Net Worth and Escape Velocity

[Tetsuya Hondo]

For those of you that have accumulated large stashes already, was there a point where things really seemed to take off, where the trend line for your net worth turned sharply higher? Was there a noticeable point where your little snowball of cash started rolling and picking up exponentially larger values, seemingly under its own volition? I'm asking about a specific dollar value here.

In other threads, some of you have suggested as much. If so, what was your financial tipping point?

(As my humble pile slowly but steadily grows, I'm hoping that there is a point as I am getting a little impatient.)

[Vertical Mode]

I love the title of this thread! Posting to follow, as I'm in kind of the same boat wondering when I'll hit "critical mass".

For one data point, I'm on the doorstep of 100k with pretty much 100% equities. Things seem to be picking up pace a little bit (I track it by quarter), but my own contributions still move the needle considerably.

[honeybbq]

I think it was when I could lose or gain in a single day more than I contributed to the account in a year.

I would guess that was when I had about $500k because a simple 3% swing would be around ~15k which was back then about the contribution limit.

Honestly, some months I look and I've made 50k in an account and some months I lose 50k in an account. It can be awhile to learn to stomach the swings.

[HAPPYINAZ]

For me it was when the stock market recovery took off in 2009 and that continuing improvement combined with increased income in 2010 made our net worth take off.  You can see the trajectory go up much steeper in the graph below.  The major dip was around 2008 and then from 2009 to 2015, the trajectory looks like escape velocity!! It started getting steep around 300K.

[catccc]

I know there are other threads about this, but I'm told at around $500K it starts to pick up.  We are past $600K now and I can say it doesn't feel like it has picked up.  But both this year and last year, the markets were like a roller coaster.  The good news is that I can easily take the swings.  Down $36K in August barely registers as more than an "oh, well" for me.

I like to look at my NW graph and eyeball the rise of different sections.  I think at first glance it looks quite linear, but if I give it a closer look, the trajectory does change in more recent years.  For instance, for the 4 years Sept. 2007 to Aug. 2011, it looks like I gained about 150K.  For the 4 years Aug. 2011 to Jul. 2015, I crossed over about 3 100K markers, so around $300K gained in that period.

https://www.networthshare.com/portfolio/sustainablesavings

[Goldielocks]

No,  not so much a specific dollar amount, as I don't fascinate on the investment value, really.

The big driver has been about monthly cash flow.
Three big turning points:

1.  Getting monthly expenses well below income.   (Took watching the budget very carefully, some changes, it was a lot of work)
2.  Saving money to offset our biggest risk.  (FU money) -- to cover changes on our variable rate interest.   (so I could sleep better at night)
3.  THEN, having more income through part time work, raises, etc., that we did not work too hard to get, only increasedour  base skills over time and made ourselves available to opportunities.

and BINGO!  I can't find enough places to stuff the extra cash.   I am in horror of the taxes being paid on it, and started to take classes to learn better strategies to deal with it.   Putting into place that better plan now...

The fact that behind the scenes, we did not move (yet again), avoided buying a 5 yr old or newer car, didn't travel, all while the stock market rose dramatically, meant that the investments grew fast without our noticing too much, and no debt taken on.


Specifically, for investments, a big turning point was when I had to actively asset allocate the account -- the new cash hitting it was no longer sufficient to re-balance, I had to actually sell investments and move the money to another asset class.   

[WSUCoug1994]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

[Bertram]

escape velocity is directly dependent on
- relation of savings per year to stash size
- overall market returns

If the stash is 10x what you save per year, and the market returns (increase+dividends) is 10 percent in the last year, then the growth of your stash is equal parts savings and returns. Same is true if the stash is half the size but last years returns were twice as high.

[Money Badger]

To the OP, there were 2 moments...   The first was when I started 401K contributions in my early 20s and saw the account "scream" up to 50K...   That number seemed huge overnight when it really was 2 years of 90's market growth

The next moment was 500K.   As a few mentioned, it just seems to be a point where things get serious and the itch to FIRE starts...   That leads to other wise decisions that accelerate stach growth and then BAM!   In a few years, you hit a million NW (if [fingers and toes crossed] the market cooperates).

[Bearded Man]

I went from about 170K NW to 550K NW in the past 3 years alone. That was largely due to super low spending and massive gains in real estate. As the market gains slow, the portfolio isn't growing as fast either. Luckily, career money gives me huge savings rate. But I'm still considering buying one or more houses, largely because I can still make money off the principal pay down, cash flow, etc.

 

[Tetsuya Hondo]

A lot of very different, yet all interesting, responses.

I asked the question because I've seen other people allude to it across various threads and I've noticed it in graphs of others' net worths (primarily for those that have amassed $1M and up). My working hypothesis is that somewhere around $600k things seem to take off as the snowball of cash continues to roll, picking up speed and mass along the way. This makes sense mathematically given compound interest, so I was curious to see if others noticed a point of rapid acceleration at some point along their own paths. 

While my net worth grows, the slope never seems to change. I'm hoping it will soon.

[WSUCoug1994]

As they say.....the first million is the hardest.

[fiveoh]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

Wow!  How much principal did that take?

[Tetsuya Hondo]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

Wow!  How much principal did that take?

I was wondering the same. That's impressive.

[Don Jean]

As they say.....the first million is the hardest.

So is learning to save that first $1 ;)

[Eric]

I'd guess that the number is around 10 times your annual savings amount.  For a round number example, say you're saving $50k/yr.  Once you reach $500k, a market increase of 10% is the equivalent to one year of working/saving.  Once regular annual market movements make you more money than what you can save, then you're on your way.

-- fingers crossed that I'm right, as I'm just about to that threshold :)

[beltim]

A lot of very different, yet all interesting, responses.

I asked the question because I've seen other people allude to it across various threads and I've noticed it in graphs of others' net worths (primarily for those that have amassed $1M and up). My working hypothesis is that somewhere around $600k things seem to take off as the snowball of cash continues to roll, picking up speed and mass along the way. This makes sense mathematically given compound interest, so I was curious to see if others noticed a point of rapid acceleration at some point along their own paths. 

While my net worth grows, the slope never seems to change. I'm hoping it will soon.

I think the range is probably due mostly to what people's portfolio values were during years of abnormally high market returns.  The S&P 500 returned over 13% in 2012, almost 30% in 2013, and over 11% in 2014, which I would guess corresponds pretty well with the people who noticed their Net Worth hitting "escape velocity" in this thread. 

In other words, the variability of stock returns probably plays more of a role here than the effect of compounding interest.

[spokey doke]

escape velocity is directly dependent on
- relation of savings per year to stash size
- overall market returns

If the stash is 10x what you save per year, and the market returns (increase+dividends) is 10 percent in the last year, then the growth of your stash is equal parts savings and returns. Same is true if the stash is half the size but last years returns were twice as high.

^^^this.

We have a good sized stache and so even our substantial savings don't make that much of a difference in a relative sense compared to when the market really takes off (as during the recovery).  This year it feels like we are just treading water

[dude]

For those of you that have accumulated large stashes already, was there a point where things really seemed to take off, where the trend line for your net worth turned sharply higher? Was there a noticeable point where your little snowball of cash started rolling and picking up exponentially larger values, seemingly under its own volition? I'm asking about a specific dollar value here.

In other threads, some of you have suggested as much. If so, what was your financial tipping point?

(As my humble pile slowly but steadily grows, I'm hoping that there is a point as I am getting a little impatient.)

Yep, post-2008.  In October of 2007, the S&P 500 high was the same as it was in 2000 before the crash.  Only after 2008 did it break through.  My account has more than tripled since the low in 2008.  Of course, I've been maxing out contributions that whole time as well.  But really, growth in my account was pretty slow until the rebound.

[dude]

I crossed $500K invested (401k only) early this year, yet despite dumping the max + catch ups + matching (which amounts to $31k+/yr), it hasn't moved a whole lot this year because of the market.  I actually dipped well below back in August when the market corrected 12% (dropped to like $495k), and I now sit at $524k.  I thought it would grow a bit faster after $500k, but it's all dependent on market returns, obviously, and this year hasn't been such a good one to this point (though the S&P is up roughly 3.2% YTD after yesterday's gains).  Sure wish the bull market had waited until I had around $500k stashed before it began its run-up!

[EscapeVelocity2020]

This is a subject near and dear to my heart, and if you stick to 'the program' long enough you'll definitely get there.  To me, EV depends on your spending.  For an easy example, MMM consistently spends 25k annually in ER without monitoring it.  He just lives his life and it meets all of his reasonable wants and needs.  So EV in his case is 25 x 25k, or 625k.

For those of us who are mere mortals (or don't have a blog about reducing consumption and staying ER), we might find our wants go up after we approach EV the first time.  And, for full disclosure, I've also benefited from a long bull market and a job that I enjoy and pays well.  So I've let my spending 'float up' to my own natural level (but not to the point where I'm spoiling the kids, or getting carried away with 'dream travel' and exotic sports cars) and I've found 40k discretionary to be pretty easy to live with.  So I'd say 1M was my NW-EV.  I could live on less, but I don't find myself wanting more. 

And the coolest (but weirdest) part about EV is that the money really does keep piling up.  It's like the movie Blow or Breaking Bad where there's a totally absurd pile of cash (or bank account).  I've diversified my portfolio since I no longer need to take risks to achieve high returns and my finances are on autopilot (I'm more interested now in keeping tax stuff simple and under my command, but I'm sure I will have to hire a CPA at some point). 

And maybe one of these days (when the kids are in college) I'll stop being so lazy and redirect my energy toward figuring out how to do better things for others.  Probably the ultimate first world problem (which MMM actually has 'worse than me'), having more than you need, but it keeps piling up.  I'd love to know what he is doing about it or thinks, other than his 'giving himself the freedom to now worry about money' post (http://www.mrmoneymustache.com/2014/05/29/give-yourself-the-gift-of-not-worrying-about-money/).

Anyway, hope that helps.  Good luck! 

[spud1987]

As others have said, it really depends on how much you save compared to the size of your stash.

Our NW is around 800k, with about 600k in investable assets. However, we haven't reached "escape velocity" yet because we contribute about 120-140k per year to our stash. Our contributions outpace any investment growth/loss. For example, our NW didn't drop in August even though the market lost 10%. I imagine our stash will have to be around 1.5M until we start really feeling market returns.

[TheAnonOne]

As others have said, it really depends on how much you save compared to the size of your stash.

Our NW is around 800k, with about 600k in investable assets. However, we haven't reached "escape velocity" yet because we contribute about 120-140k per year to our stash. Our contributions outpace any investment growth/loss. For example, our NW didn't drop in August even though the market lost 10%. I imagine our stash will have to be around 1.5M until we start really feeling market returns.

I'm in this boat as well, we only have about 150k invested but did so in the past year/ year and a half. So our investment 'buy ins' are about 100k a year. It will take about a million before the market will reasonably match that. So another 6-8 years.

[EscapeVelocity2020]

As others have said, it really depends on how much you save compared to the size of your stash.

Our NW is around 800k, with about 600k in investable assets. However, we haven't reached "escape velocity" yet because we contribute about 120-140k per year to our stash. Our contributions outpace any investment growth/loss. For example, our NW didn't drop in August even though the market lost 10%. I imagine our stash will have to be around 1.5M until we start really feeling market returns.

Well, I was hoping a thread member might pick up on my post as being a subtle disagreement with this, but let me try to state it more clearly - saving rate and market return (other than the historical average) really have nothing to do with what I think the OP is calling an 'Escape Velocity'.  Maybe we've forgotten that markets don't always go up, and maybe we've forgotten that 'saving rate' implies that we are relying on active income or reduced spending in order to 'juice' NW. 

All that matters is what your spending is.  Once your (NW) x (the historic inflation adjusted average rate of return) exceeds what you spend when you no longer track saving or spending, then you are at EV.  FI comes at a same or lower number, depending on how you define wants and needs.

For instance, I'll have years where my NW goes down (like 2008), but I'll keep spending at my current rate because EV gives the ultimate layer of defense - a sub-4% SWR (since NW keeps growing long term, exponentially).  And if things stay really miserable for several years, there is also the ability to reduce spending and coast on some of the fat from lavish spending in previous years.

All of this talk of  NW at 10x current saving rate or covering your saving with what the market returns in the short run (like 10%) isn't even FI, let alone EV.  Anyways, if you can't tell, I find this to be an interesting subject...

[RyanAtTanagra]

Well, I was hoping a thread member might pick up on my post as being a subtle disagreement with this, but let me try to state it more clearly - saving rate and market return (other than the historical average) really have nothing to do with what I think the OP is calling an 'Escape Velocity'.  Maybe we've forgotten that markets don't always go up, and maybe we've forgotten that 'saving rate' implies that we are relying on active income or reduced spending in order to 'juice' NW. 

All that matters is what your spending is.  Once your (NW) x (the historic inflation adjusted average rate of return) exceeds what you spend when you no longer track saving or spending, then you are at EV.  FI comes at a same or lower number, depending on how you define wants and needs.

I think you're defining the crossover point, which isn't what the OP is referring too.  He's talking about a general point where the power of compound interest starts to take over and the stash starts to really grow under its own momentum.

To answer the OPs question, I haven't hit it yet, I'll let you know when I do ;-)  I think the idea of it being when stash size passes 10x annual savings is probably about right, though.

Edit to add: I just realized, if that's the case (stash = 10x annual savings), then I will never hit escape velocity, as my 'number' is lower than that...

[Pylortes]

I agree with the notion that it starts being more noticeable over $600k in investable assets.  When you see the daily swings in market value exceed what you could save in several months time or what your annual bonus at work is for working your butt off it seems more noticeable.   

My definition may not be as good as some of the others but I think escape velocity occurs when daily market swings in your asset value dwarf any savings or any expenses you can hope to cut to where you feel your at the mercy of the stock market (but still keep saving anyway!). This may occur somewhere in the high six figures probably between $600-$900k but would fluctuate depending on your income savings level.

[use2betrix]

It seems a lot of posters here started REALLY investing hard the last 7-8 years since the stock market exploded. I think those gains are pretty unrealistic to expect the next 7-8 years, so those of us getting started more now probably can't expect the same insane returns as others have.

[Two9A]

It seems a lot of posters here started REALLY investing hard the last 7-8 years since the stock market exploded. I think those gains are pretty unrealistic to expect the next 7-8 years, so those of us getting started more now probably can't expect the same insane returns as others have.

Indeed. As I've mentioned before, I only started investing last year and my portfolio is sitting at -0.73% lifetime returns as of last night. 10%/yr gains is just not normal, and I'm saving on the basis of 4% gross returns, perhaps 2% after inflation.

[arebelspy]

Once you hit that first billion it really picks up.

[boarder42]

 

It seems a lot of posters here started REALLY investing hard the last 7-8 years since the stock market exploded. I think those gains are pretty unrealistic to expect the next 7-8 years, so those of us getting started more now probably can't expect the same insane returns as others have.

Indeed. As I've mentioned before, I only started investing last year and my portfolio is sitting at -0.73% lifetime returns as of last night. 10%/yr gains is just not normal, and I'm saving on the basis of 4% gross returns, perhaps 2% after inflation.

10% gains per year are normal here in the states its actually below market avg.  7% real can be assumed and expected over time in the market.

[Bateaux]

It was at about 500k that I started thinking FIRE was possible and the gains my portfolio made began to surpass my contributions.   The recession tore into that pretty well though.  Crossing 1M I became confident that FIRE will indeed happen.  The time it takes to accumulate 100k more in value has decreased significantly due to the size of the portfolio and my increased contributions. I hope 2016 brings a 10% gain to the broad market.  If it does with my contribution, my portfolio will increase about 200k.  I need 10% average growth over the next 3 years to reach my FIRE goal of 2M.

[boarder42]

It was at about 500k that I started thinking FIRE was possible and the gains my portfolio made began to surpass my contributions.   The recession tore into that pretty well though.  Crossing 1M I became confident that FIRE will indeed happen.  The time it takes to accumulate 100k more in value has decreased significantly due to the size of the portfolio and my increased contributions. I hope 2016 brings a 10% gain to the broad market.  If it does with my contribution, my portfolio will increase about 200k.  I need 10% average growth over the next 3 years to reach my FIRE goal of 2M.

that's pretty ambitious.  i hope these gains happen. 

[Tetsuya Hondo]

Once you hit that first billion it really picks up.

That's comforting as I can't retire on less than $2 billion.

[arebelspy]

Once you hit that first billion it really picks up.

That's comforting as I can't retire on less than $2 billion.

You'll probably hit OMY when you get there. After all, what if the market crashes right away, or you have an unforeseen medical emergency?

[Tetsuya Hondo]

So, a few people said that somewhere north of $500k things picked up for them, but we've also had a heck of a bull market run as well that likely attributed to it so that casts doubt on my original hypothesis. Meanwhile, those of you arguing that it's the point at which your returns outpace your contributions (assuming all other things are equal) are winning me over here. That makes a lot of sense and it gives me a milestone to shoot for on the way to FIRE. Doing some back of the napkin math here, that works out as well, that the slope of the line will increase around that point, although not dramatically. In hindsight, this seems more obvious.

[Tetsuya Hondo]

That's comforting as I can't retire on less than $2 billion.

You'll probably hit OMY when you get there. After all, what if the market crashes right away, or you have an unforeseen medical emergency?

Crikey! I hadn't even considered those things. Will $3 billion be enough? I think that Forbes says "no."

[WSUCoug1994]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

Wow!  How much principal did that take?

I was wondering the same. That's impressive.

We were just at little under $1M when we hit $100K in dividends for the first time.

[tarheeldan]

So, if we assume constant returns and a constant annual contribution, the balance in year Y equals:

Balance(Y) = cz^Y + c[(z^Y + 1 - z)/(z - 1)]

Where c is the annual contribution (and in this case equal to initial principal), z = (1+r) ; r=interest rate and Y denotes the year

The slope is basically governed by z^Y. Using a 7% rate of return (often used here as a good number for real returns over time), you find that the slope doubles within 12 years (lower r will increase Y to slope doubling). Maybe that's a good point to use, since for annual contributions of $25,000 that comes out to a balance of $534,000.

[fiveoh]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

Wow!  How much principal did that take?

I was wondering the same. That's impressive.

We were just at little under $1M when we hit $100K in dividends for the first time.

What are you invested in that you get 10% dividend yields?

[Vertical Mode]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

Wow!  How much principal did that take?

I was wondering the same. That's impressive.

We were just at little under $1M when we hit $100K in dividends for the first time.

What are you invested in that you get 10% dividend yields?

Was wondering the same, $100k in dividends is very impressive yield from <$1M principal.

[WSUCoug1994]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

Wow!  How much principal did that take?

I was wondering the same. That's impressive.

We were just at little under $1M when we hit $100K in dividends for the first time.

What are you invested in that you get 10% dividend yields?

Was wondering the same, $100k in dividends is very impressive yield from <$1M principal.

My portfolio is reasonably straight forward but very aggressive
- Large Cap - 50%
- Small Cap - 25%
- International - 25%
- Cash/Fixed Income - 0%

I do not own a single stock.  Everything I own is tied up in high dividend yield ETF's and Mutual Funds and a small number of REIT's - I am slowly moving to more ETF's from Mutual Funds as the expenses are much lower as you all know.  I have too many high fee Mutual Funds. Trying to manage the tax implications carefully on the transition.  Many of my holdings are high risk and high return.  Since I really started managing my money (2000) my return on invested assets is 11.37%.

[fiveoh]

Escape velocity for us came when we hit $100K in dividends for the year.  That's when we really started to feel the impact of growth in our portfolio.

Wow!  How much principal did that take?

I was wondering the same. That's impressive.

We were just at little under $1M when we hit $100K in dividends for the first time.

What are you invested in that you get 10% dividend yields?

Was wondering the same, $100k in dividends is very impressive yield from <$1M principal.

My portfolio is reasonably straight forward but very aggressive
- Large Cap - 50%
- Small Cap - 25%
- International - 25%
- Cash/Fixed Income - 0%

I do not own a single stock.  Everything I own is tied up in high dividend yield ETF's and Mutual Funds and a small number of REIT's - I am slowly moving to more ETF's from Mutual Funds as the expenses are much lower as you all know.  I have too many high fee Mutual Funds. Trying to manage the tax implications carefully on the transition.  Many of my holdings are high risk and high return.  Since I really started managing my money (2000) my return on invested assets is 11.37%.

Interesting.  If you ever have the time/dont mind I'd like to see some of the main ones you are invested in specifically.  Nice returns! 

[WSUCoug1994]

Equities
- CBL
- TCO

ETF
- PCY
- CSM
- SPY

Mutual Funds
- CENSX
- JATTX
- LSBRX
- OAKIX
- PARWX
- PISIX

These are my current holdings - they have shifted and morphed over the years but this is what I have right now.

[WSUCoug1994]

I guess I lied....I do have $28K left in that Loomis Bond Fund.  I also want to apologize to the OP for the thread hijack.  Happy to discuss in another thread.

[BTDretire]

As they say.....the first million is the hardest.

 I put that slightly different.
 The second million comes a lot faster than the first.

[BTDretire]

My definition may not be as good as some of the others but I think escape velocity occurs when daily market swings in your asset value dwarf any savings or any expenses you can hope to cut to where you feel your at the mercy of the stock market (but still keep saving anyway!). This may occur somewhere in the high six figures probably between $600-$900k but would fluctuate depending on your income savings level.

 I agree about the $600-$900k, especially when you compound 2011, 12, 13 and 14 returns on top of that. It was an exceptional time to have a stash(e).

[Vertical Mode]

I guess I lied....I do have $28K left in that Loomis Bond Fund.  I also want to apologize to the OP for the thread hijack.  Happy to discuss in another thread.

I think we'll all forgive you ;-) Seriously though, there are probably more than a few threads in the "Investor Alley" section of the forum in which your contributions and insight RE: dividend funds might be extremely valuable.

Back OT, I guess we're saying that a lot of this discussion hinges on how we define "Escape Velocity", or what that term means to us. Is this represented as a steepening of the trend line in our NW charts? Is it a clear point of inflection? Or, is it some psychological threshold we cross that reinforces our resolve to stay the course? (Dr. Doom's drawdown series at LivingAFI was heavy on the psychological aspects of enduring the market rollercoaster. As much as our rational brains want it to be purely a math problem, it isn't, because we're all human and subject to feelings and emotions. Loss aversion can be a very compelling force at shaping human behavior).

I'm fairly sure that $100k will feel like a psychological threshold because it was a short-term goal of mine. There is a certain reward factor in looking at NW quarterly and seeing it increase by ever-growing amounts. Perhaps $250k and $500k will also feel like milestones when I get there? Regardless of what the numbers tell me, I suspect that how I FEEL about these sums as I attain them will affect my calculus about when I've hit EV, and a challenge will be to not let that sway my decision-making.

[boarder42]

I guess I lied....I do have $28K left in that Loomis Bond Fund.  I also want to apologize to the OP for the thread hijack.  Happy to discuss in another thread.

I think we'll all forgive you ;-) Seriously though, there are probably more than a few threads in the "Investor Alley" section of the forum in which your contributions and insight RE: dividend funds might be extremely valuable.

Back OT, I guess we're saying that a lot of this discussion hinges on how we define "Escape Velocity", or what that term means to us. Is this represented as a steepening of the trend line in our NW charts? Is it a clear point of inflection? Or, is it some psychological threshold we cross that reinforces our resolve to stay the course? (Dr. Doom's drawdown series at LivingAFI was heavy on the psychological aspects of enduring the market rollercoaster. As much as our rational brains want it to be purely a math problem, it isn't, because we're all human and subject to feelings and emotions. Loss aversion can be a very compelling force at shaping human behavior).

I'm fairly sure that $100k will feel like a psychological threshold because it was a short-term goal of mine. There is a certain reward factor in looking at NW quarterly and seeing it increase by ever-growing amounts. Perhaps $250k and $500k will also feel like milestones when I get there? Regardless of what the numbers tell me, I suspect that how I FEEL about these sums as I attain them will affect my calculus about when I've hit EV, and a challenge will be to not let that sway my decision-making.

looking up what he owns i dont see how any of those stocks / funds is contributing to an 11.37% annualized gain thru dividends.

[TheAnonOne]

I guess I lied....I do have $28K left in that Loomis Bond Fund.  I also want to apologize to the OP for the thread hijack.  Happy to discuss in another thread.

I think we'll all forgive you ;-) Seriously though, there are probably more than a few threads in the "Investor Alley" section of the forum in which your contributions and insight RE: dividend funds might be extremely valuable.

Back OT, I guess we're saying that a lot of this discussion hinges on how we define "Escape Velocity", or what that term means to us. Is this represented as a steepening of the trend line in our NW charts? Is it a clear point of inflection? Or, is it some psychological threshold we cross that reinforces our resolve to stay the course? (Dr. Doom's drawdown series at LivingAFI was heavy on the psychological aspects of enduring the market rollercoaster. As much as our rational brains want it to be purely a math problem, it isn't, because we're all human and subject to feelings and emotions. Loss aversion can be a very compelling force at shaping human behavior).

I'm fairly sure that $100k will feel like a psychological threshold because it was a short-term goal of mine. There is a certain reward factor in looking at NW quarterly and seeing it increase by ever-growing amounts. Perhaps $250k and $500k will also feel like milestones when I get there? Regardless of what the numbers tell me, I suspect that how I FEEL about these sums as I attain them will affect my calculus about when I've hit EV, and a challenge will be to not let that sway my decision-making.

looking up what he owns i dont see how any of those stocks / funds is contributing to an 11.37% annualized gain thru dividends.

Perhaps he meant that the gain (he even stated gain when quoting 11.37) was over 100k.

This is possible and even a certain large portion of the gains could be dividends but it's unlikely that it was all of it.

[opnfld]

I guess I lied....I do have $28K left in that Loomis Bond Fund.  I also want to apologize to the OP for the thread hijack.  Happy to discuss in another thread.

I think we'll all forgive you ;-) Seriously though, there are probably more than a few threads in the "Investor Alley" section of the forum in which your contributions and insight RE: dividend funds might be extremely valuable.

looking up what he owns i dont see how any of those stocks / funds is contributing to an 11.37% annualized gain thru dividends.

Absent any research on my part, I assume there are some large capital gains distributions in there as well.  Technically those are not "dividends'.

I agree with the posters who point out EV depends on market returns.  2013 was a big boost, but hasn't been followed with any momentum.  Now that my stash is at Annual Savings x 10, a couple of years with 7-10% growth would definitely feel like EV.