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Early Retirement Congratulations

Early Retirement Congratulations

This morning I got great news that a very close friend of mine just put in his retirement resignation at the ripe age of 42. My friend Berny and I have worked together for many years across multiple companies and Berny was actually the first person to somehow come across my blog many many years ago and find out my secret identity.

He kept it to himself but eventually revealed to me that he knew my secret and had been following my blog. We shared a mutual interest in investing and personal finance and were able to freely bounce ideas off each other, share information, and have friendly competitions with our portfolio size and performance. I can’t tell you how invaluable it is to have someone that shares similar ideas and goals that you can have conversations with about money.

Now 14 years after getting outing me, Berny has decided showing up to work each day is not the best use of his time anymore. He can make that decision without any affect on his or his family of five’s well being. That is so awesome and so powerful.

How did Berny get to this point in his life? By doing the exact same thing I’ve done. Living below his means, investing his money, and letting time work its magic. What’s crazy or not crazy is we have another close friend that we talk about money with who we also worked with 15 years ago and all 3 of us are financially independent and Berny is the oldest one at 42. I’m 41 and our 3rd friend is in his 30s and all of us have portfolios within 10% of each other. We all invested in different investments, we all saved at different rates, we all lived below our means in different ways, and yet none of us were able to drastically change the outcome of compounding and time.Until the invention of NFTs

Part of the reason I started this blog was to document the simple process of how I became financially independent at a relatively young age and how straightforward and simple that was and for the most part I think I have accomplished that. This would be a tool for my children or close friends to see that yes it can be done and here is how he did it. I think the story of 2 of my closest friends being able to achieve the exact same results over the exact same time frame all with loads of different variables to me gives even more credence to the fact that anyone can do this by following these same simple steps.

I think it also is eye opening for me to look at all of the other people who we worked with some of whom even understood the power of saving and investing and how they for some reason fell off the wagon, whether it was fear during a crash of 08-09 or the decision to spend the money on something else they needed and how many of them will never retire early or have the financial peace of mind that comes from FU money.

As with being successful in anything in life – it’s not so much about making the perfect best timed decision and hitting it big. It’s about making the pretty good decision and making that same same decision every day over many years that you see the absolute mind boggling power of compound improvement. Consistency of doing the same simple boring relatively easy minimal short term impact thing every single day is the secret sauce and to me you will only have the discipline to stick with it if you have a long term goal or vision for your future.

To me that has always been being able to spend as much quality time with my wife and children as possible while they are growing up. Being able to predict my future of being 80 years old and looking back on my life it was so obvious to me that looking back on my life and being given the decision between driving a fancier car or spending summers off with my kids traveling the country/world would be a laughable decision. So it was so easy for me to drive a POS Japanese economy shit box and thank goodness it was unique enough for my friend to recognize it on my blog and out me.

To Berny I am so happy for you and thanks for everything you have done to speed up my financial journey. Now enjoy your time with your family and Go F*ck Yourself! **

**https://www.businessinsider.com/early-retirement-inside-joke-reddit-2018-9

Retirement Nestegg Report December 2020

Retirement Nestegg Report December 2020

Oof. Wow what a year. I don’t even know how to put into words how crazy this year was. Obviously everything going on with a global pandemic and all of the horrible things that everyone has had to deal with this year has been at the forefront of everything 2020. One would logically think that 2020 would have been a horrible year to be an investor and once the pandemic hit I would have agreed 100% with that statement and I’m not sure many experts would have disagreed either.

Fortunately this is now not my first rodeo and I have experience of the benefit of doing absolutely nothing and this year it paid off in spades. My retirement nestegg over doubled ending the year up 117%. This was driven in a very large part by my individual stock portfolios which ended the year up 218%, which was driven in large part by the meteoric stock rise of Tesla which was by far my largest holding.

Our investment gains for 2020 were just short of $1.5 million. To put that in perspective all of my investment gains for the prior 14 years were only $890k and well my entire nestegg was only worth $1.2M going into this year. That’s the power of compounding in full force and well obviously our returns supercharged everything.

I will be the first to admit that I am extremely lucky. I have hit some massive homeruns with some of the best individual stock performers in the last 20 years (Netflix, Amazon, Tesla). My Tesla position now makes up $1M of my portfolio and that amount very well could be $0 as Tesla could have gone bankrupt. I definitely took some small educated risks over my career and some of them have paid off handsomely.

The thing is I didn’t need to be lucky. I didn’t need to take risks. Simply living below my means and putting my money in index funds has resulted in me having a sizeable nestegg that gives me tons of future freedom. I have contributed significantly more to my index funds and I started very early in this journey. This gave me the freedom to take some risks without really risking anything at all. If everything blew up in my face with my individual stock portfolio I was still going to be very ok and still on track for an early retirement. I already had my pile of F-you money. This gave me the freedom to take risks with parts of my portfolio and with my career choices.

F-you money money opens up so many new doors for you and I highly suggest you start accumilating your own pile of F-you money.

This now marks 15 straight years that I have published my retirement nestegg report. In that time it has grown from $24,616 to today’s total of $2,761.505. This has been incredibly valuable to me as I tracked my progress against my financial goals. Going forward this number really doesn’t mean much to me anymore and I really don’t have much more to accomplish. In that respect I’ve made the decision to stop publishing my monthly reports going forward.

I proved my point that by simply living frugally and investing for the long term over a period of 1 or 2 decades will result in more money than you could ever need. It wasn’t complicated. You didn’t need to win the lottery. You didn’t need to be a professional athlete. Just spend less than you earn, invest it, and let time work its magic.

Fidelity Taxable – $6,025.88(+10.24%)
Taxable Account- $331,736.27(+20.49%)
Private Stock $82,500(+0.00%)
Traditional Rollover IRA – $116,164.46(+16.30%)
My Roth IRA – $1,010,837.95(+15.35%)
Wife Roth IRA – $531,398.11(+9.38%)
Wife 401k – $5,577.30(+2.69%)
Traditional 401k – $677,265.58(+4.69%)

Roth/(Traditional+Taxable) % = 55.85% (tax free)

Total Retirement Nest Egg $2,761,505.55(+11.45%)
Retirement Salary (4%) $110,460

Monthly Contributions $933.84(401k)
SP500 Performance +3.71%
My Monthly Investment Performance +11.42% (+7.71% vs SP500)
My Monthly Individual Stocks Performance +14.55% (+10.84% vs SP500)

My retirement contributions for 2020 $31,376.37
401k $7,174.31
401k matching $12,302.06
My Roth IRA $0
Wife Roth IRA $0
Taxable Account $$11,900.00
Wife Retirement Account ??


SP500 Performance for 2020 +16.26%
Investment Performance for 2020 +117.02% (+100.76% vs SP500)
Individual Stock Performance for 2020 +218.49% (+202.23% vs SP500)
Total Investment Return 2020 +$1,481,868.23

My All Time Investment Performance January 2021

My All Time Investment Performance January 2021

Another post that I am not sure what to make of the numbers. I’ve always had a smaller percentage of my retirement nestegg allocated to individual stocks. I know that individual stocks are loaded with a lot more risk and the track record for even the professional money managers is very very poor when it comes to individual stocks. Most of the highest paid investment fund managers cannot beat the market over time.

Despite this I have always enjoyed learning about companies and what the future holds and overall I think I was blessed with a pretty laid back demeanor that helped me from getting too high or too low with the various fluctuations in the market. Ultimately I think this is why so many investors fail – even the highly educated well paid ones. They let their emotions get the best of them and make decisions based on emotions instead of logic.

I have 15 years under my belt now and I see the same themes happen over and over and over again in the market. The market as a whole completely overreacts to ever new bit of news and individual investors swing widely from always seeming to throw money into far fetched get rich quick investments when it seems that there is no way the stock or market could be pushed any higher and then when things inevitably catch up with reality and stuff starts to slide the other direction they sell out completely until the next get rich quick bubble forms.

What I think is missing from a lot of investors is the long term perspective and an educated idea of where the future is headed. Like I mentioned above people get so caught up in the short term fluctuations and don’t take a look at the longer big term picture that is much easier to see and predict.

People also repeatedly think that things are going to stay the same and that is one thing that will never happen. So they always always greatly underestimate the new companies thinking the veteran industry leaders will crush them whenever they want. But the David and Goliath story plays out again and again when the little known upstart with a good idea and a lot of ambition ends up crushing the industry behemoth who is too slow to react or can’t react as they are afraid to disrupt themselves. Netflix vs Blockbuster, Tesla vs the auto industry, Amazon vs brick & motor retailers, etc.

All in all yes any of these stories could have turned out differently had the current #1 took the innovation seriously, but they don’t and they won’t again in the future. Just like it’s obvious you should pour money into the market every time there is a 30% correction – but people don’t. Ultimately it’s always fear that gets the best of people and companies. Fear of change, fear of disruption, fear of losing money, fear of losing out on making money.

Anyway as you can see below somehow the last 15 years I’ve managed to crush the market returns with my individual investments. Now the big caveat there and something I didn’t fully realize until this year is your long term track record is really only as good as your most recent returns. Big numbers have a huge effect on overall performance. Just last year my long term annualize performance was 13.92%, three years before that it was 10.72% which still outperformed the SP500 over that same period of time, but not nearly as impressive.

If next year is a down year my returns will drop significantly. Which means I shouldn’t get too big of a head after one year of spectacular performance. I feel very confident that I will never see another year like this year the rest of my life. So I should really evaluate going forward how much of my money should be individual stocks despite the fact that I currently look like I’m the next Peter Lynch.

MFJ Returns By Year

YearSP500MFJ NesteggMFJ Stocks
200615.79%14.37%14.20%
20075.49%5.50%7.25%
2008-37.00%-47.98%-37.00%
200926.46%32.75%35.78%
201015.06%24.60%36.94%
20112.11%-5.53%-2.29%
201216.00%18.12%10.25%
201332.39%50.20%68.58%
201413.69%8.91%7.91%
20151.38%7.34%14.34%
20169.54%3.32%-4.57%
201718.42%23.31%27.49%
2018-6.24%4.56%15.60%
201928.72%32.46%37.07%
202016.26%117.02%218.49%

MFJ Cumulative Returns By Year

YearSP500MFJ NesteggMFJ Stocks
200615.79%14.37%14.20%
200722.15%20.66%22.48%
2008-23.05%-37.23%-22.84%
2009-2.69%-16.68%4.77%
201011.97%3.82%43.47%
201114.33%-1.92%40.19%
201232.63%15.85%54.56%
201375.58%74.01%160.55%
201499.62%89.51%181.16%
2015102.37%103.42%221.48%
2016121.68%110.18%206.79%
2017162.52%159.17%291.12%
2018146.13%170.99%352.14%
2019216.82%258.95%519.75%
2020268.34%679.00%1873.83%

Annualized Returns since 2006

SP500 +9.08%
MFJ Nestegg +14.68%
MFJ Stocks +22.00%

My best and worst stocks in 2020

My best and worst stocks in 2020

In annual tradition I will list my best and worst individual stock performers for 2020. As you can see from the list below which I cut off at only stocks that I have owned that have doubled for me it was a crazy year.

Tesla +720%
CRWD +256%
TWLO +228%
ZM +193%
DDOG + 181%
SHOP 177%
TTD +170%
NET 122%

Obviously Tesla led the pack and I did do some portfolio rebalancing this spring during the pandemic and bought a few new stocks all of which went bananas. Many of them were up more than the figures above, but I only listed the returns since I bought them in March.

Now for my worst stock of 2020.

SBUX +19.73%

Starbucks was up just under 20%. Every single stock that I own beat the market this year. That is absolutely crazy.

Going forward I will look to rebalance my portfolio to be more balanced. My individual stocks have performed so incredibly well and have grown to become a very large proportion of my retirement nestegg. It probably makes sense to sell off some of these stocks and put them in index funds as the risk/reward situation does not really help me much. The only thing that could change my plans is a massive drop so it probably makes sense to diversify my portfolios more. On the flip side one could argue that I have a big enough margin of error that I should just keep moving full steam ahead as even a 50% haircut would not be devastating. It’s easy to think you are smart when the market is at all time highs, but this cannot go on forever and it probably makes sense to take some of the drama/entertainment out of my life.

Investment Holdings January 2021

Investment Holdings January 2021

TSLA34.07%
VPMAX12.34%
VIIIX12.11%
SHOP8.22%
NFLX5.97%
AMZN5.79%
WOLFRIVER2.99%
CRWD2.84%
AAPL2.57%
CMG2.27%
DDOG1.65%
NET1.59%
SBUX1.58%
COUP0.62%
OKTA0.60%
TDOC0.54%
FUBO0.51%
TWLO0.44%
BIP0.41%
ZM0.38%
ISRG0.36%
TXRH0.33%
DOCU0.32%
TTD0.32%
$$CASH0.30%
COST0.29%
MSFT0.28%
VFIAX0.20%
FSLY0.12%
MyFinancialJourney.com – 15 years later

MyFinancialJourney.com – 15 years later

I know I’ve done a few retrospective blog posts recently, but 15 years ago today I created this site and wrote my first couple blog posts. At the time I was a young kid with grand plans for the future and trying to learn everything I could about personal finance and investing. I was really inspired by 2 million, All Financial Matters, PF Blueprint and a few other of the first personal finance bloggers, many of whom no longer write or even operate their sites.

I am not sure if it was confidence or naivety, but personal finance to me really was relatively simple and in order to become wealthy it was just basic math. Spend less than you earn, invest the money, and let time keep incrementing the compounding number in the equation and you would be come rich. No crazy skill or luck was needed, just discipline to keep doing simple things for a period of time.

I realized not a lot of people understood this and if some day I was successful in accumulating a lot of wealth people would always assume I was some sort of anomaly that got lucky or was some brilliant investor. To be honest that was probably a big part in why I created this blog. I could document how incredibly simple it was.

Spend less than you earn, invest that money, and wait until you have enough. Anyone has the ability to do this. The less you spend the less time you have to wait. The longer you are willing to wait the less you have to save. The number one factor in the equation is spend less than you earn. Sure waiting 100 years to tap into your savings will have large impacts, but in the scope of life I think it makes sense to cut the time factor down to a more reasonable 10-20 years.

Ironically I view the investment return piece of it to be the least important of the 3 factors in the equation, but this is where most people try to take short cuts and ultimately set themselves up for failure and disappointment. Buy a total stock market index fund. Done end of story.

So all you have to worry about is finding ways to spend less than you earn and then having patience to do nothing other than make regular contributions to your index fund and you will be wealthy. It’s so incredibly simple and yet no one does it.

When I started this blog I posted my retirement nestegg it was $24,616.93. At the beginning of this month just shy of 15 years later my nestegg had grown to $2,477,729.77. That is a gain of over 100x in 15 years. Clearly I must have done something spectacular with loads of risk/luck to achieve that insane amount of wealth. Nope I spent less than I earned, invested it, and let compounding work its magic for 15 years.

Now don’t get me wrong I had a lot of things going for me. The stock market over the last 15 years has been some of the best times in history to be invested and I did make a investments in individual stocks that paid off big, but I also had a lot of things going against me. I had 5 kids, single income, and chose to take lower paying jobs and turn down promotions to be able to spend more time being a dad/husband. I make good money and my company has good benefits, but even then almost all working families with 2 incomes likely surpassed my earnings throughout these 15 years. There is nothing special with my circumstance.

Also 100x growth is amazing and having nearly $2.5M is absolutely mind boggling, but it’s also not necessary. Like if I had half of that amount of money because of lower investment returns I would still be in amazing shape with a big pile of money as a safety net to make a lot of decisions without money being a primary factor. I would still be taking my summers off. I would still be turning down promotions. I would still have everything I needed and more. Just like that number growing to $10M would not materially change my life. I have more than enough to be secure for the rest of my life and make decisions based on their merits and not on the financials. This is true freedom. This is happiness.

1. Spend less than you earn.
2. Invest it in index funds.
3. Wait until you have enough**
4. Enjoy life

** This might be the hardest decision in the sequence. I think we all think we need more than we do and sacrifice other things we truly want for excess over what would truly make us happy. This has been a struggle but please figure out what this is for your situation. It definitely shouldn’t be more than 25x your annual spending and even a figure probably half of that can give you a tremendous amount of freedom and flexibility to make decisions strictly based on happiness and not worrying about financial stressors.

Retirement Nestegg Report November 2020

Retirement Nestegg Report November 2020

Well another all time record high for our nestegg and near all-time high for gains and percentage. It’s bonkers that a gain of $430k and 21% in a single month is not an all-time record, but no just a few months ago in August the increases were even higher. As usual a large percent of these gains were driven by the performance of Tesla stock though the market has a whole had an impressive 10.76% gain now that the election is behind us. What’s even more impressive is I wasn’t even aware that the gains this month were anything special until I did this report. Looks like yesterday was a down day so I likely surpassed the $2.5M milestone yesterday – which equates to $100k forever retirement income which is more money than we will ever need.

Going forward I just need to come up with a better plan on how I can access any of this money over the next 20 years and start dialing back the amount of time we spend working.

Fidelity Taxable – $5,466.09(+6.81%)
Taxable Account- $275,325.93(+36.09%)
Private Stock $82,500(+0.00%)
Traditional Rollover IRA – $99,887.68(+28.91%)
My Roth IRA – $876,355.03(+25.95%)
Wife Roth IRA – $485,811.18(+23.15%)
Wife 401k – $5,431.03(+11.41%)
Traditional 401k – $646,952.83(+11.47%)

Roth/(Traditional+Taxable) % = 55.37% (tax free)

Total Retirement Nest Egg $2,477,729.77(+21.28%)
Retirement Salary (4%) $99,109

Monthly Contributions $933.84(401k)
SP500 Performance +10.76%
My Monthly Investment Performance +21.24% (+10.48% vs SP500)
My Monthly Individual Stocks Performance +26.81% (+16.05% vs SP500)