Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 07-07-2014, 11:50 AM   #61
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 2,650

2006: 20k
2007: 32k
2008: 50k
2009: 100k
2010: 170k
2011: 250k
2012: 340k
2013: 357k
2014: 490k
Today: 595k


2007 - 2011 are estimates. 2012 was a low income year, and past two years I had some inheritance money in there as well.

Looking at it from a distance I wouldn't say compounding is taking over just yet, but it does give a serious tailwind.
Totoro is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-07-2014, 12:58 PM   #62
gone traveling
 
Join Date: Feb 2008
Posts: 510
Quote:
Originally Posted by dvalley View Post
On some days I just want to push the fast-forward button and be 10 years into the future...but then I'll be 10years older too. I guess you really can't have your cake and eat it too
Glad to hear I'm not the only having such thoughts quite frequently
aida2003 is offline   Reply With Quote
Old 07-07-2014, 01:02 PM   #63
Recycles dryer sheets
 
Join Date: Mar 2014
Posts: 164
It really is hard not to constantly adjust the spreadsheet and be thinking of some future date when you'll have $X saved. Time flies plenty fast, but for some reason it's still a struggle to live in the now.
WannabeRetired is offline   Reply With Quote
Old 07-07-2014, 01:05 PM   #64
gone traveling
 
Join Date: Feb 2008
Posts: 510
Quote:
Originally Posted by Totoro View Post
2006: 20k
2007: 32k
2008: 50k
2009: 100k
2010: 170k
2011: 250k
2012: 340k
2013: 357k
2014: 490k
Today: 595k
Are these YE or mid-year balances? If the former, I do not know how to interpret 2014 and "Today"
I am quite positive our portfolio balance in 2009 ended lower than the balance in 2008 even with maxing out our 401k, Roth IRAs, and some taxable investing. OTOH, we were buying low in 2009.
aida2003 is offline   Reply With Quote
Old 07-07-2014, 01:28 PM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
It's a mathematical reality that compounding starts the minute you have invested savings that you are not going to raid. There is no magic number. There appears to be a threshold because humans do not think geometrically; we think arithmetically unless we train ourselves away from this.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 07-07-2014, 01:32 PM   #66
Moderator Emeritus
 
Join Date: May 2007
Posts: 12,890
For us there was no critical threshold, just a surprisingly smooth and vaguely exponential rise. Since 2001:
Attached Images
File Type: jpg Net_Worth.jpg (70.0 KB, 50 views)
FIREd is offline   Reply With Quote
Old 07-07-2014, 01:34 PM   #67
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by FIREd View Post
For us there was no critical threshold, just a surprisingly smooth and vaguely exponential rise. Since 2001:
Attractive curve!
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 07-07-2014, 01:51 PM   #68
Moderator Emeritus
 
Join Date: May 2007
Posts: 12,890
Quote:
Originally Posted by haha View Post
Attractive curve!

May it remain attractive for a while longer...
FIREd is offline   Reply With Quote
Old 07-07-2014, 02:56 PM   #69
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 2,650
Quote:
Originally Posted by aida2003 View Post
Are these YE or mid-year balances? If the former, I do not know how to interpret 2014 and "Today"
All of them january 1st
Totoro is offline   Reply With Quote
Old 07-08-2014, 02:08 PM   #70
Confused about dryer sheets
 
Join Date: Mar 2013
Posts: 7
Great comments on this thread. I think that there may be something to the $250K threshold. As I look back over my NW trends, $250K is really when it started accelerating (except for 2008 & 2009). I can also attest to what was stated earlier that it felt like it growth slowed down once the $1M threshold was crossed (although the math contradicts that feeling). It felt like it started accelerating again after $2M. Nevertheless, if I had it to do over again, I would earn my second million first, as it was considerably easier than my first million!
SkeetShooter is offline   Reply With Quote
Old 07-08-2014, 10:24 PM   #71
Thinks s/he gets paid by the post
Rustward's Avatar
 
Join Date: Apr 2006
Posts: 1,684
It would be interesting if those who report periodic worth figures would report their contribution rates and withdrawal rates as well. If, for example, I went from 40K to 340K in one year, and 340K of it was net contributions or inheritance, or whatever else, what would that mean?

Edit to add: We also need to use a standard definition of net worth.
Rustward is offline   Reply With Quote
Old 07-09-2014, 05:50 AM   #72
Thinks s/he gets paid by the post
 
Join Date: Sep 2007
Posts: 1,195
Quote:
Originally Posted by Rustward View Post
If, for example, I went from 40K to 340K in one year, and 340K of it was net contributions or inheritance, or whatever else, what would that mean?
It would mean that you're in the running for a Beardstown Ladies award.
rayvt is offline   Reply With Quote
Add some more data?
Old 07-09-2014, 07:37 AM   #73
Thinks s/he gets paid by the post
 
Join Date: Nov 2013
Posts: 1,027
Add some more data?

Quote:
Originally Posted by FIREd View Post
For us there was no critical threshold, just a surprisingly smooth and vaguely exponential rise. Since 2001:
Nice curve! Can you add some more data to it to help illustrate compounding vs returns and contributions?
NgineER is offline   Reply With Quote
Old 07-09-2014, 08:33 AM   #74
Full time employment: Posting here.
 
Join Date: Jul 2011
Posts: 723
With many of you posting your totals, I had to look back at our savings over the years. It won't be particularly useful to the group, because I didn't even bother to take the measurement at the same time each year and my savings rate has increased over time, especially in the last few years since my income has also increased quite a bit. But FWIW, I found it pretty interesting that it took me just over 8 years to save my first $250,000. My next $250,000 took about 5 years and the $250,000 after that only took about 3 years. I haven't hit $1 million yet but I project that to take about 2 years from the 750,000 mark. It sure helps when the stock market cooperates. Much more fun to watch the growth in the last few years.
panacea is offline   Reply With Quote
Old 07-09-2014, 08:37 AM   #75
Thinks s/he gets paid by the post
 
Join Date: Nov 2013
Posts: 1,027
Quote:
Originally Posted by Rustward View Post
It would be interesting if those who report periodic worth figures would report their contribution rates and withdrawal rates as well. If, for example, I went from 40K to 340K in one year, and 340K of it was net contributions or inheritance, or whatever else, what would that mean?
Started roths while in grad school, but not significant amounts. Started working 8/1/2007 and bought a house at age 32. Numbers reported below is without primary residence and I do not own any income properties yet. Wife worked some of these years which I put a comment for. Started to really LBYM in 2012 when we decided for DW to be SAHM (ER) sometime that year.

Code:
Date                Net worth         Contributions          Returns            Comments
12/31/2007           $76,436             $15,170          Not Recorded          Bought house and worked four months
12/31/2008           $82,797             $47,190            -$40,829            DW Worked 6 months
12/31/2009           $178,477            $47,820             $47,830            DW Worked
12/31/2010           $295,699            $49,090             $68,092            DW Worked
12/31/2011           $343,509            $50,200            -$2,320             DW Worked
12/31/2012           $491,088            $64,093             $83,405            DW Worked 3 months and we relocated
12/31/2013           $733,639            $104,036           $138,596            Bought new house
07/01/2014           $841,991            $42,225             $66,095            YTD results
I can't say that there is a clear pivot point, but as you get closer to your goal, it clearly goes faster. This bull market has helped getting me to catch up with the early savers. I hope to break $1MM the year I turn 40, expecting to contribute another $100k and hopefully have some positive returns during the next 18 months.
NgineER is offline   Reply With Quote
Old 07-09-2014, 10:27 AM   #76
Thinks s/he gets paid by the post
Jay_Gatsby's Avatar
 
Join Date: Oct 2004
Posts: 1,719
Quote:
Originally Posted by molof View Post
I hope to break $1MM the year I turn 40, expecting to contribute another $100k and hopefully have some positive returns during the next 18 months.
That was my goal as well and I achieved it. After that, you will really begin to notice that portfolio growth is creeping towards (or past) your annual contributions. This isn't to say that you should stop contributing, but rather that you have the ability to invest some of your annual earnings in other ways (e.g., 529s for your kid(s), new(er) car(s), smart home improvements, etc...)
__________________
He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
Jay_Gatsby is offline   Reply With Quote
Old 07-09-2014, 12:00 PM   #77
Thinks s/he gets paid by the post
 
Join Date: Nov 2013
Posts: 1,027
Quote:
Originally Posted by Jay_Gatsby View Post
That was my goal as well and I achieved it.
Howlong ago was that and how has your portfolio progressed?
NgineER is offline   Reply With Quote
Old 07-09-2014, 03:42 PM   #78
Thinks s/he gets paid by the post
Jay_Gatsby's Avatar
 
Join Date: Oct 2004
Posts: 1,719
Quote:
Originally Posted by molof View Post
Howlong ago was that and how has your portfolio progressed?
I'd rather not get too much into specifics. However, I will say that like others here, I've enjoyed the recent bull market, as well as healthy compensation increases by changing jobs, since reaching the $1MM threshold.
__________________
He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
Jay_Gatsby is offline   Reply With Quote
Old 07-09-2014, 04:48 PM   #79
Full time employment: Posting here.
CaliforniaMan's Avatar
 
Join Date: Dec 2013
Location: San Diego
Posts: 880
Quote:
Originally Posted by haha View Post
It's a mathematical reality that compounding starts the minute you have invested savings that you are not going to raid. There is no magic number. There appears to be a threshold because humans do not think geometrically; we think arithmetically unless we train ourselves away from this.

Ha
+1 Good point. Even for exponential inputs our biological sensors are designed to translate exponential inputs to perceived arithmetic ones. One example that was "illuminated" to me when I did a project which had to make a sensor measure light from partial moonlight to full sunlight. It took an effort to get a sensor to do this while our eyes adjust just fine for both by automatically changing sensors (rods to cones) and adjusting the pupil size. To us even these dramatic logarithmic changes seem reasonable and linear even though they are not.

I think for most people when we invest we really only see some numbers on a brokerage or 401k statement. There are not piles of money sitting in front of us. It is invisible money, not like the cash money you just spent on that can of soup. Now that is real money.

But we do notice a difference if we made $100 vs $100,000 that year. So in the beginning our 10% increase may only be $100 which is a pretty paltry $8 a month, not a great difference in our lifestyle, while later we might see that same 10% as a good $8000 a month. Now that does make a difference in our life.

So while the physical (and financial?) world might be geometric, I think what we really attach to are the emotional differences. $8000 a month really is different than $8 a month, so there really is a critical mass moment for us.

I think this gets to the crux of why it is so difficult for so many people to save. They simply cannot believe in the power of compounding, even when it is shown to them. It does not make intuitive sense. How can you get $8000 a month starting from nothing? In fact, I have shown young people what compounding can do for them, and on one occasion even been called a liar.

Oh well, linear beings in an exponential world.

From Wikipedia:
Illuminance and Surfaces illuminated by:
0.0001 lux Moonless, overcast night sky (starlight)[3]
0.002 lux Moonless clear night sky with airglow[3]
0.27–1.0 lux Full moon on a clear night[3][4]
3.4 lux Dark limit of civil twilight under a clear sky[5]
50 lux Family living room lights (Australia, 1998)[6]
80 lux Office building hallway/toilet lighting[7][8]
100 lux Very dark overcast day[3]
320–500 lux Office lighting[9][10][11]
400 lux Sunrise or sunset on a clear day.
1000 lux Overcast day;[3] typical TV studio lighting
10000–25000 lux Full daylight (not direct sun)[3]
32000–100000 lux Direct sunlight
__________________
Merrily, merrily, merrily, merrily,
Life is but a dream.
CaliforniaMan is offline   Reply With Quote
Old 07-09-2014, 05:32 PM   #80
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,525
I don't know where exactly the threshold lies where the power of compounding really becomes evident but as an early retiree (age 52 back 12/2002), I can certainly say it is absolutely amazing to me that my liquid NW has almost doubled since retirement while living off my investments. I wonder what it would have been like if instead of this terrible market most everybody says we have had over the last decade we had a nice one instead.
ejman is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
do we really get the compounding effect we think? dr pfau says no. mathjak107 FIRE and Money 28 03-03-2013 12:44 PM
WOW! How to save $250K over a lifetime! swampwiz FIRE and Money 48 06-01-2010 01:18 PM
Reverse compounding issue Zoocat FIRE and Money 10 12-04-2008 09:52 AM
Compounding - Saving early then stopping emi guy FIRE and Money 17 02-23-2007 09:47 AM

» Quick Links

 
All times are GMT -6. The time now is 04:58 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.