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March 07, 2014


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Nice update FMF. Amazing consistency of 14.8% annual growth - that's brilliant. Looking forward to seeing what you can do in 2014!

2013 was a great year for our net worth. We were up over $200K, which for us was almost 50%! =)

@FMF - Thanks for sharing. Looking forward to rental property updates.

11 years ago we moved to a new city, had a child and I took a huge pay cut. (Still a nice salary but less than half of what I was making when consulting for myself and traveling 100% of the time.) I bring this up to give another perspective for Compound Annual Growth Rate CAGR for the last 10 years.

We started with a nice net worth due to savings from my old job and real estate gains when moving, but didn't save that much over the next 5 years. The last 5 years has seen a large increase to my salary and increased saving. I have tracked my CAGR over the last 10 years and it comes out to 7%. That is half of FMF's number and while there may some investment differences, the main part of that is the annual savings component to fuel growth. It sounds like I have a similar investment strategy with vanguard mutual funds and rental properties.

Two points:
My CAGR was primarily driven by investment growth. My guess is that FMF's CAGR will start trending down. As his annual savings becomes a smaller percentage of his net worth the CAGR will be tied more to investment gain.

There are many different ways to get to a retirement goal. I worked really hard and got paid a lot of money for 3 years and saved a good part of that. Even though the next 5 years were tight, my net worth kept growing from investment growth. Find the path to a good net worth based on your own situation.

Erik --

Most of my early gains were fueled by savings growth, but you're right, as net worth gets higher, it's hard to grow it much with savings as the main driver.

For instance, ten years ago, I may have saved enough each year to add 5-10% to my net worth on savings alone. Last year I saved about the same actual amount, but that was only 2-4% of my net worth. Most of the results last year were driven by the market's great performance. That's the way it will be from here on out.

Congrats! I wish I new someone like you locally that could mentor me.

I quit tracking our home and personal property as assets a while back - even before the real estate boom crashed. We may end up living in the same place for the rest of our lives, anyway, so it's irrelevant what it would sell for, and it will be paid off by the time we retire.
Our liquid net worth was up 22% for the year, including IRAs, 401Ks, brokerage accounts, checking and savings.

We were up only 16% in net worth, it was an expensive year for use with both kids in preschool at the same time, and a very large gift to family for a house purchase

The tax cut is growing every year, now at 31% total. At our income level, entirely from salary, there are almost no shelters or deductions.

Our investment portfolio, which was entirely in various types of bonds was up 4.98% but in dollars it was up $357,477. We don't own a single share of stock or any mutual funds that own stocks. At the age of 79 and 80 we like individual bonds because when they mature you get your investment back, meanwhile you receive bi-annual interest payments. In our IRAs we have corporate bonds, a mutual fund that owns taxable bonds yielding 6.2%, and some 5% CDs. In our Trust account we have a large mix of municipal bonds from various states but prefer to buy California bonds because their income isn't taxed by our state. We still have to pay quite a lot of state and federal taxes because, as most of you know, with IRAs once you reach 70 1/2 you have to start moving money out of them every year and pay state & federal taxes on that money.

I logged in a net worth increase of about 10% in 2014.

Obviously it gets much harder to see impressive percentage gains once your net worth hits large numbers.
Mine included a high savings rate (about 40%) and reasonable stock market returns. The dollar increase was low six figures.

My portfolio is diversified with stocks, bonds, international and real estate. So it does not track directly with the all equity S&P 500 or Dow. In 2013 the all stock indexes beat my portfolio. I am sure that in down years that will not always be the case.

I do not include real estate appreciation or personal property (cars, furniture etc..)in my net worth.

Honestly-- as I age and the numbers get larger-- I am less and less comfortable with the daily swings. My portfolio can swing in excess of $10K in a day. That has made me more conservative and continues to be front and center as I design my asset allocation going forward. Currently I am about 60% equities. 50% equities is in the cards in the near future.

It becomes less about what can I gain and more about conserving and protecting what I have.

Anyone else relate?

This is VERY inspiring stuff.
Our net worth is in the negative.

Fmf (or anyone) where does a 32 yr old and 28 yr old married couple in the negative with net worth start? We have school loan debt, credit card debt, 3 young kids, full time (82k) and part time (27k) jobs, a home and one car (will be paid off in December). We're trying to up our credit scores because we need a new home (ran out of space and the neighborhood isn't the best). Is there a "start here" on this site that I'm not finding?


It all starts by living below your means. Its that simple.

Therman --

I agree with Millionaire #19.

Here's an article that will give more details:

And here's a complete series that will help:

Therman - First step, don't lead with your focus being on upping credit scores to enable you the benefit of getting even further in debt...

FMF - I'll say it far your biggest threat to a long comfortable retirement is that you'll never retire!

Good idea about adding a debt column for college. Our kid is only 3 so I'll do that later as he get near college age. Maybe at the start of high school.
Enjoy your work. It's great that you like your job.

Steve --


I don't count my kids college savings in my net worth either, even though I'm funding them. I don't count it as debt either because the kids are going to be responsible for the debt. I will help them pay it off later but they need to have some skin in the game to get value for the money.

FMF solid stuff and keep up the good work!

What would you say the weekly posting will be for the rest of the year? 3x a week? I love the article synopsis mixed in with the very popular profiles (reader, six figure, millionaire, retiree)

I began tracking my net worth when I found this website last year. I started with the end of the 3rd quarter in 2013. In the 5 months since then my net worth increased by 62%! A lot of that is due to market appreciation. I'm in my late 20's, and I imagine I will not see such rapid increases as I get older.

PBJ --

Just thinking that question over myself.

I am scaling back a bit as I am swamped at work and home (getting settled in a new job and house.) I would say a minimum of once a week and a max of three times a week is my thinking at this point.

I will run as many interviews as possible, but I'm running out of volunteers!

How do you get the refund from SS?

@Millionaire #19
As I got older I started to find that taking large losses in a single day was really bothering me and by 2008 I realized that my portfolio was plenty large enough that it was very important for me to get out of volatile investments and into much lower volatility investments that I could live with. At that time I also started looking at some of my charts that were based on the McClellan Summation indexes for the S&P500 and the OTC. They showed an ominous pattern of lower lows and lower highs which portended bad things to come. That's when I made the shift from mutual funds completely into bonds. It reaaly doesn't make any sense to make 50% one year and then give it all back the next as happens when you run into a recession, it's better to just keep your numbers ascending year after year. This strategy also fits in very well when you are retired and take lengthy overseas vacations.

Ginger, I wondered the same thing. There is a line #69 on Form 1040 to request refund of excess SS payments.

Ginger --

I believe it's accomplished when you file your federal tax return. I had it happen one time several years ago as well and I think this is how I got the money back.

Thanks for the responses. I'm so ready to live the life you guys are all living.

Am I reading it correctly that your charitable giving actually exceeded your spending? If so, that's admirable discipline.

FMF and I are very similar. I'm just 16 years behind where he's at! :)

FMF inspired me to start tracking my net worth and I've been posting about it to hold myself accountable for the past few months. The latest update is at

Thanks for the update FMF. I'm looking forward to hearing about this latest real estate transaction!

FMF - you are correct. It is refunded on the 1040.

FMF - perhaps $10 for an interview would draw in more profiles? After all, we are all capitalists here... :)

Hello FMF,

Would you mind disclosing which index fund investments you made by name, without any responsibility for their future performance and not as a recommendation but as ahistorical disclosue, or at least share with us any raamking site that evaluates various index fund proucts????
Paul L, Dallas Texas


Meant " Share with us any ranking site that evaluates various index fund products ???? "


Paul -

Here are the funds I use:

Sarah --

Yes, they are roughly the same.

FMF- Our net worth increased 37.6% in 2013.18% from income savings and 82% from investment income. I am 100% invested in diversified low cost mutual funds and averaged a 34% ROI. I know I'll give some of this back over time as I don't subscribe to market timing, but over the past 13 years my average annual net worth growth computes to 22.8%, so for me it's working.

Interesting year for me as for the first time my investment growth was larger than my earned income.

FMF stated above:

"It becomes less about what can I gain and more about conserving and protecting what I have."

With the media screaming the death of Social Security, pensions on the brink (if you have one), constant talk about market crashing and such, I have also felt the pull of wanting to protect my smaller nest egg. But then I think about time horizons and fall back to what would I advice someone who approached me if they had 20 or more years until they started to need the money.

I believe, despite all the screaming noise from the media, that I would advise them to have significantly more than 50% in equities. So I have put my money where my mouth is.

I suspect when I hit ten years or less at needing the money, I will change my perspective and seriously look at withdrawl stategies besides a "%" rule.

I never thought about separating out my networth increase by investment gains versus savings. Will have to take a look at that.

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