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Networth Increase Doldrums
Old 05-25-2016, 01:02 AM   #1
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Networth Increase Doldrums

Well everyone said that the first $500,000 is the hardest. So far, that has not been our experience. After hitting the $500,000 a year and a half ago after 7 years, we have struggled to get to the $600,000 mark. We were making this increase every 10 months before.

A combination of flat markets, a currency conversion panic mistake on my part, and the fact that my wife has been off work for 6 months without pay after the birth of our twin daughters, has meant things have ground to a halt.

We are Canadian renters and have been watching house prices jump 10-15% per year. It is really hard not to feel like we are falling behind.

Anyways, has anyone else ever experienced one of these savings 'doldrums'? What was your strategy for staying motivated and moving forward?
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Old 05-25-2016, 03:34 AM   #2
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You should be thankful it didn't go down.
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Old 05-25-2016, 03:36 AM   #3
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Just keep at it. At this stage you are accumulating so just plow as much as you can into savings and get that money invested and working for you

Compounding power is not always linear. There will be slow times and fast times. It's a marathon not a sprint. Some KMS will be slower and some KMS will be faster.

To stay motivated keep your eye on the long term goal top rather than just the short term increments.

New babies definitely slow the accumulation of wealth - kids cost money.
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Old 05-25-2016, 06:11 AM   #4
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You should be thankful it didn't go down.
People are getting spoiled with the bull market of 2009-2015, the same as they were in the bull market of 2000. All parties must end at some point, and people go home to sleep. They must rest and recover from the hangover before they can party again.
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Old 05-25-2016, 06:15 AM   #5
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Keep saving. Paying off mortgages. Spending less. Work side gigs.

There is only one way to accumulate wealth, and the key word is accumulate. Rely on 130+ years of market history that everything will eventually be OK.
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Old 05-25-2016, 07:23 AM   #6
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I am sure that the last 2 years have seemed hard to you, but you should look at things from a much longer perspective. I have been on the investing road for 35 years, and I recommend that you look at a chart of the stock market which is that long or longer. There have been many periods of 1.5-2 years where one made little to no gains, and also even longer periods where one was down significantly and took years to catch back up. You were fortunate to start into a period of relatively strong markets, and it is human nature to get used to a trend and think that it will always be like that. I went through the 1987 crash, the 2000-2003 bear, and the 2007-2009 bear. That was hard, and I was nervous, but it was the right thing to stick to the plan. I recommend that you read Your Money and Your Brain by Jason Zweig. Good luck and hang in there.
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Old 05-25-2016, 07:30 AM   #7
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People are getting spoiled with the bull market of 2009-2015, the same as they were in the bull market of 2000. All parties must end at some point, and people go home to sleep. They must rest and recover from the hangover before they can party again.
You've obviously never been to one of my parties. I wish the people would go home to sleep. I hate waking up hungover and tripping over people on the floor and not being able to find an unoccupied chair or sofa to sit in. I need a better class of friends.
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Old 05-25-2016, 07:48 AM   #8
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Back in my working days, I had some slow years of growth such as 2000-2003 when it took 2 years to gain $100k. But after that, I was growing $100k a year through the bull years until he market crashed in 2008. It took 4 years to get from $900k to $1M. After a few more years of fast growth, despite my being ERed with no outside (wage) income any more, I still managed to get up to $1.3M but getting to $1.4M will take a long while. I'm not tapping into principal so as long as the investment income can cover my expenses, I won't sweat the "doldrums."
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Old 05-25-2016, 09:12 AM   #9
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A combination of flat markets, a currency conversion panic mistake on my part, and the fact that my wife has been off work for 6 months without pay after the birth of our twin daughters, has meant things have ground to a halt.
What are you invested in? Are you using a financial adviser?

If you have a lot of cash in the bank, it will not grow. Bonds are similar. Individual stocks, it's a crap shoot. High dividend stocks move less. The S&P will track the market, which is flat over two years, but historically grows.
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Old 05-25-2016, 09:13 AM   #10
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You've obviously never been to one of my parties. I wish the people would go home to sleep. I hate waking up hungover and tripping over people on the floor and not being able to find an unoccupied chair or sofa to sit in. I need a better class of friends.
Well there's your mistake, you need to tell them to bring tents!
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Old 05-25-2016, 09:13 AM   #11
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What did Warren Buffet say to his executor? Put 90% in S&P 500, 10% in cash and my widow can live off that the rest of her life?
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Old 05-25-2016, 09:18 AM   #12
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In the words of that immortal (or is it non-mortal) philosopher Dory, "Just keep swimming".

And don't forget that other great philosopher, 'Stay the course'.
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Old 05-25-2016, 04:24 PM   #13
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I've been trying to hit $500k since late last year and it still hasn't happened, hoping by the end of the year but doesn't seem very promising. As long as we keep piling cash into the market one day it'll pay off, right?
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Old 05-25-2016, 04:35 PM   #14
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I totally feel spoiled by the great run over the last few years. After huge gains in our portfolio, it is a bit disheartening to see it stagnate. But I also agree it's better than seeing it heading south.
I'm a bit of a couch potato type investor so it's just "continue what we're doing". One encouraging/motivating factor is the dividend component of our portfolio. It's nice seeing the dividends continue to grow.
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Old 05-25-2016, 04:48 PM   #15
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Once over a number, one usually falls back and gets another attempt. I've found that it takes at least 3 tries over several months to stay above a milestone.
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Old 05-25-2016, 05:47 PM   #16
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Originally Posted by BigBangWeary View Post
Well everyone said that the first $500,000 is the hardest. So far, that has not been our experience. After hitting the $500,000 a year and a half ago after 7 years, we have struggled to get to the $600,000 mark. We were making this increase every 10 months before.

A combination of flat markets, a currency conversion panic mistake on my part, and the fact that my wife has been off work for 6 months without pay after the birth of our twin daughters, has meant things have ground to a halt.

We are Canadian renters and have been watching house prices jump 10-15% per year. It is really hard not to feel like we are falling behind.

Anyways, has anyone else ever experienced one of these savings 'doldrums'? What was your strategy for staying motivated and moving forward?
I'm not sure what you expected, but it's difficult to pile on the savings when you have newborn twins and are temporarily down to one income. Healthy kids are priceless!

As for being priced out of the housing market, if you live in Vancouver, you are right.

http://www.cbc.ca/news/canada/britis...uver-1.3599009
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Old 05-25-2016, 09:15 PM   #17
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Maybe it would help psychologically to measure your accumulation of shares over that time period rather than total value. If you're accumulating shares in the down times, it's like drawing back the bow, loading it with potential energy and getting ready to launch the arrow skyward.
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Old 05-26-2016, 05:18 AM   #18
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Hi everyone and thanks for the replies.

Papadada111 - very true, although our monthly costs hardly increased over the 2 and a half years of our sons life. With three this will be different, but it hasn’t hit us too hard yet.

NW-Bound I agree that the bull market of 2009-2015 has had an impact on our perspective, but to be honest, we weren’t saving nearly as much in the early stages as we were in the end, so we missed out on a lot of that.

DrRoy -thanks. It has been a while since I read it. Maybe I should go back. My concern about the whole 130 years of history is the effect that our not-so-historically precedented zero-interest rate experiment has had on the market and how that will play out. I truly believe we are in a very different investing environment in 2016.

Scrabbler1 - wow 4 years to get to the magic number from 900,000. I can see how that might have been a tad frustrating.

Senator - I am invested in mix of ETFs/mutual funds and have a bond and fixed portion of our portfolio that matches our age and tolerance levels. We do use an advisor but not quite in the traditional sense. We also have ownership of private equity within a soon to be IPO’d company. Only about 1.5% of our net worth is in cash waiting for deployment.

Dvalley – I hear ya. It sometimes feels like being a young kid at the beach. When you get the sand pile to a certain height, the loose grains just keep falling back down again. Maybe add water …?

Meadbh – This is true, and I would not trade them for any pile of money. But they are also another reason to focus on our investment plan. To be honest the lack of progress is pretty unrelated to our kids at this stage as the amount put away each month has not really been significantly impacted.

Markola – I like it. Anything to see some numbers going up 
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Old 05-26-2016, 07:00 AM   #19
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Slow and steady wins the race.
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Old 05-26-2016, 07:06 AM   #20
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Look on the bright side, you're buying (somewhat) low based on an assumed future market rise.....
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