Busiest Year Ever
2015 was the year I thought it would all come together:
- “I’ll have the house remodel done by June!”
- “I’ll get back in shape!”
- “We’ll finally buy that rental property!”
None of that happened. The house project is close to done, but not quite. I recently started running, but I’m not in the shape that I need to be in. We bid on a couple properties and came close to buying one, but were ultimately unsuccessful.
“Almost” doesn’t count. Neither does “close.”
I’m not complaining. I set high goals for myself and never stop working hard, but I find that much of my non-work time is spent with the children these days.
In retrospect, it was probably silly to take on an extensive remodel with small children. We bought a 2 bed, 1 bath home and turned it into 4 beds, 3 baths. I did (am doing) all of the electricity, plumbing and finish work myself. So far, this includes:
- Building two new bathrooms including tile, showers, installing all fixtures and all finish work
- Gutting the existing bathroom down to the studs and rebuilding
- Gutting the existing kitchen and rebuilding
- Installing plumbing for the new bathrooms and replacing most of the existing plumbing
- Wiring the new addition along with the replacing most of the existing wiring
- Installing hardwood floors (Mrs. 1500 actually did most of this)
- Fixing all of the Mickey-Mouse nonsense that the previous owner-clowns messed up
Would I do it all over again? I have no idea. We bought the home for $176,000 and after putting in $75,000 and lots of hours, it is now worth close to $400,000 (at least half of our $150,000 in appreciation is due to the local, white hot real estate market).
On the other hand, living in a construction zone wears you down.
“Is it snowing inside the house?”
“No, that’s just drywall dust.”
In past remodels, I’d work at my normal job until 5pm and then swing a hammer until 10pm. I’d put in 12 hours days on weekends and days. I’d crank it all out quickly and efficiently. With a family, I have to steal hours here and there. This job would have taken me 6 months or less without kids. Now, we’re about to hit the 3 year mark.
I went show-shoeing with a group of friends and realized how out of shape I was. Panting and sweating, I told them to go on without me. I was holding them back and felt terrible.
The home remodel kicked exercise and eating well down my priority list. Not good. What is the point of having money if you don’t have health?
Recently, I started running and am happy with how quickly I’ve made gains. When I first started, I’d be huffing and puffing after only a quarter mile. Now, I can run 2 miles. I’m still huffing and puffing, but at least I don’t have to stop.
I also picked up P90x DVDs which some random friends have raved about.
In 2015, the markets finally calmed down.As of this writing (12/22/2015), the S&P 500 is down for the year (2,058 -> 2,039). I am up ($987,351 – > $1,056,606), but not by much when I account for my 401(k) contributions.
- Net worth on 1/1/2015: $987,351
- 12/22/2105: $1,056,608
- Low: ~$920,000 (August)
- High: ~$1,082,000 (earlier in December)
I put $54,750 into my solo-401(k). Without that contribution, I’d barely be above water for the year.
The great rebalance
This year, I used my 401(k) contributions to rebalance my portfolio. I’m aiming for:
- 80% United States
- 15% foreign
- 5% alternative
Since I had almost nothing in foreign holdings, almost all of my 401(k) contributions when to VGTSX and VEIEX. These assets had a horrible year, far underperforming the S&P 500:
I couldn’t be happier. The time to buy an asset isn’t when it’s flying high, but when it’s kicked down. At current levels, it will take most of my 2016 401(k) contributions to complete the rebalance.
Success in investing doesn’t correlate with I.Q. once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing. –Warren Buffett
In 2015, I sold 100 shares of Apple and 250 shares of Facebook. One of the first moves I’ll make in 2016 is selling more shares of both. Over $400,000 of my portfolio is directly invested in technology stocks with $300,000 of that being in Facebook and Apple. My investing style is very aggressive, but even this is too much for me.
The great real estate hunt; why I’m an opportunist and why you should be too
We bid on two properties this year. The first was a single family home that we would have eventually flipped and the second was a duplex. We lost on both and that’s fine.
I don’t like overpaying for anything. I won’t pay a premium just to get into a certain asset class.
My strategy is to be flexible and deploy my money where I feel it can best serve me. If I never own a rental property, that’s fine.
My money always flows to where I feel it has the best chance to grow. I’ve said it before and I’ll say it again, growth is everything to me. I could not care less about volatility or cash flow. Very simply, I care that my pile will be as big as possible 10 and 20 years from now.
I encourage you to be flexible too. Challenge yourself to think outside of your investment comfort zone. You may be completely in love with your strategy, but if you’re not constantly evaluating it, you may be losing money.
2015 was the busiest year of my life (Mrs. 1500 note**: Boy howdy!). I tried to pack way too much in. The plans I made were far too ambitious for the amount of time that I had.
However, 2015 was also a pretty great year:
- We had no health problems. Besides a couple cavities, everyone is doing great.
- Mrs. 1500 started working at a job that she loves. Her job pays enough to cover all bills, so I am now free to quit at any time. More on this later.
- The children are doing well in school. Our older child is a voracious reader and I couldn’t be happier.
- The finances are in order. 2015 wasn’t a killer year like the past couple, but every year can’t be a winner. Everything is cyclical.
- I got to travel all over the place. I spent time in California, Iowa (and didn’t get fondled by a member of Iowa’s highway patrol this time), Nebraska, Georgia, North Carolina, Illinois and Wisconsin.
2016 will be a year where I work on transitioning to life after formal employment. February of 2017 is when my days hit 1500. I really have no clue whether I’ll make my goal of $1,120,000 in investments, but don’t care much either. I have backup plans for my backup plans (more on this later too).
Regardless of what happens in the markets, I’m positioning myself for my next life and I have a high level of confidence that I’ll be successful.
I hope your 2015 was as good as mine!
*Yep, an affiliate link. Personal Capital is my favorite online tool because it tells me a lot about my portfolio and costs nothing.
**Boy howdy? I had never heard this term before meeting Mrs. 1500. Actually, she has all sorts of little sayings that I had never heard before. Here is another one:
Fat lot of good that does me!
Mrs. 1500 frequently utters that one while driving her jacked up pickup truck outfitted with Bumper Balls and various, offensive decals. (Mrs. 1500 note: Sometimes Mr. 1500 tells lies…)
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