My Latest Update

[Bankerwithabrain]

Last time I updated was January last year.

"Currently 27 years old and single. Net worth of $340k ($350k liquid assets (cash/stocks/bonds), $10k of debt). "

Now I'm 28 and net worth of $475k (490k liquid assets), $10k debt).

Frankly I am pretty amazed at the speed of wealth accumulation I've managed.
When I look at my records I really think it comes to just living with my means.

I am only earning about $120k a year and I haven't had too many big investment wins.

I am prob. still too early to FIRE, but still working on it...

Right now I am viewing capital conservation to be the most important thing in this environment. Very difficult investing environment right now.

 

[utrecht]

You're only earning $120k per year? At 28? Life must be rough for you.

 

[Bankerwithabrain]

I was just saying in terms of net worth growth verse salary.

If I were earning $500K and my networth grew $100K it would not be very impressive.

That I've been able to grow the networth by $130K on a ONLY salary of $120K is what I meant.

Just showing the effects of LBYM.

 

[ronocnikral]

i'll bite. how does one increase their net worth by almost 40% (and in excess of a full year's salary) in a year with "not very many big investment wins?" There seems to be more to this story than solely the effects of LBYM....

 

[Bankerwithabrain]

My understanding is it increased as follows over 18 months:

$340K
+ 135K (salary after tax)
+ 25K (5% annual return on 340K portfolio)
- 25K (expenses)
= $475K

 

[mchas]

How do you have a 120k salary and end up with 135k after taxes? I'd like to know that trick

 

[Bankerwithabrain]

Last time I updated was Jan. 2011, now it's July 2012. So it's 1.5 years of salary.

 

[mchas]

Ah, I see. So your 25K in expenses are also for 1.5 years? If so that is impressive. What part of the country are you in?

I am in a very similar position as you but I am 30. I try to spend as little as possible but I probably spend 25K per year. I'm in Southern CA though which has something to do with that.

I might suggest looking at real estate investments right now. There are some good deals and if you can accumulate enough positive cash flow you can call it quits. That's what my current plan is at least.

 

[Bankerwithabrain]

I'm in the north east.

I've thought about and research investing in housing.

Based on my analysis I've decided to hold off on it.

My primary reasons are:
1) I don't think people factor in the cost of repairs enough when doing return analysis. (Or maybe I am just too conservative.)
2) I don't know exactly where I want to lay down roots. I feel that owning property will ground me a bit. (Management companies take too much of a fee too.)
3) I don't want to deal with the hassle of finding tenants. Stock/bond investing is much more passive.
4) I am still worried about deflation in the US.
5) I don't think housing prices will recover significantly in the next 10 years. The pump which was artificially inflating housing prices has been turned off.

But to each his own.

Each property also needs to be looked at on an individual basis too.

 

[hlfo718]

Wow, you spend an avg of only 1,389 living in NE? You must live outside the Tri State area. Congrats with the high savings rate. Don't be too conservative though with your investments.

 

[Bankerwithabrain]

Wow, you spend an avg of only 1,389 living in NE? You must live outside the Tri State area. Congrats with the high savings rate. Don't be too conservative though with your investments.

Hard not to be conservative in this environment.

I'll take capital preservation over returns any day of the week.