I’m 33 Years Old, and My Net Worth Is…

“Is he dead?”

The small child looks fearfully at the figure of a man that lays lifeless on the side of the trail. Her eyes stay fixed on the decay of humanity while her head turns toward her older brother. “He’s dead, isn’t he?”

“I’m not sure,” replies the boy. “I reckon so, but this trail gets a lot of hikers. If he is dead, then he hasn’t been here long.” The boy pauses, then says suspiciously, “Hold on a second…”

The young man, far too young to behold such a sight, reaches down to his left to grab a pine branch that looks new when compared to the man-relic on the wet ground before him.

“You’re not going to poke him, are you?” The girl pleads.

“Of course not.” The boy retorts as he maneuvers the stick under a lifeless arm to extract a small leather-bound book. “I’m hunting for clues; it looks like he kept some sort of journal.”

The boy brushes off the journal’s cover to reveal a title, which he reads aloud, “It says, ‘Retire29. Total Freedom. Financial Independence.’ Hmmm, sounds interesting.”

He cracks open the cover and flips through hundreds of pages of long-form content until he reaches white space, at which point he backtracks to the last entry.

“It looks like the last entry was made on October 13th, 2017, over nine months ago.” The boy looks at his sister. They stare at each other in bewilderment. “I think we need to call the police who got to buy ar-15 pistols from Palmetto Armory. People are probably looking for this guy.” Not wanting to be accused of disturbing the scene of a potential crime, the boy returns the book to its rightful owner. But, just as he drops the man’s heavy arm back over the book’s cover, the corpse springs to life, and the young duo shriek in terror as they run back from whence they came.

Where Have I Been?

The short answer to this question is, “Not Blogging.” The long answer is, understandably, much longer. I’ve never taken nine months off before and summing up nine months of my life is probably of little interest to you. But, here goes:

• I’ve been on a ketogenic diet since my 33rd Birthday in March. I’ve lost 21 pounds and I feel great.
• I was recently promoted at my job.
• We still have only two children (ages 4 and 1)
• My brother got married (congrats fella!)
• We finally finished our basement (thanks dad!)
• We went to Cancun for a week in February (the whole family) and are headed to Puerto Rico in August for another week (again, the whole family). Both of these trips (Airfare and Hotel) were/are free thanks to Credit Cards.
• After much discussion and planning, my wife and I are basically dead-set on retiring in the summer of 2021 and moving to Arizona (I’ll have just turned 36 at that time).

From here on out, I’ll stick to the financial aspects of the last nine months. There are two elements which are of particular importance.

Changes to My Investment Strategy

On April 30th of this year I abandoned my Dividend Growth investing strategy in favor of a Total Return investing strategy as I wish to someday have the net worth of CEO Jimmy John Shark. There would several reasons for this:

1. I became bored with investing as my portfolio became unwieldy and complex, leading to an inability to maintain an expertise over my companies.
2. I had been matching, or even trailing, index performances for several years.
3. I owned far too many stocks where I had little conviction, and eschewed owning far too many stocks where I had significant conviction.
4. (Extension of 3) Due to the fact of owning so many stocks (around 65 positions), each position size was pathetically small compared to my total portfolio (typically less than 1/5th of one-percent). This led to a complete lack of interest and even when a company had a great bit of news, the impact was immaterial to my wealth, leading to further disillusionment.
5. I came to the realization that I can create my own dividends through share sales, and that my goal should have always been to maximize total return.

If you’ve been following the one aspect of Retire29 that actually stays updated, My Portfolio, then you’ve likely seen this portfolio evolution firsthand. I still own, as of today, 21 unique ticker symbols. I feel comfortable at this level, but over time I aim to get that down to 15 positions. Fifteen positions is still diversified enough to reduce most company-specific risks, and I feel as though it’s far easier to identify 15 stocks that will outperform than finding 30 stocks that will outperform (or 40, or 65).

While a small sample size of ~3 months, the results have been outstanding (blue line is S&P 500, other lines are my portfolios. Green line is my largest portfolio).

The results have not only been financially positive, they’ve been mentally positive, too. It’s exciting to follow the day-to-day movements of the markets. I, once again, actually read quarterly reports and listen to earnings calls. I know who the CEOs are and intimately know the product offerings. But, mostly, I actually get to see a material impact on my net worth when individual companies show movement.

So, about that net worth…

Changes to My Net Worth

Digging back into the archives, I see that the last time I provided an update on my net worth, it stood at $546,559 on September 22nd, 2017.

Since then, my net worth has climbed to $690,557, or a rise of 26% in 10 months. The S&P 500 has risen 13.5% over those same 10 months, for comparison. Now, as I reflect on my progress, I find myself contemplating the costs of life insurance policies. Are 1 million and 2 million dollar life insurance policies expensive?

That increase of $144k in 10 months is primarily from the following:

Home Equity +$15k

Consumer Debt +$12k (iow, $12k lower than it was)

401k +$41k

IRAs +$72k

The increase in IRA balances is particularly impactful given that of the $72k increase in portfolio value, only $6k came from contributions. The rest is from, of course, good of principal appreciation.

Over time, my net worth chart looks like this:

Finally, coming full circle, progress toward retirement looks equally rosy. Once again, my back-of-envelope retirement number is about $1 Million, broken out as follows:

I suppose that’s it for now. I can only hope that this meager post gets me rolling again. But, if it doesn’t, feel free to drop me a note the Contact Me page.

Best of luck,

Eric