My main goal is to build a portfolio of $1,000,000 in 1500 days with no debt*, starting from 1/1/2013. Every month, I provide an update on my status. My goal for 2014 is to get my portfolio up to $768,536. Because we saw exceptional returns in 2013, I have accomplished this goal. Time to look back on the month of May.
What a difference a month makes. In April, I was down down down. Now, just a month later, my investments are almost at an all time high. I started the month at $854,049 and ended at $882,486. There is a lesson in this, but first, here are the numbers at of 6/1/2014:
- Days elapsed: 152
- Days remaining: 213
- 2014 gains: $12,851
- Left to go (2014): Goal accomplished!
Since the start (1/1/2013)
- Days elapsed: 517
- Days remaining 983
- Gains since 1/1/2013 gains: $296,443 (including my contributions)
- Needed for $1,000,000: $117,514
Mainstream Money Media Monkeys**
I love to read the mainstream money media. I read it for the same reason I read The Onion; entertainment purposes only! If you took the stuff they write seriously, your portfolio would be in shambles. Here are some headlines I have read recently:
- The next four days could rock uneasy markets!
- 5 stocks to sell in June!!
- The smart money is preparing for a market correction!!!
The problem with each of these articles is that they all concentrate on the short term. Trying to predict short term market swings isn’t much different than throwing money down on the roulette table. For a better perspective, we need not look any further than Warren Buffett and Charlie Munger:
Our favorite holding period is forever. -Warren Buffett
You don’t have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time. – Charlie Munger
Buffett and Munger are far more successful than any of the “gurus” on TV or your favorite website will ever hope to be. One of their defining values is long term thinking. It has worked for them and it will work for you.
If you follow the herd, you’ll step in poop
So, the lesson is to stay the course. If I would have freaked out last month and sold some of my holdings, I would have missed out on some big gains. Unfortunately, herd mentality causes people to make horrific mistakes. As long as we’re on the topic of ‘horrific’, have a gander at my artwork*** where I attempt to show what not to do:
And what to do:
.Acknowledging that you can’t predict short term market behavior will take you a long way.
*I still owe something like $120,000 on my mortgage. Because I have a low rate, I firmly believe in not paying it off. My compromise is to have enough money put away to pay off the mortgage at time of retirement. So, to retire today, I would need about $1,120,000.
**I apologize to monkeys everywhere. You all are much smarter than the mainstream money media.
***These original pieces of art are for sale as well as signed reproductions. They make excellent fire-starters (camping season is upon us!) or door signs that will scare away vacuum cleaner salesmen and small children.
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I love the artwork! One day those will be classics…a signed original Mr 1500 piece of art! I used to follow the herd and my timing was impeccable…always investing at the top and selling at the bottom. Now I just tune out the media monkeys and dollar cost average.
Andrew@LivingRichCheaply recently posted…What Are You Investing In?
Love how you said your timing was impeccable by always investing at the top and selling at a low. I’m trying to ignore all the news and hype and continue investing. It’s hard. Even harder when my husband questions it. But I remember hearing back in 2011 that a crash was coming, and there was no point in investing. But if I had bought more then, the shares would have been worth more now. Plus, to me it’s all about the dividend cash flow.
SavvyFinancialLatina recently posted…The Benefits of a DINK Couple
There will always be a crash coming. Recessions happen every 5-7 years. Unless you plan to retire in the next 7 years, you shouldn’t care.
With that said, I admit that I’m a little bit of a market timer. If the markets were to take a 25% hit, I’d dump more cash in.
Be long and you’ll be strong!! 🙂
HA! Love the “graphs!” You are a total inspiration, Mr 1500!
Michelle recently posted…Creating a Blog: 9 Ways Writing Can Help You Achieve Your Goals
Thanks Michelle! I take my art up a notch (down?) on Thursday. Brace yourself.
Love it buddy. Glad to see you guys are progressing so well. I also find the talking heads entertaining. The Cramers, Schiffs, Fabers and Gartmans of the world are contrarian indicators as far as I’m concerned.
The graphics were a nice touch. I know we’ve made a lot of money buying into a panic!
-Bryan
ps. I think you’ll get a kick out of my new post about traveling with an infant 🙂
Income Surfer recently posted…Five Things I’ve Learned Traveling With Our Infant
Thanks IS!
Those guys are all full of it. I’ve noticed with Cramer that when a stock is beaten down, he’ll scream ‘sell.’ When it starts roaring again, he’s screaming ‘buy!’ This was especially true with Apple over the past 18 months.
Scary thing is that I know really smart people who take advice from Cramer and his ilk.
That’s brilliant! It just goes to show how crazy the stock market can be. Its crazy how it can go up and down like that in just one month. You are right though, the best way to play the market is just to ignore its little fits and bursts and every month, just keeping putting that money in.
MrsFinancialFreedom recently posted…Oh No! My Savings Rate Is All Wrong!
Yep, yep, yep. I love saving money. It is strange, but I get the same rush when I make an investment that I used to get when I’d buy something. Thank you brain.
Love the artwork. And the poop joke. =)
Here’s to another month in the bag!
Mrs PoP @ Planting Our Pennies recently posted…PoP Income Statement – May 2014
Time is flying by. How do I make it slow down. Argh!
Have you given much thought to becoming an artist once you reach retirement?
It’s always fun to see an update on your portfolio. Very inspiring to see what you’ve been able to do in the last 18 months!
FI Pilgrim recently posted…How I Spent My Sabbatical
Ha, I’d make a better fartiste than artiste. Did you know that such a thing existed? http://en.wikipedia.org/wiki/Le_P%C3%A9tomane
I am not sure if I would be amazed or saddened by you selling one of those paintings! All I do know is that I would be changing my answer to the “what epitomizes consumer spending” question!!!!
Mr. Grump recently posted…Be Mindful like a Monk
LOL! No one in their right mind will be purchasing any of my artwork! I’m using artwork very liberally here!
I am absolutely in awe of how much interest you produce, year after year. Over 10% consistently! Wow!
Dave @ The New York Budget.com recently posted…5 Ways to Earn More in NYC
Ha, come back in 1000 days and then again in 2000 days tosee if I can keep it up. That is the real test…
How much for a 24k gold plated framed lithograph of the above charts??? Grats on your goals man, U r doing great!
Good Day and Grind On!
Asset-Grinder recently posted…May Dividend and Monthly Report Update
Ha, I will even sign it for you!
Words to live by, “If you follow the herd, you’ll step in poop.” Great statement for a bumper sticker. Love the graphs too by the way. It’s all about dollar cost averaging. I remember seeing ALL red in my portfolio back in 2008/9. It was tough seeing that but I did not sell one share. In fact, I kept on adding every single month like I always did. If your investment theme did not change then neither should your investing style.
DivHut recently posted…Dividend Income Update – May 2014
Thanks DivHut, really appreciate the kind feedback.
“I remember seeing ALL red in my portfolio back in 2008/9. It was tough seeing that but I did not sell one share. In fact, I kept on adding every single month like I always did. If your investment theme did not change then neither should your investing style.’
Very wise words and you were rewarded handsomely for your perseverance.
It looks like you may need to remane your blog “750 Days to Freedom”. Inspiring stuff. Keep building that empire!
MDP
My Dividend Pipeline recently posted…May 2014 Passive Income
Ha, don’t count your dollars before they compound! I’m not saying anything!
Great reminder to take the long view and stay the course with investing–thank you!
P.S. those are some nice artworks you have there… 🙂
Mrs. Frugalwoods recently posted…A Frugalwoods Vacation: What We Spent, What We Didn’t
“P.S. those are some nice artworks you have there…”
Just wait until Thursday!
Now that I have a more patient, long-term outlook on investing I actually look forward to a downturn in the market. I wouldn’t panic, I would just buy as much as I could.
I remember in 2008 when Warren Buffet calmly stated that stocks would reach all time highs within 5 years, and that any panic sellers were making big mistages. As usual, he was right.
Chris@ChattanoogaCheapster recently posted…Cheapster Nirvana: The Moto G and Republic Wireless
Yes, downturns are nothing more than opportunities for the enlightened investor. My cash pile will shrink a bit if I see a 25% drop.
**I apologize to monkeys everywhere. You all are much smarter than the mainstream money media.
^HAHAHA. Great progress this month! I always skip over the monthly “which stocks to buy/sell” articles many mainstream media sites roll out simply because I know it’s useless to try and predict just how the market will go.
Lisa E. @ Lisa vs. the Loans recently posted…May 2014 Net Worth Update