My Financial Journey

Ouch a very rough month for my retirement nestegg and for the 2nd month in a row my portfolio badly underperformed the SP500. To top it off I also finally made a land purchase so $131,000 came out of my savings account and went to buying some dirt. Also last month we purchased a new minivan for $15,000 so cash savings is flying out the door and my investment accounts are dropping as fast as they went up. Bottom line is I feel a lot poorer this month than I did last month.

In the grand scheme of things the investment fluctuations mean nothing. I have a pretty volatile stock portfolio and so when the market is up I usually greatly outperform it and when it is down well yeah I greatly under perform it. I guess the good news is the stock market is up a lot more than its down so in the long run this should benefit me.

Regarding the extra $150,000 in discretionary spending the last two months. Well yeah that part is probably not the most financially smart use of that money – clearly if I had put that money to work in my nestegg the last 5 or so years that I had been saving it I’d probably have a retirement nestegg in the 3/4 of a million dollar range. I also expect that the crazy spending will not end for a bit here as we actually build a house on the land and make use of the 15 acres of land that we purchased. However life is all about balance and while I may be “living it up” now I made dang sure that when I was in my 20s I put myself in a very good spot when it came to my financial situation and have even said that the foresight to take care of those things when I was young and get compound interest on my side early on will allow me to act like an idiot when I am older should I so choose and not screw up my retirement.

Now granted I could retire much earlier had I just set that as my sole goal, but again I am not dooming myself for the rest of my life I don’t think. While we likely will take on some debt with the new house – all of our purchases for the land, new van, etc were all done in cash and we still have a cash cushion of about $40k as well as about another $50-60k in equity in our existing house and we have no other debt other than our student loans so I am confident that even this wildly exorbitant spending regarding our new house will still allow us to pay off our mortgage, student loans, save for kids education and have a retirement nestegg well in 7 figures by the time we hit 50 (next 15 years).

Anyway here is my monthly report

Taxable Account – $4,950.85 (-7.23%)
Traditional Rollover IRA – $30,879.84 (-6.10%)
My Roth IRA – $95,751.56 (-7.79%)
Wife Roth IRA – $53,893.27 (-6.38%)
Traditional 401k – $187,250.21 (-0.16%)

Roth/Traditional % = 44.59% (tax free)

Total Retirement Nest Egg $372,725.73 (-3.73%)

Monthly Contributions $753.77 (401k)
SPY Performance +0.62%
My Monthly Investment Performance -3.93% (-4.55% vs SP500)
My Monthly Individual Stocks Performance -7.08% (-7.70% vs SP500)

Well I guess things can’t keep going up forever and I can’t destroy the SP500 every single month. After breaking $400k for the first time earlier this month my portfolio took a little dip backwards and my investments greatly under-performed the market this month. The only saving grace was that my employer’s very generous 401k matching and bonus program both hit this month so about an extra $8k went into my 401k this month that makes the month not look quite as bad as as it actually was.

To be honest I feel much more comfortable with things heading south especially after the almost unprecedented run-up and prosperity we have seen in the stock market the last 5 years, I’m still somewhat young and have a long investing career ahead of me so the more pessimistic the stock market is the better off it will be for me in the long run.

Taxable Account – $5,336.62 (-1.43%)
Traditional Rollover IRA – $32,879.53 (-5.21%)
My Roth IRA – $103,836.82 (-6.70%)
Wife Roth IRA – $57,565.12 (-4.97%)
Traditional 401k – $187,559.51 (+4.85%)

Roth/Traditional % = 44.59% (tax free)

Total Retirement Nest Egg $387,177.60 (-0.94%)

Monthly Contributions $8,483.36 (401k)
SPY Performance +0.69%
My Monthly Investment Performance -3.11% (-3.80% vs SP500)
My Monthly Individual Stocks Performance -5.83% (-6.52% vs SP500)

Well I never in my wildest dreams would have thought I’d be writing this post so soon, but today my retirement nestegg topped $400,000 today. It was less than 9 months ago that I broke $300,000 and $200,000 16.5 months before that, and $100,000 28 months before that and five years before that I started investing.

Once again the power of compound interest is becoming crystal clear as you follow my retirement nestegg.

Taxable Account – $5,435.18
Traditional Rollover IRA – $35,121.03
My Roth IRA – $112,779.11
Wife Roth IRA – $61,867.48
Traditional 401k – $186,251.10

Total Retirement Nestegg – $401,453.90

$100,000 NestEgg Milestones

Date	DOW Jones Value	MFJ Nestegg
Oct 2008	10,000	$ 69,300
Oct 2009	10,000 (+0%)	$100,000 (+44%)
Feb 2012	13,000 (+30%)	$200,000 (+100%)
Jul 2013	15,423 (+19%)	$300,000 (+50%)
Feb 2014	16,395.88 (+6.3%)	$400,000 (+33%)

Well another great month for the stock market and another great month for my retirement nestegg. Once again my investments outperformed the SP 500 and my retirement nestegg is inching up on $400,000 – which is absolutely mind boggling since I just hit $300k in July! This also marks the 100th monthly report in a row that I have done for this blog.

To put the power of compound interest into perspective – my first monthly report was filed in December of 2005 and my nestegg was at $24,616.93 and that had represented over 3 years of savings to that point. This month my retirement nestegg grew by $21,177.32.

Taxable Account – $5,414.22 (+3.76%)
Traditional Rollover IRA – $34,686.58 (+4.71%)
My Roth IRA – $111,290.81 (+6.50%)
Wife Roth IRA – $60,576.09 (+7.40%)
Traditional 401k – $178,886.48 (+4.94%)

Roth/Traditional % = 44.59% (tax free)

Total Retirement Nest Egg $390,854.18 (+5.73%)

Monthly Contributions $742.72 (401k)
SPY Performance +4.31%
My Monthly Investment Performance +5.53% (+1.22% vs SP500)
My Monthly Individual Stocks Performance +6.38% (+2.07% vs SP500)

Well I we started out 2014 with a down month for the market and to be honest that kind of excites me. Again I am young and am contributing so a bad market benefits me tremendously. Also as you can see I put over $9000 of new money into my accounts this month so have money to deploy should things start falling.

Once again I have bested the SP500 by a significant margin and while the time period is still short I am very excited at the prospect that I will be able to get market beating returns with my individual stocks and this will increase the already amazing power of compound interest. We will see – everyone feels like a genius during a bull market like we have had for the last 4-5 years, but overall things are going pretty well for me so far and its possible I have the right long term mindset to be able to beat the odds that so many investors face when trying to get above average returns.

Taxable Account – $5,218.22 (+83.73%)
Traditional Rollover IRA – $33,125.25 (+14.29%)
My Roth IRA – $104,502.73 (-1.34%)
Wife Roth IRA – $56,404.15 (+0.84%)
Traditional 401k – $170,426.51 (-1.58%)

Roth/Traditional % = 44.12% (tax free)

Total Retirement Nest Egg $369,676.86 (+0.77%)

Monthly Contributions $1,105.11 (401k) $2,500.00 (Taxable) $5,500.00 (Traditional IRA)
SPY Performance -3.56%
My Monthly Investment Performance -1.71% (+1.85% vs SP500)
My Monthly Individual Stocks Performance -1.26% (+2.30% vs SP500)

Wow another year has already passed and this sure was one of the most exciting years for my retirement nestegg growth. My retirement nestegg grew 62% in 2013 or $140,370.78!! If you take out my contributions for the year my investments made me $113,682.25 this year!

That is absolutely insane as my portfolio which just sits there and takes extremely little work on my behalf is now making more than my salary in my 40 hour a week day job. It also more than the $100,000 goal I had set for myself to save by age 30 in just one year with no contributions on my part! Compound interest is an amazing force!

On top of that my investment performance was outstanding this year and my individual stock portfolio returned over 68% this year besting the SP 500 by almost 39% on top of the fact that the stock market had one its best years ever.

Taxable Account – $2,840.14 (-0.11%)
Traditional Rollover IRA – $28,983.28 (+5.10%)
My Roth IRA – $105,925.74 (+3.64%)
Wife Roth IRA – $55,934.43 (+3.11%)
Traditional 401k – $173,158.95 (+2.42%)

Roth/Traditional % = 44.12% (tax free)

Total Retirement Nest Egg $366,842.54 (+3.06% 1 month) (+62.00% 1 year)

Monthly Contributions $736.74 (401k)
SPY Performance +2.36%
My Monthly Investment Performance +2.86% (+0.50% vs SP500)
My Monthly Individual Stocks Performance +3.65% (+1.29% vs SP500)

My contributions for 2013 $26,688.53 ($17,788.53 401k) ($8000 Wife Roth IRA) ($900 Taxable Account)
SP500 Performance for 2013 +29.60%
Investment Performance for 2013 +50.20% (+20.60% vs SP500)
Individual Stock Performance for 2013 +68.58% (+38.98% vs SP500)
Total Investment Return 2013 +$113,682.25

As usual another new high and another significant out performance by my investments of the SP500 index. This really cannot go on forever as I’ve had many years worth of gains just this year alone. Let’s hope for another financial apocalypse sometime soon. In related news I have finally I believe secured a piece of land to build our house on. After many years of searching we have a signed purchase agreement for 15 acres of land and will likely be building next year. Poor financial decision, but not everything is about dollars and cents and hopefully with this out of the way in 2014 I can concentrate more on our finances going forward. Meanwhile this cruise control thing has worked out pretty good for us.

Taxable Account – $ 2,843.34 (+11.91%)
Traditional Rollover IRA – $27,577.98 (+4.43%)
My Roth IRA – $ 102,201.93 (+5.03%)
Wife Roth IRA – $54,249.70 (+3.89%)
Traditional 401k – $169,066.71 (+2.48%)

Roth/Traditional % = 43.57% (tax free)

Total Retirement Nest Egg $355,939.66 (+3.64%)

Monthly Contributions $736.74 (401k) $1500 (Wife Roth IRA)
SPY Performance +2.81%
My Monthly Investment Performance +2.98% (+0.17%)
My Monthly Individual Stocks Performance +3.86% (+1.05%)