My main goal* was to build an investment and cash portfolio of $1,120,000* ($1,000,000 to retire on and $120,000 to pay off the house) 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.
It feels weird writing about money right now:
- There are other things to worry about. Some are getting sick and many more are suffering from the secondary economic consequences.
- The market has been experiencing wild gyrations. It seems silly to report where my portfolio was on one day since the next day it may be up or down $30,000.
But, this blog is supposed to be about money, so I feel that I owe you my numbers. Perhaps it’s also more interesting to talk about personal finance now anyway. After all, difficult times are when good money skills matter most.
Before I get to the money part, I have a little more to say about the other circumstance. Unless you live in a supermax prison or a cabin in the middle of the woods, the virus has affected you. It’s strange how quickly life went from normal to batshit crazy. I hope that all of us come out of this a little stronger, more resilient, and with greater gratitude for normal life.
March Spending: $2,752
March was our lowest month of spending since we started keeping track. Aside from the mortgage ($1,238.49), our three biggest expenses were:
- Groceries ($947.60): We stocked up.
- Household/auto ($215.47): Mostly tools. And a little toilet paper.
- Utility bills ($129.31)
In 2019, our average monthly spending was $5,424.75. So, our COVID spending was half of normal. Yikes.
In the past, Mindy and I have talked about doing a lean spending month. We’d cut out restaurants, alcohol, and any other frivolous spending. We never pulled the trigger on it though. Until now when we were forced to.
We’re now leanFIRE or virusFIRE or covidFIRE…
March Performance Update
Our investment portfolio (stocks, rental home, coworking space, trailer park, and other real estate deals) started the month at $2,078,857 and ended at $1,979,773 for a loss of $99,084. Add in our primary residence and our net worth now sits at $2,344,773:
One interesting exercise is to look at Personal Capital charts B.C. (before COVID) and A.C. (after COVID).
B.C.: From 1/1 through 2/19 (all-time S&P 500 high), the market was on a happy trajectory upward, kind of like a roller coaster getting ready for the big drop…
** queue the screams **
A.C.: This looks like a really fun roller coaster, but a really violent ride on the S&P 500:
My portfolio isn’t down as much as the stock market because much of it is in real estate. Before I tell you how I value real estate holdings, you have to know how I think about these investments:
- Stock market: I’m a growth investor, so I care about long-term appreciation. I hold some of these investments in post-tax accounts so we can sell them for money to live on in retirement.
- Real estate: Property is about cash flow. I hold almost all real estate investments in a self-directed 401(k) account for tax efficiency.
I hold real estate for diversification. Or so I thought.
COVID has already hurt the stock market hard and real estate will suffer soon. So much for diversification.
Stocks V. Real Estate
Despite all of the doom and gloom, the stock market isn’t down that much. My second biggest stock holding is Amazon which is actually up significantly:
Real estate will suffer, but I expect it to be a lagging indicator. We have lost members at the coworking space due to furloughs. I don’t expect that my syndication deals will pay anything for the next 6 months. One of our private loans also stopped paying. We had plans to Airbnb our old house over the summer (prime vacation time in Colorado). With the virus torching that plan, we signed on long-term renters.
The drops don’t worry me. You’ll never know the cause, severity, or timing of the next market drop, but you do know that it will drop. And it will rise again after.
2020 (as of 3/31/2020)
- Days elapsed: 91
- March losses: $99,084
- 2020 losses: $55,267
Since the Start (1/1/2013)
- Days elapsed: 2647
- Gains since 1/1/2013: $1,448,997
Portfolio and Net Worth
- Investment portfolio and cash value: $1,979,773
- Net worth (primary home included!): $2,344,773
Still Plugging Away
When school was canceled, I thought that I’d have to give up my home remodeling projects. I thrive on building and creating, so this threw me into a mini-depression.
I decided that I needed to carve out some time for myself every day. It isn’t easy, but I’ll usually wake up at 6 and do some work on the home and then if homeschooling goes well, I squeeze in a couple more hours in the late afternoon.
At the moment, I’m working on a deck. This will be a fancy piece of work totaling about 400 square feet and featuring a curved edge. I built a small, simple deck years ago, so this one is much more difficult. It’s been a fun challenge though and has come out great so far.
When the deck is done, I’ll build a sun-powered pool heater and the zip-line I promised my children years ago. I’ll also lay the foundation for a backyard pizza oven that I’ll build at a later date. After that, I’ll put the tools away for the summer sit on the deck for a spell. Maybe life will be on its way back to normal by then?
*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 (LOOK at the MONEY I’m MAKING!). My compromise was to have enough money put away to cover the mortgage at the time of retirement.
***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. 1500’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.