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July Performance Update (Day 2037): Hundred Thousand Dollar Dreams Decimated

August 7, 2018 by Mr. 1500 Days 36 Comments

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.

Most of July was a great month for my finances. On July 24th, my portfolio was up over $60,000 for the month. For. The. Month. To put this in perspective, my annual gross salary was less than this for the first 5 years of my career in software development.

Anyway, there was a loaded word in that last paragraph:

Most

So, you know something bad is about to happen. Kinda like you’re the guy wearing the red shirt in Star Trek and you’re about to beam down to the mysterious planet. Or, you’re the person in the horror movie going out to inspect the strange noise in the woods.

Queue the ominous music!

The thought I had on July 23rd was this:

I’m up $60,000. Facebook reports earnings tomorrow and Amazon the day after. If they both have solid earnings, I could finish July up $100,000!

At the time, my Facebook shares were worth about $300,000, so a good report combined with good news from Amazon would easily propel my portfolio over the $100,000 mark.

In case you didn’t hear what happened to Facebook, here you go:

So yeah… +$100,000 didn’t happen. And by didn’t happen, I mean quite the opposite happened. My stock portfolio took a huge kick to the groin, erasing all of the gains for the month and then some.

Half of me isn’t worried while the other half is terrified.

I’m Not Worried

Every company has ups and downs. To expect every quarter to be a winner is ridiculous. I’m a long-term guy through and through.

Facebook has a lot of momentum (and untapped revenue potential) in Instagram. Some say it’s worth more than $100,000,000,000 alone. That is billion with a big “B.” Facebook’s entire market cap is about 500 billion.

And don’t laugh at my crappy month just yet. If you bought Facebook at IPO like I did (1,000 shares at $42), your returns are the S&P 500 x 5:

But my returns are even better because I bought an additional 1,000 shares for an average price of $20. Here are some of my purchases:

Note the 585% overall return

I’m Terrified Because

Facebook is tapped out. They have over 2 billion active daily users. China isn’t going to let it in. There just isn’t much more room for user growth.

Facebook doesn’t have a huge moat. People get bored of social networks. Remember Myspace and Friendster? Facebook and Instagram will eventually be displaced.

And most of all, Facebook has behaved poorly. The company was careless with user data and wasn’t transparent about the problem. Naughty, naughty. Do I really want to own a company that behaved like this?

What To Do

I blab all the time about how I’m an index investor now. It’s true. My stock holdings are a holdover from my days as a stock picker.

I’m slowly selling off my individual stock portfolio to avoid capital gains. It will take me years to sell off my Facebook shares, but unless new information comes along, it will be the first to go. I feel a lot better holding Amazon, Google, and Berkshire Hathaway.

In the meantime, I may be in for a roller coaster ride and that’s ok; I enjoy some occasional drama.

 

July Performance Update

Facebook thrashed my portfolio like a chew toy in the mouth of a Doberman Pinscher. My net worth started the month at $2,149,222 and ended at $2,142,950 for a loss of $6,242. Queue the sad trombone.

I forgot to take a screen capture of Personal Capital showing my net worth, so you’re going to have to settle for this crappy drawing:

Chart NOT from Personal Capital***, but I put an affiliate link here anyway because I like money.

2018 (as of 8/1/2018)

  • Days elapsed: 213
  • Investment portfolio gains: $100,249 (including 401(k) contributions**** of $26,723)
  • Net worth gains: $150,249 (investment portfolio gain of $100,249 + home appreciation of $50,000)

Since the start (1/1/2013)

  • Days elapsed: 2037
  • Investment portfolio and cash: $1,627,920
  • Gains since 1/1/2013: $1,041,707
  • Needed to quit work ($1,120,000 in investments): Mission accomplished!

 

Portfolio Breakdown

We have a diverse portfolio that includes real estate:

  • mobile home park (elevated home living to the easily offended)
  • private loan (only one outstanding)
  • syndication deals

And stock market holdings:

  • individual stocks (old thinking)
  • index funds (most money goes here now)

Here is the breakdown:

  • Stock market: $869,395
    • Monthly gain: –$9,583
    • 2018 gain: $79,609
  • Real estate: $738,555
    • Monthly gain: $3,291
    • 2018 gain: $20,640
  • Cash reserve: $20,000

This is the first month since I started keeping track (earlier this year) that real estate has beaten stocks. My real estate holdings aren’t setting the world on fire yet. but they spit out reliable income. Also, as the investments age, they will start to produce more money. Syndications mostly payout out at the end and the trailer park was cash flow positive this month for the first time (it needed a lot of TLC).

 

One Other Thing

Out of all the stupid things to blow money on, cars are about the worst. But, I did it anyway. Last year, I bought a nice example of my childhood dream car, an Acura NSX:

Ridiculous, right?

But, I always loved the car. It’s lightweight, handles like a dream and Honda reliable. I figured I’d buy one and work it out of my system.

In any case, I’ve had it now for 16 months with no drama. It’s reliable and fun. I haven’t been arrested for driving like a maniac yet. But one thing I didn’t count on was potentially making money from the hunk of aluminum. Earlier this week. Mrs. PoP (a fellow NSX owner) sent me this article:

I have no idea if the NSX will outperform Facebook (or the Dow), but it’s a helluva lot more fun. Plus, it won’t sell anyone’s data to evil organizations or skew any elections.

 

 

*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.

**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.

***This is an affiliate link. If you sign up, the blog (me) makes some cold, hard, beautiful, 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 you are a fine person of above-average intelligence.

****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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Filed Under: Performance Tagged With: Acura NSX, facebook, instagram

Reader Interactions

Comments

  1. Cubert says

    August 7, 2018 at 5:08 am

    Crazy what’s happening with FB these days. At least they made the right call (albeit about five years late) on InfoWars.

    I’m terrified of owning individual stocks in this day and age of surprises. Happily floating down the index fund river, and leaving my pants out to dry on the real estate wire. Gotta love not only the returns on real estate, but the tax treatment is choice.

    Love that ride, my friend. Why couldn’t we have taken that sweet thing house hunting??? Oh yeah, Mrs. Cubert would’ve made me ride in the trunk.

    Reply
    • Mr. 1500 Days says

      August 7, 2018 at 4:17 pm

      “I’m terrified of owning individual stocks in this day and age of surprises.”

      Yep. The quickening pace of disruption terrifies me.

      And yeah, we’ll take the NSX out next time you’re here!

      Reply
  2. JRobi says

    August 7, 2018 at 5:51 am

    I’m done with single stocks despite (or maybe because of) having nowhere near the success you did investing. Leaving each of my descendants an A share of Berkshire Hathaway stock is on my bucket list, however. You’re still crushing it for the year. Kudos….

    Reply
    • Mr. 1500 Days says

      August 7, 2018 at 4:18 pm

      That’s an awesome bucket list item!

      Reply
  3. Gwen @ Fiery Millennials says

    August 7, 2018 at 6:45 am

    Sad trombone, indeed. Stock investing is so much fun! My portfolio went up a few thousand dollars last month and has since gone up even more. I hope it continues to do so over the next few decades!

    Reply
  4. drDividend says

    August 7, 2018 at 7:20 am

    Great post Sir! Congrats on the early Facebook IPO purchase, I’m sure it must have been one hell of a ride. Not nearly as thrilling as the NSX’s drive, but still an enjoyable one. Keep up the awesome work! I will be checking back to view your progress.

    Reply
    • Mr. 1500 Days says

      August 7, 2018 at 4:19 pm

      Thanks!

      Reply
  5. Ms. Frugal Asian Finance says

    August 7, 2018 at 7:40 am

    “Chart NOT from Personal Capital***, but I put an affiliate link here anyway because I like money..”

    You made me laugh there hehe. Not everyone would be willing to admit that they put an affiliate link somewhere because they like money :p

    Facebook’s performance was disappointing indeed. But I’m glad you have AMZN stocks to balance it out (I hope).

    Now off to another great month!

    Reply
    • Mr. 1500 Days says

      August 7, 2018 at 4:21 pm

      Does anyone not like money? 🙂 CLICK THE LINK! Just kidding. Maybe…

      Reply
  6. Mr. Pop says

    August 7, 2018 at 7:55 am

    I was wondering how this would impact your portfolio. Risk is a funny thing-it tends to come out of nowhere (if you knew which way it was coming from, it wouldn’t be risky!)

    We’ve probably lost some value on our canal lot this month because of Florida’s algae problem…I admit not seeing that one coming.

    Reply
  7. Kelly | FundKey Life says

    August 7, 2018 at 8:42 am

    It’s impressive. I feel so behind reading this. I do have a goal of reaching 1 mil in 5 years but I haven’t really worked out the details or exactly what I would do to achieve that goal. Thanks for sharing this. Now I have a lot of work to do.

    I still remember exactly what I was doing when Facebook went public. My coworkers kept saying it will be the next MySpace and talked me out of investing. Sigh

    Reply
    • Mr. 1500 Days says

      August 7, 2018 at 9:39 am

      The fact that you have a goal and know that you have work to do means that you’ve already won most of the battle. You’ll be just fine. Be frugal, save your ass off and you’ll be there before you know it. Just remember to enjoy the journey!

      Reply
  8. Joe says

    August 7, 2018 at 8:44 am

    I was thinking about you when I saw FB dropped like that. Your portfolio still held up pretty well so no huge deal. I think it’s a great idea to sell off FB a bit at a time. I like Google, Amazon, and BRK much more too.
    Glad to hear the NSX is working out very well. That’s an awesome ride.

    Reply
  9. freddy smidlap says

    August 7, 2018 at 9:00 am

    just like joe said above, i was thinking about your portfolio when i saw the f.b. drop. the blogosphere is funny that way. i’ve never owned f.b. but had some pains with netflix and shopify, but am staying with them for the long term. they’re both huge winners over the last 3 years. are y’all still contributing income as part of net worth gains?
    freddy smidlap recently posted…Good Eats for Cheap #4 – Grilled Pork and Sweet CornMy Profile

    Reply
    • Mr. 1500 Days says

      August 7, 2018 at 4:24 pm

      Yep, we’re still fortunate enough to be able to contribute a little. The blog throws off dollars here and there and the Mrs. is still employed. Life is good.

      Reply
  10. Zaxon says

    August 7, 2018 at 11:59 am

    I confess, the first reaction i had when i saw FB down was “Ooooof Mr 1500 going to need a beer or 10” lol.

    Reply
    • Mr. 1500 Days says

      August 7, 2018 at 4:26 pm

      Haha, it doesn’t bother me thaaaat much. Even if it went to 0, everything would be fine. I mean, I’d probably yell and scream for a bit and drink a lot of beer and the next day I’d have a headache and possibly be incarcerated, but I’d live.

      Reply
  11. Mrs.Wow says

    August 7, 2018 at 7:53 pm

    You can just blame Merc (mercury in retrograde) for the July face plant. My month was off its rocker in many ways, so lord knows I’ve been blaming that planet for all of it. And I’m also a Leo, which apparently it impacts us the most.
    Mrs.Wow recently posted…Our Huge Tax Bill… OopsMy Profile

    Reply
    • Mr. 1500 Days says

      August 8, 2018 at 7:06 am

      Watch you talkin’ bout’ willis?! 🙂

      Reply
  12. Jim Smith says

    August 7, 2018 at 9:08 pm

    FB is ripe for the picking. They are venturing into politics and nobody is betting that infowars is an isolated incident. Everybody knows which way they lean which means they are pissing off about half the country. Maybe it’s just me but I’m not sure I’d want a significant chunk of my net worth in a company who’s business model is alienating half the country.

    Reply
  13. Financially Free says

    August 8, 2018 at 7:31 am

    Even with the drop in Facebook you’re still up more than $100K for the year. That’s pretty good. And who would have thought a car would ever turn out to be a good investment? Everything you touch turns into gold? P.s. I love the eye-rolling meme, that made me laugh 🙂

    Reply
    • Mr. 1500 Days says

      August 8, 2018 at 4:33 pm

      Thanks FF! Yeah, life is good. And since that drop, the stock has recovered much of the loss. I’m up $60,000 for the month now.

      Reply
  14. FIbythecommonguy says

    August 8, 2018 at 7:46 am

    Amazing how a single stock can create so much havoc. Had a similar case in July, was up and had a single stock tank and take out nearly all of July’s earnings. It will be a blip on the radar in the long run. Your YTD is still looking good.
    FIbythecommonguy recently posted…Dividend Income Update – June 2018My Profile

    Reply
    • Mr. 1500 Days says

      August 8, 2018 at 4:32 pm

      Yep, I lose 0 sleep over it.

      Reply
  15. Ken says

    August 8, 2018 at 8:00 pm

    Would you rather have user growth rates at FB’s new forecasts and 2 billion users or be a flashy startup with triple the growth and 1 million users? FB will continue to monetize and build the moats.continue to diversify, but remember FB can still grow in new ways using its massive profits. Love the blog!

    Reply
    • Mr. 1500 Days says

      August 9, 2018 at 8:17 am

      Yeah, FB has a lot of untapped potential.

      Thanks for the kind comment@

      Reply
  16. wendy says

    August 8, 2018 at 8:35 pm

    All the more reason to stay in Index funds and slowly slide out of individual stocks… I admit that I’ve never owned individual stocks except for the employee stocks that I was given at my first job, that I later cashed out. Everything has always been 401ks in larger funds, target date funds, and now all index funds.

    Love your hand drawn chart – Personal Capital should try that sometime, see if anyone freaks out

    Reply
    • Mr. 1500 Days says

      August 9, 2018 at 8:17 am

      PersonalCapital contacted me about a position as Creative Director! Haha, who am I kidding!

      Reply
  17. Mr. Tako says

    August 9, 2018 at 12:58 am

    A loss of only $6k after all that? Whew! Your portfolio really held up well. You’re totally fine!

    I guess you can file this month under “What happens to growth stocks when they finally stop growing.” 😉

    All kidding aside, it might be smart to sell a few shares and pick up an investment that’s a *little bit* less volatile.

    Reply
    • Team CF says

      August 9, 2018 at 2:07 pm

      I’m on the same page here, that could have been a whole lot worse! That being said, you might seriously want to start considering taking some of those capital gain taxes and diversify, right?!

      Reply
      • Mr. 1500 Days says

        August 9, 2018 at 9:15 pm

        Yep. Capital gains are a pain, but losing it all would be even worse…

        Reply
  18. Eric (formerly BigGuyMoney) says

    August 9, 2018 at 5:37 pm

    Hey, haven’t checked in for a while. I just figured out that you finally called it quits (yeah, I know I’m very late to the party apparently). Please accept a very belated congrats! It was great meeting you in Denver a few years ago. Hope you and your family are well.

    Reply
    • Mr. 1500 Days says

      August 9, 2018 at 9:11 pm

      ERIC! It was fun meeting up with you in Denver many moons ago! And you were a good blogger. The good ones always quit while the bad ones (looking in the mirror) stick around!

      In any case, I hope you and the family are doing well too. Thanks for checking in and do send me a note if you ever make it back to town.

      Reply
  19. Steve says

    August 9, 2018 at 8:47 pm

    Does it get harder to swallow the swings as your investment portfolio grows? I find myself almost looking at money completely differently now since it’s all virtual.
    Steve recently posted…Mint Mobile Review – Same Service, Better PriceMy Profile

    Reply
    • Mr. 1500 Days says

      August 9, 2018 at 9:19 pm

      Nope, it’s actually easier. The farther I get away from work, the less I care about money.

      Facebook freaks me out just a little bit because I have so much tied up in it, but even that doesn’t bother me much. I suppose some of my lack of worry now is because my buffer is substantial. I could get by on the 2.5% Rule without blog income. With the blog, it would be less than 1%. I’m very grateful.

      Reply
  20. Hồng says

    August 21, 2018 at 3:32 am

    Everyone has dreams to strive for. That is the purpose of each person’s life

    Reply

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Freedom!

My goal was to build a portfolio of $1,000,000 by February of 2017; 1500 days from the birth of this blog (January 1, 2013). And hey look, I’ve since retired!

Investments only (primary home excluded)
1/1/13 (The Start): $586,043
1/1/14 (1 Yr Later): $869,635
1/1/15 (2 Yrs Later): $987,351
1/1/16 (3 Yrs Later): $1,057,961
1/1/17 (4 Yrs Later): $1,257,128
1/1/18 (5 Yrs Later): $1,527,701
1/1/19 (6 Yrs Later): $1,549,440
1/1/20 (7 Yrs Later): $2,035,040*
1/1/21 (8 Yrs Later): $3,379,746**
1/1/22 (9 Yrs Later): $4,762,642
1/1/23 (10 Yrs Later): $3,112,821

2023: Investments only
1/1: $3,112,821

Overall
2023 investment gains: $0
Investment gains since 1/1/2013: $2,526,778
Net worth***: $3,342,821

* The big jump between 2019 and 2020 was partly because we bought another home, but kept the previous (much more expensive) one as a rental. We have since sold it.

** Tesla.

*** Includes our primary home equity in addition to our investment portfolio.

Finally, we still have about $290,000 in mortgage debt (which I love!). No regrets about the debts!

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Investing is risky business. The information contained on this site is for informational purposes only. As with all matters financial, proceed with caution. Do your research and seek professional advice.

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