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.
The year is off to a great start. The portfolio is up $138,086:
During the same period, we’ve spent $12,675:
Without the three mortgage payments ($4,281), our spending would have been $8,394. But even with the mortgage, the portfolio increase was more than 10x our spending. Financially, we have nothing to worry about. However, I
Every. Single. Damn. Dollar.
Buy The Burrito?
A couple of weeks ago, I was lamenting a purchase:
I was out on the town but had forgotten my lunch at home. It was a busy day and my house was a 30-minute walk away. Since I don’t eat breakfast, I was extremely hungry. Should I:
- Skip eating? *groan*
- Walk home and eat? This would disrupt the work I had planned.
- Buy a burrito. There is a hole-in-the-wall Mexican place I enjoy a couple of blocks away.
I’ll tell you what I did in a moment.
It All Goes Back To Efficiency
Living an efficient life is what makes financial independence possible. A simple, lightweight, thoughtful existence can take you far. And it goes beyond money.
- Food: I cringe when I see food being thrown out. There is no shame in leftovers.
- Fuel: I live next to a big hill with a stop sign at the top. After stopping, drivers routinely stomp on the gas, only to slam even harder on the brakes 10 seconds later. Why not just accelerate gently and let gravity do your work? Don’t turn that beautiful kinetic energy into heat!
Time is a resource too:
- Driving: Whenever I have to go somewhere, I plot the most efficient route beforehand. I also try not to drive unless I have at least a couple of destinations.
- Avoiding lines: I plan shopping trips when there aren’t 5,000,000 other people at the store. Home Depot and IKEA are tolerable at 11
amon Wednesday; not so much on Saturday at 1 pm. Also, at least one of the self-checkouts is almost always open. Why wait in a line when I can just scan my purchases myself?
I apply efficiency to money as well. Just like food, fuel, and time, money is a resource that I don’t waste. No matter how much I have, I like to think that I’ll always use money thoughtfully. Why should I spend more just because I have more? If a purchase will bring value to my life or give me real happiness, I go for it. Otherwise, I put the money to work.
And in a related note, even though I’ll never go back to a full-time job, making money is more fun than spending it. I have no clue what I’ll spend the surplus on, but it’s exciting to have a big powder keg at the ready. And if I end up never spending it on anything, I’ll be able to leave the pile to a worthy organization after I croak.
I decided to stay put and ate lunch when I got back home. I feel silly spending $10 when my meal at home costs less than $2. I was pretty hungry when I finally ate my first meal at 2:30 in the afternoon, but in addition to saving money, exercises like this increase the mental toughness game too.
March Spending: $4,867
Despite my frugal ways, March was an expensive month. We spent $4,867. Without the mortgage, we would have spent $3,440. This month was more expensive because we’re getting our home ready for a possible sale.
Why sell? We live in a pricey part of town and all of the families we knew have moved away, so there isn’t much reason to stay. Also, I’m itching to remodel another home. I won’t approach this one in the same batshit crazy way that I did the last one. I’ll do the work only when the girls are in school and won’t be in any hurry.
The Mrs. and I have a house in mind and are negotiating the purchase now…
After the mortgage, our largest expenses were:
House stuff ($889.89): We’re still tying up loose ends from our remodel. I’m currently finishing off the shower in the master bathroom:
Groceries ($503.32): Our cheapest month yet for groceries!
Tattoo ($250): I’ll never get a tattoo, but Mrs. 1500 loves them:
Most Fun Expense: Spring Break!
During the girls’ spring break, we spent a night in Denver. We used points for the hotel and used a local program called Discovery Pass to get into museums for free. While we didn’t pay for the lodging and amusements, we still spent money on food and fuel.
March Performance Update
We started the month with a net worth of $2,173,864 and ended at $2,202,256 for a gain of $28,392:
2019 (as of 3/31/2019)
- Days elapsed: 90
- March gains: $28,662
- 2019 gains: $138,086 (including 401(k) and HSA contributions**** of $6894.34)
Since the start (1/1/2013)
- Days elapsed: 2280
- Gains since 1/1/2013: $1,101,483
- Investment portfolio and cash value: $1,687,526
- Net worth (investment portfolio plus home equity, a silly toy car (Acura NSX!), bikes, and dinosaurs): $2,202,526
We have a diverse portfolio (full listing here) that includes real estate:
- Mobile home park (elevated home living to the easily offended/politically ultra-correct)
- Coworking space: We own a building/small business in Longmont
- Private loan ($40,000)
- Syndication deals (six)
And stock market holdings:
- Individual stocks (old thinking)
- Index funds (most money goes here now)
Both sides of our portfolio saw increases:
- Stock market: $779,364
- February appreciation: $27,193
- Real estate: $868,162
- March income from mortgage notes, syndications, and private loan: $793
- 2019 income (doesn’t include VNQ): $7440.14
- Cash reserve: $40,000
Spending money on a bigger house, new car, shiny gadgets or fancy meals would certainly bring happiness, but it would be temporary and actually lead to unhappiness long term. The bigger house would come with a bigger tax bill and more stuff to take care of. The new car would come with a higher insurance bill and the worry about someone dinging it in parking lots. New gadgets tend to become a time suck (hello iPad). Fancy meals bring a bigger gut.
It sounds cliche, but it’s true; the simple things bring happiness:
- walks with the family
- cooking a great meal at home
- good conversation with friends over a beer
Life is good.
*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. 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. 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.
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