Net Worth Gains through the Years

I love, love, love Quicken and have been using it for years -- almost two decades now. One thing I like so much about it is that it allows me to track my net worth and see my progress over time.

I thought I'd share my net worth gains by year (from Quicken) to demonstrated how the path to growing your net worth is not one straight climb. Sometimes it's up a bit and sometimes it's up big. And sometimes it's even down. Here are my results.

Over the past 17 years, my net worth has had a compound annual growth rate (CAGR) of 12.5%. But the gains versus the prior year have never been 12.5% exactly. Instead, they are as follows:

• 1997 - 15.6%
• 1998 - 22.8%
• 1999 - 18.6%
• 2000 - 14.2%
• 2001 - 9.7%
• 2002 - 4.8%
• 2003 - 28.3%
• 2004 - 17.5%
• 2005 - 7.2%
• 2006 - 19.9%
• 2007 - 13.3%
• 2008 - -15.7%
• 2009 - 28.8%
• 2010 - 20.9%
• 2011 - 7.0%
• 2012 - 15.9%
• 2013 - 19.5%

A few comments:

• I've only had a couple bad years -- both driven by bad years in the stock market. 2008 was my only down year and I think we all know what happened to cause that. 2002 wasn't that great either because the dot com bubble burst.
• In the early years my gains were mostly driven by my savings rate. We made much more than we spent and the difference went to growing our net worth (we invested the money for later growth.)
• The last few years have been driven by the stock market. I kept investing all through the 2008 crash and those funds are up dramatically since then. In fact my best year was 2009, the year after the crash. It's noteworthy that my second best year was 2003, just after the bubble burst.
• Four years had gains above 20%. I love those years. :)
• As for absolute dollars, 2013 was the best. Almost a 20% gain on a significant net worth is awesome. I hope I have a few more of those in my lifetime.

Ok, so not much to learn in this post, but kind of fun to look at the numbers.

How about you? Does anything stand out as you look at your net worth results?

Comments

[CD]

I only started tracking consistently in 2007. Looks like my investment portfolio has a lot more volatility than FMF's - which is probably appropriate for my circumstances. I was also aided by what turned out to be an amazingly fortuitous rebalance in 2009.

2007 - +18.5%
2008 - -24.0%
2009 - +78.5%
2010 - +29.3%
2011 - -0.97%
2012 - +24.1%
2013 - 17.5%

I'm still at a point that savings rate matters as much as returns, so trying to keep that as high as possible as it's almost entirely within my control.

[Jun]

Did you include house car furniture, etc. in your calculations of net worth? If so, how did you handle it? I've been using Quicken since 92 but not sure how to do what you did. Thanks.

[FMF]

Jun --

That's a good question.

The answer is that many people do it differently, and that's ok -- as long as you're consistent (comparing apples to apples every year.)

Personally, I include everything -- the value of my house, cars, etc. I do not put a price on personal property like clothing and so forth.

This makes it harder to increase my net worth (as a percentage) as the house/cars do not go up in value (the cars actually go down). But I feel it's what my true net worth is -- what I own if I sold it all.

I depreciate cars over four years and add in liabilities for things I know I'm going to spend. For instance, if I know I want to give $10,000 to an organization in four months, I might create a liability (debt) and add $2,500 per month for four months. Then when I make the contribution, I net the liability to zero.

Yes, I know I'm a nut-case when it comes to financial planning. :)

[Stephen M]

When I discovered this website last year, I decided to start tracking my net worth. I decided to calculate quarterly, and my first calculation was 9/30/2013. When I last calculated on 6/30/2014, I saw it increased 52% over the past 9 months. Not sure I would have experienced that if I wasn't tracking the numbers.

Thanks for the very informational blog.

[Mike]

I used to use Quicken too. Nice tool but the fact that they set it up to stop working every three years and force you to buy an upgrade really ticks me off. I now use Ace Money. Its free!

[#7]

I don't use quicken, but I do calculate both m/o/m and y/o/y increases on a monthly basis in my NW spreadsheet (I've been using the same spreadsheet for about 13 years now).

2001: 70.8%
2002: 36.5%
2003: 37.2%
2004: 37.2%
2005: 46.4%
2006: 28.9%
2007: 99.5%
2008: -22.0%
2009: 52.7%
2010: 17.5%
2011: 14.7%
2012: 19.0%
2013: 15.6%
2014 (June): 20.5%

Of course you can see history reflected in the numbers.. 2007 was an anomaly with some major capital gains as well as a modest inheritance. In 2013 we replaced three cars (I don't include cars in NW). But the most interesting observation is the drop in growth as "internal growth" starts to dominate new savings.

Of our NW, about 35% is in assets that aren't growing much (property, etc..).

[Chris]

Since I started seriously investing in 2006 here are my yearly results, with a CAGR of 24%:

2013 +40.0%
2012 +11.6%
2011 -15.2%
2010 +35.5%
2009 +32.7%
2008 -51.9%
2007 +19.0%
2006 +12.7%

Of course 2008 was brutal but it also meant everything was on sale. Like you mentioned, recessions really are the best time to invest - it's painful to watch investors pull their money out during those times and "wait it out" when that's the opposite of what they should be doing.

[Rob G.]

Here are my results since I started tracking it.

2014(YTD): 7%
2013: +25%
2012: +20%
2011: +11%
2010: +23%
2009: +38%
2008: -19%
2007: +21%

Prior to 2007 I did not keep detailed records but I know that my net worth increase by 159% from 2004 to 2007. The high return was mostly driven by relatively high contribution amounts.

[Old Limey]

I have kept track of my investments since 1/1/1993 which was after I had retired and had consolidated everything at Fidelity. I have never had a losing year since then.

My best year ever was 2000 when I made 30.96%.
My overall gain from 1/1/93 to 7/10/14 is ANN=15.92% compounded.

I have been in municipal and corporate bonds and two bond funds since 2007 when I decided to move into the slow lane for good.

I have always rembered two pieces of advice from a speaker and investment advisor at a seminar I attended just after retiring. It was:

DON'T LOSE MONEY
UNDERSTAND THE POWER OF COMPOUNDING.

[Josh Stein]

We're still at a negative net worth, but it's getting closer and closer to zero. The hope is by mid-next year we'll be positive.

I include the value of the house in our NW calc, but no "bigger ticket" items that we don't intend to sell for value (e.g., cars). The car payment (former car went "boom" before we were ready financially to buy a new one) is included in the debt side.

[M9]

1997 27.2%
1998 32.4%
1999 27.3%
2000 10.3%
2001 9.8%
2002 8.6%
2003 42.7%
2004 22.5%
2005 13.4%
2006 17.1%
2007 8.3%
2008 -37.3%
2009 38.1%
2010 12.5%
2011 -0.9%
2012 5.9%
2013 3.0%
2014 2.3% to date

1997 through 2013, 12.5% compounded. 52% is due to savings, 48% is due to returns. No savings added since 2011.

[CK]

I use Quicken as well. I looked at the % increase in my NM since 2000 and I actually track very closely to yours so I won't list mine out.

The one thing I wanted to add is that my 2008 change was also -15.7%....

[John Wedding]

What stood out for me wasn't that you had a lot of gains, but that you've tracked it for a loooong time! That kind of data is incredibly valuable.

[Steve]

Funniest thing is I'm traveling right now for a month and away from my quicken and it really bothers me I can't look at mine! (just realizing how closely i watch it)

I think I'm basically beating FMF in the good years b/c my investments are prob a little riskier (ton of small cap indexing)... and behind in the bad years for the same reason... and behind in the average years prob due to FMF's incredible savings rate (mine's pretty good until u compare it to FMF...).

[#6 millionaire]

I started working in 1996.

1997: 100%
1998: 110%
1999: 70%
2000: 40%
2001: 15%
2002: -10%
2003: 30%
2004: 35%
2005: 30%
2006: 100%
2007: 100%
2008: 40%
2009: 8%
2010: 55%
2011: 9%
2012: 9%
2013: 12%
2014: estimated at 10%

It looks like I may lose my job at the end of this year so not sure what next year will bring.

-#6

[#6 millionaire]

Sorry, forgot to mention my CAGR the past 17 years has been around 34%, how I wish that could continue going forward.

[John Mackenzie]

To start with I Envy you. What a steady growth rate of fund. OMG! I can’t help envying you. If I could have been so steady I would have been a rich guy by now. I’m surprised to see that you commented you had a couple of bad years. When people went negative you still had a 7% or 4.8% growth rate of fund. The economy went bust in those periods. I was almost at the verge of bankruptcy during 2005. However, I bounced back since then. :) I just one question to you – How did you achieve over 28 per cent growth? Did you go all stocks or you invest in highly speculative stocks only? Please share some ideas.

[PJ]

Here's my output from Quicken, starting when I think I had all my debts and assets in the software:

2006 9.5%
2007 59.5%
2008 -24.1%
2009 193.5%
2010 39.9%
2011 2.3%
2012 23.8%
2013 63.7%
2014 7.9%

This is a CAGR of 35.1% if I'm calculating correctly. I don't think this can be sustained realistically. My current plan is to try to stay at 28.3% CAGR to reach $1 million in seven years. I have a monthly Net Worth growth target that I need to meet to make this happen; and I am currently 9 months ahead of schedule.

2009 is not a misprint. We sold a condo for a modest profit, but more importantly, I rebalanced my retirement portfolio on Jan 27, 2009. The S&P 500 bottomed out on March 6, 2009. I've been riding it back up ever since.

Obviously, I could go for a lot less volatility.

[Old Limey]

My portfolio history since retiring in 1992 and switching into income investments in 2007.

End of 1992 .. $323K
End of 1993 .. $588K
End of 1994 .. $604K
End of 1995 .. $727K
End of 1996 .. $807K
End of 1997 $1.028M
End of 1998 $1.460M
End of 1999 $2.360M
End of 2000 $3.063M
End of 2001 $3.217M
End of 2002 $3.282M
End of 2003 $4.181M
End of 2004 $4.501M
End of 2005 $4.686M
End of 2006 $5.507M
End of 2007 $5.788M
End of 2008 $5.939M
End of 2009 $6.202M
End of 2010 $6.479M
End of 2011 $6.836M
End of 2012 $7.179M
End of 2013 $7.518M

[FMF]

John --

I had a few big years which can almost completely be attributed to:

1. A stock market that was up big (I do have a high % in stocks versus bonds)

2. A large gap between my income and expenses, enabling me to save a ton of money.

[Jon]

I love tracking my net worth and looking back at previous years and see how it's grown over time. I mainly look at a graph and can point out the major rises and falls. It really motivates me to keep doing what I am doing when I see where I came from.

[Old Limey]

This is an example of being a consistent saver and the Power Of Compounding money over 54 years.
==========================================================================

I started work in the USA in 1960 as an aerospace engineer at the age of 26 at a salary of $173/week.

When I retired in 1992 at the age of 58 my salary was $1,394/week.

As you can see above, the total value of our investment portfolio when I retired was only $323,000.

In 2013 the gain on my investment portfolio, now invested solely in income investments, was $339,000.

The lesson is that you need compounding if you are to stay ahead of inflation.

[Deserat]

Interesting posts by all - I haven't run the deltas by year, but I look at the value of my portfolio over time - as Old Limey shows, it starts to accelerate over time until you start withdrawing. The basic rules of spend less than you earn and invest the rest is the secret, and yet it takes work and discipline over time...and over time your net worth grows.

The wonderful feeling of being financially independent is hard to beat. If you've instilled the discipline in your spending over the years, you have confidence you can meet most or all of the financial issues that may befall you. Additionally, the security allows you to make decisions more carefully and not necessarily in crisis mode.

The freeing of time to pursue that which truly interests you is wonderful as well. It makes a huge difference in the amount of stress in your life.

Thank you all for sharing your stats...on the early retirement board, those stats which I saw many years ago as well as the book by Paul Terhorst about retiring at 35 started me on my journey (soon after, Your Money or Your Life, Tightwad Gazette and then Four Pillars helped in the strategy and tactics).

[Old Limey]

@Deserat
We're also fortunate that we also get pensions and social security checks and we can easily live on those since we have been debt free since 1992 when we retired.

Obviously we overdid the saving but you never know what the future has in store for you so you have to play it safe. Everything we own including our home and condo in the Bay Area will pass on to our 3 children so they have nice retirements to look forward to.