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.
Put A Fork In 2017
If you had asked me on 1/1/2017 what the year would look like from an investing standpoint, I would have told you this:
The S&P 500 will end the year lower.
Whoah, I couldn’t have been more wrong! Including dividend reinvestment, the S&P 500 was up almost 20%:
And my own set of stocks did even better. My top 5 holdings clobbered the S&P 500:
- Facebook ($261,000): 53%
- Amazon ($86,000): 56%
- Google ($82,000): 35%
- Berkshire Hathaway ($78,000): 22%
- Tesla ($57,000): 46%
I’m a big believer in index funds, so I don’t buy individual stocks much anymore. If I could move my stock holdings into an S&P 500 index fund and not pay capital gains, I’d swap out almost the whole portfolio immediately. However, taxes are real, so I’m slowly selling off these assets.
One thing I never try to do is time the markets. Regardless of market conditions, I’m always deploying money at the earliest opportunity. I do this for two reasons:
- Over the long term, the stock market goes up more than it goes down. I’m just putting my money on the right side of the odds.
- Even if market valuations are high (like right now), over the long term (I have decades of life left), corrections are just little blips. For example, if I cherry-pick the worst time period during the Great Recession, the picture is terrifying:
However, if you left the markets in 2009, you would have missed one of the greatest bull runs ever:
Over the long-term, the picture is even better:
Performance Update: December
Up up up the markets went and my holdings went along for the ride. My investment portfolio went from $1,518,363 to $1,527,701 for a gain of $9,338. My net worth went from to $1,983,363 to $1,992,701:
And 2017 was a magical year. My investment portfolio started at $1,257,128 and ended at $1,527,701 for a gain of $270,573. This includes $44,000 in 401(k) contributions and -$45,000 for a silly car purchase.
The $270,573 in all that we need to live very comfortably for 5-6 years. This feels good.
And my net worth went from $1,627,128 to $1,992,701 for a gain of $365,573. This gain is $100,000 more than the portfolio gain because of home appreciation and the car purchase.
Of course, the investment gain is on paper only. There will be years when I end lower too. However, I’m only 44. In a crazy sort of way, I feel like I’m just getting started. In the years to come, I’ll surely have returns that are much better than 2017. Never forget this:
The bigger the snowball gets, the bigger the snowball gets.
Life is good.
2017 (as of 12/31/2017)
- Days elapsed: 365
- 2017 gains: $270,573 (including 401(k) contributions**** of $44,000 and car purchase of -$45,000)
Since the start (1/1/2013)
- Days elapsed: 1825
- Investment portfolio value: $1,527,701
- Portfolio gains since 1/1/2013: $941,658
- Needed to quit work ($1,120,000 in investments): Mission accomplished!
- Net worth: $1,992,701 which includes:
- Investment portfolio and cash: $1,527,701
- Home equity: $400,000
- Silly toy car: $45,000
- Other cars, bikes, dinosaurs: $20,000
2018
The new year is here and markets continue to soar. They won’t do it forever though. Just like 2017, if you asked for my opinion, I’d guess that the S&P 500 will end the year lower. However, a guess is all that it would be. And if 2017 is any indication, I’m a crappy guesser.
*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.
***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.
Nice recap, Carl. Among other things, this stuck out for me:
“…if you left the markets in 2009, you would have missed one of the greatest bull runs ever.”
Regardless of the timing, you need to be in the market. As you mentioned separately, you never try to time the markets. Nor do I; I’d make terrible decisions and lose more than my shirt.
Congrats on your continued progress. – Mike
Mike @ Balanced Dividends recently posted…6-Month Update: Fundrise Passive Income Review
Congratulations, how exciting that you’ve probably crossed the $2 million mark already (given makrets are up 5% this year already). How does it feel to be a multi-millionaire?
Yeah, we did actually. Over $2,100,000 in net worth now (I also adjusted my home’s value, more on that next month).
It feels pretty great. The best part of having money is that it frees you from having to think (or worry) about money.
Mr. 1500 Days recently posted…Performance Update (Day 1825): 2017! Up $270,573!!
Incredible how quickly it can grow, congrats!
Mr FOB recently posted…Beleggen 2018 in indexfondsen
Yep! Up, up and away! Yippee!!!
Woohoo!! Great job, it looks like you had a really good year! You’re super right about leaving/staying in the markets after 2009! As my sister and I just discovered (in moving my parents investments slowly over to Vanguard for easier management in their retired years), my parents investment advisor had all their holdings in 100% stocks..wth! THANK GOD the market kept going up, up, up, otherwise they would not be retiring this year or next (and thank god we caught this before it went down.) It’s a hard coin toss: If they were invested more conservatively (which, had any of the 4 of us known, they’d be in a different asset allocation), they wouldn’t have benefited from this constant market rise…but then, this did play out as best as we could have hoped for. It just makes my head and heart flutter at the ‘what ifs’.
This post makes me super antsy to be done accumulating already; my snowball is tiny – less than 5% of what I’ll actually need. Le sigh. 🙂
And isn’t it scary that advisors put people in stocks? I cringe when I hear someone tell me about their advisor who have them in a bunch of stocks and routinely trades in and out.
Give that snowball some time to accumulate. You’ll be surprised at what starts to happen…
Great gains. This has been a major year. Being 44 like yourself I try to be circumspect…but watching your portfolio move up so quickly almost makes you forget. That it can all go the other way!
Those are some excellent gains Carl! Congrats!
Everybody did really well last year, and it looks like this is set to continue into 2018. A strong economy, tax decreases, and increased consumer debt spending should all contribute to solid stock market performance in 2018.
The bear is going to return someday, and I think we’ll be ready for it.
Mr. Tako recently posted…The FIRE Movement Was Inevitable
Great gains in 2017 and it is continuing so far in 2018. Congratulations.
“The bigger the snowball gets, the bigger the snowball gets”, so true. We really starting seeing this last year and look forward to a bigger and bigger snowball in the future.
FIbythecommonguy recently posted…DIY Basement Stairs
It’s been a very fun ride the past year and change. I do start to worry about how this ride ends though. We’re sticking with our Simpleton’s Portfolio AA and just rebalancing annually.
But man, it sure is tempting to go defensive now that we’re this close to our goal. I’m not nearly as concerned with maximizing the upside as I am in defending what we have, so close to the finish line…
Bad approach? Maybe. But it’s like when you have a lead at the end of the football game. You don’t run up the score: you run the ball, eat clock, and get the stinking W.
Done by Forty recently posted…A Peek at the Future
Hmmm, this is a tough call. Is there a way to do it without going to cash? In our case, we moved money into real estate. If the stock market takes a big dump, I’m confident that my real estate will hold up (unless it gets mega-sh***y like 2008-2009).
We’re kind of liquidating our real estate now: sold one rental in 2017 and are thinking of selling the other one in 2018. I just don’t love being a landlord, or the headaches with property (i.e. – stuff breaking).
But yes, some alternative to stocks/bonds/cash might be interesting.
For now, we’ve slowed the pace at which we’re DCAing our home proceeds into the market: right now, we’d finish up 12/31/2019…
Done by Forty recently posted…A Peek at the Future
Hmmm, maybe syndication deals would be good for you too?
I remember you writing about that but I honestly don’t know much — would have to look in to it more.
Done by Forty recently posted…A Peek at the Future
Man, that is a lot of money in 2017 for doing absolutely nothing but opening an investment account, depositing money and buying a few shares. Good luck with the transfer of the stock picks into index funds, it’s unfortunate that you guys have to pay taxes on capital gains (which is the one tax we don’t have over here, but this is well compensated by the others)..
Team CF recently posted…I wrote my resignation letter
I know, right? It’s far more money than I ever made from my job. Craziness. Good crazy.
And if our income was lower, I wouldn’t have to pay capital gains. This is a good problem to have.
Soabbox Alert!: Taxes in the U.S. are too low. Unfortunately, people completely lose their shit here in the states at just a hint of a tax increase. Never mind the 20,000,000,000,000 in debt…
Hell yes taxes are too low.
Cue the doucebag talking point of “Well, you can voluntarily send in more money to the Treasury if you’re so bent out of shape about it!”
Done by Forty recently posted…A Peek at the Future
I like big snowballs.
Congrats on an excellent 2017.
If 2018 turns out to be half as good I’d be happy.
Brian @ The Graying Saver recently posted…Avoiding a Problem That Afflicts Nearly 20% of Smartphones
Big snowballs are good. I admit that mine used to be small. Only in recent years have they grown. 🙂
“If 2018 turns out to be half as good I’d be happy.”
I set my standards lower. If 2018 doesn’t go down in flames, I’ll be happy! #StillAPessimist
I like the comment about how the bigger the snowball gets, the bigger the snowball gets. We’re teetering between low to mid six figures in investments right now, and I’m waiting for the snowball to really pick up speed!! In the mean time, I’m throwing as much cash at that snowball as I can.
Go!
Go
!! GO!!!
You make it look so easy Carl. Ha! Congrats. The snowball is rolling because of a lot of hard work and good decisions you and Mrs. 1500 have made over the years.
You keep saying you’re not a stock picker, but Google, Facebook, Amazon, Tesla, Berkshire … you’ve got something going. . I own a little Berkshire, but after that it’s index funds and mostly real estate and notes. I like picking those a lot better.
Long time lurker. Love your site and story. A couple of thoughts from someone who is a little ahead (by about $1 million) of where you are. Get rid of your home value out of your net worth. Get rid of your car value out of your net worth. You should go through life with off balance sheet assets such as these things, but do not confuse yourself that they mean anything beyond utility. By the way, your NSX and all of these sites online since 2008 remind me of parking behind a car to get on a freeway in 1999. It was a Nissan NSX and its vanity plates said NASDAQ! So funny. None of you bloggers have been tested as investors!! Either you are on something or onto something!!! Cheers!!!!
Yeah, I definitely think about these items separately. That’s why I break it out separately in the post; investment portfolio value and net worth. When I consider the money that I need for retirement, the car and home aren’t included. However, they are backup plans. If I ever needed money, I could dump them. Then, I’d just walk everywhere and rent!