Did I get your attention? Today is the reveal of my net worth. This is not bragging, just showing where I am and where I plan on going. Over my life, I can’t even count how many times I’ve been told by people, “When are you going to prove it. Retire!” (especially this year). Don’t fall for that crap. You do things on your terms, not theirs. Just keep about your life, say “fuck ’em” and know that you are keeping your eye on the prize of hitting FI/FU/BAMF Money. Hopefully this lends some credibility to me and this site.
Tip of the Week
Before the reveal, I do want to point something out to everyone. There is a shit ton of bad advice/advisors out there. “Financial Advisors” are a bull shit profession. It is a sales job. They are after your money to make commissions. Would you take financial advice from someone who is in debt $250k and has nothing left at the end of the month to sock away into the very investments they are pitching you? If you are working with an advisor, you need to have an open conversation with them about their own finances. Something you can do for a little check up on your advisor is FINRA Broker Check
One of the most useful things on the broker check is disclosures. You can see if they had any bankruptcies, credit card settlements, law suits. It may help you get information about that guy sitting across from you driving a fancy car and wearing a nice suit. If you see some of those disclosure, it’s a red flag. Do you want to do business with them, can you really trust them, are they just trying to sell you something or really help you. There are some good advisors out there. You just have to find them.
Net Worth Revealed
Here is excel spreadsheet for the details: NET WORTH SPREADSHEET
A little analysis and insight into my spreadsheet:
- This is just me. I am not married, so everything you see is what you get. If one guy can do this, a working couple should have the ability to do even better. I am a normal dude, with what I consider a normal simple life. I wear T-shirts, jeans, and Chuck Taylors to go out, lounge around the house in shirts and shorts. Nothing about me, says “This guy is well off”.
- For my net worth I do not include any physical assets (car, house, stuff/junk around the home), because I will need a place to live, a car to drive, junk in the home to kill time. Also, the value of an item is determined by what someone is willing to pay. You may be overvaluing something if you can’t find a buyer. I only use financial assets, stocks, bonds, cash, mutual funds, ETF’s. Things that can be converted into cash with the click of a button.
- I have absolutely no liabilities/debt. No mortgage, car payments. You may remember in accounting 101:
ASSETS – LIABILITIES = OWNERS EQUITY (A-L=OE)
I have effectively taken liabilities out of the equation. So ASSETS = EQUITY (A=OE). Yes there are short term things that are paid monthly like utilities, food, gas, but they are nominal and covered by my dividend income. If anything, I am understating my net worth, based on the traditional sense. But why always follow tradition, sometime you should question it.
- Tracking- Very important. I know where I am, have been, hope to go (goals column)
- Time- I can see exactly how long it has taken me build up some money. Also, IT TAKES TIME TO BUILD UP YOUR NET WORTH, SO START AT AN EARLY AGE. Notice, I started at an early age tracking this stuff, age 20 as I was preparing to finish my first degree.
- Goals – I hope to grow my net worth by about $100,000 per year going forward. But I know bear markets happen. Notice that I have a goal range of $500k-$850k for year 2015. We’ve have a nice run in the market, unfortunately it doesn’t just go straight up all the time.
- % Increase – Basic Math. In 2003, a 140% increase in my net worth led to an increase of $32k for the year. Over time, as your financial assets build up, a smaller % Increase for the year can make the same or more for you. Looking at 2014, a smaller increase of 16% led to an increase of $103,000 for the year. Over time your money is working more efficiently for you.
- Net Worth and Financial Markets- A typical day in the markets for me equates to making/losing more in one day than I make from working a job for 1-3 months. 1% change in the markets in one day, equates to $8,000 change in my net worth for the day. I don’t make $8,000 at work in one month. I can say “Fuck It!” at any moment and leave work.
- It doesn’t show, but through out all these years, I maxed out my retirement plan when I started working full time beginning in 2002 after completing graduate school, I have been maxing out a ROTH IRA since I started working as a teen, and investing everything I can at the end of the month inside of a brokerage account. Over time, as debts would eventually go away, the amount placed in brokerage accounts each month would go up. The key is consistently investing over time.
So there goes it. A sneak peek into my net worth. You can use the spreadsheet to track yours, if you’d like (and I highly recommend doing so). You may decided to track yours a little differently. Also, if you have debts to pay off, don’t forget to subtract the liabilities to get at your net worth. You may have a $1million home, but if you owe $900,000 you are far from being a millionaire.
The main take away from this should be: start early, invest, invest regularly, invest in down markets, set your goals and work towards it.
This is one spread sheet that every person should have in their life. Coming soon, spreadsheets about dividend income and expenses (monthly cash flows) will be posted, projecting future years dividend income, tracking current dividend income. A combination of all of these bits of data are needed to give a good picture of your overall financial well being.
Welcome to BAMF Money.com
Update for 9/30/2015 $728,700.71
Drop of -$64,228.29 since I last checked. Ouch. Oh well.
Update for 10/31/2015 $868,668.94
Increase of $139,968.23 since the end of September. Nice!Follow me on the social medias:
Welcome to the FI blogging club. Can’t wait to learn more.
Thanks for stopping by. Hope to add a little to the FI subject matter and climb the ranks.
$800k is a huge sum! Nice job. I completely agree with the way you calculate your net worth–it’s not like your car or house is going to be giving you any spending cash in retirement. Congrats on your looming early retirement date. I hope to be where you are soon! 🙂
Thanks for stopping by. Took a hit last month and need to update, but no big deal. Can’t wait to roll my retirement plan to my ira, 72(t) that bad boy and live off some of the dividend stream of income.
More stuff to come hopefully this weekend. Happy investing
Love the site and thanks for all the details of your finances. It really helps me to see details and compare to my own for possible improvements. I’m not far behind you but sure wish I would have statred as early as you and gotten some money lessons in my childhood. I got divorced about 10 years ago and that sorted of ignited my FI journey. I’m single just as you are and have one daughter but I seem to be far ahead of my married counterparts who have two incomes. My target to date to retire from corporate America is 2017. Reading stories like yours are inspiring and motivating. Keep up the great work!
Glad this helpful. Congrats on your book. I remember seeing you on a morning show somewhere. We all experience something that sets up back, but how you bounce back is what’s important. Starting early always key, put time on your side. Future Value formula is FV=PV(1+r)^t. T is time and exponential, the key to the equation.
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