What did different 100k milestones feel like to you?

[inline five]

In Jan 2016 we had $600,000 and I switched to an online aggregator as I switched from mutual funds to individual targeted trades. By early Jan 2017 we hit $1m and today net worth is around $1.4m

This story is great, but I need deets.  How did you add $800k to your net worth in two years on only $100k of household income? 

We've added less, but we earn and contribute more, and we started with a higher baseline so market returns have been more helpful to us than they were to you.  We also "earned" a bunch in leveraged real estate equity in a hot market, but not 400k/year.

Please tell me it wasn't bitcoin.

We make more now. Our averaged HH income is $100k. We save about $100k a year over the last two years so $200k has been contributions.

$130k in home equity of which $40k-ish is appreciation and $90k pay down.

I've only owned several companies. Four actually.

Who cares if it was bitcoin? It wasn't but it doesn't really matter.

I know a guy who bought a couple thousand or something and sold for $500k and bought a house cash. Money is money.

[BuffaloStache]

They all feel like COOKIES!

[image removed for brevity]

But then, I have the maturity of a 6 year old, so feel free to listen to the adults instead.

I feel like this reply was overlooked, but amazing. I have a new way to mark big $100k net worth milestones! We just passed $100k this year, but due to a potential condo rental and house purchase in the next year we may dip below that again.


For those either FI or close to it, at what ~$100k-level did the exponential growth/compounding interest effects really seem real to you? Nords classically states that humans are inherently bad at visualizing exponential (or any non-linear) growth, and I certainly agree. Getting to $100k seemed like a lot of work, so it seems impossible to me that there will come a day when my investment gains/dividends will provide a significant boost as well as my monthly savings.

[sol]

it seems impossible to me that there will come a day when my investment gains/dividends will provide a significant boost as well as my monthly savings.

Oh it's real.  Our net worth routinely fluctuates day to day by more than our monthly expenses (or savings). 

[SimpleCycle]

Everything is joint, so I never got to $100k on my own, we got married and bam, $100k.  So it didn't feel like an accomplishment, but it did feel like a measure of safety.

Things that did feel big:
-hitting $0 net worth on my own (yay, my assets are bigger than my student loans and I paid off my credit card debt!)
-hitting a $100k year over year increase (this was when we were around $250k to start, so it was a huge amount of market growth)
-we're nearing $500k liquid, and that feel HUGE.  definitely serious FU money and definitely enough to give us options.

Around $300k is when it felt like "a lot of money" to me.  That is when I started learning about asset allocation, and also when we seriously upped our savings rate.  Suddenly more things seemed possible.

[pegleglolita]

Sorry if this is a little off-topic, but when you all are calculating net worth, do you assume fair market value for your home and subtract mortgage amount?  Or is there some penalty for the non-liquidity of real estate you have to factor in?  In other words, instead of fair market value do you use the "fire sale price you would need to sell it the day you list it"?  Just a philosophical question really.  I don't remember passing $100K, but now that I think about it it does feel kinda nice.

[one piece at a time]

Liquid assets or investable assets are  what most people think of. If you've got a 4 bedroom house downtown in a major city that you are keeping because of amenity for yourself and children, then I suppose you could add in some "downsizing equity" when tracking things.

I only look at liquid assets. If I can't get it in a week it doesn't count. So my $350k is eft, eft indexes and cash. My house and retirement account doesn't count (I always assume I'll be dead before I get to the withdrawal age).

[EricL]

Passing $100,000 milestones isn’t that big a deal.  Even for the first one.  I check often enough I never get surprised when I pass them. The BIGGEST impression ever made was a day when the markets hiccuped dramatically up a few percentage points. On that day I made the equivalent of my old monthly minimum wage job wage in one day.. THAT was a seriously awesome WTF moment.

Of course, the market hiccuping downward is often accompanied by serious ”Don’t freak out. Breathe motherfucker, breathe. This shit happens all the time. It’ll be OK.” moments too.

Despite my age there’s still a part of me that thinks like a private or minimum wage kid.

[MrMoneySaver]

Net worth is defined as assets minus liabilities. Real estate and retirement accounts definitely count. People can make up other definitions, but that's non-standard usage and should be qualified accordingly (eg, "My liquid net worth is ...)

For the purposes of this thread, the term used was "milestones," so I guess we can define that as we wish. I think of it as invested assets, whether in retirement accounts or otherwise.

[BuffaloStache]

it seems impossible to me that there will come a day when my investment gains/dividends will provide a significant boost as well as my monthly savings.

Oh it's real.  Our net worth routinely fluctuates day to day by more than our monthly expenses (or savings).

Thanks for the insight sol, but when did this start happening? Was it after $600k, $500k, or more?

[BuzzFire]

it seems impossible to me that there will come a day when my investment gains/dividends will provide a significant boost as well as my monthly savings.

Oh it's real.  Our net worth routinely fluctuates day to day by more than our monthly expenses (or savings).

Thanks for the insight sol, but when did this start happening? Was it after $600k, $500k, or more?

I personally started to take notice around $600k. This year I had my first WTF moment when in one day my VTSAX gains equaled about half of my final year's take home pay.

[MasterStache]

it seems impossible to me that there will come a day when my investment gains/dividends will provide a significant boost as well as my monthly savings.

Oh it's real.  Our net worth routinely fluctuates day to day by more than our monthly expenses (or savings).

Thanks for the insight sol, but when did this start happening? Was it after $600k, $500k, or more?

Certainly depends on the market. But recently I have witnessed it happening with less than 500K invested.

[CameronK]

The two major milestones that made me take notice, was when I had more invested in the markets than the total value of my paid for house, and then recently when I tallied the last 12 months worth of investment gains are more than the 6-figure (gross) salary it took me all year to earn.

[sol]

Thanks for the insight sol, but when did this start happening? Was it after $600k, $500k, or more?

That depends on your savings rate, doesn't it? 

If you're saving half of your income and make 10% on your investments, then a 1% daily market fluctuation on your invested nut will exceed your monthly expenses in year six.

Code: [Select]

year income nut spent/mo  1% flux 50% savings rate
1 100,000 55000 4167 550
2 100,000 115500 4167 1155
3 100,000 182050 4167 1821
4 100,000 255255 4167 2553
5 100,000 335781 4167 3358
6 100,000 424359 4167 4244

If you have an 80% savings rate, then it's in year two.

Code: [Select]

year income nut spent/mo 1% flux 80% savings rate
1 100,000 88000 1667 880
2 100,000 184800 1667 1848

If you have a 20% savings rate, then it's in year thirteen.

Code: [Select]

year income nut spent/mo 1% flux 20% savings rate
1 100,000 22000 6667 220
2 100,000 46200 6667 462
3 100,000 72820 6667 728
4 100,000 102102 6667 1021
5 100,000 134312 6667 1343
6 100,000 169743 6667 1697
7 100,000 208718 6667 2087
8 100,000 251590 6667 2516
9 100,000 298748 6667 2987
10 100,000 350623 6667 3506
11 100,000 407686 6667 4077
12 100,000 470454 6667 4705
13 100,000 539500 6667 5395
13 100,000 615450 6667 6154
13 100,000 698995 6667 6990

I've assumed uniform income over this period, but you could just as easily modify the income column with an assumed inflation rate.  I've also assumed 10% investment return per year, which is conservative for the past eight years but slightly higher than the long term average.  Again, you could modify the "nut" column to reflect an assumed arbitrary return percentage on investment per year, instead of just a fixed 10% each year.

Also note that the salary you put in per year is irrelevant.  At a 50% savings rate, it's year six regardless of whether you make 100k or $1 per year, because it's only a matter of percentages.

Spreadsheets are fun!

[Bateaux]

About the time we crossed the 500k invested amount was about the time I started to study the 4% rule.   Then immediately realized that 500k is chicken feed.  Crossing the 1 million invested mark was mentally inspiring.   Figured at 1M we'd hit FU money, but 4% rule once again informed me 1M is still just not enough scratch.   Set Fire goal of 1.5M and unfortunately it wasn't the victory I'd expected.   With the ACA coming under attack a medical emergency could wipe out 1.5M quickly.   Set new goal, 1.5M for living expense and 500k additional for health care expenses for a total of 2M invested.  Sitting near 1.9M now with zero debt and additional paid off real estate.   Highly thinking of reseting FIRE goal to 2.5M total.   That's 100k a year using 4% rule.   That's real money.

[MrMoneySaver]

Highly thinking of reseting FIRE goal to 2.5M total.   That's 100k a year using 4% rule.   That's real money.

Something tells me you won't feel that way when you reach it.

[BuffaloStache]

About the time we crossed the 500k invested amount was about the time I started to study the 4% rule.   Then immediately realized that 500k is chicken feed.  Crossing the 1 million invested mark was mentally inspiring.   Figured at 1M we'd hit FU money, but 4% rule once again informed me 1M is still just not enough scratch.   Set Fire goal of 1.5M and unfortunately it wasn't the victory I'd expected.   With the ACA coming under attack a medical emergency could wipe out 1.5M quickly.   Set new goal, 1.5M for living expense and 500k additional for health care expenses for a total of 2M invested.  Sitting near 1.9M now with zero debt and additional paid off real estate.   Highly thinking of reseting FIRE goal to 2.5M total.   That's 100k a year using 4% rule.   That's real money.

Definitely don't mean to judge here, but isn't this the definition of "one more year" syndrome? I guess it's reasonable if you want to absolutely confirm that you never need to work again, but don't forget to remember your inherent safety margins (you mentioned ACA, so I'm assuming you live in the US). Either way, good luck!

[sol]

About the time we crossed the 500k invested amount was about the time I started to study the 4% rule.   Then immediately realized that 500k is chicken feed.  Crossing the 1 million invested mark was mentally inspiring.   Figured at 1M we'd hit FU money, but 4% rule once again informed me 1M is still just not enough scratch.   Set Fire goal of 1.5M and unfortunately it wasn't the victory I'd expected.   With the ACA coming under attack a medical emergency could wipe out 1.5M quickly.   Set new goal, 1.5M for living expense and 500k additional for health care expenses for a total of 2M invested.  Sitting near 1.9M now with zero debt and additional paid off real estate.   Highly thinking of reseting FIRE goal to 2.5M total.   That's 100k a year using 4% rule.   That's real money.

Definitely don't mean to judge here, but isn't this the definition of "one more year" syndrome? I guess it's reasonable if you want to absolutely confirm that you never need to work again, but don't forget to remember your inherent safety margins (you mentioned ACA, so I'm assuming you live in the US). Either way, good luck!

People like this can never "absolutely confirm" they won't need to work.  What if my cousin has a medical emergency?  What if our daughter wants to be an Olympic gymnast?  What if North Korea nukes US soil and I need live in an underground bunker for ten years?

What if an earthquake destroys my house?  What if medical advances mean I can put my brain into a robot?  What if Elon Musk starts selling real estate on mars and I'll only be able to afford a condo by the ice machine unless I have a billion dollar down payment?

There are enough what ifs in life to keep you working forever, if you let your aspirational fantasies take over.  At some point you have to draw the line, and accept that more money will not make you any happier than being free of your job will make you.  Even if it means you get to be a robot living on mars.

[Lmoot]

I'm still partway through my first hundred thousand $130k. Hoping to reach a quarter mill before I reach 40. That is going to be my next big milestone, $250,000. Hope I reach it before my car reaches 250,000 miles.

[retireatbirth]

it seems impossible to me that there will come a day when my investment gains/dividends will provide a significant boost as well as my monthly savings.

Oh it's real.  Our net worth routinely fluctuates day to day by more than our monthly expenses (or savings).

Thanks for the insight sol, but when did this start happening? Was it after $600k, $500k, or more?

Even at $300k, you can get some pretty cool days. Market was up 1% plus I think my fund will post about 1.5% dividend today so that's $7,500 which pays for my next 3 months of living expenses. Wow!

[MrMoneySaver]

Even if it means you get to be a robot living on mars.

Even if that happens, you still shouldn't pay off your mortgage. Boarder42 told me so.

[BuffaloStache]

Even if it means you get to be a robot living on mars.

Even if that happens, you still shouldn't pay off your mortgage. Boarder42 told me so.

This has been a wild and fantastic ride... thank you

[Bateaux]

About the time we crossed the 500k invested amount was about the time I started to study the 4% rule.   Then immediately realized that 500k is chicken feed.  Crossing the 1 million invested mark was mentally inspiring.   Figured at 1M we'd hit FU money, but 4% rule once again informed me 1M is still just not enough scratch.   Set Fire goal of 1.5M and unfortunately it wasn't the victory I'd expected.   With the ACA coming under attack a medical emergency could wipe out 1.5M quickly.   Set new goal, 1.5M for living expense and 500k additional for health care expenses for a total of 2M invested.  Sitting near 1.9M now with zero debt and additional paid off real estate.   Highly thinking of reseting FIRE goal to 2.5M total.   That's 100k a year using 4% rule.   That's real money.

Definitely don't mean to judge here, but isn't this the definition of "one more year" syndrome? I guess it's reasonable if you want to absolutely confirm that you never need to work again, but don't forget to remember your inherent safety margins (you mentioned ACA, so I'm assuming you live in the US). Either way, good luck!

People like this can never "absolutely confirm" they won't need to work.  What if my cousin has a medical emergency?  What if our daughter wants to be an Olympic gymnast?  What if North Korea nukes US soil and I need live in an underground bunker for ten years?

What if an earthquake destroys my house?  What if medical advances mean I can put my brain into a robot?  What if Elon Musk starts selling real estate on mars and I'll only be able to afford a condo by the ice machine unless I have a billion dollar down payment?

There are enough what ifs in life to keep you working forever, if you let your aspirational fantasies take over.  At some point you have to draw the line, and accept that more money will not make you any happier than being free of your job will make you.  Even if it means you get to be a robot living on mars.

Yes, yes, yes...entertain me dammit you beautiful bastards.  Hopefully my OMY syndrome will be limited to 1.5 more years syndrome and end mid 2019.  Hopefully done in my 50th year.  I'm a huge Elon Musk fan and yes, being able to afford some of the toys he's dreaming up is part of my problem.

[Loren Ver]

So I noticed the big numbers passing us by even if it was slowly, so I had DH make me a wooden dragon with a hoard to guard.  As we hit 10k it gets another gold coin with the number on it.  We are slowly filling the dragon's hoard.  This gives us a good visual representation of how much we have to go since DH sized it to fit the number of slots for our FIRE number.  We only updated it on the quarters of the year to avoid market fluctuations.  Also, since I know about volatility, the coins are added with sticky tack so I can take them off as needed.  Not a happy reminder, but DH an I are both analytical so accuracy is important to us.  Stupid adventurers stealing from my dragon :(.

LV   

Seriously!?!?! That is amazing! I want pics!!!

As per request.

[Loren Ver]

They all feel like COOKIES!

Example:



But then, I have the maturity of a 6 year old, so feel free to listen to the adults instead.

Also - I love this.  I am going to do this.  Maybe for 700,000 if I can wait that long.  Yum cookies.   A minute on your lips, forever on your hips.  I'll get to see if everyday!

LV

[Rubyvroom]

The first $250K was a good feeling because that was the end of the first year we actually flexed our MMM muscles.

$400K was also a big one because I had forecasted we'd only reach $385K by the end of this year, but with the market run up we reached $400K by November.

This is a different sort of milestone, but there was one month in 2016 and two months in 2017 where the market generated more than we saved. I'm looking forward to more of those.

[BuffaloStache]

So I noticed the big numbers passing us by even if it was slowly, so I had DH make me a wooden dragon with a hoard to guard.  As we hit 10k it gets another gold coin with the number on it.  We are slowly filling the dragon's hoard.  This gives us a good visual representation of how much we have to go since DH sized it to fit the number of slots for our FIRE number.  We only updated it on the quarters of the year to avoid market fluctuations.  Also, since I know about volatility, the coins are added with sticky tack so I can take them off as needed.  Not a happy reminder, but DH an I are both analytical so accuracy is important to us.  Stupid adventurers stealing from my dragon :(.

LV   

Seriously!?!?! That is amazing! I want pics!!!

As per request.

Between the cookies and the dragon board, I feel like I am definitely not celebrating my 'stache milestones nearly as creatively or as much as I should be. Inspired!

[jexy103]

-$30K - Found Dave Ramsey and started paying attention to finances. Felt depressing and like a had a loooong road ahead.
$0 - I bragged to my father that I had paid off enough of my student loans that my debt equaled my assets. He told me, "Congratulations- now you're on par with the homeless man down the street." Gee, thanks Dad.
Found MMM
$100K - Whoo-hoo! 6 figures! That was a lot of work, but actually not as hard as I expected.
$200K - Wow, that went a lot faster than the first $100K.
($250K - Cool, a quarter mil.)
$300K - "Hey, honey- another $100K." "Cool."
$400K - "Oh, honey, I looked at Mint today and realized we've been over $400K for a few weeks now." "That's nice."
$500K - TBD, but I think the 1/2 million will feel nice. But except for 5 being half of 10, it's really just another number with a bunch of zeros after it.

[Jessica J. Babbitt]

I like your thoughts after reaching the 300K milestone, "no more corporate bullshit". I will be there soon.

[BTDretire]

It felt awesome. 100 grand gets a lot of hookers and blow!

  Ya, but it sucks that you're to Mustachian to spend it on that!

[BTDretire]

I'm to old and it was to long ago, I don't remember.
I do remember a big milestone on 1-1-11 and I'm
hoping the market holds up through* the end of the year.
I'll check my net worth in 1-1-18, I'm confident that will
be a second big Milestone.
 Never really did any celebrating, I mention it to the wife and
she's like, oh, and moves on.
 I do plan on taking her out to dinner this time.
I would not be where I am without her.
 Age gives us the advantage of 36 years growth.

* shouldn't that be threw the end of the year?