Oh the Progress You’ve Made…

Sometimes I forget just how far aheads I am (in terms of savings) than most of the American population, let alone most people my age (28.) I obsessively check my networth and investment growth, and have this month watched my “investing for fun Sharebuilder account” hit $100k. Sure it’s down a few thousand now under that mark, but I’m confident it will inch over the line again. My total Networth is now $200k, a goal that seemed completely impossible just 5 years ago on my then $50k a year salary.

A few months after I started investing in this “fun” account the stock market crashed and it was hard to keep watching my investment account go down. At the time, even though I had about $15k in the account, it was painful to watch it slip to $10k or less. I knew that was the right time to invest as much as possible, so I started to try to pour as much as possible from each paycheck into my investment accounts.

Interestingly enough, my more “safe” investments — such as my Vanguard index funds — have not performed well at all over the last 7 years. Meanwhile my fun account — which is unfortunately taxable but the only place to put my investment dollars when either I have no 401k option or I’ve maxed out my 401k and Roth — had performed quite well. It’s had its ups and downs, but I realized overall since starting the account it has made about $25k — on less than $75k investment. Knock on wood as things can always change, but the performance has definitely been much stronger than my safe accounts that have barely moved at all.

I recently met up with two of my friends from different aspects of my life — one who I grew up with back east, who moved across the country to go to culinary school and has been moving her way up in the world as the manager of a hotel. The other, also my age, I met in a summer program in high school. She too picked up and moved across the country and is now working as a video editor. All of us are middle class — the hotel manager, I’ll call her Sally, owns a 2br condo in the suburbs, which her parents helped her purchase despite the fact that they were struggling with money. I don’t know her exact income but I’d guess it’s around $60k. My friend the video editor has been at the same job for 6 years now, and hasn’t received much of a raise in those 6 years. Her income I estimate to be about $50k. She likes her field but is unhappy with the company and some colleagues, but is comfortable without change. She hasn’t saved for retirement yet and is living in a 1br apartment for about $1200 a month (which isn’t bad for the city she’s in, but having roommates could help her save more.) Meanwhile, my boyfriend just quit his PT $20/hr job and has $0 in retirement savings. He turned 30 last March and is finally getting his act together and looking for a FT position with benefits and such.

I’m sitting here today staring at the net worth in my PersonalFinance.com account, with the number $200,947.58 staring back at me. This isn’t a fake number or guesstimate of my networth today. This isn’t filled with some questionably accurate estimate of a car or home value. This is $200,947.58 of straight-up cash and stock investments. This isn’t meant to brag — for one, I could have been much wiser with my money to date and saved even more, and two, I know I’ve been fortunate in my upbringing to be able to get where I am today, with no student loans and $5k from my parents plus $10k from a lawsuit when I was a kid to buy my first car and get started in the world.

Still, my friends noted above had similar situations. My friend the hotel manager may have student loans, but her parents bought her a 2br condo. My friend the video editor had her college education paid for and is likely going to inherit a large sum down the road. My boyfriend’s college education was paid for by his mother, and he lives at home paying $0 in rent in a part of the country where jobs that pay well are relatively plentiful. So, in short, I feel ok comparing myself to these three people I know in understanding my level of success versus the rest of the world who may be less fortunate.

In June, the average American family saw their net worth drop 40% in that three-year time period from $126,400 to $77,300. Going on 29 and single, I’m already well above that. It’s sad to think that most families do not have more than $77k in networth! I’m still shocked that I’ve been able to save and earn this much on my investments in less than a decade of work. I’m a bit terrified of how little i’ll be able to save once i have a family and kids — I’m pretty sure the whole financial advice that marriage is good for your finances is actually going to be the opposite for me.

Looking ahead, I’m focused on continuing to save $50k per year. My goal has always been to hit $250k by the time I turn 30. As long as the stock market cooperates next year that may be achievable. Given I’m at $200,947 right now with 3.5 months left in the year (and a big iphone release coming out which will only help Apple stock ride up in the short term), I could theoretically hit this goal much sooner than thought. The car purchase will definitely get in the way — it’s kind of funny, but one thing my DUI proved is that large expenses don’t have to get in the way of your goals. I’m still pissed at myself for all the chaos that one stupid day caused to my life, but the reality is the DUI was my largest-ever “expense” and I’ve lived to tell about it. I estimate the DUI will cost me $10,000 all things said and done, whereas previously my most expensive purchase was my car for $7500. Sure, without the DUI I’d actually be able to purchase a car right now and be well over my networth goals, but in a way it’s shown me that you can spend money in life and still save quite a bit.

My goal has always been to have $500k in the bank before having children. The plan right now is to get married at 31 (in 2 years) and start my family in 3 (wedding in 2014, start family in in 2015.) That gives me 3 years to save $300,000, so that goal is highly unlikely. This year my stock performed well but in reality I’ve saved about $25k and the other $25k was earnings on my investments. That may not happen in future years and it very may well go in the other direction. Eeks. But even if I can save $50k per year, that’s still just $350k by the time I want to start a family… no where near the $500k goal. I could wait another 3 years to start a family and put marriage off as well, if I can continue as planned saving $50k per year I should reach $500k by 34. But I’m worried 34 is too late to start having children given my PCOS and how hard it will be for me to have kids in the first place. Sigh. I get very freaked out about how fast life is going and all the choices that need to be made. But I really don’t want to have children until i hit that $500k networth mark. Of course my company stock options can significantly impact this. If my company is able to have a successful exit, my networth could skyrocket past that goal. That’s always in the back of my mind, but I don’t like to consider that in my planning as it also very well may not happen. It’s crazy to think that there’s a better-than-winning-the-lottery chance that it may, but until the day that happens I’ll stick to my plan of saving $50k per year, and try to up that quite a bit so I can get to $500k earlier than 34!

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3 thoughts on “Oh the Progress You’ve Made…”

  1. You have no debt? Iphone 5 announcement 9/12. That will make your Apple stock go way up….or ummm.

    Congrats on reaching your goal!

  2. Don't forget to update your net worth goal 2012 side bar graphic! Congratulations! I'm just focused on getting myself to a positive net worth right now and I'm 25. I'm ~44,000 down- started at 52,000 and should be able to knock off another 10,000 k by the end of the year (I have 6,000 in savings now). I sometimes wish I had been lucky enough to graduate debt free, but at least it's given me something to work towards and a reason to take interest in personal finance.

  3. Congratulations on reaching your savings goals! That is quite impressive and you seem to be very educated on investing and the whims of the stock market. As I see it, managing our retirement accounts takes time away from the time I can be spending perfecting my programming skills (and similar). Our financial planner handles all this. However, I was thinking after reading all these investing blogs that I would take maybe $7-8K out of our liquid savings and invest it myself once I get some free time to learn what I'm doing. Could you recommend any resources for a total neophyte? I don't think anyone is born knowing how to invest, right? It is a skill that can be developed, like any other, I'm guessing…

    On a related note, I have detected a tinge of panic whenever you discuss your marriage and childbearing schedule. You don't have to be married to have kids nowadays, you know. And while I've never had a maternal pang in my life – if anything, I'm becoming less maternal as I go through my third decade – my addiction to science led me to read up on the process of IVF. Besides being expensive, it introduces a whole boatload of health risks, which unfortunately, like the health risks of pregnancy and daily dose birth control, are downplayed or not discussed at all when women are in the ob-gyn's office. (The reason for this is, as always, that women are defined primarily by their reproductive organs, and many doctors feel threatened by women who are educated and assertive about their health needs – ESPECIALLY male doctors.) I've read accounts of women in my own city getting so sick from the fertility drugs that they had to take months off of work at a time. While fast-growth, early stage startups have never been on the table for me (I tend to succeed best at companies that are making the transition from start-up to maturity), I am aware of the demands they make on your time, and the long hours they require to succeed, particularly at the director level.

    Are you prepared to potentially sacrifice your career for IVF? I ask this because many of your posts have wavered between ambivalence about your career and ambivalence about children. We all need to decide what we want vs. what we're doing just because it's what most people do. I know I had to make some hard choices when I realized I was turning into a yuppie zombie and selling out on everything that was true to my DIY nature. I regrouped over the past 12-18 months, and while life isn't perfect on the career front, it's a whole hell of a lot better than what it was. I don't know you, and I certainly can't advise on having a family, as the whole idea is alien to me. However, I do see some potential challenges ahead that you might want to consider before you execute the plan described in this blog entry.

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