My main goal* was to build an investment and cash portfolio of $1,120,000* ($1,000,000 to retire on and $120,000 to pay off the house) 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.
Have you ever heard of Punch Buggy? It’s a car game played by children. If a kid sees a Volkswagen Beetle, they yell “Punch Buggy!” and are then allowed to hit another kid in the car. Violent family fun!
Side note: Our car rides always end in sisterly violence, even if no Beetles are spotted.
A couple of years ago, I invented a new game for the children called Tesla Getcha. It’s the same idea as Punch Buggy, but with Teslas. Seeing another opportunity to inflict pain on each other, the girls embraced the game enthusiastically.
I had a secret motivation in Tesla Getcha; market research. Since I own Tesla stock, I wanted to see if Teslas were catching on or not. At first, the game started out slow. Tesla sightings were few and far between. However, now we see them all over.
A year ago, I only ever noticed one in my small neighborhood, a lonely Model S. Fast forward to today and I count at least four (two Model 3s and a Model Y have joined the club). And this is in a neighborhood that has 40-year-old homes with many original owners still living in them. It’s a good sign for Tesla if conservative seniors are buying the vehicles.
If the Tesla uptake continues to accelerate, Tesla Getcha will be banned from the car lest the back seat become a nonstop fight. Which it kinda already is…
So why am I talking about Tesla anyway? The stock went nuts in August, soaring 74%. Despite our increasingly frequent Tesla spottings, this valuation is illogical, irrational, insane, and won’t end well, at least in the near term. But in the month of August, the stock blew up our portfolio.
Our egg started the month at $2,790,942 and ended at $3,102,689 for a gain of $311,747.
Benjamin Graham once famously said:
In the short run, the market is a voting machine but in the long run, it is a weighing machine.
This means that in the short-term, the market is a popularity contest. Tesla is the popular kid at school that got voted Homecoming King. Its stock is really popular now, so investors are climbing over each other to buy it.
However, in the long-term, the fundamentals are what will determine the stock price. The homecoming king may have peaked in high school. He may end up working as an assistant manager. When not at work, he sits on the couch watching sports, chugging beer, and eating Cheetos. Tesla may go on to sell 10,000,000 cars in a year, be the first to market with Level 5 Autonomy, and becomes a major player in the energy industry. If so, its current stock price is more than justified. However, none of those things will happen for years, if they happen at all. So, the current stock price is speculation. And insanity.
I don’t play the market timing game and purchased most of my shares a long time ago, so I’m holding on for the long-term.
August Performance Update
The investment part of our portfolio (stocks, rental home, trailer park, private loans, syndication deals, and coworking space) grew $311,747 in August. Add in our $150,000 in primary home equity and our net worth comes out to $3,252,689:
Besides Tesla and related tech stock mania, a syndication deal we had in Florida through Praxis closed. We received our principal of $50,000 back along with a payment of $28,527 (this is in addition to the quarterly payments we had been receiving since the start of the investment). Since we hold this investment in a solo-401(k), the profits won’t be taxed at this time. We held the investment for about 30 months and our total payouts were $38,304. It looks like the S&P 500 returned about 27% during the same period of time, so chalk one up in the win column for us.
2020 (as of 8/31/2020)
- Days elapsed: 243
- Investment portfolio gains: $1,067,649 (Our gains are outsized because we took equity out of our home and invested it. The next number, net worth, which includes home equity, is more accurate.).
- Net worth gains: $852,649
Since the Start (1/1/2013)
- Days elapsed: 2799
- Investment portfolio gains: $2,204,899
If you’ve had a look at our investments page recently, you’ll notice that the Stash O’ Cash is piling up.
I am NOT a fan of cash. Those dollars are just sitting there doing nothing. And it’s actually worse than that. Those dollars are slowly eroding value courtesy of inflation. I like to immediately deploy dollars to the front line as soon as they come in.
However, we’re waiting on another real estate deal. This one is a self-storage facility, something I’ve always wanted to get into.
Be patient little dollars. Your time will come.
*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 (LOOK at the MONEY I’m MAKING!). 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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