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.
Deadportfolio
July was our best month ever. Our portfolio gained $185,139. My first job out of college paid me about $37,000 per year before taxes. In 30 days, my investment appreciation was equivalent to 5 years of income from that first job. I know, it’s 20 years later, inflation, blah, blah, blah, but the numbers still blow my mind. Even at the peak of my earnings, I never made $185,000 in a year, much less a month.
These numbers feel uncomfortable to write about. What the hell is going on?:
Much of this insanity is due to Tesla which went bonkers in July:
Tesla quick take
I wrote about Tesla a couple of months ago. Back then, the stock was $650 and I thought it was expensive. It’s $2,000 now!
Tesla is insanely overvalued for what the company is doing currently. Its market cap is $350,000,000,000 (!!) and it will sell about 500,000 vehicles in 2020. That comes out to $700,000 per vehicle sold! Yowsers!
Tesla is insanely undervalued if the company does everything it plans including an autonomous taxi fleet, solar power, energy storage, insurance, etc. I think autonomy is the most important. But it’s also the most difficult.
I wouldn’t be at all surprised if Tesla dropped to well below $1,000 per share in the near term. I can also see Tesla being a $2,000,000,000,000 (I just love typing all of those zeros!) company in the long term (10 years). Because I don’t play the market timing game and have a strong stomach, I’ll continue to hold my shares.
Perhaps I’m just drinking the Kool-Aid. Or smoking the…
My other tech holdings have been killing it too. What the tech? I have no idea.
July Performance Update
July was our best month ever. Our investment portfolio (rental home, trailer park, private loans, syndication deals, coworking space) went from $2,605,803 up to $2,790,942 for a gain of $185,139. Add in our $150,000 in home equity and our net worth comes out to $2,940,942.
It’s at this point that I’ll mention a couple of things:
- Wife Mindy has a job. She earns roughly enough to cover our expenses. Am I really FIREd? Probably not. But, that’s just a label. Mindy and I are happy with our lives and that’s all we care about.
- Wife Mindy has an unplanned side hustle. Mindy got a real estate license so we could save money on transaction costs for live-in flipping. The side effect of this is friends and blog readers occasionally ask to work with her. In July, Mindy earned $11,783 from a deal.
2020 (as of 7/31/2020)
- Days elapsed: 212
- Investment portfolio gains: $755,902 (Our gains are outsized because we took equity out of our home and invested it. The next number, net worth which includes home equity, is more accurate.).
- Net worth gains: $533,026
Since the Start (1/1/2013)
- Days elapsed: 2768
- Investment portfolio gains: $2,204,899
Surreal Markets
None of this seems real. As I type this now (early in the morning of 8/21/2020), Tesla is at $2,040 per share:
And our portfolio is closing down on $3,000,000. Insane.
Maybe we really are living in a simulation and the aliens are screwing with us. Just kidding. Maybe…
*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.
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****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.
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you keep writing about selling some of those roaring individual stock shares and turning them to index funds. i’ts hard to pull the trigger, isn’t it? we’re selling small amounts of our huge winners within a reasonable long term capital gains tax rate. i still like keeping enough in play to capture the future upside though. congrats on the big wins. i can still remember looking at tesla when it was a $25 stock and never bought any. doh!
Very hard to pull that trigger! And the more time goes on, the less it matters. At least it the individual stocks keep going nuts! I don’t want to pay a lot in capital gains, so the percentage I can sell keeps going down. This is a very excellent problem to have!
Any thoughts on selling enough Tesla to recoup your original investment? I often wonder what will happen to Tesla if Elon is no longer there.
You are rocking it dude. Don’t worry about the retirement police, you have legit cred with that kind of net worth. You are going to have the same problem I do, I’m sure you already do. Not knowing how to spend that much money after being so frugal for so long. It’s weird how hard it is to spend large even if it’s not large compared to your income and net worth. It’s a first world problem, maybe a two percenter first world problem.
Haha, I think about this “problem” often! When I need another car, I’ll sell some of my Tesla shares and buy an actual Tesla. However, all of our cars work fine, so this won’t happen for a while! Why disrupt your life when it’s all working fine?!??
Tesla is just crazy. And that expected range for it you have! Haha, what a wild one. Glad you guys have been able to grow from the wild ride, but, hope it doesn’t wind up as a case of falling knives! 🙂
More generally the market has just been nuts. We’ve been up for months, too. As you suggested, the world is on fire but the investor class is doing OK so far.
Lastly, I think we can let you two slide into semiretirement or a transitional early retirement phase like we’re currently in! No handcuffs for you two yet!
Chris@TTL recently posted…The Value of Time: A Telling Tale of Spending Verse Living
Do you think Personal Capital does a good job of accounting for rental property? As far as I can tell it goes by Zillow value estimates.
I feel like it can’t keep up with true property value (like post-renovation). I feel like it’s over inflating the value of our primary home too.
I’ve kept the real estate off of Personal Capital for this reason, but now it’s useless for estimating our net worth because real estate is more and more of our portfolio.
Congrats on the monster gain. Tesla was one of my stocks in my moonshot portfolio. But it was too high so I booked some profits. After all, no one lost money taking profits I say.
Plus the chart reminded me of my icos. And the $200K loss in the crypto winter 🙁
Financial Freedom Countdown recently posted…Flipping Houses: How To Flip A House Profitably
It’s crazy how the market has recovered since March. Some of my non-FIRE friends thought I was crazy to keep investing while the market was down, but as MMM says, the market is just on sale! That plus the addition of a 401k this year means I will probably hit my next milestone, six figure net worth, which is exciting! Since I am considering starting a business next year, it would be nice to have that in my back pocket.
Man, $3M net worth – I can imagine that would feel surreal!
BC | FrugalWheels recently posted…Domestic cozy, safe spaces and financial independence
Wow! I appreciate you sharing this information so openly. It is cool to see how Tesla is killing it for you, but you also have a diversified portfolio so you have a lot of things going well for you.
Thanks again for sharing!
Gale L. recently posted…Pineapple Money
Wow, it’s impressive to see your net worth go up by over $500,000 (25%) despite going through one of the biggest economic disruptions.
I would imagine a lot of people are feeling really good about being a believer in Elon Musk and Tesla.
Sport of Money recently posted…Evolution Of My Money Beliefs
Do you think Tesla’s increase could be a potential s&p inclusion which means all etfs would have to stock up on it very soon?
That’s part of it. So is the stock split. So is battery day on 9/22.
God it is again on it today after the split. Crazy.
$TSLA will reconcile itself with reality someday…