Tag Archives: year end financial gains

Year End Financial Results 2016

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Well, it that time of the year for reflection on how the year went!

My secret wealth goal has only improved a little, but this is not necessarily a bad thing!  I’m making a bit more these past few years, so much so that my wealth growth delta amount is just barely passing my accumulated earnings delta change.  If my salary was static, my wealth goal would be improving, but currently its growth is just a small improvement.  At a certain point, my secret wealth goal has the potential of having parabolic growth instead of the linear growth my accumulated earned total income amount.

The tail end of last year and this year has enabled me to cross a few of my wealth accumulated milestones!  While I’m not going to go into deep details, a couple of my thresholds have been crossed.  So much so, that I’m now coming up with new financial and wealth goals.  Including some that might go beyond my personal financial scope and instead enable me to help (albeit in a small manner) other with their finances.  This is a stretch goal for me, but I think it’s worth the risk and if I do it right!

Okay, on to my financial pyramid (or wealth pyramid).  Lately since I passed over into the green outlined region, the pyramid for me is really more of a wealth pyramid now instead of a financial pyramid.  And if you have read my blog from the beginning, you know that I mentioned a few time the concept of financial “critical mass”.  Well, while I’m still not rich yet, I believe that I have enough “critical mass” now to try a few financial things.  Hopefully, I’ll have more financial experiments in 2017!

So speaking of my financial or wealth pyramid, where am I now?

If you look at the pyramid below, I’m somewhere about 5 to 15% up into the lower Upper Middle Class area.  While I believe I have the core credentials to be considered Upper Middle Class, I’m still frugal and personally do not reflect the class that some could consider me to be apart of.  My kids and their friends too, belong to the the Upper Middle Class more than I do (and not sole because of on my efforts).  I still wear clothes that are 10+ years old, and wear shoes until they have holes in them.  Old habits are hard to break, and this is the way I was raised, so in many ways, I will never really be a part of the upper middle class class… no matter how far I’m able to climb on the financial pyramid below.

Financial Pyramid

I’m starting to think that in many ways I’ve been incredibly fortunate and lucky financially, especially considering where I started at, and in my opinion, how the cards were not exactly in my favor.  I definitely didn’t have a silver spoon in my mouth growing up, and I was actually born with a black eye.

Recently, I went through some old spreadsheets I created ten years ago, and believe it or not, but my wealth level is almost exactly what I predicted it would be at.  I’m just a little bit head because of the year-end “Trump rally” or “Santa Claus rally.  It just shows the power of planning as realistically as possible.

So my financial life is good overall, my kids seems pretty happy and fulfilled and I’m okay.  Overall, if I were to grade myself, I now think I would be at an “A-” level, so this new outlook is a small wealth advance from my last grading where I considered myself at a “B+” level.  It will be difficult to achieve the grade of a solid A though…  To accomplish that level, it may take me 10 years…

Here is wishing you all a great new year in 2017!

Don

Year End Investment Portfolio Analysis

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So after writing the article called “Mutual Funds versus Stocks Why I Choose Stocks“, I wondered if my personal “regular account” gains from the past would trump my 401k gains.  I was especially curious about as long of a record period as I could calculate.  So ironically (or is it because I’m focused on this right now), I click on reports in my brokerage account, and low and behold, they have a calculation for the past 4 years.  So since they have such an excellent feature, I decided to perform a quick and dirty Year End Investment Portfolio Analysis!

So let’s start with my regular brokerage accounts first!  I have over 5 accounts (2 of which are my kids) and unfortunately I couldn’t eliminate my kid’s accounts.  They almost certainly pulled my average down a bit since I haven’t done quite as well in their accounts as mine (I have no idea why, but most likely because I set them in stocks and ignore their account a lot of the time).  Their accounts didn’t do horrible, but I’m sure it did pull my account average down a few percentage points.

It’s noteworthy to mention that if I was to include my ESPP money hack, I believe that my actually percentage would be up another 1/2 to 1 percent.

So here is my number for the past 4 years, 19.04% (annualized).  Not bad huh, especially since I believe the number would actually be closer to 20%

Brokerage Account Return for the Past 4 Years

Last 4 years

In my 401k, my return for this period was 11.6%, not horrible but less than the S&P 500’s return which was around 16% per year (or close to this number).

So I was pleased with my 19% (really more like 20%) number (and if you take out my kids account from the equation, the return would have been higher)…  I think my Year End Investment Portfolio Analysis verifies that I’m doing okay investing in stocks versus mutual funds!

If I were to just let the account balances ride out with no new contributions to the principal to either my 401k or regular brokerage accounts, it would take a bit more than 10 years for my regular brokerage account balances to pass my 401k balance.  So I was a little too optimistic on my regular brokerage account passing my 401k balance, but it’s still fun to have the my stocks (regular accounts) compete against my mutual funds (my 401k balance).

Here’s to a great new year!

Don