How My Net Worth Progressed To Financial Independence

What does a net worth trajectory look like over time when it “accidentally” gets to financial independence?  As discussed in my journey post, I never had the goal of getting to financial independence until, well, I got there.  But I saved like a champ and did all the right things, most of the time at least.

Stock ticker I did a post a while back about my glorious spreadsheet, with all of her simplicity and history.  So for those out there who are striving for FI I thought there’d be value in pulling charts from my spreadsheet and seeing the progression of a portfolio over a 20 year period that had no deliberate goal of getting to financial independence, but did.

The period in question is from May 1997 to now, which started in the craziness of dot-com irrational exuberance, and goes to the present with a raging bull still on the loose.  But in between we had the dot-com crash, the somewhat stagnant mid-2000’s, and of course the 2008-09 recession.

First I want to get this out of the way – I don’t divulge actual numbers.  My reasons are pretty much the same as Tanja from Our Next Life and she did a post on that here which I fully agree with.  I also respect those who do share them and don’t think it’s the wrong thing to do.  It’s just not the thing for me.

 

LET’S GET CHARTY

So now that we’ve got that out of the way…  Here’s the broad look at my net worth from May 1997 to present.  Of note, this does not include the equity in my house which is a decent chunk of change.

Net Worth Chart

Underwhelming huh?  You’re right.  My ups and downs occur at the same time as the markets ups and downs.  So I took my numbers and put them on a logarithmic scale against the S&P 500.  Of course I was investing more money all the time, so my net worth line naturally starts pulling away from the S&P, but I want to focus on the relative bumps in the two lines.

Net Worth Chart

 

I definitely had a great run in 2003 – 2004 as compared to the S&P, and looking back I know much of that was a super-charged savings rate.  I also earned more in those years at my second job as an adjunct instructor at a local university.

As you can see my diversification paid off in the 2008-09 recession and I didn’t take nearly as big of a hit.  By then I had a substantial amount of money in the Vanguard Total Bond Index fund.  I didn’t do it in preparation of a market crash as if I had some super-power knowledge, I did it to diversify more.

The last chart I’d like to show is my taxable investments versus my non-taxables.

Net Worth Chart

I have a mixture of IRA’s and a TSP account (a 401k for government workers) for my non-taxables.  My taxable accounts consist mostly of Vanguard Index Funds with a few other mutual funds mixed in that I’ve been looking to sell and put in Vanguard.

I was hoping the new tax bill might reduce the capitol gains tax which is why I waited, but alas it did not.  I’m probably just going to bite the bullet and sell the shares in those funds gradually and pay the cap gains tax.  Life could be worse.

Mainly I want those funds gone because they don’t do any better than the S&P but they have higher fees.  Plus consolidation means simplification and makes life better.

On the last chart it’s clear that I’ve always had similar amounts in my taxable and tax-free accounts.  This was not done deliberately per se, it just worked out that way.  I always maxed out my tax free options, although I think I was a year or two late to the back-door Roth game after my salary put me out of traditional Roth eligibility.

Stock Ticker But after maxing those out I still had money to invest since I saved at a high rate, so I was always stashing a good amount of money in my taxable accounts.

Take note of the dip I highlighted in late 2014.  This put the value of my taxable assets below my tax-free assets for a while, but they recovered pretty quickly and have been pulling away again.

Stay tuned for the big reveal on what caused that dip.  Trust me folks, your gonna want to read that post!

If you’re wondering about my asset allocation, it’s a 20 year span so it has varied of course.  But I’ve mostly stayed between 70 – 85% stocks, and mostly between 7 – 15% bonds, with the rest being cash.

 

YOU BORING, LAZY SOD

If you want my investing style in a nutshell, it’s three things – boring, lazy, and kinda conservative.

Boring because I took the index fund route for the most part.  I may have bought 8 or 9 individual stocks in my whole life.  Some winners and some losers, but I quickly saw that it wasn’t for me and I could expend way fewer brain cells in index funds for the same or better results.  Duh.

According to the White Coat Investor boring is the way to go, and he’s smart.  So there.

Bored Cheetah

After Hearing About My Investment Strategy
#NoHyenaFutures? #GazelleForDinnerYetAgain

Lazy because I spent very little time working on this stuff.  I learned the basics in my 20’s, set my strategy, and rode it out.  Clicking a few buttons here and there to transfer money from my checking account to Vanguard burned maybe 23.5 calories in total all those years.  Lazy indeed.

And conservative because there were times in my 30’s when I drifted down to 67 – 68% stocks, with over 20% cash (ghast!).  That’s mostly rooted in the fact that I have no safety net.  I come from a family with no money and no real assets.

Currently, I’m at 85% stocks, 11% bonds, and 4% cash.  Ironically that’s the highest I’ve ever been in stocks, at my oldest age. 

Like everyone else, I can’t predict when the inevitable market correction will come, but it will come, make no mistake.  The conservative side of me, which is the dominant side, thinks I should start getting that 85% down at least in the 70’s if not more, but who knows.  If I had that game mastered I’d be famous.

So there you have it.  How a boring, lazy, and conservative investor accidentally achieved financial independence by his mid-40’s.

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27 Responses

  1. Team CF says:

    Life can be so simple some times, it’s almost scary 😉 All I can say, well done, should have followed your example as we would have been done now too. Expensive mistakes were made by primarily not investing, followed by a couple of investment mistakes. Hopefully we are now on track too.
    Deep bow to you Sir (and to all the young folk out there, take note!)

    • Accidental Fire says:

      I’ve read your blog, you’re on track for sure and even though your approach is a bit different you’re knocking it out of the park.

      Thanks for the kudos!

  2. I think there is something to be said about lazy and boring investing. I’ve always been a fly under the radar gal myself so this works perfect for me! Congrats on your financial success!

    • Accidental Fire says:

      Thanks Tonya. I’m not really lazy in other parts of life… well maybe “procrastinator” is a fair description 🙂

  3. DocG says:

    The best investing is the slowest, and sometimes laziest. Boy I hate when you accidentally stumble upon FIRE when not trying! Of course, you did all the hard work and were wise either way.

    • Accidental Fire says:

      Yeah, when I stumbled upon the 25x math it was an eye opener. Like, there’s only a bajillion worse things that could have happened that day!

  4. Boring and Lazy sounds fun. I have index funds in retirement accounts, and I’d like to get some in my taxable account, but I really haven’t found many funds available without a decent minimum purchase that’s out of my price range. Do you have any suggestions on how to get into some without such a high minimum purchase amount?

    • Accidental Fire says:

      Most Vanguard Index Funds have a $1000 minimum I believe. However, you can get in the ETF (Exchange Traded Funds) for just one share. The only real difference is that and ETF is traded like a stock share (traded all day), where an index fund is only bought/sold at the end of the day (or once a day). Sounds like ETF’s might be the way to go for you, the fees are sill pretty low.

  5. I am definitely a part of the boring/lazy investing club! I actually got even more boring and lazy this year with my families (fiancée and I) Roth IRA’s. I sold the index funds we were in and then moved all the money in both accounts and put them in the Vanguard Total Stock Market Index Admiral Fund. Makes everything a lot simpler, especially knowing the math behind our investments as they sit and compound for the next 35-40 years!

    • Accidental Fire says:

      Nice to have you in the boring lazy club Sean! You’re so young and you’ve got this stuff down now. It’s a shoo-in that you’ll be FIRE before you’re 40!

  6. I’m guessing you aren’t investing in crypto then 😉

    With zero safety net it makes a whole lot of sense to be extra conservative. While I would never ever have wanted to ask my parents for money (or be forced to move back in with them after I moved out for college), there is a lot to be said for just knowing that option exists if the worst were to happen.

    • Accidental Fire says:

      Crypto is not my thing. Unfortunately I have a good friend who is doing it because her brother made a “killing”. I know she’s too smart for it but I don’t want to damage the relationship.

      Not having a safety net definitely gave me a sense of urgency in life and helped me not screw up. In the end it was a blessing.

  7. Doug says:

    Boring and Lazy is how you do it. its the best way really. I have done the boring and lazy of course sometimes i was really lazy and didnt even invest in my accounts though i did have the TSP going and a small amount going into mutual funds through USAA so it wasnt a total ignorance now my goal is add to my taxable stock accounts every year.

  8. BusyMom says:

    Those plots look so cool.
    I wish I had tracked our net worth! I have started now, two months into it.

  9. crap! best comment i ever made.

    • Accidental Fire says:

      Sorry Freddy, maybe my bloghost company had issues today? I didn’t get any notices from them.

      Thanks for reading though, I appreciate it!

  10. Mr. Groovy says:

    Well, done, sir. Well done. Nothing wrong with boring and lazy investing. Mrs. G and I have basically adhered to that philosophy and it has worked remarkably well for us too. Hail VTSAX! Hail rebalancing once a year!! Hail living under the radar!!!

    • Accidental Fire says:

      Thanks Groovy. I’d like to point out that I don’t consider myself boring and lazy in other parts of life 🙂

  11. Bob says:

    Boy, It’s really nice to see a chart of someone that has kept records and has been saving that long. First time I’ve seen a 20 year chart of that. Sounds like you might be in Canada and that time period of 2015 or so was when the oil crash happened and Canadian indexes are more heavily related to commodities and oil in general. So that might be part of the reason for the dip. I know my account dipped a little as well with the oil stocks and railroad stock getting slammed pretty hard.

    Keep up the good work!

    • Accidental Fire says:

      Glad it added value for you! I’m actually not in Canada and the cause of the dip will be revealed in a future post that I’m almost done.

      Just checked out your blog and I see you’re an active outdoor junkie as well. I will be weaving more of my outdoor adventures into my writing as my blog matures.

      Thanks for the comment!

  12. Boring and lazy for me, too. Except I’m invested in approximately 98% stocks, so things might get a lot more interesting when the inevitable crash comes!

    • Accidental Fire says:

      For you that’s the right thing to do! You’re so young you have endless time to recover from the inevitable crash. And the one after that 🙂

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