Poll: What proportion of your portfolio is due to market growth ?

[DrRoy]

I do have the records for this and figured it out a few months ago. With RE 3 months away, and after 36 years of w*rk and saving, out of my total investment portfolio, 38% of it is from the contributions, and 62% is from growth.

 

[Danmar]

Too tough and complicated to figure this out. Maybe about 75% appreciation. Will depend how old you are and how long ago you stopped contributing? It's even hard to figure what my contributions would have been. Option cash outs? Etc.

 

[ABQ2015]

100% due to growth?

That was the case with my brother's first portfolio - all due to company stock that grew to about $400K in just a few short years. Unfortunately it was Enron.

 

[foxfirev5]

Even though it's a slow day I surely don't have enough time or energy to figure out my returns over the last 38 years. Furthermore in the early days I simply contributed to the retirement plan and forgot about it. After about 15 years I had a mid five figure portfolio. Then it took off and here I am.

 

[Alan]

I've only been saving and investing since 1995 and I have kept track of all my contributions and balances every year, and each year I calculate the XIRR return for the last 3, 5 and 10 years plus the XIRR since 1996 (the first year I calculated this stuff).

I also do keep a total of investment gains and losses so it was easy for me to divide that total by the current total of investable assets, however I don't know if that is a useful figure to know 7 years into retirement where I have been making large withdrawals most years.

FWIW it is 74.5%

 

[Koogie]

I intended the poll as a very rough means to measure which has been more important in the long run, saving or investing as a component of your current portfolio.

Some will have a portfolio comprised mostly of savings, invested conservatively, so will show little growth.

Others might have a smaller kernel but invested more aggressively and have a portfolio comprised more of market returns.

The poll won't show that mix of course, nor the time frame. But that is what can be expanded on in your commentary. It'd be damn hard to compose a poll to measure all three of those main factors.

As to those who have been invested for 50 years and can't "come up with the records" Relax. It's not a tax audit. Take a guess and tell us about your journey to today.

 

[devans0]

In the archives of a few hard drives that are in storageis where the correct answer lies. During the early savings years, it was achingly small percentage of growth. At 2008, it was over 100%. Our investments have done well since. My best guesstimate is 1/3 contributions and the rest being growth.

Since we don't work, but the portfolio still grows, the contribution fraction get smaller each year. Portfolio grew 10% this year even with spending.

This is a handy poll. Planners and dreamers can get a feel for how compound interest worked IRL. Kudos for the poll.

 

[NW-Bound]

I intended the poll as a very rough means to measure which has been more important in the long run, saving or investing as a component of your current portfolio.

Some will have a portfolio comprised mostly of savings, invested conservatively, so will show little growth.

Others might have a smaller kernel but invested more aggressively and have a portfolio comprised more of market returns.

The poll won't show that mix of course, nor the time frame. But that is what can be expanded on in your commentary. It'd be damn hard to compose a poll to measure all three of those main factors.

As to those who have been invested for 50 years and can't "come up with the records" Relax. It's not a tax audit. Take a guess and tell us about your journey to today.

My wife and I each have a rollover 401k that we have not withdrawn from. With some work, I can figure out how much the original contributions add up to. After all, I still have all the tax returns, and the W2's. It takes a bit of work, and I may do that some day.

But roughly speaking, I can consider how the 401k contribution limit used to be only $10K/year, plus I could not possible save that much in my early working years. Multiplying that plus the employer matching by the number of years we worked at our megacorps, I think the principal cannot be more than 20% of the current values.

One of these days, I may dig out the records and get the exact numbers.

About my after-tax accounts, no way in hell I could reconstruct the cash flow in/out of these accounts, many already been closed or merged through the decades.

 

[rodi]

New math.

oooh - one of my favorite songs.

 

[rodi]

I don't have the records to fully account for contributions for my retirement savings... plus, as others pointed out - I've withdrawn some of the investments and it's challenging to figure out how much of the withdrawal was from gains, vs original contributions....

But - the one account I have clear records on is the kids 529 accounts. I've been dollar cost averaging in, consistently, since 2008... (Still doing this). The account is 1/3 growth, 2/3's contributions. No withdrawals yet... still 2.5 years off from that. Asset Allocation is 50/50 equities/bonds index funds.

 

[RunningBum]

No idea, and no motivation to figure it out. I wouldn't do anything useful with the number. It's probably pretty high though, since much of my wealth is from stock options, which are 100% growth. I was putting about 1/2 my pay check into investments though, including 401K and ESPP contributions as well as my own account funding.

 

[NgineER]

Started investing for real in fall of 2007, before then some roth contributions while in graduate school.
Socking away about 50% of paycheck the last four years.
This amounts to roughly 7% addition to invested assets in 2016.
Currently at about 49% of portfolio due to growth.

 

[CyclingInvestor]

I saved about 600K in my 27 years of working, and have pulled much more than that in my 10 years of retirement, so well over 100% of my current portfolio is due to stock gains.

 

[audreyh1]

This was easy for me because even though I have been a saver and investor all of my life, the bulk of my net worth was generated by a somewhat modest investment a long time ago in the stock of the small company I went to work for right out of college.

 

[Gill]

I've been investing since the 1950's and have absolutely no idea of how much of my net worth is attributed to portfolio growth and income. I suspect it is at least 50%,maybe more.
Bruce

 

[donheff]

Let's see.

((Years in retirement x average budget) + college withdrawals + real estate)) divided by (original portfolio value when I quit working) = about 2/3.

Current portfolio = original portfolio x 1.25

So, (1/3 OP) / (1.25 OP) = 26%, which would be my original contribution value. Therefore, Ms Market + Mr Inflation have contributed about 74% of my current portfolio. More or less ..

edit to add - if I include my own "portfolio alpha value add" in the post-work era - IOW, my messing with the portfolio asset allocation, I think Ms Market and Mr Inflation have added 100% and I've wasted 24% with bad investment choices. The biggest portfolio contributions I've made is sharply reducing my meddling.

Interesting way to figure it. Since I retired twelve years ago my portfolio has grown 50%, 75% if you include spending over the period. But since DW was still working for a few of those years and we were not drawing down it would be a bit closer to say we are about 58% up including spending. It is up roughly 33% absolute over the years since DW stopped working.

There is no way I could hazard a guess comparing actual investment input vs current value over the life of our investing years.

 

[Cobra9777]

For us, this is not too difficult to estimate. I maxed out my 401K from the time I started work until I retired, with possible exception of the first 2 years. I don't have records, but those max contribution amounts (by year) are available online. DW did the same but started a bit later, and then she worked longer.

Our taxable account was basically just an emergency fund (invested conservatively) until about the last 5-6 years of working, when it grew substantially due to increased savings. So, at the time we retired, most of the taxable account (probably 90%) was savings, not market growth. With 2 pensions and rentals, we've consumed very little of the portfolio thus far in our 3 years of ER, so withdrawals are not a significant factor.

So... if I add up the max 401K contributions for the specific years that DW and I each worked, plus 90% of the taxable account at the time we retired... that figure is 39% of today's net worth, which means 61% is from market growth.

The complicating factor is stock options, which accounted for quite a bit of late growth in the taxable account. Yes, there is a growth factor prior to exercise, with timing strategies and all that. But I always considered any net cash proceeds as simply "payroll." So I just count that as principal, with subsequent market growth occurring after the cash is invested.

 

[target2019]

I went with 32% due to growth (returns) for the past ten years.

Vanguard has performance information for that part of our portfolio for 02/01/2007 - 12/29/2016.
I calculated returns/total and result was 32%. It would be difficult to calculate much else for all accounts, going back forever.

For the same period, the personal performance was 4.9% rate of return for retirement accounts.

 

[Spanky]

100% due to growth?

Sorry about the confusion. I tried to question the 100% figure in the poll. 100% growth is not plausible since even a dime (or penny) in a saving account would invalidate the 100% figure.

 

[NW-Bound]

Well, the OP could have put down 99.999,999% for your single penny, but it's 100% for practical purposes.

And then as I showed above, the "IRS math" says that once you start to draw from your Roth IRA, it will eventually become exactly 100% gain, no rounding necessary, when your withdrawal exceeds the original principal.

 

[Big_Hitter]

according to my recordkeeper, my k plan return has been about 7.5% per annum since 1/1/2012 so I guess I could back into something based on that. I rolled over my old mega in late 2011 so that's 43% of the roll in balance right there.

 

[kcowan]

I would guess 70%.

The first 25 years had a number of contributors:
- salary growth from $7.8k to $200K
- $50k in home equity growing to $1.5 million when liquidated
- Company stock option plan generating 20% compound returns

Last 20 years has been primarily portfolio growth with dips in 2000 and 2008 supplemented by contributions.

 

[523HRR]

Interesting question, but I am simply unable to gather the data needed to answer this poll.

 

[Meadbh]

To answer this question would require extensive research into the archives, which I am not prepared to do.

 

[sengsational]

In 1982 I created a spreadsheet (in Lotus 1-2-3) for a buddy of mine to check his investment returns, and I decided to start using it too. Once per quarter I enter my net contribution or withdrawal, matching contribution (for 401k), and gain/loss. The sum of the three plus the previous balance matches the quarterly statement. Those 4 columns are repeated for each fiduciary (401k company, brokerage account company, bank, etc), and totaled. This allowed me to do an overall IRR calculation. I didn't originally set-out to keep this going as long as I have, but I have. As of September 30, I've got 60% growth, 35% contributions, and 5% company match. I imagine most folks included the company match in their growth?