It dawned on me the other day that unless you’ve been reading the blog for a while, you probably haven’t a clue *how* we’ve grown our net worth to where it is today.
Outside of the boring incremental gains/saving at least ;)
So today I thought I’d share a quick background on how we got to where we are now for anyone new to the site or those who just never felt like pouring through the archive of 2,500 posts (!)
There are some one-offs here, but by and large a bulk of our growth has come from some HUSTLING, PATIENCE, FOCUS, and then of course from a dollop of LUCK and PRIVILEGE thrown in.
Here are the highlights:
#1. I’ve been maxing out my retirement accounts every single year for a decade! The backbone of our net worth, and really the habit that started it all for me… I knew that so long I as I just did this *one thing* every year, there was no way for our $$$ not to grow over time. So I made it my #1 mission that no matter what’s going on in life, I have to complete this and everything else (*IF* there’s anything else) is extra. This has continually increased our net worth by at least $20,000-$30,000/year + compounding, depending on whether my wife maxes out her retirement accounts as well.
#2. I took advantage of an INSANE 401(k) matching at my previous 9-5. At the time I started learning about finances, the company I was working for offered an unprecedented 100% match on 100% of anything you put in, up to the legal maximum limit of $16,500 at the time. Which meant that if I contributed $16,500 to my 401(k) for the year, my company would match that with *another* $16,500 right there on the spot, and fully vested! As soon as I heard this I jacked my contribution amount to 90% of my paycheck (the most it would let me) and lived off $69/paycheck until I reaped every last penny from that perk, haha… And then did it again the following year until our company eventually phased it out… (What’s even crazier? Only like 3 of us even participated in it!!)
#3. I started all this major investing during the financial crisis of 2007/2008. This was pure luck, and played a huge role over the next decade as we continued picking up stocks on MEGA SALE while the economy rallied throughout. I’m under no impression that my success was solely based on smarts, haha, outside of realizing I needed to keep fueling the fire!!
#4. I married my (frugal) wife and then eventually combined finances with her. This not only of course cut back on living expenses, but also added another $20,000 or so to the pot. As well as helped streamline all future management of our finances as our family – and goals – began to grow.
#5. I sold off a dozen or so websites/projects I had built or purchased over the years. At the peak of my hustling I was running about 10 different websites and having all kinds of income streams coming in as I was trying to build my “empire.” After a while though, priorities – and kids – helped taper my obsession, and I eventually sold off everything except for this blog here that started it all :) Over time this netted us about $250,000, though would later prove troublesome as our cash-flow never fully recovered.
#6. My wife went back to work and turned our family from SIKs to DIKs! :) (Single Income with Kids // Dual Income with Kids) After 6-7 years of being out of the work force and earning her PHD, this was a welcomed change that not only brought our cash-flow back on track, but eventually allowed me to scale back my working even more and become the stay-at-home-daddy-blogger you see today. And now she’s the breadwinner of our family – Go Mama!
#7. We’ve received $30,000 of inheritances and gifts over time. None of which will unfortunately replace our loved ones we’ve lost, but all gifts very much appreciated and put to use in a way we hope honors them. One of these amounts was for $20,000 from my dear grandma passing, and the other amounts came from various other people and times which we plan on paying forward in the future.
And that covers a majority of it!
A lot of other changes went down over the years as well – such as the *mental* transformations over time (minimalism, becoming a father, realizing life trumps money!) – but event-wise these items above are the biggies. And thankfully overrides all our failures from this time period as well! ;)
At any rate, hopefully this puts things in better perspective, and I’ll have to be better about referencing this more in the future reports we do… (which you can always find here, btw – all 135 of them!)
How are you growing YOUR money over there? Similar to this, or your own form of financial wizardry? ;)
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Personal Capital account instead.
Personal Capital is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Personal Capital - check it out here: Why I Use Personal Capital Almost Every Single Day.
(There's also Mint.com too btw which is also free and automated, but its more focused on day-to-day budgeting rather than long-term net worth building)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!