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View Poll Results: What is your actual average ROI in the last 15 years (1991-2006)
Less than 6% 2 3.51%
6 to 7.99% 4 7.02%
8 to 9.99% 11 19.30%
10 to 11.99% 11 19.30%
12 to 13.99% 2 3.51%
14 to 15.99% 1 1.75%
More than 16% 9 15.79%
I have no idea! 17 29.82%
Voters: 57. You may not vote on this poll

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Re: Your average ROI in the last 15 years
Old 04-27-2006, 12:37 PM   #41
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Re: Your average ROI in the last 15 years

Quote:

A 16% overall portfolio return for a couple of years is great. For 15 years it is remarkable. I'd be interested in hearing how it's done without including high risk or bad math.
Not sure about 15 years ... but over 10 years and over 16% - real estate north of Boston (or any noreastern city).
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 12:41 PM   #42
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Re: Your average ROI in the last 15 years

I don't think you guys are taking into consideration Real Estate as an investment. *I voted "don't know" but then used the calculator link and got over 20% return. *Yes, it is very possible. *Timing helps - without the last couple years when we got this huge jump - if we had sold out five years ago (almost did at one point) we wouldn't be almost ready to ER. *I could do a more in depth figuring, but even my basic figuring is quite close. *SO, please don't think people answering "over 16%" *or "don't know" have no clue - some of us probably don't want to be bothered doing the math, and the others may have a personal investment area that they are savvy with, or had stock options, etc. *

YOUR milage may vary. tho! *

Have a good day, guys!

Jane *
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 01:16 PM   #43
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Azanon
I'd like to see a quicken printout of 15 years with every financial data piece of information entered for someone claiming to actually know the exact figure.
That would be me, Az, but I've shared enough.

You seem to find it hard to believe, but we kept our paper records and I've been entering the old data (1985-1992) a little at a time over the last decade while keeping up with the newer investments.

Since Quicken will cough up an IRR for just about any combination of security & time I've broken our performance down by those factors as well. We've managed an annual total return of 11% since 1986-- and that's everything including money markets, EE bonds, and some truly sucky individual stocks. During the '80s & '90s we pulled in over 13% per annum from Fidelity's Puritan and Equity-Income funds-- and that's AFTER paying the 2-3% sales charges. We also achieved a tad under 15% from Heartland Value in 1995-2000.

Of course all of this pales alongside the 7500% IRR I achieved from 4Kids Entertainment (KDE), of Pokémon fame, during two weeks in Oct 2002. It paid for a nice family vacation.

BTW we have W-2 & tax-return data going back to the late '70s. I'll know when I break even on my Social Security distributions...
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 02:08 PM   #44
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Nords
BTW we have W-2 &* tax-return data going back to the late '70s.* I'll know when I break even on my Social Security distributions...
Nords, I would be interested in the break even point too.* Don't know how you calculate yours, but my calculation tells me I have to live very looong, much longer than I envision or want to.

Sam
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 02:54 PM   #45
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Re: Your average ROI in the last 15 years

I know the real estate market isn't as volatile as the stock market, and there are many other ways of investing in real estate than pure equity, but how risky do you feel it is to invest a large portion of your networth, leveraged at 80-90%, in real estate equity? I ask honestly, not facetiously. I have a number of friends who have done quite well in real estate. I also have an uncle who, 50 years ago, was a now-he-is, now-he-isn't real estate millionaire several times before he finally died as a very modest thousandaire. Recent history, aside from the effect of the Japanese on some sectors of US real estate in the 80's, seems to suggest that RE prices only go up. Maybe 80% leverage in that market is no riskier than 0% leverage in the stock market.

By the way, stock option proceeds don't count toward ROI. They are earned by work, not investment, so they count as contributions to the portfolio, not portfolio earnings.
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 02:55 PM   #46
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Sam
Nords, I would be interested in the break even point too.* Don't know how you calculate yours, but my calculation tells me I have to live very looong, much longer than I envision or want to.
Hey, you gotta have long-term goals-- or else life becomes a meaningless hedonism marathon, right?

The first trick of SS recoupment is to use as little data as possible. *So I plan to hold my future SS contributions to zero.

I've paid in $45,585 and I expect to start withdrawing about $8000/year (2005 dollars) in 2022. *If the ECI keeps going at 3% (arbitrary figure, if someone has a better wage index I'll use it) for another 17 years then I'll be withdrawing $13,223/year.

If I'd invested those SS contributions in a mutual fund paying 6% after tax then I'd have $247,000 in 2022. *At that point I'd be withdrawing 5.3%/year. *So although I'd recoup my initial contributions within four years, odds are in my favor that I'd never catch up with the compounding. *However to determine when I'm sucking out more taxpayer dollars than I've paid in I guess I'd have to track the SS lockbox's earning history since 1977. *Anyone have an idea where to find that number?

I'm not sure that anyone should aspire to make a similar "profit" from Medicare.

Another one of my goals is to earn more in pension checks than in active-duty base pay. *I should reach that in the high 80s or low 90s.

Spouse and I also think it'd be cute to be together on our alma mater's Top 10 Oldest Alumni list. *However minimum qualifying age is currently in three digits. *Considering that the incumbents were born when the average life expectancy was ~47 we may have quite the cyborgetic feat ahead of us.

I'll keep you posted...
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 03:22 PM   #47
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Nords
I've paid in $45,585...
Nords, are you sure?* That number looks low.* I don't know how the military work, but in the civilian world, the employer contributes an equal amount to SS on behalf of the employee.

Anyway, my calculation is simple too.* By the time I bail, I would have contributed to the SS fund for 30 years.* The actual amount contributed included the contribution by my employers as well.* I want my ss fund to run out at age 82.* Using 3% inflation (COLA), the ROI is only 4.80%

For the fund to run out at age 90 (way to optimistic), the ROI would be 5.65%.* There is not a way for me to win, but I never expect to.

Sam
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 03:30 PM   #48
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Re: Your average ROI in the last 15 years

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That would be me, Az, but I've shared enough.

You seem to find it hard to believe, but we kept our paper records and I've been entering the old data (1985-1992) a little at a time over the last decade while keeping up with the newer investments.
No i dont Nords. I dont find it hard to believe you did. I find it hard to believe that everyone clicking on this thread and responding is spouting out actual, 100% accurate data.

But of course i believe a few of us are actually doing this. As I said, i have all of my data since 1996 and counting. But i'm very anal retentive, and do things that most other people dont do. My dad made a fortune investing, but for the life of him, he'd be totally guessing if you wanted to know his IRR since 91'. Like most big investors and RE positioned people, he has investments scattered all over the place.

Nords, you and I are the exception... the less than 20% of people, not the rule.
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 03:37 PM   #49
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Re: Your average ROI in the last 15 years

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Yes, it is very possible.* Timing helps - without the last couple years when we got this huge jump - if we had sold out five years ago (almost did at one point) we wouldn't be almost ready to ER.* I could do a more in depth figuring, but even my basic figuring is quite close.* SO, please don't think people answering "over 16%"* or "don't know" have no clue - some of us probably don't want to be bothered doing the math, and the others may have a personal investment area that they are savvy with, or had stock options, etc.
And if I had borrowed as much money and pumped it into Dell in 1991, i'd beat the 16%+ too, easy.* * You're, saying, oh well that's a big if Azanon,....* before realizing you're now seeing my point.* *;-)

Again, are we talking about what was possible, or what people here actually pulled off.* *I simply dont think its likely at all more than 1 or 2 people here averaged within their financial portfolio, greater than 16% IRR from 1991-2006.

>* Real estate has been great since 1999 or so.* *This not to be confused with 1991.* *Who here invests 100% of their financial net worth exclusively in real estate?* *Maybe just a small handfull?* *Then how many of them netted 16%+ since 91'* *;-)* I wouldnt count actively buying and selling (ie: showing houses in person, or flipping houses spending hrs doing it), because i'd consider that a job. I'd expect a lot more than 16% profit if i did this as an occupation.
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 03:44 PM   #50
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Azanon
I find it hard to believe that everyone clicking on this thread and responding is spouting out actual, 100% accurate data.* *
Azanon,

I don't know if anyone cares about what you think. *I know I don't give a damn about your thought.

There are so many nice, considerate people on this board, why don't you learn a little from them.* You disgust me.

Regards NOT,
Sam


Everybody,

Please forgive me for the above outburst. *I just can't help anymore. *This guy is just too insulting, too belligerent. *Worse, he has not respect for anyone.

Sam
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 04:23 PM   #51
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Sam
Nords, are you sure?* That number looks low.* I don't know how the military work, but in the civilian world, the employer contributes an equal amount to SS on behalf of the employee.
Pretty pathetic, eh? Right off my W-2s, so it doesn't reflect anything kicked in by DoD. My 1977 employer (before I joined the Navy) might have kicked in his extra $92.

Actually the total is a bit low. There's an extra $1200/year "special military service credit" added to the 1978-2001 wage reports sent from DoD over to the SSA. At 6.2% that adds up to an extra $1785.60 above the $45,585, but I didn't have to cough that up and I'm not sure who foots the bill for it (other than the taxpayers).

You could be right, DoD could be kicking in the same amount that I did. However I've never checked into it. Any experts here from DoD on that subject? The Other Michael, what do you know from the SSA side?

Year FICA
1977 $92
1978 $102
1979 $217
1980 $235
1981 $275
1982 $536
1983 $712
1984 $854
1985 $1,154
1986 $1,381
1987 $1,507
1988 $1,680
1989 $1,782
1990 $1,929
1991 $2,037
1992 $2,246
1993 $2,435
1994 $2,572
1995 $2,696
1996 $2,837
1997 $2,974
1998 $3,138
1999 $3,307
2000 $3,531
2001 $3,710
2002 $1,646
2003 $0
2004 $0
2005 $0
2006 $0
2007 $0
2008 $0
2009 $0
2010 $0
2011 $0
2012 $0
2013 $0
2014 $0
2015 $0
2016 $0
2017 $0
2018 $0
2019 $0
2020 $0
2021 $0
2022 $0
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 04:29 PM   #52
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Nords
Pretty pathetic, eh?* Right off my W-2s, so it doesn't reflect anything kicked in by DoD.* My 1977 employer (before I joined the Navy) might have kicked in his extra $92.
Nope, not pathetic at all.* My numbers are pretty much in the same range, except they are twice as large because of the employer's contributions.

Sam
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 04:39 PM   #53
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Re: Your average ROI in the last 15 years

Sam- Thanks for the outburst! *

I think it is hard for Az to see anything as other than "black or white"

Az- I didn't go into details, and I am NOT going to give you figures, BUT

We bought raw property (zoned commercial) somtine around 1989
Husband is builder and WAS paid to build commercial buildings
We have done maintance and paper work, however, we COLLECTED rents as we paid down our mortgage - that is payment (2x) NOT included in return on investment
We have held onto and built equity into this over the past 15 plus years
We live in a area that has really, really jumped up in the past couple of years (after being stagnant more or less for a long time -- it was way overdue)
We will continue to collect income until we sell - (don't NEED to sell, but will sell so that we can take winters in the warmer climes)

Quote:
"Who here invests 100% of their financial net worth exclusively in real estate? * Maybe just a small handfull?"

We have been close to 100% RE most of our married life. *It works for us. *I am not including any other RE we own other than our commercial project in this exercise - *don't worry it wouldn't change the numbers - just didn't feel the need to add those as they add up to less than one fifth of the project. *We are very picky on what we buy and when we sell. *

We have always paid our bills, had good credit and have a local bank which will lend us money if times are bad.

You are in a TOTALLY different world than someone like my DH who is an entreprenuer (NOTE _ I hate this word, it sounds so hoity-toity, but it describes him properly) *

There are others here who have built up businesses, dot coms, RE portfolios that have paid managers, etc. * * I REALLY don't think it's just 1 or 2 members.

That's it - I'm not going to go around with you again about this.

Jane


P.S. If it makes you feel any better, we have no pension, no paid health benefits and won't pull much in SS. There is always a downside, too. :P
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 06:01 PM   #54
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Re: Your average ROI in the last 15 years

I don't know about Azanon's issues, but mine was that those that could gain 16%+ returns were probably either very lucky or significant risk-takers, or possibly miscalculating (for example including returns from their labor in the portfolio ROI). Sounds like you put a lot of leveraged eggs in the real estate basket and let it ride that way for a long time. The degree of leverage decreased with time as the property's value increased and the mortgage decreased, so the risk level wasn't constant through time. You also had the capacity in the family to manage the risk to an extent since the investment was in the area of your DH's expertise. Still, I would characterize the investment as overall fairly risky, a your reward shows it. Congratulations!
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Re: Your average ROI in the last 15 years
Old 04-27-2006, 10:32 PM   #55
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Re: Your average ROI in the last 15 years

10.3%. With some luck? BTW - Not proud of this admission. Took a 50K loan on my mostly equity 401K in January 2000 When my balance was only 128K. Paid back over the next 5 years at much lower prices. Never went back and figured it exactly but probably accounts for ~1% over the 15 year period. Get this, interest on the loan was 10.5% paid back to myself!
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Re: Your average ROI in the last 15 years
Old 04-28-2006, 01:38 AM   #56
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Re: Your average ROI in the last 15 years

Excel sez: IRR = 12.6% from late 2000 to end of 2005. (Didn't start investing until 2000.) Up until 3 years ago, it was usually negative. Passive asset allocation.

Bpp

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Re: Your average ROI in the last 15 years
Old 04-28-2006, 02:00 AM   #57
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Re: Your average ROI in the last 15 years

Quote:
Originally Posted by Jane_Doe

Quote:
"Who here invests 100% of their financial net worth exclusively in real estate? * Maybe just a small handfull?"

We have been close to 100% RE most of our married life. *It works for us. *I am not including any other RE we own other than our commercial project in this exercise - *don't worry it wouldn't change the numbers - just didn't feel the need to add those as they add up to less than one fifth of the project. *We are very picky on what we buy and when we sell. *

We have always paid our bills, had good credit and have a local bank which will lend us money if times are bad.

You are in a TOTALLY different world than someone like my DH who is an entreprenuer (NOTE _ I hate this word, it sounds so hoity-toity, but it describes him properly) *

There are others here who have built up businesses, dot coms, RE portfolios that have paid managers, etc. * * I REALLY don't think it's just 1 or 2 members.

That's it - I'm not going to go around with you again about this.

Jane


P.S. If it makes you feel any better, we have no pension, no paid health benefits and won't pull much in SS.* There is always a downside, too.* *:P
My wife and I are in the same boat as Jane.* We had most of our eggs in the real estate basket and it worked out well for us.* I also invest in property and build homes as Janes husband does.* It has worked out WAAAY better than our stocks given the same time period.*

It has a lot to do with timing.* Real estate does not fluctuate as fast as other investments so it is far easier to "time".* That does not mean however that I won't be buying and holding other investments real hard in the future.* I just know I've lost my A** in recent years in the market and wished like hell I would have bought more real estate.* Hindsight......

I think what Jane and at least I'm trying to say is...if you have a talent in something like real estate or whatever, you are more comfortable with it and can probably do better in the long run.* Real estate fluctuates but, there is always different angles for different market conditions and if you know what the angles are, and when to attack, you have greater earning potential.

"Entreprenuer" I hate that label too.* I prefer capitalist. I take advantage of what the market is giving me.* Right now it has been real estate for me, in the future it could be something else.* The trick is to not be so closed minded to not see the gift horse looking at you in the face.* I hope I never have too much tunnel vision to not take advantage of what the surrounding market conditions are giving me.*

ps...
Quote:
(don't NEED to sell, but will sell so that we can take winters in the warmer climates)
Agreed. 8) Panama here I come!!! 8)
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Re: Your average ROI in the last 15 years
Old 04-28-2006, 02:04 AM   #58
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Re: Your average ROI in the last 15 years

Maybe we should distinguish between ROI on passive investments vs active investments.

I decided in my 20's that the only way I could control my ROI was by investing in myself and taking active control over the outcome. 20% annualized returns for passive investments is pretty rare, but maybe it's not so rare for those with active participation in their investments.
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Re: Your average ROI in the last 15 years
Old 04-28-2006, 03:21 AM   #59
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Re: Your average ROI in the last 15 years

I see a lot of people talking at cross-purposes here. In another thread I had run numbers for ROI and IRR; they can be significantly different. As Nords & others pointed out, ROI is most appropriate for a single investment at a particular point in time, whereas IRR gives a more accurate picture when you are moving $ in and out, and when you have dividends and multiple buys through reinvestment.

wab, it depends on how you would define "active" vs. "passive". Would you treat an actively-managed fund different from an index fund? If you are talking RE, someone buying/selling/building/renovating/managing properties that are not a primary residence should factor his/her labor costs in doing so, to arrive at an 'investment' profit figure one could compare more easily to results obtained from just a few hours a year of research, record-keeping, and rebalancing. In that case, though, RE sounds more like a business (j*b) than a pure capital investment... Maybe that's what you mean? Not sure how Jane would see it, but I agree that "building up a business" is kind of OT here; people are interested in how their savings can grow to support them in retirement, though they may "earn" their nest egg and reach FI in myriad ways.

Of course azanon's dad wouldn't have bothered to figure his IRR.. Now we have Quicken to do it for us!

azanon, I think you had better tone it down. I assume people here are giving it their best shot and don't impugn either their numbers or their motives. If you don't like the numbers they are "spouting", do you think that by bullying them, the numbers will change? This forum is all about learning how to reach financial goals, in particular, FIRE; there'll be tortoises and hares, and people will make mistakes (but will hopefully learn from them, and from the successes of others..). It's not helpful to imply something cannot be done, when people are telling you otherwise.

It's true the poll won't reflect the "average" investor. A.) The average investor doesn't have their antennae tuned to FIRE and the development of better investing strategies like indexing, asset allocation, dumping their advisors and high-cost funds, etc., to lower their investment expenses and increase returns (as so well investigated on this forum). B.) Of this first self-selected group, the average forum member may not have been tracking their progress as closely as would be required to supply a number; the second self-selected group of "trackers" may be more successful than "average" due to their heightened awareness.

I was surprised to see my IRR number. Then I read something recently in the Economist:
Quote:
...women consistently earn higher returns than men... Women were less likely to "churn" their investments; and men tended to commit too much money to single, risky ideas. Overconfidence and overtrading are a recipe for poor investment returns.
How did I 'survive' 2000-2002? In hindsight, because I was too busy doing other things to bother getting on the tech bandwagon, and I had a healthy dose of international stocks. And I never sold. 17% IRR YTD 4/28/91-4/28/06. Does not include any RE, just brokerage accounts (and no REITs, either).

Quote:
Originally Posted by Azanon
My ass someone made 16% in a portfolio over 15+ years, including 2000-2002.* I have some snake oil for sale too.
See, that's your overconfidence talking.* *

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Re: Your average ROI in the last 15 years
Old 04-28-2006, 04:05 AM   #60
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Re: Your average ROI in the last 15 years

Well, I voted that "I have no idea".

I only wrote down my net worth for the first time, on Jan 1., 2000. And have been doing it yearly since then.

In Jan. 2000, my net worth was well into 6 figures, so I wasn't starting from a small amount that would skew the figures [it was over 1.5 times my annual gross salary at the time].

The net worth has grown almost exactly 33% per year since then, including savings, up to the present month. And a graph of the yearly numbers actually tracks pretty well with that straight line curve. During the lower return years, my savings mattered more because the net worth was smaller. From 2003 on, I have gotten huge investment returns.

In terms of just raw numbers, I think my biggest wins were in my heavy commitments to small value and emerging markets, which each make up about 1/6 of my entire portfolio. These have 3 year trailing returns of 31% and 45% (per year), respectively.

When I look back, I still can't believe how well the investments have done. I really never could have predicted it. If I had to guess, and this is an educated guess, I would guess about 16% annual return during the entire time period (this is plugging in my approximate savings along the way, etc.). Also, I have paid only a small amount of net taxes, including dividends, during this time because everything is in passive index funds and I did some strategic tax loss selling and I am still deducting $3000 from ordinary income per year for those carry-forward losses.

I think the total net worth is about 1.1 times lifetime after-tax earnings, and I have been working at a regular job for just under 11 years. I am very happy with this outcome. 8) and realize that the luck of good returns had much to do with it. I have worked the entire time for a company whose stock is now down 95% or so from its high. Many of my co-workers went from being rich to middle class pretty quickly.

Kramer
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