Your reaction to rising assets

[scrabbler1]

Back in the late 1990s, I had the dual fortunes of being in my peak earnings years at my old job and peak investment gains in both my 401k and taxable accounts. I was also getting most of the shares in my company stock (ESOP) program and those shares would explode in value in the mid-2000s, enabling me to ER at the end of 2008.


Refinancing my mortgage back in 1992 helped put me on a path to being able to save an extra $200 per month and that, combined with the beginning of the 1990s boom soon gave me enough savings to take some of those market gains and pay off my mortgage by early 1998. Even though my non-retirement savings took a small hit, the huge market gains at the time more than offset the hit to my portfolio. I had just hit the $100k mark in my non-retirement portfolio but dropped below it temporarily before going back over that mark within a few months.


For the next few years, I was living on 1 biweekly paycheck and saving/investing the other one. Wow, that was pretty awesome! It took only 3 years to go from $100k to $200k in my non-retirement portfolio. My 401k was slightly lower but its value had also doubled in that time.


The seeds to achieving an ER had been planted.


Greatly reducing my monthly expenses along with my nice portfolio allowed me to switch to working PT by mid-2001. I was already living on one paycheck, so reducing my net pay by 40% still allowed me to save while easily covering my expenses.


The stock market slowed for a few years in the early 2000s but then my ESOP took off, so by the middle of 2004 the 401k had overtaken my non-retirement portfolio. It was rising 20%-25% and the next seed for my ER was being planted. I would cash out the stock a few years later (at favorable tax rates) when its value had grown by 3,000% (yes, three THOUSAND) compared to 1997.


I took a hit in 2008 like everyone else did but I also used the down market to buy in at some bargain basement prices, further enhancing the start of my ER. So even falling asset prices turned out well for me.


These days, in my 8th year of ER, even earning zero in wages I have seen increases in my portfolio despite pulling out nearly $30k each year in (unreinvested) dividends.


Life is good.

 

[Ed_The_Gypsy]

What goes up will come down.

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[adrift]

I made a lotta dough last month so we ate $600 worth of seafood in 2 days at home.

Gotta love it. 30 years ago we had boomers bragging about doing $600 of blow in 2 days. Now, we have boomers bragging about doing $600 of seafood.

It's healthier to eat $600 worth of seafood than $600 worth of steak.

Even when indulging, one must think of the long-term health issue.

Now, we have boomers worrying about what this will do to your blood vessels. 30 years ago, $600 of blow wasn't as much of a concern.

Personally, I'm sure $600 of blow would kill me. But, since I'm allergic to seafood, I'll take my odds on the nose candy.

 

[ShokWaveRider]

Seems like OP is a little dismayed at the lack of excitement at the big growth he's experiencing. About 12 years ago I had a passive business that generated between $200k - $300k PER MONTH. And I remember having the thought, "gee this is so easy. Where's the excitement??" Suffice it to say, I'd give my right arm to get back to those glory days.

Portfolio growth is about freedom, not excitement.


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I/we NEVER made that kind of money ever! Even with 2 incomes. A lowly Engineer and an Administrator can only make so much. However, we still managed to accumulate ~$3m by the time we finally retired at 58 for me in 2012 and 57 for DW in 2015. We retired a few times before that for just a few years to do things like Travel and Go Sailing. But we got lured back to the w*orking worlds by previous employers.

Now we are very comfortable living off our stash, taking what we need when we need it. No lavish risky investments for us. No Company Pensions, No SS for a few years, that will only make things better. Sleeping well with little to no stress.

 

[EastWest Gal]

After a good day in the market, I will often tell my DW. " we made $xxx,xxx" today, She always asks " is it new money?" Ie have we been at this level before. I almost always have to respond "yes, we have made this money many times before". Still better it goes up than down.

I do the same thing, because it's fun and I call it "funny money". It's not real until it's in the checking account.

In 2013 I started tracking the NW in a spreadsheet. I calculated the % change each month. When NW jumped $600K that year and most of the increase was not from w***ing, I questioned the need to work starting in early 2014. I found this forum, found Firecalc, and realized I could retire and still watch the NW go north.

It is an amazing feeling of freedom.


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[traineeinvestor]

Hmmmm ....

I tend to keep my mouth shut and say nothing when our finances have a good month and let DW know when we have a bad month - it helps keep our feet on the ground and DW's credit card in her purse.

 

[Danmar]

Hmmmm ....

I tend to keep my mouth shut and say nothing when our finances have a good month and let DW know when we have a bad month - it helps keep our feet on the ground and DW's credit card in her purse.

I see your point. My problem is that my DW has her own portfolio that she tracks. Also, has joint access to all our accounts and checks them several times a week. Can't get away with nothin' 'round here.

 

[target2019]

One advantage of keeping a summary sheet is that you can enter a benchmark or statistic, to temper your measurement of rising assets.
I have a column for PE10. Always record it at months end. It sits at 26.96 today, or 10 points above the mean. Rising assets could quickly become declining ones.

 

[ShokWaveRider]

I use quicken reports.

 

[bclover]

So unfortunately in the last 3 years I suffered some serious lost. My husband, my little brother and my best friend all pasted away so I have been made brutally aware that money does NOT bring me contentment. That being said I keep an eye on my investment without stressing. Debt free was not a major biggie for me. I retired with a mortgage and I'm considering buying an investment property. Basically I'm proud of my accomplishments but all my friends are equally minded so I don't know a bunch of folks like the horror stories Yahoo, motely fool and other internet sites love to hawk.
In general if I had to put an emotion to savings and investments it would be "stress-free"

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[kcowan]

We do the portfolio and NW assessment twice a year. Been doing it for 20 years. So I have experienced the 2000 and 2008 corrections. The runup since 2008 has encouraged us to try to spend the inheritance but so far without success! A major upgrade of our apartment is underway but that will be one time. We travel to Europe in the front of the plane. But otherwise still on budget.

It is fun to reinforce that we are A-OK though. It also helps us plan for lump sum donations/transfers.

 

[W2R]

I have hung around this forum and I still feel like the low man on the totem pole

Me too! But I followed my plan and now I am happily retired. I am still probably lower on the totem pole than many of our members. But you know what? I don't care if I am. I am happy, I am retired, I feel like I have more than enough, and that's what matters.

Remember that this is the internet, and it is possible that some members here may post in a slightly misleading way. Either way, it doesn't matter. What matters is that you are making progress towards your own goals. If you are not getting there fast enough to please yourself, then you always have the option of kicking up the LBYM.

The accumulation phase is an exciting journey. Good luck to you as you make your way towards your retirement.

 

[Maenad]

I think the hedonic treadmill can definitely apply to net worth and the size of your portfolio as well as the more common example of spending. However, we've noticed that after a certain amount, it goes from "money" to "numbers", because it's just more than either one of us even imagined when we were growing up, and we just can't quite grok that much moolah.

 

[NW-Bound]

When in my 40s, I did not think I would have today's net worth.

So, why am I cool and not excited, and still want more?

It's because I also learned about the SWR of 3.5% or less. The amount that I can spend is much less than what I made while working. So, I am exchanging the hassle of work for the worry of prolonged market downturns.

And as time goes on, my monetary concern subsides, to be replaced by health and aging worries.

"If it's not one thing, it's 'nother" -- Gilda Radner

 

[Options]

My reaction is to do nothing:

Doubling Your Money With Passive Investing | ETF.com

...what would happen if you had a time machine? What's the most valuable thing you could do if you could go back 30 years one time and meet your 30-year-younger self? What's the most profitable investment advice that you could give?

I give the example of “Back to the Future,” when Biff goes back and meets his teenage self and gives him a sports almanac. What if you're given an economic history book when all the recessions would have occurred? I show definitively that having that knowledge and acting specifically on that knowledge actually wouldn't help you gain any edge over the market.

The most valuable thing you could do would be to go back in time, open up a brokerage account, put the money in there and then not allow anyone to touch it for 30 years. Because just riding out all the bull and bear markets that happened in between and allowing your money to compound for that amount of time would be far more profitable than knowing when a recession is around the corner. People find that surprising, but it's absolutely true.

 

[RobbieB]

I do nothing investment wise, just have more fun! That caviar was excellent.

The more dough I make, the more dough I can blow!

Blow more dough is my goal -

 

[Bobw235]

I think the feeling I get when I check the balances in our accounts is a mixture of pride, some self-satisfaction and a feeling that we have enough saved to last the rest of our lives. My wife and I have always been savers, but I never felt like we did without. The house was paid off before our son went to college.

Last night I took a quick look at the investments and told her we'd passed another big milestone. I think she was pleasantly surprised, then went back to watching her show. What I did note was how much cash our financial advisor has sitting on the sidelines. He's long been saying that the market is overvalued. He tends to be pretty conservative. That said, it was with his guidance that we felt comfortable making the plunge into retirement when we did.

 

[ShokWaveRider]

I think the feeling I get when I check the balances in our accounts is a mixture of pride, some self-satisfaction and a feeling that we have enough saved to last the rest of our lives. My wife and I have always been savers, but I never felt like we did without. The house was paid off before our son went to college.

We do too, and we are subscribers to the home being paid off crowd too. Congratulations.

 

[FrankiesGirl]

I'm mostly in awe when I look at our balances. It's humbling to see the net worth numbers rise higher than I ever imagined. Still doesn't seem real most days.

Both myself and my husband are FIREd as of this year (I FIRED just over a year ago), in our early 40s. We won't ever have to work again unless there's an epic meltdown, as even losing half our portfolio is doable with some minor belt tightening.

We worked hard, saved a large percentage of our income, paid off all debts (besides mortgage) and figured we'd be okay and able to retire earlier than our traditional retirement age, but learning about how to invest was the watershed event for me. It might have been a sad occasion (my father's death and subsequent inheritance) that pushed me to learn how this all works, but it literally changed my life and my future forever.

The concept that you can put your money to work for you instead of working for money... mind-blowing. Still can't believe how simple that is, but it does work, and the more you have working for you, the more it makes.


.

 

[Quest4Fire]

I have found a great sense of freedom and contentment in being financially independent.
It's even more joyful when I recall just 20 yrs ago, I was homeless, owned a garbage bag of clothing, and an old car.

Cool.

 

[dunkelblau]

At first it was moving goalposts so as the numbers grew the target moved higher. Somehow it always came pretty close to double, so "maybe in a few years" ... Four years ago it took a major health scare to drill in the concept of 'enough'. But I ended up using the surplus to rework my job requirements rather than quit. So for me FI was really not so much about RE but rather saving my career in a manner of speaking. All in all I think it was well worth the sacrifices in my youth.

 

[RobLJ]

It's taken the last 7-9 years, but I'm finally starting to get used to 70-100k shifts in networks when the market corrects 5-12%, then goes back up over the next month or 3 months or 6 months. Nice problem to have, as long as the market doesn't go down 60%. 63% stock allocation helps a bit.
It was tough in '08 and '09 though.

I'm mostly in awe when I look at our balances. It's humbling to see the net worth numbers rise higher than I ever imagined. Still doesn't seem real most days.

The concept that you can put your money to work for you instead of working for money... mind-blowing. Still can't believe how simple that is, but it does work, and the more you have working for you, the more it makes.

.

 

[SJ1_]

..... I guess what I am trying to say is the closer I get to 500k, not there yet, the more it doesn't seem amazing to me at all.way?

I know what you mean. you set a goal that seems so far off and one day you get close to it and it and it now longer seems that impossible or that hard to do.

sounds like you are headed in the right direction.

 

[Mulligan]

I had a reaction to my rising assets yesterday.....I have always scrubbed my house siding by myself every few years. Yesterday I started the process again....Got about 15 minutes into and said "screw this, I got money and I dont want to do this anymore". So I put away my stuff and called a house scrubbing company to do it this next week. I am so done with that project for good.


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[kgtest]

Gotta love it. 30 years ago we had boomers bragging about doing $600 of blow in 2 days. Now, we have boomers bragging about doing $600 of seafood.



Now, we have boomers worrying about what this will do to your blood vessels. 30 years ago, $600 of blow wasn't as much of a concern.

Personally, I'm sure $600 of blow would kill me. But, since I'm allergic to seafood, I'll take my odds on the nose candy.

wait... what?