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Month: January 2022

I lost $1 million dollars

I lost $1 million dollars

Well this is another goal of mine which sounds counterintuitive, but in my October 2018 Retirement Nestegg Report I was commenting about how losing $100k in a month was a non event for me and then made this statement

My goal some day is to lose $1 million dollars in portfolio value.

Well today after a few weeks of carnage it occurred to me that I may have lost about $1 million dollars on paper and sure enough my portfolio set an all-time high on Nov 4th of 2021 and now today just 79 days later my portfolio has fallen more than $1 million dollars below that ATH. Mission Accomplished!!

A couple of thoughts on this.

I originally made that statement because in order to lose a million dollars you have to have a fairly large sum of money – hopefully quite a bit more than $1 million, but at least $1 million. So if someday I lost $1 million dollars that probably meant that I was doing pretty good and was in pretty good shape and the $1 million dollars was not going to be as devastating as it sounds. Percentages of big numbers are big numbers. They can work for you and against you and while I lost $1M in 79 days I gained more than $1M 64 days to hit that all-time high.

I also lost $1M and to be honest it really has added zero stress to my life. Like I mentioned I lost $1M and am back to the same portfolio I had in September. Easy come, easy go. Volatility and fluctuations in the market are normal and the price you pay for the performance. I never in my wildest dreams expected to be hitting the numbers that I have hit the last few years and so taking things down a few notches really doesn’t make me feel like I’m somehow behind schedule, in fact I’m still currently wildly ahead of schedule and have a sum of money that has me in great shape for the rest of my life.

Nothing has changed. I still own all of the same businesses I did 79 days ago and their business prospects have not materially changed. All of the factors outside of their control and my control have changed. Investor sentiment is a very fickle thing that swings wildly out of control in either direction, but at the end of the day it affects absolutely nothing other than the short term prices. Case in point for much of Tesla’s existence and them building up their company to one of the best business models in the world, investor sentiment was very much against their company and their CEO. None of that however affected what the underlying company was doing and the profits that they would be making in the future. Same with my portfolio. I feel very good about the prospects of my individual companies I own and the health of the largest companies that drive my index fund performance and over a 5 or 10 year period I will not even be able to pick out this spot on the chart of where I lost $1M. Just like the great recession does not show up on a long term chart of my nestegg growth.

Also while I am starting to tap into some of my nestegg for early retirement, do not need the vast majority of these funds for many years so the fact that my portfolio is up or down and hit a certain number today doesn’t mean anything to my future prospects unless I let it dictate my emotions and do something stupid and change my course. Just like no single day, month, or year made one iota of difference of where my portfolio is today. This is a long term game and while it’s nice to check in on progress from time to time you need to stay focused on the big picture and just keep doing the same small daily habits that have huge effects on your long term future.

I feel like I’ve made some crazy predictions on this blog and every single one of them have come true much faster than I ever could have imagined. I probably should make some grand prediction about how I can’t wait to have $10M or $100M dollars some day, but to be honest that would not change my life in any meaningful way. It’s funny how important financial metrics/numbers were to me or how important I thought they were, but as I’ve now hit that area of Financial Independence I realize that things like your time and doing things you enjoy with people you love is the only thing that matters. The numbers and metrics give you that freedom and once you have that freedom the additional dollars do not affect your life in any meaningful way. The sooner you can get to that number the greater the compounding affect it has on your life, but once you are there money becomes such a minor part of the equation.

If you are still on your journey to FI, use these short term dips as opportunities. I have no idea when the market will bottom out and neither does anyone else, I very well could be writing about losing $2M, but in the meantime I will continue to enjoy the things in life that matter.

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%

My Best and Worst Stocks in 2022

My Best and Worst Stocks in 2022

In annual tradition I will list my best and worst individual stock performers for 2021.

Ethereum +407.64%
Moderna +143.11%
DataDog +80.93%
Cloudflare +73.05%
Microsoft +51.21%
Costco +50.67%
Tesla +49.76%
Apple +33.82%
Intuitive Surgical +31.76%

So one thing that probably pops out that I have now delved into the crypto sphere and while Ethereum is up 407% this year I am actually up much more as I put a trivial amount of money in at the beginning of the year to learn about it and have somehow managed that everything I bought with it has gone up a ridiculous amount and I am up like 600x my initial investment which was just a few hundred dollars. I still consider this entirely speculative and educational and would not be surprised to have all of it go to $0 as a chunk of it is in ETH, but also have some NFTs that in theory one could currently sell for a few hundred thousand

Not quite as crazy of a year as last year, but still some very strong performers and Tesla was up 50% which really makes a large impact on my portfolio.

Zoom -45.48%
Fubo TV -44.57
Arcimoto -41.19%
Twilio -22.20%
Crowdstrike -3.34%

Regarding my biggest losers most of these are very small allocations in my portfolio and were very speculative in nature when purchased other than Crowdstrike. I will continue to hold and see what happens long term.

Investment Holdings January 2022

Investment Holdings January 2022

In annual tradition I list all of my investment holdings. These do not change much during the year and I am really not contributing too much to my retirement accounts anymore and I rarely sell. That being said some of my largest holdings have grown quite a bit. Tesla now accounts for nearly 40% of my retirement nestegg which I guess is what it is. It’s not something I would feel comfortable trimming at this point in time.