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My All Time Investment Performance January 2022

My All Time Investment Performance January 2022

Well time keeps flying by and somehow these ridiculous numbers keep getting better and better each year. I am fully aware that one bad year which we are probably due for can and will greatly reduce these returns and I do feel like I am more lucky than I am skilled, but I now have 16 years of returns and have beat the SP500 10 of 16 years and my stocks have over double the annualized returns of the SP500 over the same period of time.

Doubling the annualized performance sounds cool and all, but if you stretch that over 16 years you see the absolute insane impact of doing that has over the long term. Over the last 16 years every dollar that I put into individual stocks has turned into $25.20 where as had I just only invested in an index fund would be worth $3.51 which is over 7x the amount of returns. The longer this continues and the bigger the numbers get the more exaggerated this will become.

Like I mentioned above I am not sure what to think of this. I feel like I have been EXTREMELY lucky and just a couple different decisions would have drastically changed the outcome of this experiment. I do think I have a certain knack for see what changes are coming in the world and having the conviction to stick to my intuitions even when everyone around me is calling me an idiot for talking about electric cars or streaming internet video. That being said I am well aware that none of the things that I was convinced about were necessarily a lock to become reality and Tesla could have gone bankrupt a couple of different times and Netflix could have been taken out by a competitor.

I am now to a point in my life where I need to make some decisions on whether to put it into cruise control and just ride the market averages or do I have a big enough cushion of excess money where I can continue to take calculated risks and if they blow up in my face I am still going to be perfectly ok. Ultimately I think the longer time goes I will probably fall into the latter camp of continuing to take calculated risks knowing that I can survive a few mistakes without meaningfully blowing up my future plans in life. I still have 40% of my nestegg invested in Tesla stock which is a very polarizing, speculative, and volatile company, but I strongly believe in the mission and the leader so this is one of those calculated risks. I don’t see it happening, but even if Tesla were to go to $0 I would still be in a very good situation.

This ability to have this huge cushion of money that is a big safety net is allowing me to take on some additional risks. I finally toyed with crypto this year and put $500 in to learn and fully expected to lose all $500. That $500 has now turned into a few hundred thousand dollars and I actually now am doing some side work in the crypto space for one of the top people in the industry. I also yesterday decided to take the plunge into real estate and put an offer in on some land to build a self storage facility with another friend who is a real estate investor.

For someone who had no experience in crypto and no experience in real estate these types of moves would be terrifying and honestly something I probably would have never done if I didn’t have the huge safety net of a nestegg. It’s allowing me to just explore and learn new things and new areas that ultimately very well could each result in even more money, safety, and ultimately freedom to use the rest of my life to continually explore and do things that I will truly enjoy or are interested in.

I still have my day job for now that pays me extremely well and gives me my summer months off and provides me with 7 weeks of vacation, but as time goes on and these other numbers continue to grow and other opportunities continue to blossom it probably does not make any financial sense for me to keep my day job anymore which is kind of a crazy thing. Not so much that I do not need to work any longer to provide for my family, just that I am probably costing myself money by using my time and effort at my day job. I know this is always the toughest thing for every FIRE person to do come to the realization of, especially when my current job 99.999% of people would kill for. Working 9 months year with an additional 7 weeks of vacation, crazy 401k matching, bonus, relaxed work from home schedule, etc and at the end of the day a point is coming here likely soon where I will say no thanks and this is coming from a guy with 5 young children to care for and put through college.

It’s definitely a major mind shift that is so hard to do when you spent your entire life finding ways to earn and save money and get a great job with great benefits and constantly hoarding away money for the future and now that future is here and to be perfectly honest its a lot scarier than I thought it would be. Turning off the spigot of cash and perceived security of a stable day job might honestly might be one of the hardest things I will do even though I know deep down I will look back and think you idiot you should have done that much earlier!! I think this is where the side work and the real estate investments will maybe finally push me over the edge where I feel confident enough that I’m not in any way hampering my or my families future by turning off the spigot of money from the day job.

Anyway long post as I don’t get out here as often as I used to and the end of the year is where I reflect and contemplate my life more. It’s been an awesome journey so far and I am genuinely excited for the next phases of my life. This blog has been invaluable to me and I honestly learn so much myself just by going back and reading older posts. Everything has gone better than I could have ever dreamt and now I just need to finish up the final few chapters of this journey.

Crazy stupid investing results below

MFJ Returns By Year

YearSP500MFJ NesteggMFJ StocksMFJ Investment GainsBeat SP500

MFJ Cumulative Returns By Year

YearSP500MFJ NesteggMFJ Stocks

Annualized Returns since 2006

SP500 +9.88%
MFJ Nestegg +15.60%
MFJ Stocks +22.65%

What am I saving money for?

What am I saving money for?

This seems like kind of a horse after the cart type of moment, but I’ve more recently started to wonder what I am saving all of this money for. My retirement nestegg has grown exponentially and overall I think I have done a pretty decent job of saving a significant portion of my income for retirement.

I’ve set goals and have met them and I have toyed with setting new goals for myself. For example I set that $1M for 40 goal 2-3 years ago and never wrote a post as to what, why, or how I was going to do that. Part of the reason was that I didn’t know really the why and well the how part really relied on my investment returns which as we no tend to not be a linear/stable thing you can project over a short period of time like five years.

So take a step back – ever since I was in high school I knew that I wanted to live below my means and let compound interest work its magic. I am sure in high school I was leaning more towards the man if he let this money compound for 50+ years would have many millions of dollars at his disposal at 70 years old.

Then as I left college and began my working career and contemplated a family I knew that the idea of retiring early would definitely appeal to me. In fact my wife was going to school for teaching and shortly after graduation I was seriously considering going and getting a masters degree in teaching so that I could have summers off with my wife and our future family.

Then I realized teachers don’t make much dough so maybe it would be better for me to stay in a high paying field like computer science, get my MBA instead, save like crazy when I was young, and then when I was older and money didn’t matter that much maybe pursue that teaching thing as an early retirement.

In my MBA classes we had a class where you basically figure out what you want from life and what you want your career to be – in the end somehow I settled on college professor. Again I would have summers off, flexible schedule, and well the money was better than teaching high school, but then there is that whole PHD thing.

So while I never had a solid plan one recurring theme was having summers off with the family and saving money early on in my life to give me the freedom to pursue other options where the schedule was great and maybe the pay was not so great.

Well here I sit I am 34.5 years old and have accumulated 4 children that I have grown fond of. I have a retirement nestegg of nearly $370k, another $170k+ in cash savings, and a few other assets. I still have my mortgage $110k+ and some student loans of about $40k. So right now I have a liquid net worth of $400k+, though most of that is tied up in retirement plans that aren’t easily touched before age 59.5.

My career is going very good and I am able to save support my family of six while saving a significant amount of cash each year. I could have actually made probably a lot more money in my career, but have I shunned overtures by my bosses to take on higher roles or to relocate to Europe for the sole reason that I like my current work/life balance and if anything I would like to scale it back even further rather than go the other direction with more responsibility and more money. I have more money than I can use right now and the call of more money, a fancier title with more responsibility, advancing my career, or relocating to fancy places around the world does not appeal to me at all.

My wife has been able to stay home with our children and has graciously put off using that teaching degree until our kids are all in school. Ideally it would be awesome if when she decides to go teach full-time again that I was also able to convince my work to allow me to have a similar schedule if I took a proportional paycut. I am not sure if this will fly or not. I am well respected and valued and I do work for a European company where in Europe many of my colleagues have 6 or more weeks of vacation, but I do work in the USA and my boss even in my last performance review said he was disappointed that I was looking to keep a good work/life balance and not interested in taking on higher roles with my skill-set – so me turning around and asking to reduce my workload by 25-30% more might not go over well.

I could also take another step backwards in my career and go back to consulting and just work it out with a local consulting company that I don’t work during the summers – I think this may be more doable.

Regardless I need to be in an even better financial situation where I am not so dependent upon my primary job to provide for my family. This may require me to start saving more money in taxable accounts that are more easily accessible while I am younger than age 59.5

So if I had to cut this very long post down to a simple conclusion it is that I am saving money so that I have the freedom to spend more time with my family while they are young – especially during the summers. I want the flexibility and freedom from not having to pursue a job that does not fit this schedule.