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Old 07-07-2014, 12:50 PM   #61
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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.
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Old 07-07-2014, 01:58 PM   #62
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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
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Old 07-07-2014, 02:02 PM   #63
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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.
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Old 07-07-2014, 02:05 PM   #64
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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.
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Old 07-07-2014, 02:28 PM   #65
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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
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Old 07-07-2014, 02:32 PM   #66
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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, 46 views)
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Old 07-07-2014, 02:34 PM   #67
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For us there was no critical threshold, just a surprisingly smooth and vaguely exponential rise. Since 2001:
Attractive curve!
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Old 07-07-2014, 02:51 PM   #68
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Attractive curve!

May it remain attractive for a while longer...
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Old 07-07-2014, 03:56 PM   #69
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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
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Old 07-08-2014, 03:08 PM   #70
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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!
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Old 07-08-2014, 11:24 PM   #71
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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.
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Old 07-09-2014, 06:50 AM   #72
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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.
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Add some more data?
Old 07-09-2014, 08:37 AM   #73
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Add some more data?

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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?
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Old 07-09-2014, 09:33 AM   #74
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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.
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Old 07-09-2014, 09:37 AM   #75
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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.
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Old 07-09-2014, 11:27 AM   #76
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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...)
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Old 07-09-2014, 01:00 PM   #77
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That was my goal as well and I achieved it.
Howlong ago was that and how has your portfolio progressed?
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Old 07-09-2014, 04:42 PM   #78
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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.
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Old 07-09-2014, 05:48 PM   #79
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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]
0.271.0 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]
320500 lux Office lighting[9][10][11]
400 lux Sunrise or sunset on a clear day.
1000 lux Overcast day;[3] typical TV studio lighting
1000025000 lux Full daylight (not direct sun)[3]
32000100000 lux Direct sunlight
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Old 07-09-2014, 06:32 PM   #80
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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.
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