The Record Thus Far
"Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish."
1997 | $80,641 |
1998 | $134,135 |
1999 | $224,502 |
2000 | $300,710 |
2001 | $337,281 |
2002 | $401,199 |
2003 | $477,903 |
2004 | $549,144 |
2005 | $684,813 |
2006 | $864,380 |
For the record:
- We did not receive stock options.
- We did not own any rental properties.
- We did not inherit money.
- We did not win the lottery.
- We are not employed as managers or executives.
- We are not self-employed.
- Starting in 2000, we are a one-income family with kids.
In short, we're a typical middle class family with a typical middle class lifestyle. Yet we save a lot of money. Saving money is what is mainly responsible for the continual increase in net worth shown in the above table. The rest of the increase came from investment growth. I listed the factors that did not contribute because I wanted to be clear that saving money and increasing net worth is possible even if you aren't a dual-income family or an executive or a business owner.
As I indicated in my first post to this blog, there is no silver bullet to increasing net worth and making early retirement work for me. The track record above is based on very basic principles of saving and investing money, but applied consistently over a long period of time. 10 years is a long time to stick to a budget! I find that once net worth begins to increase significantly, there is a tremendous temptation to alter the original plan and spend a lot of what has been accumulated. This is what all the advertisements and salespeople in life try to entice one to do.
But I am sticking with the plan. I think back and remember why I started down this road. It was not to enjoy big houses and luxury vehicles and leather sofas. It was not about having things. And it was not about prestige. And it was not about security. It was about time -- more time for my wife and kids and other relationships that mean something to me. And it was about the freedom to pursue my own goals in life unshackled from the daily grind of earning a paycheck.
Oh yes, I am sticking with it...
10 comments:
SB,
That is one very nice table. It's inspiring to see someone who has made the decision to retire early and worked for 10 years at it.
Your giving me something to look forward too as I work on my own dream to retire at 45.
Keep up the posts and best of luck,
CD
Thanks for your kind words, CD.
It is indeed a long road. Best of luck to you as well. I see we have very similar goals.
Great progress on the net worth and a great blog too, sb! It is well written and very thoughtful. I wish you all the best as you pursue your goals.
money diva
This is a truly inspiring post -- I have posted my numbers for the last 10 years here.
Thanks for the comment, Nigel. I will check out your site...
Thanks SB.
This is a great post. Recently I started taking a close look at my expenses and finances. Disciplined saving and simple style investment like investing in cost effective index funds will help to achieve the disired financial freedom. Disciplined and consistant saving is the key word.
Ch.V
Hi,
You have posted the stocks you hold, do you also have MFs?
What is your asset allocation and MF/Stock Portfolio look like?
Please share if you are comfortable otherwise I understand.
Anonymous: My apologies for the lack of a timely response, as I have been away for much of this month. To the extent I feel comfortable, I will address your questions in my next post. Thanks for your comments.
SB, I wonder if you would break down your net worth investment holdings between retirement (IRA/401k) and Taxable accounts. I was excited to find your blog today, I have had the goal of retiring at 45 for some time so I loved the name of the blog. My strategy involves investing mainly in my retirement accts in early on then gradually switching to my taxable accounts. I would love to share my strategy and learn more about yours via email if possible.
r_mantini: Yes, I also took the approach that funding non-taxable retirement accounts came first, and then taxable accounts. This seems reasonable in that you take advantage of the deductions and the tax deferral early, but then try to put enough away in taxable accounts to carry you through 59 1/2 without paying the penalty for tapping retirement accounts early.
But I try to avoid overemphasizing the issue of maximizing deductions and avoiding the early withdrawal penalty. The tax differential between ordinary income and capital gains can be significant, and so can the tax bracket differences. I'm expecting my portfolio to be split roughly 50%/50% between taxable/non-taxable when I retire. I'm mainly looking for flexibility. I can achieve tax deferral in taxable accounts simply by not selling, and I can withdraw money early from retirement accounts by paying the 10% penalty. Obviously, I would try to avoid the latter scenario, but worst case, you can assume you pay the penalty on everything and think of your retirement accounts as being worth 90% of their current value.
As for e-mail, it would be nice to share ideas with others who have similar approaches to their finances. On the other hand, like a lot of financial bloggers, I value my anonymity, and posting an e-mail on my site does tend to lessen that. Let me see if I can come up with something...
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