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.
My days as a streaker are over. I suppose they couldn’t last forever. And if I’m going to be totally honest, it was getting a little uncomfortable. I mean, I did it for like 7 straight months. Deep down, I knew that I was getting away with something and it would end badly.
Not that kind of streaking. I’m talking about my streak of investment portfolio appreciation. Seven months of growth came to an end in February:
It felt unnatural to have those kinds of gains for so long. While the long-term (10 years and beyond) trajectory of the markets is usually up, short-term is much different. I’m glad the streaking is over. It’s cold outside.
Stock Market Versus Real Estate
Our portfolio is split between real estate and the stock market. From this point on, I’m going to break out the gains (or losses) so you can see how each is doing. And since I haven’t provided an update on my portfolio in a long time, I’ll briefly summarize my holdings now.
Stock market: Almost all new purchases go to index funds, but I still have a lot of individual stocks from my days as a stock picker. I’m winding this down slowly to avoid capital gains. Here are my top 5 holdings:
- Facebook: $257,853
- Amazon: $97,628
- Vanguard Information Technology index fund: $95,319
- Google: $79,000
- Berkshire Hathaway: $75,602
Real estate: I own no rental properties near where I live. The market in my neck of the woods is overheated. However, that doesn’t stop me from investing in real estate:
- Trailer park ($170,000): Mrs. 1500 and I own part of a
trailer park. Wait, I’ve been told to not call it a “trailer park” anymore. Mrs. 1500 and I own part of an Elevated Home Park. - Syndication deals ($275,000): We have money spread across six syndication deals:
- Praxis: San Antonio ($50,000), Atlanta ($50,000) and Tampa ($50,000)
- Wildhorn Capital: San Antonio ($50,000) and San Antonio again ($25,000)
- Watermark IV: Midwest ($50,000)
- Private loans ($195,000): Both of our loans pay 10% interest.
- Praxis Debt Fund ($50,000): This one pays 8%.
- Random cash ($30,016): All of the real estate investments spit out cash:
- The private loans and debt fund pay monthly.
- The syndication deals pay quarterly.
- The elevated home park is still being rehabbed, so we haven’t taken a payment yet. I don’t expect to earn anything from it until the second half of the year at the earliest.
When we earn cash from the real estate investments, we put it back into an account to help fund the next real estate deal. If the amount gets too big, we’ll put it back into the markets. We hope to keep our money evenly divided between the markets and real estate.
Performance Update: February
Our net worth went from $2,112,322 to $2,090,431 for a decrease of $21,891:
2018 (as of 3/1/2018)
- Days elapsed: 60
- Portfolio gains: $69,622 (including 401(k) contributions**** of $7,088)
- Net worth gains: $119,622 (portfolio + home appreciation of $50,000)
Portfolio Breakdown
- Stock market: $835,414
- Real estate: $720,016
- Cash reserve: $20,000
Since the start (1/1/2013)
- Days elapsed: 1884
- Investment portfolio and cash: $1,575,431
- Gains since 1/1/2013: $989,388
- Needed to quit work ($1,120,000 in investments): Mission accomplished!
Net worth: $2,090,431. This includes:
- Investment portfolio and cash: $1,575,431
- Home equity: $450,000
- Silly toy car: $45,000
- Other cars, bikes, dinosaurs, custom Peeps deely bopper: $20,000
The Next Streak?
I glanced at Personal Capital while I was typing this post and noticed that my portfolio was down over $31,618 this morning (3/19):
Yikes. Hold on a second, I take the “yikes” back.
I still remember when I started investing. If I was up $100 in a day, I’d get super excited. If I lost $100, I’d be filled with terror.
$31,618 is a big chunk of change to lose. It’s enough to fund the luxury version of our lives for 6 months and the clamped-down version for a year. And the thing is, I just don’t care. Over the long term, everything will be fine.
It took me a LONG time to get to this point. I’ve been thinking about investing for two decades and it’s only in the past twelve months that I’ve made my peace with money. Life is good, even if I’m down $31,618 in two hours.
Now excuse me while I go outside to run around naked.
Greece Chautauqua (fully clothed at all times)
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*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. So, if I were to quit my job now, I could spend about $60,000 in my first year of retirement. I’d stick way that number too because market valuations are ambitious. And I just don’t need to spend $60,000 per year.
**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 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.
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It sucks you lost so much money like that, but Facebook is a terrible company who knew for the past two years how significant this data leak was and did nothing about it, so it appears the past is catching up with them (and their stock). Its frustrating for shareholders like you though that they didn’t do anything sooner! Maybe things will get better and your stock will recover. But it’s good you have a positive outlook and so many streams of income, so regardless of how one of your stock company turns out, you’ll survive and do well.
It does suck, but I’m glad it all came out. This is why good journalism and a free press is so important.
If you handle that much user data, you have a responsibility to protect it and be transparent about its use (or misuse in this case). Facebook let it’s users down by not better protecting the data and by not making a statement until its hand was forced.
And there is a lesson in here too. If you buy an individual stock, you’re exposing yourself to risk like this. I’m slowly letting them all go.
That opening photo is awesome! You look like Forrest Gump if he decided to streak his way across America hahaha! Anyway, your training seems to be paying off in spades, and loving the beard 🙂
To totally change gears…quick question about your stock market investments. How has your asset class battle/experiment been going (as it’s been a while since you’ve provided an update)? Even though it was a down month, the 1500’s are still doing great on all ends. Health and wealth ftw!
Asset Class Experiment! Thanks for remembering! I actually sold the holdings and rolled them over into my self-direct solo 401K) to buy the trailer park. I should have kept it going though even if I didn’t hold the equities themselves. I suspect that the technology fund (VGT) would be winning.
Dude. It looks like all your body hair got scared of your ferociously bright shoes and scampered up to your chin and cheeks. LO Fing L!!!
Thanks for sharing your real estate ventures. I’m considering turn-key rentals, since similarly here in MPLS, the market is outta control. Need to branch out to other locales it seems.
Body hair! I have the same amount of body hair as a 5-year-old child! Should I bathe in Rogaine?
Yeah, your market is super hot too! It’s a difficult problem. You want the diversification, but it’s not worth it if you have to pay a substantial premium. Instead of turn-key, a value-add rental may be the way to go, especially if you have some skillz…
These market decreases are a great time to get to know yourself. If your reaction to a dip is “yikes” and not “the sky is falling, sell everything” I think you’re going to be okay.
Oh and please do me a favor, if you come to FinCon, none of that other kind of streaking.
“Oh and please do me a favor, if you come to FinCon, none of that other kind of streaking.”
WARNING: Avoid the opening night party.
Nice picture!
I FIREd in 2012 and I’ve been really lucky to be in a Bull Market up to this point. I always knew that sometime my luck would run out. I guess it could be sometime. 🙂
Mr. Freaky Frugal recently posted…Automation is coming to a job near you
Want a framed, signed limited edition copy? 🙂
Thanks, but I’ll pass. 🙂
Mr. Freaky Frugal recently posted…Automation is coming to a job near you
The picture made me a little afraid to click into the post. I think I would go to bed and cry for days if I lost 20k but in the grand scheme of things, it will come back up and you’ll get it back. Hopefully, you don’t have an opposite streak! (is that where you run naked backwards?)
ps…I choked on my coffee laughing when I read “Elevated Home Park”
Budget On a Stick recently posted…Managing a Third-Life Crisis
“The picture made me a little afraid to click into the post.”
Haha, I’ve sent an enlarged copy to your house!
Agreed, was terrified to death where the click on that picture was going to end up!
Team CF recently posted…Living On A Boat
Just wait until you see what I’m going to do with the Peeps…
THE HORROR!!
Budget On a Stick recently posted…Managing a Third-Life Crisis
Don’t worry, I took the censor bars out of it!
How did you fare after earlier this weeks Facebook collapse. The news keeps touting Zuckerbergs lost billions.
Facebook alone has brought me down $30,000. Facebook also brought down the rest of the tech sector too, so overall, I’m down $50,000. I’m not too concerned. Hopefully, it’s a wake-up call to these big tech companies. If they don’t get their acts together, the government is going to step in and take care of it for them!
The upside of us being many years yet from FI (and farther from RE) is that I don’t have too much of a stake in what the market does in the next few years, but I do expect there to be a serious correction or full recession soon. And in my area, they’re called “manufactured home communities” ?
Manufactured homes! Hmmmm, that one still may not go over well. I’m sticking with “Elevated” for now!
“I do expect there to be a serious correction or full recession soon.”
Oh yeah, I think something will happen too. There is a lot going on in the United States and hell, the rest of the world. Interesting times….
Still think the damage to your portfolio in percentage terms is minimal! Guess the move to real estate is a smart bed to add some hedging in terms of portfolio value fluctuations. That being said, curious to see where the whole Facebook debacle is going to go. But you are still up such a lot, so this will not hurt as much. Definitely see the drive to move toward index funds!
Team CF recently posted…Living On A Boat
The Facebook debacle sure is a debacle! They need to guard data better and be more transparent. I thought Zuckerberg was better than this.
But yeah, it doesn’t matter much. The shares are down $20, but still $133 (5x) more than what I bought them at about 5 years ago.
“I thought Zuckerberg was better than this.” – Can you elaborate on why you have any trust in our technocrat overlords?
I don’t have that much trust. I’d never enter any information I really care about into facebook. However, Zuckerberg seemed to be better than most. There is his charity and his announcement a couple months ago to remake facebook to focus on social interaction. Maybe the latter was a move to combat decreasing time on the site? Dunno. Sigh…
I cringed at the FB stock. Your portfolio would probably have been up without it! So, technically not a loss, right? JK.
Haha at elevated home park. Such is the beauty of words 🙂
Olivia recently posted…Living in a Gentrifying Neighborhood Will Save You Money
You like the EHP? We have vacancies! Much cheaper than the big city! I’ll give you free rent for the first month because you wrote the excellent guest post! 🙂
I hope you do realize that two of VGT’s biggest holdings are also Facebook and Google…so If you own those stocks separately you may want to look at your diversification in the tech sector at least. Really enjoyed the breakdown and some of your real estate choices (the trailer park is especially interesting for me!)
thanks for sharing this with the rest of us!.
Yep. I still like tech a lot (maybe too much). If I had to choose 2 stocks to hold for the next 10 years, they’d be Amazon and Google. However, I also look forward to holding no individual stocks.
The trailer park has been really interesting. I plan to write updates soon, so stay tuned!
Hey Buddy!
Looking trim!
Hope to see ya soon
Thanks Brent! I’ll be in Chicagoland this summer. Let’s continue our pizza explorations!
How about some advanced warning next time. I will never be able to unsee that image.
Brian @ The Graying Saver recently posted…February 2018 Expense Report
Haha! And I’ve sent a framed, signed copy to your home so that you never have to forget it!
At some point you will say “Why didn’t is just sell those individual stocks over 2 years and pay the tax…?”
With your primary residence, real estate has devoured your net worth. It might work out great. I’d rather own thousands of companies in an index fund, but there are many paths through the woods.
We’re going streaking through the quad!!!
My stocks could very well burn me. I’m fine with the risk though. These tech companies have massive valuations, but still massive upside. For example, if Google’s Waymo gets autonomous cars right, the revenue from just that would be staggering. Autonomous driving is a software problem now and I think Google will solve it first.
Real estate: I should point out that I don’t count my primary home as an investment or in those numbers. I do count it in the net worth though and it’s worth way more than I ever thought it would be less than 5 years after buying it.
How did your syndication deals come about? More specifically, how did you end up investing with these companies?
Syndications are complex; loads of moving parts. I have a post coming up where I talk more about them. The very short answer is that the operator is most important to me. After that, I access the details of the deal. More soon.
I’d rather have my money in real estate that I manage and control. I just can’t make it work here in Boulder County though.
Excellent. Looking forward to it!
I’d love to hear about how you go about identifying/finding these operators.
Did you used to work for FB or just really believed in their future?
I think we lost over $10k yesterday afternoon and it was like, meh. Amazing how numb you get to the numbers. But if $20 goes missing from my wallet, bothers me a heck of a lot more.
MrSLM recently posted…How I Negotiated a $40k Raise
Facebook! Folks said it wasn’t worth the $42/share when it IPO’d. Of course it wasn’t; the site hadn’t been monetized yet or transitioned to mobile. My hypothesis was that once they turned the monetization screws, money would start flowing in. I also didn’t have any doubt that the move to mobile wouldn’t be that big of a deal.
I bought 1000 shares at IPO price of $42 and then another 1000 at about $19. No empire lasts forever and I’m an indexer now, so I’m slowly selling off…
“Amazing how numb you get to the numbers. But if $20 goes missing from my wallet, bothers me a heck of a lot more.”
I know, right? I was peeved when I learned I had $1.60 in late fees at the library! Life is good!
Ha the late fees at the library rings close to home, MrsSLM will kill me if I end up with fees. Doesn’t seem to care in the slightest when I tell her that our portfolio is up $$$ though.
MrSLM recently posted…How I Negotiated a $40k Raise
i didn’t even realize that fb took a slide like that. i guess they’re not on the watchlist and i own about 50 individual stocks. tech can make you rich. that was quite a day yesterday, but all my tech stuff carried it all back and then some today. i’m now like a couple of other commenters. “the market’s down, what’s for dinner?
”
freddy smidlap recently posted…My Zero Dollar a Month Cell Phone Plan
You are NOT allowed to go streaking through Portland on our Hip Hop run! I’m not FI yet and can’t afford to get arrested hanging around with a known reprobate!
And I sure hope that no Peeps were harmed in the making of your headgear!
On a more serious note, I’m generally ignoring the market but secretly hoping it gets it’s downturn going so that it can bottom out and start recovering by the time I try to FI in 5ish years, so as to reduce my sequence of returns risk…. (is that wrong!?).
As for FB… The Few, The Proud, The NEVER Had a FB Profile
(instead, I sold my soul to Google….)
more people need to use the word “reprobate.” never had a FB profile: outstanding as well. i’ve never had a cell phone.
freddy smidlap recently posted…My Zero Dollar a Month Cell Phone Plan
“i’ve never had a cell phone.”
Wow, just wow. That’s incredible. I’m thinking about dumping my smartphone for an old style phone. I need less distraction.
I think streaking through Portland may actually be alright. Take a look at some of the doughnut selections at Voodoo (I can’t even bring my kids in there! 🙂 ): https://www.voodoodoughnut.com/doughnuts/
Currently, I’m an unknown reprobate. Streaking would certainly change all that though, wouldn’t it? OK ok, I’ll cover up my naughty bits with lots of Peeps. What could possibly go wrong? 🙂
“As for FB… The Few, The Proud, The NEVER Had a FB Profile”
It’s better that way.
After watching my portfolio constantly going up for the last few years, it was hard to watch it go down so much in a few days in Feb. But staying the course is what got me where I am now. I thought the market was too high at S&P 2500 and if I sold a lot I would have missed the additional gains. Its always so hard to predict. Overall Im way up from a few years ago which is hard to believe. Its basically got me to FIRE even after my layoff which was a nice thing. I going to start looking at selling out of my individual stocks and using the proceeds to buy ETF index funds etc. I’ve made money, but I think ill do better with less risk over the long term and I dont have to worry about specific companies all the time.
“…but I think ill do better with less risk over the long term and I don’t have to worry about specific companies all the time.”
My thoughts exactly. Individual stocks freak me out now. The pace of innovation is getting faster which means companies will rise and fall with greater speed. I don’t have the time or desire to keep up with it all.
Bahahaha, Elevated Home Park! Little known fact: I used to live in an “Elevated Home Park.” They’re not THAT bad. 😉
Mrs. Picky Pincher recently posted…Work-life balance for Type-A people
I agree! I’d totally live in one! Mrs. 1500 was not on board with the idea…
How do you like the syndicated real estate investments? Have payments been consistent?
Did you visit the property locations before you invested?
I watch American Greed and they make me a little nervous.
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So far, they have performed according to projections. However, because the payout mostly happens when the building is sold, you don’t really know until then how good it was until the end. The thing that worries me most about these deals is a massive recession.
I didn’t, but I do loads of research. The main thing I do is talk to friends who are familiar with the area. Then, I look at the local economy (where do jobs come from?). Then, I look at stuff like demographic trends (are people moving here?) and crime statistics.
Your outperformance relative to the stock market is because you loaded up on the hottest stocks – the tech sector. When the next bear market and recession comes (and they do come inevitably), the tech sector will also be the one that falls the most.
Troy @ Bull Markets recently posted…Study: a strong economy and weak stock market is bullish for stocks
You’re correct, but I’m not too worried. I bought Google at IPO in 2004 and that has done OK, even though one of the greatest economic downturns of all time took place. Although I recently sold it, the Apple I bought in January of 2007 held up just fine too.
I don’t care about bull or bear markets. I care about long-term potential. Give me 10 years.
And I’m not a stock picker anymore. I’m slowly letting go of these positions in favor of index funds.
Streaaaaaking those images are fantastic – it’s always crazy how short our memories are. S&P was 2341 a year ago, it closed at 2588, so up in the last 12 months… but it was also 2786 on March 9th. It’s dropped almost 200 points in a very short period of time so everyone is now “sky is falling!”
Love the elevated home term though 🙂
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I know, right? But I admit I used to freak out too.
I still watch it every damn day, but it’s for entertainment purposes only. I couldn’t care less what happens. Wake me up in 10 years…
Congratulations on hitting the miles and beer-to-miles ratios! I used to run in my 20s but now find all types of excuses. This series is definitely inspirational!
Was wondering how you were stomaching the FB episode. That’s the thing with investing – it’s easy to say we’re holding for the long-term but never know if we’re actually holding a RadioShack. Buffett always references something like “Berkshire has dropped 50% three times since current ownership took over…” but, again, different when you’re running the company and have all your net worth tied up in it.
Anyhow, good luck on the race. If you get a chance, Rogue in Newport is an excellent afternoon with great flights!
“Was wondering how you were stomaching the FB episode.”
Yeah, I don’t care much. Even if it goes to $0, I’m still fine. And maybe facebook deserves to go to $0. Hopefully, they get their crap together.
Looking marathon ready!
I did not know you were such an active and successful real estate investor. Have you looked at REITs lately?
I’ve heard/read several people remaking that they are seeing private real estate deals with high prices/low cap rates than what they can get via many REITs. I took a look at a few and it seems some are getting cheap-ish. Then again, I guess if the RE market was going to take a leg down, you might expect the public securities to reflect new pricing before private deals. Thanks!
Was not quite sure where to put this comment, but this seems like as good a place as any . . .
I’ve noticed that you and several of your FI peers (jlcollinsnh, Mr.MoneyMustache etc.) seem to very specifically use Vanguard index funds as the basis of your stocks and bonds investment portfolio. I am curious as to why you should have all landed at the same gate, so to speak? Is there a sponsorship or endorsement deal going on here that you might be willing to share about, or is it down to something else?
I appreciate that the V funds tend to have extremely low fees, and after reading lots about ‘the 4% rule’, that’s clearly important, but I thought I’d ask in as least confrontational way as I can muster to see if there were other reasons for choosing these funds specifically?
Hope that’s not too antsy! – great blog and great outcome! Inspirational stuff.
Hey Lee!
Oooh, this is a very big topic and this isn’t confrontational at all! Questions like this are great.
What it all boils down to is this: It’s very difficult to beat the indices. Picking individual stocks is very difficult. The best thing to read on the topic is this: http://jlcollinsnh.com/stock-series/
Many of us gravitate to Vanguard because Jack Bogle helped popularize the index fund. However, there are plenty of other investment firms that also provide low-fee funds now.
And there are many other great ways to invest money as well. I’m a big fan of real estate.
I commend you for your openness. You’ve just won my respect more.
Thanks MFK!