New milestone

[Andre1969]

I added up my totals as of yesterday's close, and saw that I hit a new milestone. I broke the $400,000 barrier. $400,462, to be exact. This feels like a major accomplishment too, because I really worked at this one. The main thing that put me over the $200K barrier was selling my condo back in December, 2004. And I was up over the $300K mark by May 2005, mainly because I took out a $75K HELOC on my house, and then took out another $25K on top of that.

So in many ways, those first two barriers really weren't all that "special", I guess. But since then, I've put about $30K into a 4-car garage, bought a $25K Xterra, and then when interest rates started going up, paid the HELOC down by about $25K. And steadily added to the portfolio. So in light of all that, the $400K really feels like I've accomplished something!

Hopefully the $500K mark won't be too far off!

FWIW, I'm not shooting for anything too specific. I figure that once I hit roughly $1M, and no outstanding debt (HELOC paid off), I should be ready to FI/RE. I'm not married, and no kids, so I think it should be doable.

 

[Milton]

Well, congratulations! It is good to celebrate financial milestones.

I find some of the contents of your post to be slightly confusing, though:

(1) "The main thing that put me over the $200K barrier was selling my condo back in December, 2004." It sounds like you simply converted one type of asset (real estate) into another (cash), resulting in no material change in your net worth(?).

(2) "And I was up over the $300K mark by May 2005, mainly because I took out a $75K HELOC on my house, and then took out another $25K on top of that." Apparently you raised cash by borrowing: again, no overall change in your net worth(?).

Hope the above doesn't come across as unduly critical ... most likely I misinterpreted part of your post.

 

[ziggy29]

Congratulations. We just went over $500K combined in all our retirement accounts last month. In some sense, saying "half a million" sounds like an awful lot, but it's still only about $20,000 a year at retirement.

 

[Donzo]

Congrats! Net worth half way there! You will find the 2nd half much easier as long as the MARKET gods allow.

Anyway...it's cool that you follow/found this major milestone -- I wish I had been thinking along these lines... I was always to busy trying to keep everything in control. It would have been exciting to enjoy these steps to freedom.
I kinda woke up one day really burnt out and realized that I could FIRE. That was pretty cool also!

 

[Andre1969]

Hi Milton. I'll try to clarify my previous post...

(1) "The main thing that put me over the $200K barrier was selling my condo back in December, 2004." It sounds like you simply converted one type of asset (real estate) into another (cash), resulting in no material change in your net worth(?).

I moved back in late 2003, but held onto the condo until December 2004. I wanted to rennovate it before putting it on the market, and made some major bungles along the way. Luckily, the real estate market was on the way up, so delaying getting it on the market worked out to my favor. First goof was getting the brother of a good friend of mine to do the rennovations. He started off fine, but then started slacking off, and I was too trusting. He finally bailed on the job and left me standing. I let the condo sit for awhile, stupidly hoping that this guy would come through for me and finish, but he pretty much bailed on his whole family. I also heard that his house burnt down, and there were allegations that he did it himself to collect on the insurance! Finally, I came to my senses, realized this dude wasn't going to finish, and found someone my stepdad recommended. And in a fortunate turn of events, my place apprecitated by about $30-35K during that time.

Anyway, while selling the condo didn't improve my net worth, it did move about $76,000 worth of profit from a solid asset (the condo) into other investments (mutual funds, stocks, etc). It also removed about $1100 in monthly expenses from my books. I guess I should also clarify here, that when I say my portfolio went above $400K, that's just monetary stuff...401k's, IRA's, investments with Janus, American Century, Scottrade, etc, savings bonds, an Emigrant Direct account, and my savings account. I kept real estate and other physical assets like cars, etc out of the equation.

(2) "And I was up over the $300K mark by May 2005, mainly because I took out a $75K HELOC on my house, and then took out another $25K on top of that." Apparently you raised cash by borrowing: again, no overall change in your net worth(?).

Yeah, again, no overall change in my net worth, but it did help pad the investments (Janus, Scottrade, American Century, etc).

If you factor in my net worth, including real estate, cars, other physical assets, etc, minus the ~$74K on my HELOC, I'm probably well over $400K. I guess I'm just not factoring in real estate though, because I figure that no matter what happens, I need a place to live. So while it is an asset with a monetary value, it's not something that can easily be tapped for cash. I'd either have to sell and downsize, or take out some equity. And as it is, I'm trying to pay that HELOC down. The rate shot up to 8.5%. It was originally around 5.25-5.5% when I first took it out. When the rate was low, I was just rounding the minimum payment (interest only) up to the next higher $100. But last fall, when rates started shooting up, I just paid it down by about $25,000, so that the minimum monthly payment would be about the same. Now I have it down to where the minimum is about $525, but I've been writing the checks for $1,000. I'm hoping to get it paid off by 2016, which is my fantasy retirement date.

 

[Andre1969]

Congratulations. We just went over $500K combined in all our retirement accounts last month. In some sense, saying "half a million" sounds like an awful lot, but it's still only about $20,000 a year at retirement.

Yeah, ain't that the truth! I remember looking at the house behind my grandmother, who lives right across the street from me, back in early 2003. At the time, they wanted $142K for it, and it was a total gut-job. My agent suggested that I don't offer any more than $100K for it, because she figured it would easily take another $40-50K to get it up to spec.

Around that timeframe, I had about $88,000 saved up, between retirement/non-retirement accounts, savings bonds, etc.

The guy who ultimately bought that house put a ton of work and money into it. I'd say close to $100K, IF he did it legal-like and got permits (we wonder about that, though). Well, he had it on the market earlier this year for $389K, but ultimately dropped down to $374K. There are people living in it now, who say they're buying it, but I dunno what they ultimately paid, or if they're doing the rent-to-own thing.

Still, that's an eye-opener, to think that while I've amassed close to a half-million dollars, it's still only enough to pay cash for what's essentially considered a starter home in these parts.

Ultimately, when I do retire, part of my plan is to sell this place, which is in the Maryland suburbs near DC, and try to find a cheaper place to live. Even if the place is free-and-clear by then, property taxes could be a killer.

 

[Callie]

Speaking of milestones, our 401K funds went over 1mil last week. We are adding about 55K per year due to our ages and my husband's work does a 7% match plus a 10% bonus into 401K.

We have other assets as well, but nice to reach this milestone.

 

[FinanceDude]

Speaking of milestones, our 401K funds went over 1mil last week. We are adding about 55K per year due to our ages and my husband's work does a 7% match plus a 10% bonus into 401K.

We have other assets as well, but nice to reach this milestone.

Congrats to you and Andre......... You know what they say, the "1st Million is the HARDEST to make"...........

 

[lazygood4nothinbum]

congrats andre1969. i still remember when my 401k hit $100k. i thought it was pretty cool but at the time, probably mostly because i hadn't checked it in quite a while, it came as a bit of a surprise.

it wasn't very significant because in my mind i wasn't saving for anything in particular, certainly not for early retirement. i was just saving in the natural course of things.

i was rarely goal oriented. for me being motivated by any one goal seemed too carrot & stickish. i always preferred running free and seeing where life brought me.

 

[bssc]

Congratulations everyone.

I think that milestones seem to be 100K, 1 million and the amount you need to retire.