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.
If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.-Warren Buffett
I’ve been thinking about these Performance Updates recently and how silly they are. Successful investors don’t think in weeks, months or even years; they think in decades. If I could sum up successful investing in one sentence, it would be this:
Buy an index fund and then do nothing.
Fidelity famously studied investors and found that the best performers are the ones that never take action. The dead are the most successful investors. Death is a steep price to pay for performance, but there is still a lesson:
Ignore the noise. Do nothing. The events of next week or the next 4 years of an administration mean nothing when you only care about performance over multiple decades.
It turns out that the Fidelity story may be fake, but the part about inactive investors being the most successful is true.
But here I am, publishing monthly updates. This one in particular makes me look like an investing savant:
However, look 3 months back and this number is much less impressive. I’m only up $120,484 when I go back to September:
Why continue these updates? I started publishing them because I wanted to be as transparent as possible with my financial journey. It drives me nuts when humans write about something great that they did and offer no proof.
But fast forward to today and the updates don’t feel quite right anymore. I’m throwing up big numbers and I feel like I’ve become mostly unrelatable. Some like Angry Andy have even accused me of bragging:
For now, I’ll keep publishing these updates. They help me churn my thoughts and stay honest.
Life In The 1500 Household
I’ve been neglecting this blog for much of 2020 for lack of time. COVID claimed some of it. Home improvement was the other time black hole.
I’m finishing up minor work on the kitchen now. We shoved the refrigerator back into a wall I moved and I’m installing cabinetry (yay IKEA!) around it:
I also painted, installed lights and receptacles in my basement last week:
I’m happy with the progress we have made, but it’s time to take a break.
A smart human once said that this:
Happiness is expectations minus reality.
I had big expectations for 2020 and my projects. In the spring I would:
- Remodel one of our bathrooms
- Complete the basement finish including a new bathroom
- Build a deck and pergola
In the fall, I would:
- Remodel the kitchen
- Start the remodel of our master bath
I remodeled the bathroom and was deep into the basement finish when COVID started. My remodeling mostly ceased when the girls started school at home but I tried to hang on to my projects and timelines anyway. Why? Because I’m an idiot! The earliest Mindy and I would sell the home is spring of 2022, but we’ll probably hang out here until our kids are done with school which is around 2030. Imposing arbitrary deadlines on myself and not letting go caused me unhappiness. No more.
I’m going to finish installing the kitchen cabinets and stop work in the basement shortly. I may complete some projects in the yard when the weather warms up, but the tools will mostly be in storage until COVID is over and the girls are back in school, probably fall of 2021.
Our net worth started the month at $3,078,350 and ended at $3,363,173 for a gain of $284,823:
This was a good month because of Tesla stock. I bought it on a silly whim in 2012 (Elon Musk is cool!) and held on. The big move was partly because of the 11/16 announcement of inclusion into the S&P 500. I believe in the long-term vision and potential of Tesla, so I’ll continue to hold the stock.
2020 (as of 11/30/2020)
- Days elapsed: 334
- Investment portfolio gains: $1,188,673 (Our gains are outsized because we took equity out of our home in order to increase our investable assets. The next number, net worth, which includes home equity, is more accurate.).
- Net worth gains: $963,133
Since the Start (1/1/2013)
- Days elapsed: 2890
- Investment portfolio gains: $2,637,130
I listen to a couple of finance podcasts and also loosely pay attention to market news. In the past week, I’ve heard:
We’re on the verge of a housing meltdown similar to the Great Recession! The smart money is moving to cash to pounce on deals.
The vaccine is out. COVID will disappear soon and there is so much pent-up demand from the quarantines, the economy will explode!
While these views are opposite, both came from smart humans. Who will be right? No one knows. One thing I do know is that trying to make money based on what you think is going to happen next quarter is silly. I’ll leave you with one of my favorite quotes on the subject:
Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.-Peter Lynch
Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.-Pete Lynch
*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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