“If you hang in there long enough, you get your day; and its even better.” -Eddie Vedder
My main goal is to build a portfolio of $1,000,000 in 1500 days, starting from 1/1/2013. Every month, I provide an update on my status. My goal for 2013 is to get my portfolio up to $672,750, from a starting point of $586,043. Time to look back on the first quarter.
- Days elapsed: 88
- Days remaining: 1412
- Gains: $14,258
- Left to go (2013): $72,449
Wow, its hard to believe that the first 3 months are done. Already, 6% (3/50 months) of my little experiment is in the history books. This is post #37. The time has flown by and its been a lot of fun. Enough jibber jabber though, let’s get down to business:
The first quarter was awesome for the markets! The S&P gained an incredible 10%, reaching an all time high on the last day of the quarter! Wow.
However, my holdings didn’t do so hot. The 1500 portfolio went from $586,043 to $600,301. This comes out to an increase of 2.4%. Compared to that 1st quarter market performance of 10%, I did flat. out. horrible. The horror, the horror.
However, it actually gets worse. Between 401(k) contributions and additions to the cash pile, I contributed $14,264. This means that I actually lost $6. Looking at it that way, I had a return of 0%. Whoah. I feel like a chihuahua that has been kicked and kicked hard, running off with my tail between my legs: Yipe! Yipe!! Yipe!!! No quiero.
Long time readers know that my horrible returns are due to my overallocation in Apple. In this quarter, Apple went from $553 a share all the way down to $442, dragging me down by almost $40,000. I have no one to blame but myself. If you have all of your eggs in one basket and that basket falls off the cliff, it’s going to be painful.
Thinking Ahead
Long term, I’m optimistic. However, I’m not feeling so hot about the next 6 months:
- Apple has so much negative sentiment dragging it down, it wouldn’t surprise me if it continues to fall. I’m a bit surprised it hasn’t dipped into the 300s already. I believe that the company will be fine long term, but there may be rough waters for a while. If this guy is right, I’ll lose almost another $60,000 in the next 3-6 months. Yipe! Yipe!!
- The stock market is due for a correction. The gains of the first quarter can’t continue forever. Corrections are healthy and just a part of the normal investing cycle. However, I think that the market still has room to grow before the end of the year, just not so much in the very near future.
Am I worried? Nope. This is a long term experiment and I’m optimistic about the next 4 years. As a matter of fact, right now I’m more optimistic than ever. Mrs. 1500 and I had a long conversation this morning about our investing plans for the next 4 years. We are going to start acquiring rental properties very soon. We’re also going to significantly increase our investments in Prosper and Lending Club. Deep down we’re both entrepeneurs at heart, so we have other dreams as well. More later.
Some other random thoughts:
- I have almost put enough money into my 401(k) to get my full employer match for 2013. Since I have $300,000 in 401(k)s, I don’t max out anymore, preferring to put my money in after-tax investments.
- Our home in our despised neighborhood is for sale. With any luck, we’ll be on the road soon to a new and better place. When we do sell, we’ll not only buy a primary home, but also a rental or two. We want to provide stability for our children, so we’ll stay put for the next 15 years, when the littlest 1500 will be done with high school.
- Regarding the blog, I’m very happy to see Mrs. 1500, who was skeptical at first, really enjoying contributing to it. Her posts get more traffic than mine and I couldn’t be happier. I’ve heard that some men don’t like it when their wives are more successful than them. Not me. Ever. Surround yourself with great people who challenge you and you become a better person yourself.
- Finally, the first 3 months of blogging have been an awesome experience. The best part of it is connecting with other bloggers and readers who share our dreams and help us learn. It has been very cool interacting with each and every one of you. I look forward to meeting many of you in the near future, whether it be at FinCon in October or at Ale Asylum in May.
So, congratulations to the rest of you on a fantastic first quarter. If you get to the finish line ahead of me, save a beer! I prefer heavily hopped pale ales. Bonus points if it’s from Ale Asylum.
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I’m also a tad bit pessimistic on the markets in the near term, and didn’t like that we had to drop our Roth IRA money in last week… but it had to be done by April 15th, and I didn’t want to try and time it over a 3 week period so just went ahead and did it. Ah well… the future tax benefits soften the blow a tad.
We actually had a really good quarter – and it was boosted (on paper) at the end when I finally booked the increase in our home’s value that’s been trending upwards for about 6 months.
Very interested to see how the rental business works out for you guys. So far it’s been very good for us.
Mrs PoP, I cannot wait to be a landlord! We did it once before and it worked out well. We were very careful to screen people and thus caught a bunch of bad eggs. I’d much rather have a place sit empty for a month than get the wrong person in.
This will be a big series of posts once we get going. We plan on documenting it all.
1500, are you still stock picking or have you gone the way of indexing?
Congrats on the blog success. I saw the shout out over at Blogs are Sexy. You guys are killing it!
Almost everything from this point on will not go into the stock market at all, but into real estate and Lending Club/Prosper. If I do put more money into the markets, it will be index funds and Berkshire Hathaway. The one exception is my 401(k) which goes into the Fidelity’s Contrafund.
I love the transparency and the goal. That’s quite a sizable nut you’ve got in the markets. I’m too nervous so I’ve sold most of my holdings in my 401k. Is this portfolio your 401k or after tax portfolio?
About half of the 600K is in 401(k)s while the other half is in after tax investments. My 401(k) options are very weak. Most of the money in my primary 401(k) is in Fidelity Contra. I tried to get my employer to let me rollover my 401(k) while I am still employed. That was a big “no go.”
Congratulations on the success of the blog so far! Truly it has been a pleasure reading what both you and the Mrs. have written.
Additionally, I am really looking forward to reading about your future real estate plans! I wholeheartedly believe that a couple of well managed rental properties are a valuable addition to the investment portfolio.
Thanks for the nice comments! We plan on documenting all of our adventures with real estate, so stay tuned.
That’s pretty amazing that the S&P has been at full steam through the end of Q1 and you’re sitting at -$6. Haha! It comes in waves though. Apple will definitely come back. All losses will be recouped and the 1500s will probably end up being the 1000s instead.
Congratulations on your 3 month mark. And your wife’s posts are pretty amazing. 😉
I know! I did the math and when I saw the -6 number, I nearly gagged! Come on, -6, really?
Congratulations on breaking the 1 million mark on Alexa as well!
Thanks!
Wow, I see you’re almost into the 200,000s! Wow, you’re killing it! Time to quit the day job! Well, you probably can’t quit yet!
I read this post and figured out how to start an Alexa Ranking all by myself with only minimal hair pulling and screaming.
Won’t be anywhere near the 2 of you but it is a start.
Will you sell a large part of your Apple when/if it rebounds and you have recovered your investment?
Plan? Do I have to have a plan, ha! I’m not sure what I’m going to do. If I had to guess, I think that this one has a good chance of seeing the 300s in the next 3 months. On the other hand, that same little voice tells me that they will be higher by end of year. I don’t try to time the markets, so I’m staying put. If I had something else to put my money in right now, I may consider dumping some. We’re in a bit of a holding pattern now until our home sells. As soon as that happens, we will reconsider everything.
I wish Apple would do some things different though. For example, gaming on iOS is huge. Its the biggest gaming platform out there. Why on earth haven’t they come out with an App Store for Apple TV? To me, it seems like a complete no-brainer. The rumor mill isn’t pointing to this any time in the near future either. Come on Apple, get off your ass and do it!
I’m lucky in that I bought most shares in 2007 when it was under $100, so I’m not underwater. I’ll get out when I have something else to put the money into, probably those rental houses I keep talking about!
If you still believe in Apple, now is the time to add to your position 🙂
Hi Ed, this something I think about Every. Single. Day.
However, I’m not buying more for a couple reasons. It is already 20% my portfolio. I don’t need any more. More importantly thought, I’m not sure how much I still believe in them. Samsung just copies and doesn’t innovate. However, Google does and I believe they are Apple’s real enemy. Google makes money off of services, so it is in there interest to sell devices at cost (remember that Motorola purchase?). If I were Apple, I’d be watching for that Google X phone. I’d also be building up my ecosystem to keep people in the Apple family (where is the iTV or at least an App store for Apple TV?).
Love your site! Great discussions.
We have the same goal, and I’m a few percentage points ahead of you for now. Your progress will be motivation and inspirations for me. Do you count your home equity in your goal to 1M? My goal is 1M plus paid off house (~275k).
My goal is the exact same as yours, 1 million and a paid off house (or enough money in addition to the 1 million to cover the amount left on the home). With interest rates so low (our mortgage is 3.25%) and my success with Lending Club/Prosper (10%), there is no way I’d pay off a mortgage.
I do not count our home equity in my 600K and I don’t count the debt against it. The main reason is that we’ll be moving soon and plan on buying a much cheaper home. We definitely overbought.
Thanks for the comments!
Are you and the Mrs. handy? The fact that I struggle with changing my own light bulbs (who’s idea was it to put them way up on the ceiling?) keeps me from becoming a landlord.
Having to hire a tradesman for every little repair or improvement greatly increases expenses and would too drastically cut in to returns for me to consider it without a partner and partnerships, outside of marriage, present another entire set of problems.
Yeah, I can remodel a bathroom in a weekend. We’ve replaced many hot water heaters and know how to fix just about anything. If you were closer, I’d come over and take care of your pesky window.
It never hurts to give it a try. YouTube is a great source of information for how to do things. I used to check out books from the library to learn, but YouTube has completely replaced that. Get one of your boys to help you out; you can do it!
My sons are very handy but getting us all in the same room at the same time to accomplish something is almost impossible.
They are both in school full time and work a lot of hours every week and we don’t get a lot of time together -even the son who lives here and goes to school near the house.
The older one is coming home for a few hours today for Easter(he had to work the other days) and the boys are carrying the freezer and the kitchen table out to the garage in preparation for my yard sale.
I was thinking the same as Girl Meets Debt. I know nothing about investing but want to start as soon as I am financially able to. I often turn to My Money Design for any of my investing questions but I think I will add you to the list!
Even though you had a down month your progress is very inspiring (and intriguing) to me! Wish you the best of luck on reaching your goal as early as possible. Congrats on the three months of blogging!
Congrats on 3 months Mr & Mrs. 1500 😀 I just finished 3 months earlier this month and I couldn’t believe it. Time goes fast while blogging 😉 I also admire your attitude when it comes to investing. I don’t know anything about investing but once I start, I know who to look to!
Great work! I’d be interested to hear your thoughts on the tech market, since you personally felt some of the Apple backlash this quarter.
Ever thought about selling out of the money covered calls to bring down your cost?
Maybe. While I do know what a covered call is, I have yet to mess with derivatives. Maybe its time to start?
FAR FAR from a derivative:
http://www.myjourneytomillions.com/articles/screening-covered-call-options-for-my-traditional-ira/
That’s an incredible increase in just 3 months! Kudos! Is that mostly increases with your 401k, or are you actively trading?
Can’t wait to continue to watch your gains and see how you educate people.
Hi Todd, the answer is about 0. Besides my peer lending, I’m on cruise control lately.