so I pay someone else to do it.
Dining out ($270.43): I’m not sure how I feel about this. We could certainly dial it back, but we’re mindful here. Most meals out this month were social occasions with friends or family. We had fun. Still, according to this, the average household spends about $3,000 per year at restaurants. We’re about average. Meh.
Most Fun Expense
I blew like $6 on this piece of cherry pie with really good ice cream. It was spectacular:
April Performance Update
We started the month with a net worth of $2,202,256 and ended at $2,268,597 for a gain of $66,341.
2019 (as of 4/31/2019)
- Days elapsed: 120
- April gains: $66,341
- 2019 gains: $204,157 (including 401(k) and HSA contributions**** of $9,611.00)
Since the start (1/1/2013)
- Days elapsed: 2310
- Gains since 1/1/2013: $1,167,554
- Investment portfolio and cash value: $1,753,597
- Net worth (investment portfolio plus home equity, a silly toy car (Acura NSX!), bikes, and dinosaurs): $2,202,526
Portfolio Breakdown
We have a diverse portfolio (full listing here) that includes real estate:
- Mobile home park (elevated home living to the easily offended/politically ultra-correct)
- Coworking space: We own a building/small business in Longmont
- Private loan ($45,000)
- Syndication deals (six)
And stock market holdings:
- Individual stocks (old thinking)
- Index funds (most money goes here now)
Both sides of our portfolio saw increases, but some of the details are difficult to keep track of because we’ve been moving money around in anticipation of a real estate deal. I do know that we brought in $5,376.85 in real estate income:
- Syndication deals: $4,083.34
- Coworking space: $1,000
- Private loan: $293.51
2019 income from real estate is $15,317.71. If income kept its current pace, we’d make about $46,000. However, I expect profits to increase from the coworking space as the year progresses. We’re also close to taking our first distribution from our trailer park, so I’m guessing that our real estate income will end the year above $60,000. While this is somewhere between 7 and 8%, I’m not complaining. The syndication deals, mobile home park, and coworking space are all investments that will distribute greater amounts of money with the passage of time.
Making a little bit of money now is not the goal. Making a lot of money in the future is. I’m building momentum.
*My goal wasn’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. Since my investment portfolio now sits at $1,550,000, I can spend about $62,000 in my first year of retirement.
**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 and I firmly believe in not paying it off. My compromise was to have enough money put away to cover the mortgage at the time of retirement.
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****My 401(k) contributions include my own, Mrs. 1500’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.
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I’ve been thinking about (and my wife is surprisingly onboard with) ditching my full-time telecommute headache-inducing job and going part-time at something far lower stress within walking distance. This was inspired when I realized the exact same thing about compounding: we’ve so far invested $26,500 in 2019 and we’re up another $44k on top of that in the same time period. I plan to put in at least another four or five years to get while the getting is good, and to hedge against a down year or four in the future, but it’s so liberating to know that we could actually make that work.
Or if I could convince current corporate overlords to let me go 60%… might be worth bringing up at my annual review in a few years…
No coffee or milk or anything “normal”. I love that you had your cherry pie with a beer 🙂 I would say that offsets your concern of remaining among the average in eating out. Cheers!
Financially Fit Mom recently posted…There ain’t no Crystal Ball!
Looks like your seeing steady gains Carl, congrats! Steady as she goes is a very good thing!
Would love to hear your thoughts on this piece John Oliver did on mobile home park ownership and investors and how it relates to your own experience investing there. I’m sure not all investment groups are the same and there’s a good chance he chose his facts carefully for shock value and entertainment purposes so I’m not trying to point a finger or anything, just interested in your reaction: https://www.youtube.com/watch?v=jCC8fPQOaxU
Keep up the great work with the blog!
I’ve also been wondering about this! Your investment was one of the first things I thought of while watching that segment.
Where do you find your syndicated deals and how do you suggest one go about finding a group if we want to get started with the same investment?
The 506 Group and BiggerPockets are both great places to do research. Proceed with caution though. I picked what was supposed to be a really great syndicator and one of the deals is doing incredibly bad.
i think our individual stocks make up about 50% of our investment portfolio, where i don’t include our house. that has gained more than mrs. smidlap and i will make combined before taxes this year at our w-2 jobs. this i why you invest and try and forego spending EVERY LAST DIME in your relative youth. it really is an awesome phenomenom but it doesn’t happen instantly in a day or a week, does it?
it’s good to see your real estate ventures starting to pay.
freddy smidlap recently posted…Fitness Journey Phase II
“it’s always better to let money work for you than the other way around”
Love that, it’s so true! I’m stealing that one, hope you don’t mind 🙂
“Making a little bit of money now is not the goal. Making a lot of money in the future is. I’m building momentum.”
This is like the snowball effect. Start will a little, stay focused, small gains turn to big gains, turn to huge gains. I look back and remember when I would see a gain of $500/month and thought that was amazing. I never thought I would get to $5,000 or $10K in a month, Now I can see +/- $30,000 in a month, blows my mind! Can’t wait to hit a $60K month.
fibythecommonguy recently posted…Net Worth Update #26: May (-$36,718.65)
That cherry pie looks delicious.
It’s always nice to experience good return for the market, even though it’s unrealized. Definitely a lot better feeling than if the market goes down.
BTW, how is blog income factored into your performance? If you view it as a separate entity, how is that entity’s performance factored into your performance numbers? I don’t see it mentioned above.
Sport of Money recently posted…Small Action – Big Financial Impact
I don’t mention blog income, but it is usually $1,000 to $2,000 per month. Nothing to sneeze at, but I’ve never liked mentioning it because I’ve seen some do it as a clickbait.
I like that you save room at the table and in your budget for dessert. We are all big dessert fans in our household! I would be curious to see how the syndication deals are working for you. Our portfolio is about 50/50 paper/ real estate. Our real estate is 80% rentals and just one private loan. I did a syndication a few years back and it was a nightmare to get updates and paperwork in time for tax season. I know it was just the disorganization of the sponsor, so I’d be willing to try again. Curious to hear about your experience!
Caroline at Costa Rica FIRE recently posted…Conquering The 41-Mile Old Croton Aqueduct Trail A Few Miles At A Time
Syndication deals are a mixed bag. Some are doing really well, some aren’t. And I won’t really know until the syndicator sells the building.
The bottom line is that I’m less excited about these deals than I was two years ago.
So I’d say your financial asset growth is not ridiculous. It’s whats supposed to happen at this stage in the market cycle. Also it’s rapid recent growth does NOT mean you get to spend a bunch more. Well, that’s unless you want to follow a different spending rule than the 4% rule. The run-up is your cushion against the next market drop and nothing more.
Also, I love cherry pie so…where’d you find that amazing slice? I must have some 🙂 .
Inspiring! I like the way that your holdings are diversified to include real estate income. I’m coming onboard with favoring this over bonds because I think real estate will hold its value better if the economy turns soft.
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I love posts like these because they show how powerful compounding interest gets at big numbers. I’m still definitely in the “put in the work and save” phase but it’s been fun watching the little nestegg keep growing a little more every month, knowing one day it will help me buy my freedom.
Also, I like what you said on the ChooseFI podcast about living your life now. I totally agree. Although I’m definitely looking forward to pursuing all the things I do now more in retirement, I am not waiting to start them until I step away from the workforce, that’s for sure. I’ve definitely had to put some things off – there is only so much time and bandwidth – but the day I FIRE I will have plenty to do!
By the way, dinosaurs should absolutely be factored in to any discussion of net worth. Love it!
B.C.!
Thanks for all of your kind comments and it sounds like you’re living life tight. Keep doing what you’re doing!
Dinosaurs, ha! They keep asking for raises, so I’m not sure how much longer I’ll be able to feature them on the site. Jerks!
That cherry pie looks delicious. If I were you, I would pay for it