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.
Our portfolio moved up $119,622 in January.
$50,000 of this was accounted for by my annual update of our home’s value. The other $69,622 was because of investment portfolio appreciation.
Home: Up $50,000
We almost didn’t buy our home. We had just moved out of a neighborhood that we hated, so were leery of buying another house in an unfamiliar city. We had moved to Colorado from the Midwest and were planning on moving back.
Our plans changed after we found a home that was a good live-in flip candidate. After the home was fixed up, we’d rent or sell it if we didn’t like the neighborhood and wanted to move on.
We bought the home for $175,000. It was a dump, so we threw $100,000 and a whole lot of time (too much time) into rehabbing it. During the same period, real estate went bonkers in our neighborhood.
In 2014, a home similar in size to ours and also in poor condition came on the market for $440,000. I thought that it was ridiculously overpriced. $300,000 was reasonable, but then it sold for $375,000 anyway. The new owner fixed it up and listed it in 2017 for $600,000. I thought that price was crazy too, but then it sold for $580,000.
The $580,000 home is slightly larger than ours and has a bigger lot, but we have 4 bedrooms. Mr. $580,000 has 3. Also, all of our space is above grade while some of the this home’s space is below grade. I don’t think our home is worth as much as Mr. $580,000, but it’s close.
And 2017 was another good year for real estate in our neck of the woods. The average sales price of a single-family home went up 11.6%. This isn’t sustainable, but I’ll take it while it lasts.
I had previously valued our home at $500,000, but based on the Mr. $580,000 comparable and Boulder County appreciation, I’m bumping it up to $550,000. This may be conservative, but I’d rather err on the low side of the valuation.
Home Ownership?
After all of this, you may think we’re big proponents of home ownership. I’m not. I think it’s silly when I see recent college graduates rushing out to buy a home because they think it’s a good investment. If you really want to own, house-hack a multi-family or find a live-in flip. Creative strategies can make the numbers work.
If I was young and just out of school and I couldn’t afford a multi-family or make a house hack work, I’d find the cheapest room or basement to live in close to work.
Right now, you may be thinking this:
Dude, you own a house!
To that, I’d reply with:
I prefer to think of myself as a very long-term flipper. We have about $275,000 invested in the home, so could sell it for double what it’s worth after less than 5 years. Forced equity takes work and sweat (and a lot of profanity), but a live-in flip can be a great way to make a lot of tax-free money. I don’t want to stay in our neighborhood longer than 10 more years. After we sell, we may never own again.
Stock Market Madness: Up $69,622
January was one of the best months for my investments. A frothy stock market pushed my holdings to new highs. At the start of the month, my investment portfolio was $1,527,701 and about half of it is in stocks. The other half is real estate including private loans, syndication deals and a trailer park. Since the real estate deals take a long time to ramp up (only $1,600 of income in January), almost all of the $69,622 in appreciation was due to the stock market.
Numbers like this are amazing to consider in the perspective of time. My first real job back in 1998 paid about $37,000 per year. Twenty years later, January’s appreciation of $70,000 is about the same amount that I would have earned for putting in 2 years (or 4,000 hours) of stressful labor.
But Is It A Trap?
Since the end of January, the stock market has taken some interesting turns. And by interesting, I mean down!
Before the end of January, the markets rocketed up, up, up for a long time. And in the near term, it won’t end well. Stability breeds instability.
Over the long term, it won’t matter because the trajectory is up. This is because of underlying factors such as increases in productivity and population growth.
Since I won’t need to get at most of my money for 10 years or longer, little market farts are slightly annoying, but nothing more. Keep a little cash on hand to ride over the rough spots and don’t let little corrections bother you for even another minute.
Performance Update: January
January was fantastic:
2018 (as of 2/1/2018)
- Days elapsed: 31
- Portfolio gains: $69,622 (including 401(k) contributions**** of $4,108)
- Net worth gains: $119,622 (portfolio + home appreciation of $50,000)
Since the start (1/1/2013)
- Days elapsed: 1856
- Investment portfolio and cash: $1,597,322
- Gains since 1/1/2013: $1,011,279
- Needed to quit work ($1,120,000 in investments): Mission accomplished!
- Net worth: $2,112,323 which includes:
- Investment portfolio and cash: $1,597,322
- Home equity: $450,000
- Silly toy car: $45,000
- Other cars, bikes, dinosaurs: $20,000
Health Update
Money doesn’t mean a thing if you don’t have your health. My first big goal of the year is to run a half-marathon on 3/31 in Portland. I’m not a runner and I’m not an athlete, so this challenge is especially difficult. This will most likely be the first and last half-marathon I ever participate in.
Since I started training on 12/19, I’ve put in 86 miles. I still don’t enjoy running and probably never will, but my weight is below 160 and my resting heart rate is about 62. While I still have some fat to lose, I haven’t been this healthy in years.
One More Thing: Greece!
I’ve been invited to speak at Chautauqua later this year! I couldn’t be more thrilled for this opportunity. If you like to talk about any of the following:
- investing
- philosophy
- the current state of nuclear fusion
- Voltaire
- home remodeling (especially live-in flips)
- computers
- electric autonomous aircraft
- dinosaurs
- winter sports
- cognitive biases
- artificial intelligence
- Admiral Ackbar
- beer
This is for you! Join us. This is going to be awesome.
*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.
Join the 10s who have signed up already!
Subscribing will improve your life in incredible ways*.
*Only if your life is pretty bad to begin with.
CB24 says
Health/diet Q – do you track and manage your macronutrient intake? Properly tracking overall calorie intake and macronutrient breakdown with your activity level will shred that last bit of fat off. Def recommend it if you don’t already.
Mr. 1500 Days says
Nope. Well, maybe. I’ve been trying to eat more lean protein and less carbohydrates. Do you have any suggested reading material?
Mrs. Adventure Rich says
Dang, that is a healthy monthly increase! Though, I think I’m more excited about hearing all the half marathon updates… it has become quite the competition 😉
Mrs. Adventure Rich recently posted…Winter Running Traction Throwdown: YakTrax vs. NANOspikes
Mr. 1500 Days says
I wish that my running stamina would increase as quickly!
Budget On a Stick says
I usually take a look at my net worth from the previous month and do a mid-month check-in to see how we are doing compared to the last…. not this month.
Anytime I think about looking at our spreadsheets I think, “rofl it’s going to be so much lower in Feb. than it was in Jan.”
Oh stock market how you toy with us.
Budget On a Stick recently posted…The Weight Of Debt
Mr. 1500 Days says
“…not this month.”
Haha! It’s been quite the rollercoaster! And I’ll bet it continues. 2018 will be a lot different than the past couple of years.
Tom @ Dividends Diversify says
I hope that’s not you on the ball with the weight on your back. I would end up in the hospital. Agree on you opinion about real estate. Tom
Tom @ Dividends Diversify recently posted…Reflection on a Market Correction & What Did I Buy?
Mr. 1500 Days says
Hell no! I have the dexterity of a drunk cow walking on ice.
Joe says
Looking good! January was a great month, but February isn’t looking too good. It doesn’t matter that much because we don’t plan to withdraw for 10 more years. A correction is good in the grand scheme of thing. I think the market will keep going up this year. No need to panic yet.
I haven’t updated our property value in a while. The market is stabilizing here in Portland. I’ll update the value when we sell.
Mr. Tako says
Nice job on the January net worth increase Mr. 1500. You make it look easy!
When the stock market gains slow, I suspect you’ll get out and push! 🙂
Mr. Tako recently posted…Investing Ideas: February 2018
Done by Forty says
I’m still recovering from my surgery but am looking forward to being able to do some sort of exercise in a week, even if it is only light jogging. My buddy and I have a similar challenge to what you had last year: trying to lose 11 pounds by April. I’m maybe a third of the way there, depending on the day you weigh me. Diet’s proving to be the hard part: I keep eating carbs.
I have no idea where the market is heading but I’d suspect the sugar high of the tax cuts will give the bull a chance to run further and faster than it would have otherwise…
Done by Forty recently posted…Haters Gonna Say It’s Fake
Mr. 1500 Days says
Diets are hard man. Really hard. I love sweets and we have about 12,937 boxes of girl scout cooked in the garage. I can bike for 12 hours in a row and have, but resisting the crap is hard.
The good news is my body fat is 16.8% which is probably the lowest it’s been in 2 decades. 1.8% more to go to get down to my goal.
FIRECracker says
“Money doesn’t mean a thing if you don’t have your health.”
So true! Congrats on the increase in net worth and muscle! It’s always good to have a small waist and a big wallet 😉
Mr. 1500 Days says
Haha, yeah! I had high blood pressure 6 months ago. By dropping 20 pounds, I’ve probably improved quality of life in my senior years by a ton.
Mrs. Picky Pincher says
Looks like things are going well, Mr. 1500! I know every time there’s a market fart, people feel like the sky is falling. It’s all about looking at the long term and not freaking out.
I don’t think I’d look at our home as an investment, but I know people do make their riches with home investments/flipping. If I could do it over again, I do think I would have used my FHA loan to buy a multi-family unit as a source of passive income. Shoulda-coulda-woulda!
Mrs. Picky Pincher recently posted…Frugal Living Tips That I Love
Jason says
Congrats on the great month. And the Greece Chautauqua sounds great. I am sure everyone will have a great time. Wish I could make it.
Jason recently posted…What Are You Selectively Hardcore About?
Mr. 1500 Days says
Thanks Jason! And Februay is looking up too. Craziness.
Financial Samurai says
Congrats for being rich!
Who ends up paying for drinks at the Greek meet-up then? 🙂
Sam
Mr. 1500 Days says
I’d totally spring for beer. Wait, this crowd can hold their own. Maybe not…
Michelle@MichelleIsMoneyHungry says
Good luck with the race! And, I’m completely fascinated with this Chautauqua thing (once I understood it wasn’t the park in Boulder).
Mr. 1500 Days says
Haha, not the park in Boulder! Although, that park is pretty cool too!
Myjourneytofi says
Can we have a friendly wager (beer?) that you’ll run more than one half marathon? The emotions of the day are very addictive.