Road to $10 Million Net Worth Update for Q4 2020

Welcome to my little experiment where I try to make my way towards a 10 million net worth figure all while living this FIRE life. How do I plan on getting there? Just by a few basic simple life disciplines of course! Invest religiously! Live below your means! Keep learning!

 

How I plan to achieve this goal

I set myself up with some straightforward short term goals to help me get closer to my ultimate goal. Steps I can see myself accomplishing in a fair amount of time. Here are the current goals as of now.

 

Investment Goals

  • 2020-3: Generate $10,000 in dividend income
  • 2020-3: Invest at minimum $1,500 per month into the dividend portfolio.
  • 2020-3: Reach a $50,000 Fundrise Portfolio.
  • 2020-5: Maintain steady portfolio growth between 6% to 12%
  • 2020-6: Invest $100 per month into M1 Growth Pie.

 

Generate $10,000 in dividend income

Based on how things are coming along, I expect to hit 10K somewhere between year 2022 and 2023. I am reinvesting all dividends right back into the portfolio to allow the magic of compounding to take effect. Check out my progress here.

 

Invest at minimum $1,500 per month into the dividend portfolio

The LBF Dividend Portfolio had a total net inflow of $36,594.90 ($3,049.57 per month) by the end of Q4. Quite a bit more than $1,500 due to deploying more cash than usual during the market correction back in March of 2020.

 

Reach a $50,000 Fundrise Portfolio

  • Fundrise portfolio including iPO ended the quarter at $30,115.70 (+9.1% since last year)
  • No changes to the iPO investment for the quarter.
  • Goal completed: 60.2% (up from 55.1% in Q3 2020)

 

Maintain steady portfolio growth between 6% to 12%

I need to see the total value of all investments to grow between 6-12%. That should be sufficient to help me reach the 10 million net worth target in my lifetime!

The year ended on a strong note. More than I had anticipated.

I kept my cash holdings relatively modest post pandemic crash.

 

Invest $100 per month into M1 Growth Pie

Do not let anyone tell you investing $100 a month will get you nowhere. It all starts small and it is more about building the right habits! Keep investing my friends! Regardless of how much per month you can invest!

Account snapshot taken January 4, 2021.

Made some adjustments to the M1 finance LBF Growth Pie.

Updates to Pie for Q4 2020:

  • Added Ticker: CRWD @2% of portfolio
  • Ticker BA lowered from 5% to 4%
  • Ticker WORK lowered from 3% to 2%

And that’s a wrap for investment updates! Time to check up on the next part of the equation!

 

Income, Expenses, & Cash Flow

Here are the goals:

  • 2020-3: Achieve positive cash flow every month of the year.
  • 2020-5: Increase annual income by 6% every year.
  • 2020-6: Maintain long term average savings rate at or above 30%

 

Achieve positive cash flow every month of the year

In 2019, I dipped into negative territory 3 times. 2020?? I dipped into negative territory 4 times! Regardless of how much I made in December… 🙄 I hate dipping into the red. I will work towards positive cash flows for every month of the year!

 

Increase annual income by 6% every year

My income is up 39.8% this year compared to the last. Most of the gains are related to the stock market. What is crazy is I am nearing my post FIRE income numbers quicker than I had anticipated.

 

Maintain long term average savings rate at or above 30%

What gets measured gets improved. I did better than last year. Likely due to the pandemic of course.

 

Net Worth Update

I have two simple goals when it comes to the net worth:

  • 2020-6: Increase net worth by at minimum 6% annually.
  • 2020-6: Maintain a minimum 6% lifetime CAGR.

 

Increase net worth by at minimum 6% annually

Snapshot of net worth from Personal Capital.

Net worth is up +12.6% for 2020

My net worth figures are calculated from my personal spreadsheet and may not reflect accurately with the Personal Capital snapshot above. I like to lower my expectations when it comes to appraising property values.

Anything above 6%, I am grateful. Not in my wildest dreams prior going FIRE did I expect my net worth to grow so quickly without having to work a 9 to 5 job.

 

Maintain a minimum 6% lifetime CAGR

As of Q4 2020, my net worth CAGR rests at 33.6% since 2008. That is a slight uptick from last year at 32.3%.

 

ETA 10 Million

Estimated Time Arrival (Best to Worst Case)

5M: Between 9 – 15 Years

10M: Between 17 – 29 Years

I made some slight modifications to my calculations. I further lowered my expectations on returns.

Worst case scenario shows in 29 years I will hit my 10 million mark. However, I will be about 70 years old by then. The goal is to reach it sooner all while enjoying life of course. The fact that the worst case is doable is quite amazing!

That wraps up the update for the year folks! Excited to see how the next year will pan out! 🚀🚀🚀

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