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View Poll Results: What portion of your portfolio is due to market growth ?
0-5% 5 7.14%
6-10% 3 4.29%
11-20% 7 10.00%
21-30% 5 7.14%
31-40% 9 12.86%
41-50% 9 12.86%
51-60% 9 12.86%
61-75% 17 24.29%
76-90% 2 2.86%
91-100% 4 5.71%
Voters: 70. You may not vote on this poll

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Old 12-30-2016, 08:13 AM   #41
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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.
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Old 12-30-2016, 10:33 AM   #42
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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.
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Old 12-30-2016, 10:41 AM   #43
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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.
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Old 12-30-2016, 11:21 AM   #44
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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.
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Old 12-30-2016, 11:31 AM   #45
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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.
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Old 12-30-2016, 12:48 PM   #46
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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.
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Old 12-30-2016, 01:12 PM   #47
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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.
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Old 12-30-2016, 02:00 PM   #48
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Interesting question, but I am simply unable to gather the data needed to answer this poll.
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Old 12-30-2016, 02:16 PM   #49
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To answer this question would require extensive research into the archives, which I am not prepared to do.
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Old 12-30-2016, 02:35 PM   #50
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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?
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Old 12-30-2016, 02:49 PM   #51
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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.
Maybe we need to complicate it more so that values greater than 100% are possible!

Say you have an account that you've added $100, then it grew to $200. If you removed $100, then it would be 100% gains. But if you removed $150, it would still be 100% gains. I think you should be able to add-back the $50 so that it would be $250/$200 = 125% gains
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Old 12-30-2016, 03:26 PM   #52
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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?
match should not be in growth
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Old 12-30-2016, 04:28 PM   #53
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Maybe we need to complicate it more so that values greater than 100% are possible!

Say you have an account that you've added $100, then it grew to $200. If you removed $100, then it would be 100% gains. But if you removed $150, it would still be 100% gains. I think you should be able to add-back the $50 so that it would be $250/$200 = 125% gains
If we talk about the gain over the principal, yes, the sky is the limit.

But the OP asked how much of the portfolio is the gain, and something cannot be more than 100% of itself.
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Old 12-30-2016, 05:05 PM   #54
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If we talk about the gain over the principal, yes, the sky is the limit.
Yep. 100% is "it" based on the OP.

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match should not be in growth
"Shouldn't", yes, agreed. For me it isn't/wasn't included, but the default for some might be to add up everything they, themselves contributed and lump the rest.
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Old 12-30-2016, 05:50 PM   #55
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We shred our records after the period we need to hold for tax purposes, so the closest I can estimate is "not nearly enough". This would probably hold true if I did still have those records.
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Old 12-30-2016, 06:35 PM   #56
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I actually have sufficient records to calculate this. Not penny perfect but close enough.

But I wont, because it would involve opening up old paper files for a period of twenty years or so.

My guess is around two thirds was due to growth.
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Old 12-30-2016, 06:42 PM   #57
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I have no real idea but I would guess my gains are 3 times as much as what I have put in and my company has contributed.
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Old 12-30-2016, 11:43 PM   #58
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Difficult to calculate. First, it goes back so many years. Second, other than our savings, we had company stock options, stock purchase and stock grants. Not sure how all that should be calculated. Third, in addition to investing in stocks, bonds, we have quite a bit of real estate also.
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Old 12-31-2016, 08:12 AM   #59
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The one and only number I care about is the bottom line total. How it got there is irrelevant.
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Old 01-01-2017, 11:52 AM   #60
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I have the investment info in Quicken (data was transferred to it from Money and from an earlier financial program from the 90s), so I just looked at the total gain column in comparison to total investment assets. I likely will go into the 50-59% category this year since I'm right on the margin and am no longer contributing. There is a hole in the data from '90-'92 but it wouldn't affect the result much since those funds went into an annuity, before I shifted from that provider to Fidelity in '93.
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