Author Topic: Four Years of Tracking Net Worth  (Read 38013 times)

mbk

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Re: Four Years of Tracking Net Worth
« Reply #50 on: September 20, 2014, 10:20:02 PM »
In 2014, my networth will grow by more than my income.

THAT is a badass moment.

Thanks. I haven't shared this with anyone. And I am in research field making relatively low salary. Most of my friends earn 2-3 times more money. Some of them spend it all, but others are good at saving & investing. Once I move from academic research to industry, I believe all I need is 5 years to call it quits. And you are an inspiration, considering you made your million with a teacher's salary.

arebelspy

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Re: Four Years of Tracking Net Worth
« Reply #51 on: September 21, 2014, 03:58:25 PM »

Thanks. I haven't shared this with anyone. And I am in research field making relatively low salary. Most of my friends earn 2-3 times more money. Some of them spend it all, but others are good at saving & investing. Once I move from academic research to industry, I believe all I need is 5 years to call it quits. And you are an inspiration, considering you made your million with a teacher's salary.

I did it with two incomes coming in though (having a very helpful spouse).  But yeah, real estate can make crazy fast net worth gains.  Ultimately though it's more about the cash flow, because paper value rises and falls, but I'm retiring on income, not net worth.  :)

Setting great habits now will make your FIRE path ridiculously fast when you go from academics to business.  That's a great way to go.
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The Dutchman

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Re: Four Years of Tracking Net Worth
« Reply #52 on: September 26, 2014, 07:14:19 AM »
...Slow and steady on an average income is difficult but seeing this progress makes it worth the struggle!  We're really doing it!! :)....

Congrats!

So this will be an odd one.  But I will float this out there.  In theory you could boil down your gains to 1 number.  It is terribly depressing.  However, it is interesting. 

Here is how I do it: keep it simple date in one column net worth in the other.  Then create a graph in excel.  It should look like a stock chart (going up over time); however, being a MMM reader it will likely always trend up and never down.  From this point you right click on your graph chose "add trend line", change the type it to "logarithmic", and check the box at the bottom that says "display r-squared value". 

That "R-Squared" value is the one number you can boil your many years of savings down to.  It is basically your production rate.  Higher the number the better production you have. 

OP's production rate is .9378.  I have included your graph as an attachment.  Cool thing is that you can project out what your net worth will be using the trend line.  So if you go by the historical data you provided then your net worth in 2016 will be 120k.  As you continue to update and add more years and data the production rate will change and your projection will change. 

PS - If you guys want to see the excel file or would like to compare production rates let me know.  Might be worth another thread so we don't muddy this one. 

arebelspy

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Re: Four Years of Tracking Net Worth
« Reply #53 on: September 26, 2014, 07:53:46 AM »
Why is the r-squared a "production rate"?  Isn't it simply just a measure of how well the trendline fits the data?

So you can have it display the equation for the trendline, and use that to project, and the R-squared value is (more or less) an indication of approximately how accurate that value will be.

I'm not sure what you mean when you call it a production rate.

I may be way off, it's been a long time since I took statistics. But that was my understanding.
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The Dutchman

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Re: Four Years of Tracking Net Worth
« Reply #54 on: September 26, 2014, 08:25:03 AM »
Why is the r-squared a "production rate"?  Isn't it simply just a measure of how well the trendline fits the data?

So you can have it display the equation for the trendline, and use that to project, and the R-squared value is (more or less) an indication of approximately how accurate that value will be.

I'm not sure what you mean when you call it a production rate.

I may be way off, it's been a long time since I took statistics. But that was my understanding.

I am no statistician myself so I could be off.  The reason I call it i the "production rate" is because if your end game is to retire then more money going to your net is better.  The quicker you build the higher your R-Squared number will be.  As your R-Squared goes up (as a result of higher savings rate) then you are "producing" more towards your retirement.

This could be flawed logic.  Not sure. 

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Re: Four Years of Tracking Net Worth
« Reply #55 on: September 26, 2014, 08:31:50 AM »
Why is the r-squared a "production rate"?  Isn't it simply just a measure of how well the trendline fits the data?

So you can have it display the equation for the trendline, and use that to project, and the R-squared value is (more or less) an indication of approximately how accurate that value will be.

I'm not sure what you mean when you call it a production rate.

I may be way off, it's been a long time since I took statistics. But that was my understanding.

I am no statistician myself so I could be off.  The reason I call it i the "production rate" is because if your end game is to retire then more money going to your net is better.  The quicker you build the higher your R-Squared number will be.  As your R-Squared goes up (as a result of higher savings rate) then you are "producing" more towards your retirement.

This could be flawed logic.  Not sure.
Completely flawed.  The R squared is just what Rebel said, it's a measure of how close the trendline fits the data.  So if you have variable data, like I do with one year that net worth didn't grow at all, then the trendline just isn't going to fit well and you'll have a low R squared.

Now, if you plot a linear trendline, and display the equation, then the slope of the line may tell you something useful.  A higher (steeper) slope means you are building up money faster.

domustachesgrowinhouston

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Re: Four Years of Tracking Net Worth
« Reply #56 on: September 26, 2014, 08:41:33 AM »
I think it's a neat idea, I might try to play with it a bit myself, though statistics is definitely not my strong suit.  I've only been tracking since 2012, but I've noticed three factors that really seem to make a difference:  My spending continues to decline giving me more to save, my income trends up also giving me more to save, and the investments compound which seems like (so far) over time the returns are more quickly closing the gap on my regular income.  In all, I would expect the trend line to be more exponential, primarily due to the investment incomes.  Thanks Dutchman.

dandarc

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Re: Four Years of Tracking Net Worth
« Reply #57 on: September 26, 2014, 08:43:38 AM »
Why is the r-squared a "production rate"?  Isn't it simply just a measure of how well the trendline fits the data?

So you can have it display the equation for the trendline, and use that to project, and the R-squared value is (more or less) an indication of approximately how accurate that value will be.

I'm not sure what you mean when you call it a production rate.

I may be way off, it's been a long time since I took statistics. But that was my understanding.

I am no statistician myself so I could be off.  The reason I call it i the "production rate" is because if your end game is to retire then more money going to your net is better.  The quicker you build the higher your R-Squared number will be.  As your R-Squared goes up (as a result of higher savings rate) then you are "producing" more towards your retirement.

This could be flawed logic.  Not sure.
Completely flawed.  The R squared is just what Rebel said, it's a measure of how close the trendline fits the data.  So if you have variable data, like I do with one year that net worth didn't grow at all, then the trendline just isn't going to fit well and you'll have a low R squared.

Now, if you plot a linear trendline, and display the equation, then the slope of the line may tell you something useful.  A higher (steeper) slope means you are building up money faster.
This - you can get a nice high R-Sqaured even on a decreasing fit line.  Try this:
DateAmount
1/1/20101000
1/1/20110
1/1/2012-1000
Should get an R-Squared of 1, but this would not be a good trend for your networth - slope is -1K per year.

The Dutchman

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Re: Four Years of Tracking Net Worth
« Reply #58 on: September 26, 2014, 09:03:08 AM »

This - you can get a nice high R-Sqaured even on a decreasing fit line.  Try this:
DateAmount
1/1/20101000
1/1/20110
1/1/2012-1000
Should get an R-Squared of 1, but this would not be a good trend for your networth - slope is -1K per year.

I agree it doesn't make sense if you try to bake the numbers.  The idea would be to take a base line over a couple of years and figure out what your R-Squared number and then try to improve your rate as the years go on.  You can not compare one person's to another either because a person with an R-Squared of 1 who makes 100k is not a direct comparison to a person with the same R-Squared who makes 50k...  It is a competition with yourself. 

Completely flawed.  The R squared is just what Rebel said, it's a measure of how close the trendline fits the data.  So if you have variable data, like I do with one year that net worth didn't grow at all, then the trendline just isn't going to fit well and you'll have a low R squared.

Now, if you plot a linear trendline, and display the equation, then the slope of the line may tell you something useful.  A higher (steeper) slope means you are building up money faster.

So change it from logarithmic to linear.  It makes no difference your R-Squared is still your slope.  Higher the slope the more you are saving. 

Hannah

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Re: Four Years of Tracking Net Worth
« Reply #59 on: September 26, 2014, 12:49:38 PM »
Just going to comment that the fundamental flaw with all this R2 is that your independent variable is time.

Finding a best fit line is a great exercise, but the application is meaningless.

An appropriate regression analysis requires multiple variables to be considered simultaneously and a sample size of more than 5. Only then can the fit of your line help you predict... anything.

dandarc

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Re: Four Years of Tracking Net Worth
« Reply #60 on: September 26, 2014, 01:09:46 PM »
So change it from logarithmic to linear.  It makes no difference your R-Squared is still your slope.  Higher the slope the more you are saving.
R-Squared is NOT your slope.  R2 - http://en.wikipedia.org/wiki/Coefficient_of_determination  Slope - http://en.wikipedia.org/wiki/Slope

All it tells you is how well the data fits the trend line - nothing more, nothing less.  And as Hannah points out - this doesn't mean much of anything in this application.

I'll quit now - falling into the "Someone on the internet is wrong!" trap.

The Dutchman

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Re: Four Years of Tracking Net Worth
« Reply #61 on: September 26, 2014, 01:13:10 PM »
So change it from logarithmic to linear.  It makes no difference your R-Squared is still your slope.  Higher the slope the more you are saving.
R-Squared is NOT your slope.  R2 - http://en.wikipedia.org/wiki/Coefficient_of_determination  Slope - http://en.wikipedia.org/wiki/Slope

All it tells you is how well the data fits the trend line - nothing more, nothing less.  And as Hannah points out - this doesn't mean much of anything in this application.

I'll quit now - falling into the "Someone on the internet is wrong!" trap.

I have been bested; you are correct.  Slope would be a better way to measure. 

I apologize for this one. 

arebelspy

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Re: Four Years of Tracking Net Worth
« Reply #62 on: September 26, 2014, 04:39:22 PM »
Right, so just make excel show the equation for the best fit line, and the slope is the number next to the x, as it typically shows it in y=mx+b, where m is the slope and b is the y-intercept.

The r-squared is just how well your data fits that regression line, or how good its predictive ability should be, in general.
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LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #63 on: November 23, 2014, 12:06:21 PM »
At week end we are down to $89,000 in Assets (markets are down and we paid some large-ish bills) and $0 in Liabilities. Of this amount, there is the following breakdown:

Current (9/12/2014)

Retirement (Roth): $30,250
Retirement (Trad): $10,250
Brokerage:            $5,900
HSA:                     $2,500
Cash:                    $40,100

Net Worth :           $89,000

Year End 2014

Retirement (Roth): $39,000
Retirement (Trad): $14,000
Brokerage:            $5,900
HSA:                     $2,800
Cash:                    $40,100

Net Worth:            $101,800

Our plan for the coming year, given DW's new gig, is to drop $17,500 into her 401(k), $12,500 into my 401(k), and $5,500 into both IRA's. This would all be pre-tax. Employer match would also add $2,500.

My company's policies don't allow for my contribution to reach the full $17,500 so we can only drop $41,000 into retirement accounts. This falls $9,000 short of our projected "investable income" so the excess funds will be routed to HSA's and brokerage accounts.

Year End 2015

Retirement (Roth): $39,000
Retirement (Trad): $57,500
Brokerage:            $12,000
HSA:                     $6,000
Cash:                    $40,000

Net Worth:            $154,500



Current (Nov 2014)

Retirement (Roth): $34,350
Retirement (Trad): $15,650
Brokerage:             $6,100
HSA:                      $2,700
Cash:                     $41,000

Net Worth :            $99,800

Gross Income:      $77,000 (projected)

We will cross over into six-figures in a few days, ahead of schedule.  Should be resting at $105,000 by year end.  This would equate to a $43,000 net worth increase in 2014 - roughly 56% of our gross income.

The next obstacle is minimizing our tax exposure in 2015.  Projections are showing that we should owe ~$800 in federal income taxes on an income of $92,000 if we maximize our 401(k), 403(b), ESOP, IRA, and HSA space.  In total, $53,500 will be funneled into tax advantaged accounts.  I'm counting pretty heavily on future use of a Roth conversion ladder to access these funds.

neo von retorch

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Re: Four Years of Tracking Net Worth
« Reply #64 on: November 25, 2014, 10:24:29 AM »
Great job on your net worth improvements!

I've been tracking mine for about 11 years but here's where I'm at since I bought a house in 2007... (includes savings, retirement, all debts - does not include home value)
12/31/2007 -$151,951
12/31/2008 -$140,971
12/31/2009 -$119,939
12/31/2010 -$93,545
12/31/2011 -$99,622 (bought expensive car, durrr)
12/31/2012 -$66,047 (traded for more reasonable car)
12/31/2013 -$31,214 (retirement contributions and match)
12/31/2014  $23,000 (projected)

I'm positive now... 2014 has been a good year. Downgraded car. Benefited from stock investing in mid-2013. Some freelance income.

Home is probably worth roughly $160k. Mortgage now at ~$105k. No other debts (other than monthly credit card balances which are paid off.)

Inquizator

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Re: Four Years of Tracking Net Worth
« Reply #65 on: November 29, 2014, 04:28:25 PM »
It's neat to see everyone post their 'journey'.

I've been tracking one less year; though I got married in 2011, so it's a good year to start tracking.
Net worth at year end:
2011: $953
2012: $43,504
2013: $100,252
2014: $147,776 (Nov.)

Ricky

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Re: Four Years of Tracking Net Worth
« Reply #66 on: November 29, 2014, 07:39:45 PM »
Current (Nov 2014)

Retirement (Roth): $34,350
Retirement (Trad): $15,650
Brokerage:             $6,100
HSA:                      $2,700
Cash:                     $41,000

Net Worth :            $99,800

Gross Income:      $77,000 (projected)

We will cross over into six-figures in a few days, ahead of schedule.  Should be resting at $105,000 by year end.  This would equate to a $43,000 net worth increase in 2014 - roughly 56% of our gross income.

The next obstacle is minimizing our tax exposure in 2015.  Projections are showing that we should owe ~$800 in federal income taxes on an income of $92,000 if we maximize our 401(k), 403(b), ESOP, IRA, and HSA space.  In total, $53,500 will be funneled into tax advantaged accounts.  I'm counting pretty heavily on future use of a Roth conversion ladder to access these funds.

Given $41k is probably way more than you spend in a year, why so much cash? Throw them babies in an index.

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Re: Four Years of Tracking Net Worth
« Reply #67 on: November 30, 2014, 02:31:20 AM »
I have been tracking net worth since 2010

2010 - $15,000
2011 - $30,000
2012 - $45,000
2013 - $65,000
2014 - $90,000
1/2015 - ~$105,000 (estimated)

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Re: Four Years of Tracking Net Worth
« Reply #68 on: December 26, 2014, 04:32:36 PM »
Current (Nov 2014)

Retirement (Roth): $34,350
Retirement (Trad): $15,650
Brokerage:             $6,100
HSA:                      $2,700
Cash:                     $41,000

Net Worth :            $99,800

Gross Income:      $77,000 (projected)

We will cross over into six-figures in a few days, ahead of schedule.  Should be resting at $105,000 by year end.  This would equate to a $43,000 net worth increase in 2014 - roughly 56% of our gross income.

The next obstacle is minimizing our tax exposure in 2015.  Projections are showing that we should owe ~$800 in federal income taxes on an income of $92,000 if we maximize our 401(k), 403(b), ESOP, IRA, and HSA space.  In total, $53,500 will be funneled into tax advantaged accounts.  I'm counting pretty heavily on future use of a Roth conversion ladder to access these funds.

Given $41k is probably way more than you spend in a year, why so much cash? Throw them babies in an index.

Not knowing if you're ready to make a down payment on a house in 2 years or 10 is a bitch. I'd rather invest the $25k that's earmarked for housing but our timeline is so dependent on "life" over the next 12-24 months that we've decided to play it safe.

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #69 on: April 28, 2019, 05:17:25 PM »
Hey all - looking for a place to track our progress through the years so I'm reviving this thread for that purpose. Last time that I posted was in November 2014 when we had a net worth of $99k and weren't sure where life would take us. This was shortly after DW graduated college. Since then a lot has changed - as I suspect it has for all of you as well. We moved across the country for work/adventure, started new jobs, bought our first house, and had a child. Our current assets total roughly $725k, with an outstanding mortgage of $260k. Our primary focus at the moment is paying this down. Despite the math, we're comfortable with the opportunity cost over the next 3-5 years. We're contributing 15% + Match to our retirement accounts. Because of some front-loading this year, I'll be able to max mine out with just the 15% going forward.

Net Worth
2010: ($18,000)  [Student Loans]
2011: $25,000     [Married]
2012: $41,000
2013: $62,000     [DH Graduated]
2014: $108,000   [DW Graduated]
2015: $172,000
2016: $263,000   [Cross Country Move & Career Change]
2017: $353,000   [Bought House]
2018: $365,000
2019: $465,000 [Current]

Income*
2010: $33,000   + $2,000   = $35,000
2011: $43,000   + $5,000   = $48,000
2012: $45,000   + $8,000   = $53,000
2013: $42,000   + $15,000 = $57,000
2014: $48,000   + $29,000 = $77,000
2015: $53,000   + $55,000 = $108,000
2016: $45,000   + $52,000 = $97,000
2017: $74,000   + $45,000 = $119,000
2018: $65,000   + $30,000 = $95,000
2019: $105,000 + $30,000 = $135,000 [projected]

*DH + DW = Household

It's nice to see the progress through the years. That small net worth change in 2018 was largely due to the market correction post-September. We went from just over $400k back down to $365k. Playing the long game and very comfortable with lots of market risk so we didn't do anything but dump a lot more in each paycheck. Thanks for reading.
« Last Edit: April 28, 2019, 06:47:26 PM by LivingTheory »

Gremlin

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Re: Four Years of Tracking Net Worth
« Reply #70 on: April 28, 2019, 05:28:00 PM »
Awesome work LivingTheory!  Reckon you're now putting that Theory into Practice.  *ducks*

I remember reading somewhere that human beings have a tendency to overestimate what they can achieve in a year, but significantly underestimate what they can achieve in 10 years.  You're almost ten years in and your progression should be a case study for those that are just starting out.

Just keep going as you are...

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #71 on: April 29, 2019, 06:09:19 PM »
You're almost ten years in and your progression should be a case study for those that are just starting out.

Just keep going as you are...

Thank you. We’re trying our best to build a stable future for ourselves. It really is about living the theory that we all discuss. 😆

jojoguy

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Re: Four Years of Tracking Net Worth
« Reply #72 on: April 30, 2019, 04:40:38 AM »
Way to go dude! In my opinion, tracking makes it fun. We`ve doubled our retirement money since joining MMM 7 months ago. The tracking threads are my favorite to read. It is great to see some posts from years ago from somebody who is in debt or is beginning their journey go from nothing to being worth hundreds of thousands or a millionaire. Very inspirational post, bro.

Zaga

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Re: Four Years of Tracking Net Worth
« Reply #73 on: April 30, 2019, 05:04:45 AM »
Net Worth
2010: ($18,000)  [Student Loans]
2011: $25,000     [Married]
2012: $41,000
2013: $62,000     [DH Graduated]
2014: $108,000   [DW Graduated]
2015: $172,000
2016: $263,000   [Cross Country Move & Career Change]
2017: $353,000   [Bought House]
2018: $365,000
2019: $465,000 [Current]



It's nice to see the progress through the years. That small net worth change in 2018 was largely due to the market correction post-September. We went from just over $400k back down to $365k. Playing the long game and very comfortable with lots of market risk so we didn't do anything but dump a lot more in each paycheck. Thanks for reading.
You're progress is remarkably similar to ours by year.  I do love stepping back and looking at overall change after 10 years and being astounded!

2010 net worth -38,000
current net worth +431,000 (neither including home equity)

I bet you beat us to FI though, keep up the amazing work!

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #74 on: May 01, 2019, 02:42:19 PM »
I bet you beat us to FI though, keep up the amazing work!

I don’t know, if your NW is that high without home eq included... Bet you’re pretty close to FI. For apples-to-apples, our NW of $465k includes $130k of home equity. We’re at $335k if you back that out. I include it since it’s an after-tax asset at our disposal. Plus, it just looks nicer. Lol

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #75 on: May 01, 2019, 02:45:16 PM »
In my opinion, tracking makes it fun. We`ve doubled our retirement money since joining MMM 7 months ago.

Nice work! You timed that start perfectly. Buy on the Q4 dip and then see the huge Q1 rally.

Glad this thread helped in some small way. I love having post history across different forums from years ago. Helps me see how my mindset has shifted as life changes. Keep up the great work!!

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Re: Four Years of Tracking Net Worth
« Reply #76 on: May 01, 2019, 04:27:15 PM »
I bet you beat us to FI though, keep up the amazing work!

I don’t know, if your NW is that high without home eq included... Bet you’re pretty close to FI. For apples-to-apples, our NW of $465k includes $130k of home equity. We’re at $335k if you back that out. I include it since it’s an after-tax asset at our disposal. Plus, it just looks nicer. Lol
Well I didn't include home equity in the low number either, and your stash is growing as fast as ours is on a slightly lower income.

I don't care either way, I hope we both make it there faster than I expect!

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #77 on: May 11, 2019, 07:46:10 AM »
I hope we both make it there faster than I expect!

Amen to that!!
« Last Edit: May 11, 2019, 07:49:41 AM by LivingTheory »

arebelspy

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Re: Four Years of Tracking Net Worth
« Reply #78 on: May 12, 2019, 09:27:07 PM »
I love seeing updates like this years later. :D

Well done on the growth, on keeping the focus. Congrats on the new job(s), and kid.

Sounds like life is pretty great. :)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
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golfreak12

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Re: Four Years of Tracking Net Worth
« Reply #79 on: May 17, 2019, 09:48:24 AM »
Glad to see the updates.
Why the lower income after 2017 ??

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #80 on: May 17, 2019, 11:26:49 PM »
Why the lower income after 2017 ??

Couple of reasons. We were saving for a house down payment and also had our first kid in 2017. I stopped working so much overtime in 2018 and my SO went part time to avoid daycare. Since then I moved into a higher-paying position which brought our cumulative income to a new high.

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #81 on: May 19, 2019, 07:27:58 AM »
I love seeing updates like this years later. :D

Well done on the growth, on keeping the focus. Congrats on the new job(s), and kid.

Sounds like life is pretty great. :)

Thanks, ARebelSpy! Another five years of discipline and we’ll reach FI. Hope to have the house paid off and 25-30x our current expenses by that time. Will likely continue working until I’m 40 (10 years away) so our nest egg and vacation budget will really grow during the second five year period. We’ve added a lot of security to our lives at 28 and 30, which is fun to reflect back on, but now it’s all about making things safe in perpetuity.

FLOW

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Re: Four Years of Tracking Net Worth
« Reply #82 on: May 19, 2019, 08:04:58 AM »
Thank you for bumping this thread!!! Threads like these are a gift to the forum.  In 2014, the year 2019 seemed impossibly far away, and yet 5 years happened and still here. Looking out 5 years again, it makes 2024 seem more real.  Hopefully you'll bump this thread again. 

Thanks for sharing your journey.

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #83 on: May 23, 2019, 06:59:57 PM »
25x expense is an enviable goal. How much is your current expense? Are you figuring out daycare and college savings in it?

Our current spend is about $51k per year. Roughly $26k of that is mortgage principal and interest so our debt-free expenses are $25k. We don’t pay for daycare since my spouse went part time and we work opposite schedules to cover each day of the week at home. You could make the case that we pay for daycare in lower income but that doesn’t affect our FI plans much. My promotion last year more than makes up for the reduction.

Paying for our kid’s college is more of a “want” for me. It’s factored into the plan in the sense that after FI we could fully fund it within 1 or 2 additional working years. This is a “need” for my spouse so I fully expect to cross this off the list between ages 35 and 40.

« Last Edit: May 23, 2019, 07:01:28 PM by LivingTheory »

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #84 on: April 14, 2020, 12:10:51 PM »
It’s been almost one year since my last update. Things are a little more tumultuous right now than we’d all like so the numbers could be a good bit higher but it’s worth it to track through the years.

At risk of sounding tone deaf in the current environment, I’ll share that I received a promotion yesterday that bumps my base salary to $112,000 and my annual bonus potential is closer to $27,000. Our spending has and will remain the same with each bump in pay. The one change to expenses has been the mortgage: we refi’d from a 15-year, 3.375% fixed rate, to a 5/1 ARM at 2.625%. Our annual expenses are now down to about $40,000 all in but with continuing to throw cash at the loan, actual net cash flow is still the same. FI expenses are about $25,000.

Net Worth
2010: ($18,000)  [Student Loans]
2011: $25,000     [Married]
2012: $41,000
2013: $62,000     [DH Graduated]
2014: $108,000   [DW Graduated]
2015: $172,000
2016: $263,000   [Cross Country Move & Career Change]
2017: $353,000   [Bought House]
2018: $365,000   [Promoted at Year End]
2019: $559,000
2020: $555,000  [Current] ($625,000 at market highs)

Income*
2010: $33,000   + $2,000   = $35,000
2011: $43,000   + $5,000   = $48,000
2012: $45,000   + $8,000   = $53,000
2013: $42,000   + $15,000 = $57,000
2014: $48,000   + $29,000 = $77,000
2015: $53,000   + $55,000 = $108,000
2016: $45,000   + $52,000 = $97,000
2017: $74,000   + $45,000 = $119,000
2018: $65,000   + $30,000 = $95,000
2019: $104,000 + $23,000 = $127,000
2020: $142,000 + $20,000 = $162,000 [projected]

*DH + DW = Household

The annual bonus that I received in March is sitting in our savings account until the economy is on more stable footing. Once we feel comfortable, we’ll throw this at the mortgage, bringing it down to $210,000 or so. This means we’ll officially own half of our house. Quite the milestone mentally.

Current Assets:
$420,000 House, $309,000 Invested, $33,000 Cash, $25,000 Vehicles

Current Debts:
$232,000 Mortgage

Plan of attack is to max my 401k ASAP to get cash flow freed up and continue putting into my spouse’s 403b. Can only funnel $10,000 here since they have a contribution cap per paycheck. We’ll max my 401k and HSA annually and fill the 403b as possible. From there we’ll keep dumping on the mortgage until it’s gone in about 4 years. I was limiting our extra payments to what we could bring home within the 12% bracket but the now-higher income means we can’t avoid the 22% tax in any scenario. More will go to the debt because of this.

Part of me wants to bite the tax bullet and plow through the mortgage in 3 years. Probably won’t ignore our other goals for a few years just to shave some months off the loan though.

Once our toddler starts school (no idea the right age, it’s a ways away) my spouse will likely return to full time work. Our income would jump from $146k ($111k + $15k + $20k), using a conservative bonus figure, to $185k - $200k. I’d expect to have a paid-for house and $500k+ invested by then. Pretty great position to be in when we start making that kind of money.

We’ll be funding our kid’s college account heavily once the shorter term goals are done or if we switch priorities. Never want to box ourselves into one school of thought without analyzing that stage in our lives.

Thanks as always for following along. I love to see how far we’ve come from the college kids who started this journey. Hopefully I’ll be able to celebrate reaching the first million with you all soon.
« Last Edit: April 15, 2020, 10:04:36 PM by LivingTheory »

2Birds1Stone

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Re: Four Years of Tracking Net Worth
« Reply #85 on: April 15, 2020, 01:07:37 AM »
Sweet sweet progress! Almost FI based on 4% rule!

bonbonbaron

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Re: Four Years of Tracking Net Worth
« Reply #86 on: June 16, 2020, 10:32:10 AM »
Do you guys count your home equity toward your net worth? Just curious. I'm calculating mine right now... Just not sure whether to include that or not.

Without home equity: $  56,394
With home equity:      $109,394

neo von retorch

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Re: Four Years of Tracking Net Worth
« Reply #87 on: June 16, 2020, 10:40:10 AM »
I do... but I don't track home value over time. (I'm about to sell a house, so I plan to put in a line item for the net value change after closing costs!)

So

Assets
- liquid
- total appraised home value

Liabilities (debts)
- credit cards
- mortgage balance
- other loans

Total is the combination. (Equity is just appraised value minus mortgage but this calculation takes care of that for you.)

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #88 on: June 17, 2020, 10:15:40 AM »
Do you guys count your home equity toward your net worth?

We do. I count every (reasonable) asset and then back out the mortgage. That takes me through everything liquid and then our cars. I’m not about to count personal use items like furniture or jewelry but they’re technically a part of this equation. Just not worth it to me when the bigger pieces tell 99% of the story.

Assets - Liabilities = Net Worth

For Us:
(House Value + Investments + Cash + Vehicles) - House Debt = Net Worth

That’s how we approach it but at the end of the day it’s all about what view will keep you motivated and on track to grow your stash. It’s an actual accounting term but tailor it to what you want to see.

bonbonbaron

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Re: Four Years of Tracking Net Worth
« Reply #89 on: June 17, 2020, 01:01:00 PM »
Do you guys count your home equity toward your net worth?
We do. I count every (reasonable) asset and then back out the mortgage... Assets - Liabilities = Net Worth

Ooh... Then I better curb my enthusiasm:

$109,394 - $97,000 = $12,394. Oh well. At least it's positive.

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #90 on: June 17, 2020, 01:57:55 PM »
Ooh... Then I better curb my enthusiasm:

$109,394 - $97,000 = $12,394. Oh well. At least it's positive.

How much is your house worth, ignoring the mortgage?

bonbonbaron

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Re: Four Years of Tracking Net Worth
« Reply #91 on: June 18, 2020, 01:57:07 PM »
How much is your house worth, ignoring the mortgage?
It was listed at $165k before I haggled them down to $155k. If you mean what it's current value is disregarding that, then I'm not sure; I haven't gotten it appraised since then.

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #92 on: June 18, 2020, 02:21:24 PM »
How much is your house worth, ignoring the mortgage?
It was listed at $165k before I haggled them down to $155k. If you mean what it's current value is disregarding that, then I'm not sure; I haven't gotten it appraised since then.

Okay. The reason I ask is that it looks like you're double counting your mortgage when calculating your net worth. You added home equity originally to arrive at $109k and then backed out the $97k mortgage. Home equity is your home value minus your mortgage so it's already accounted for. The way it looks to me is that you have $56k in liquid assets and a $160k house. Backing out the $97k loan means your net worth is somewhere around $119k. Does that seem accurate?

Liquid Assets (Cash & Investments): $56,000
Home Value (Conservative Estimate): $160,000

Mortgage (Outstanding Balance): $97,000

Net Worth: $216,000 - $97,000 = $119,000

clarkfan1979

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Re: Four Years of Tracking Net Worth
« Reply #93 on: June 24, 2020, 07:57:17 AM »

2010 (age 30): approximately -10,000 (full-time grad school)
2011 (age 31): approximately even (graduated grad school)
2012 (age 32): approximately 50,000 (got married)
2013 (age 33): approximately 85,000
2014 (age 34): 142,000

* I bought one foreclosure in 2007 and a second foreclosure in 2012. I'm counting appreciation for both of them. One is a rental. The other is our primary house, which will most likely be a rental in 1-2 years. I'm a University prof and I will most likely be changing schools in the near future for more money. I interviewed at two schools last year in which my salary would have doubled. I didn't get either job, but I think it should happen in the next 1-2 years, along with a 50% - 100% raise. I started out real slow because of graduate studies, but I'm confident that I can pick up the pace in the near future.

This is fun to go back to a post I made 6.5 years ago. Thinking back from my projections of 2014 to 2020, our current household income is lower than I would have expected, but our net worth is higher than I would have expected. Our lower household income is somewhat on purpose because my wife made a conscious decision to work part-time since May 2015 and I chose my last job (August 2019) based on overall lifestyle design and not highest W-2 income.

Continued Net Worth (Measured in February)

2015 (Age 35) 272K
2016 (Age 36) 364K
2017 (Age 37) 452K
2018 (Age 38) 522K
2019 (Age 39) 618K
2020 (Age 40) 726K

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #94 on: July 17, 2020, 07:30:17 AM »

2010 (age 30): approximately -10,000 (full-time grad school)
2011 (age 31): approximately even (graduated grad school)
2012 (age 32): approximately 50,000 (got married)
2013 (age 33): approximately 85,000
2014 (age 34): 142,000

* I bought one foreclosure in 2007 and a second foreclosure in 2012. I'm counting appreciation for both of them. One is a rental. The other is our primary house, which will most likely be a rental in 1-2 years. I'm a University prof and I will most likely be changing schools in the near future for more money. I interviewed at two schools last year in which my salary would have doubled. I didn't get either job, but I think it should happen in the next 1-2 years, along with a 50% - 100% raise. I started out real slow because of graduate studies, but I'm confident that I can pick up the pace in the near future.

This is fun to go back to a post I made 6.5 years ago. Thinking back from my projections of 2014 to 2020, our current household income is lower than I would have expected, but our net worth is higher than I would have expected. Our lower household income is somewhat on purpose because my wife made a conscious decision to work part-time since May 2015 and I chose my last job (August 2019) based on overall lifestyle design and not highest W-2 income.

Continued Net Worth (Measured in February)

2015 (Age 35) 272K
2016 (Age 36) 364K
2017 (Age 37) 452K
2018 (Age 38) 522K
2019 (Age 39) 618K
2020 (Age 40) 726K

WOW! You're on an amazing pace. I love having these historic posts to look back on. Mindset, goals, income, and net worth all change more than we could expect. I'd encourage anyone reading to write down what they foresee for the future and then check back in a few years. Fun little time capsule.

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #95 on: February 20, 2021, 10:45:31 AM »
I'm bumping my thread to enter another year of data. We ended up having a great 2020 on paper but a tough one emotionally and mentally. I feel like our family has finally found the rhythm of how to work and socialize in the safest ways possible. Not much has changed on the professional front in the last 12 months - just status quo and staying the course. That's something that we're very appreciative of given the current environment. Thankful to be employed and have a chance to plow forward.

Our net worth went up over $200k last year and so far, in the first seven weeks of 2021, it's up another $100k. This recent jump is thanks mainly to an investment taking off. It's been a lot of fun to see the hard work of investing over the last decade pay off with sizeable compounding. I think of this quote: "It took me 10 years to become an overnight success".

On the horizon for the year ahead is to (1) grow our family with another child, (2) reach $900k net worth, and (3) continue to max out my 401k and HSA. As always, we're paying down our mortgage at about $40k-$50k per year. Now that we're refinancing to a 1.7% loan though, I might put those dollars in some lower-risk investments to achieve the same goal but keep liquidity. Our mortgage payment, without escrow, will be about $650 and adds to the financial peace and flexibility that we've been after. P&I was more than $2100 when we bought our house in 2017. Now we can subside on a gross income of $45k-$50k if needed.

One thing I've noticed this past year is that the pull of lifestyle creep is insane and insidious. It worms its way in before you even realize it's happening. We'll need to stay diligent to avoid this pitfall. Our current lifestyle provides plenty of happiness and anything additional would only be a temporary increase. Hedonic treadmill and all of that.

Net Worth
2010: ($18,000)  [Student Loans]
2011: $25,000     [Married]
2012: $41,000
2013: $62,000     [DH Graduated]
2014: $108,000   [DW Graduated]
2015: $172,000
2016: $263,000   [Cross Country Move & Career Change]
2017: $353,000   [Bought House]
2018: $365,000   [Promoted at Year End]
2019: $559,000
2020: $769,000
2021: $868,000  [Current]

Income*
2010: $33,000   + $2,000   = $35,000
2011: $43,000   + $5,000   = $48,000
2012: $45,000   + $8,000   = $53,000
2013: $42,000   + $15,000 = $57,000
2014: $48,000   + $29,000 = $77,000
2015: $53,000   + $55,000 = $108,000
2016: $45,000   + $52,000 = $97,000
2017: $74,000   + $45,000 = $119,000
2018: $65,000   + $30,000 = $95,000
2019: $104,000 + $23,000 = $127,000
2020: $140,000 + $20,000 = $160,000
2021: $140,000 + $10,000 = $150,000 [projected]

*DH + DW = Household

Current Assets:
$450,000 House, $553,000 Invested, $20,000 Cash, $25,000 Vehicles

Current Debts:
$180,000 Mortgage

We'll see what happens in the next few months. I have my annual review coming up soon and hope my bonus isn't impacted too much by lower company revenues. All of these investment gains could be gone tomorrow but I appreciate them while they're around and will continue looking at long-term goals. Barring that, we're on track to reach FI in 2-3 years now and will be millionaires in 2022. DW going back to work full-time may happen after our kids are older. Certainly downsizing our house would speed things up a bit but I think maintaining this current setup is good for now.

Onward and upward! Best of luck to you all out there. It's fun to track the progress that we've made just a few years (7) out of college.

Mrs. Sloth

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Re: Four Years of Tracking Net Worth
« Reply #96 on: February 20, 2021, 10:59:05 AM »
Wow...great job! Thanks for sharing your income history as well. A lot of people on this forum makes sooo much more in income (or so it seems) and so it is inspiring to see someone making such great progress in networth growth dispite not making those type of salaries. Keep up the good work!!

PencilThinMust

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Re: Four Years of Tracking Net Worth
« Reply #97 on: March 14, 2021, 06:53:38 AM »
Really enjoyed your yearly updates!!

neo von retorch

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Re: Four Years of Tracking Net Worth
« Reply #98 on: March 14, 2021, 07:08:03 AM »
Great job on your net worth improvements!
...

Since then, sold the previous house (just last year after using it as a rental), got married, bought a house together.  So all of these values are total net worth - including appraised house value and mortgage debt.

Year   Total
2011   $60,378
2012   $95,933
2013   $128,786
2014   $184,603
2015   $245,147 (married)
2016   $319,288 (bought house)
2017   $430,109
2018   $502,059
2019   $651,070
2020   $796,041

Past six months were unemployed, and net worth grew a record amount. Go figure! Start work back up on Tuesday. Hello, fire hose, we meet again!

LivingTheory

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Re: Four Years of Tracking Net Worth
« Reply #99 on: March 16, 2021, 06:16:18 AM »
Really enjoyed your yearly updates!!

Thank you. It’s fun to have a few entries to look back on. We’ll see where we end up by 40.