My Spreadsheet Is Family And I Love Her
In my recent Accidental Fire Journey post, I mentioned how I started my investing career after stumbling across an issue of Money magazine, in 1995. I subscribed and devoured every issue. Remember that the world-wide web was a teeny-weeny child only around 5 years old at that point, and online resources were limited. It was still largely a paper world. Also remember this was the start of web-insanity on Wall Street. If a company was online and had “.com” in it’s name, it could launch an IPO and rake the cash in. I had a sneaking suspicion in the back of my mind that it can’t be this easy. Things can’t keep going up 28% every year… these dot-com companies can’t keep doubling every 4 months….. there’s no free lunch…
As I was learning about money and investing with my new magazine subscription, some of the now famous “irrational exuberance” rubbed off on me, but most didn’t. So even though I dabbled with a few individual stock picks, I mostly stayed away from it. At the back of every issue of Money in those days was a list of all major mutual funds and their returns. I studied those closely (…I know…loser) and it was clear most funds generally moved with the market, and the ones that didn’t tended to be very narrowly focused. The part of my brain that thinks I’m smarter than everyone else wanted to dig in and pick more stocks. “I can do this, I’ll simply work harder than everyone else. I’ll read, learn, and pick winners”.
But thankfully, the other part of my brain that thinks the first part is a conceited asshole won the day. I realized that the extra work and time wasn’t worth it, plus it was cutting into my beer-drinking time….. and I drew the line there.
It Has Rows and Columns And It’s Alive!
Thus was born my spreadsheet. My blessed excel spreadsheet. She was born in May of 1997. I didn’t base her DNA off any existing example. I simply listed my assets, my debts, and some easy formulas to add it all up and show my net worth. I religiously updated the numbers on the 1st of every month. And I’ve been doing it for over 20 years now. Same spreadsheet, same file. Simple, easy-peasy. The data will reveal the truth and set you free if you just enter the data.
If I’ve learned one thing, it’s don’t underestimate the power of tangible progress. The numbers on the spreadsheet didn’t lie. The graphs were real. Month after month, year after year, the main message was “onward and upward”. Once I learned to ignore the downs as temporary setbacks and focus on the ups, it was all gravy. Sure some downs were scarier, like the tech-bubble crash and the crash in 2008. But I held course. Pump more money in, let compounding interest and capitalism do their thing. Wash, rinse, repeat. Boo. Friggin. Yah.
As the net worth kept getting larger, my resolve only deepened. I rarely if ever thought about what I’d do with the money. I was too busy in my routine of growing it. Then one day, not overnight per se, but at a relatively alarming speed, I found that I was beginning to really dislike my job, and oh yeah, my net worth was now over 7 figures. Shit – when did that happen!? Almost simultaneously I discovered the Trinity Study and Mr. Money Mustache, as if it was all choreographed from above.
How Do You Measure Yourself Against Other Golfers?
Imagine trying to lose weight over a period of time without having a scale. Sure, it can be done, but it’s probably harder. Seeing progress motivates you. It reinforces your conviction that you’re doing the right thing. My humble spreadsheet has been that motivator for me for 20+ years. So I thought she deserved a tribute post to show gratitude. I’ve never been this choked up about a bunch of 1’s and 0’s before. I’m having a moment…… I need to go…
That is awesome I can relate being a bit nerdy in this department as well. I use a spreadsheet and update once a month. It is motivating to me to see the movement good and bad of my overall goals.
Yes – I think monthly is a perfect time interval to check in. It’s short enough to give you a nice boost of confidence but long enough that you’re not obsessing about it.
I can relate. I started my magic spreadsheet back in 1995 on Lotus 123. It has since been migrated to Excel of course, and transposed once or twice for fear of becoming corrupted. Man. Talk about a relic that’s been tweaked a million times over! No macros, no pivots, just pure summarized numbers. Ahhhh….
Wow, you’ve got me by 2 years! I do remember Lotus 123, now we’re talkin’ some way-back stuff. We also used Lotus Notes. It’s great to hear someone else who has been carrying a digital timepiece through the years.
If it ain’t broke, it doesn’t need to be fixed!
Do you have a post on your investment strategy? I’m a younger guy looking for the right way to invest my savings!
I don’t yet, this is a pretty new blog but I will get to it. First off, the fact that you’re a younger guy and already reaching out for this stuff means you’re winning. Starting early is a massive factor in becoming FI. I did, and it seems you are too.
I’ll give you the cliff-notes of my strategy since it’s pretty simple. First off, max-out all of your 401k and IRA options, Just do what it takes to make it happen. If you have an employer-match for the 401k, for the love of all that’s holy make sure you get that. They’re trying to give you money – take it!
As for what I invested in, after experimenting with buying some individual stocks in my early 20’s, I went all mutual funds. At first I did have some active funds (managed by a dude or dudette who makes beaucoup bucks by charging you fees). But after seeing the light I went with all low-cost index funds, mostly Vanguard.
Throughout my career I generally had 75 – 80% of my money in stock index funds, about 10 – 15% in bond index funds, and the rest in cash (emergency fund). It was that simple. My stock ratio went higher at some points (it’s around 85% now actually), but generally that was it. Easy peasy.
As for the emergency fund, try to find a bank or money market fund that is giving at least some interest. I think there are some online ones like Ally that are giving something. Your local bank probably doesn’t give squat.
If I could give you one piece of advice, it would be to read Jim Collins’ stock series on his blog, and if you wish, buy his book. Honestly, that’s all you need to learn to invest.
You can’t beat the market, so buy the market and you’ll win. I hope this helps and thanks for stopping by and commenting!
Thank you, I really appreciate it! I’ll definitely check out Jim Collins’ blog and book. Thanks again!
I love my spreadsheet (started in 97) as well. Nothing fancy, just some entries, calculations, and graphs. We have multiple accounts (his and her ROTH, IRA, 401k, two brokerage and a checking acct) and one thing that I like about it is the ability to quickly see our overall asset allocation to make sure we stay at our targets.
Wow, our spreadsheets might have graduated high school together! The are more of us than we think out there!
Thanks for the comment and for the advice last week 🙂
I’m also a fellow spreadsheet lover – I use them to track both my dividends from stocks as well as my net worth from month to month. The rush of updating my numbers each month is always something I look forward to haha how’s that for nerdy??
Great post, thanks for sharing! 🙂
I know that rush very well, and it’s coming this week. Even when I know it’ll be a down month becuase of stock market turmoil I still have the rush, because 9 times outta 10 the ‘down’ isn’t as bad as I expected.
Thanks for stopping by!
I love my spreadsheet too! I always thought I was old school, using a simple spreadsheet instead of using Personal Capital or Mint. (: Glad I’m in good company!
Yep, I haven’t gone with PC or Mint because I’m too afraid to give one company all of my username/passwords. I have a few friends who are “ethical hackers”, they’re computer geniuses. They tell me that anything can be hacked.
I’ve been researching how PC does it’s security and who knows, I many find the risk to be acceptable one day. But for now my spreadsheet still does the trick.
I was really against tracking my net worth until I started doing it about 5 years ago and now I can’t tell enough people about doing it! There is something satisfying about seeing the long term growth…or better yet when I know I have had a few shitty months with regard to spending seeing the lack of growth gets me pumped to snap out of it
I also have a spreadsheet for this very purpose, but it also helps us track our accelerated student loan payoff. Quick question – what would you say to updating only quarterly? I found that month-to-month was almost a bit more “depressing”, since we are recent college grads still swimming in debt. Once I switched to quarterly updates I could see better progress & find more motivation than depression. Thanks for the wonderful post!
I’d say “Yes!” to updating quarterly since you’ve already found that it works for you. There’s really no magic formula here. All things equal I think quarterly is actually better but once I settled on monthly I stuck to it since I’m very very routine oriented. And if a routine is working, it almost becomes a superstition for me. Just one of my personality traits.
The only thing I would add about checking quarterly is that if you have a scenario where you just updated all your numbers and say a week later the market had a sizable crash, you’d probably want to check again in 30 days or so just to see what happened. A quarter is a bit long when major market moves are happening but those are rare. What just happened last week is not in that category.
Thanks for the kind words Kristi!
All things awesome! I think this post deserves a… re-post, re-fresh, whatever you would like to call it. It is still as relevant today as it was 2+ years ago. And I dare say, always will! What works is what matters! #lovemyspreadsheet 🙂
Spreadsheets for the win Brian! What gets tracked gets improved, so keep at it!
I love my spreadsheet:) It keeps me on track by reminding me why I’m doing this and why saving works so well. It’s a colorful record of where I’ve been and where I’m going. I think just knowing your numbers changes your behavior, even if you aren’t really trying, sort of like if you start tracking what you eat, you will likely start eating at least a tiny bit better because it’s forefront of your mind and that makes a difference.
“The which gets tracked gets improved”, don’t know who originally said it but so so true.
Do you, or would you share the template of your Excel spreadsheet?
Well since it’s so basic I don’t see a need – it’s literally about 8 or 9 columns (one for each of my mutual funds or bank accounts). I simply have them added up, and then I have one column for what’s left on my mortgage and I subtract that. That’s my net worth. Since I keep my financial life very very simple the spreadsheet is bare bones 🙂 Thanks for stopping by!