As I noted in How to Measure and Track Your Wealth, I track my net worth monthly using Quicken.
I update all my asset accounts and record all my expenses, then run a net worth report. I review it and compare it to my goal for the month (I have an annual goal I break into months) as well as consider steps I need to take the next month to make progress.
I’ve been doing this for 20 years. In this post I’ll give you a report on 2015 results, my performance over the past 20 years, and 2016 plans.
2015 Results
Here’s how 2015 ended up:
- Overall net worth was up 2.6%
- The gain was due all to savings as the stock market (where the vast majority of my assets are invested) was flat.
- These results do not include any appreciation for my rental properties. Based on reports from my property manager, I could likely sell them for $100k to $200k more than what I paid for them (including upgrades). I do not add these values to net worth (I leave them on the books at cost).
Overall, it was a disappointing year, but at least there was some gain. The market was down slightly, so being up at all is a decent result.
These sorts of years are to be expected. The market can’t be up 15% every year and after several years of good performance, there was bound to be an off year.
20 Years in Review
As for my results the past 20 years, here’s what I’ve posted (gains versus the prior year):
- 1996 – 26.9%
- 1997 – 15.6%
- 1998 – 22.8%
- 1999 – 18.6%
- 2000 – 14.2%
- 2001 – 9.7%
- 2002 – 4.8%
- 2003 – 28.3%
- 2004 – 17.5%
- 2005 – 7.2%
- 2006 – 19.9%
- 2007 – 13.3%
- 2008 – -15.7%
- 2009 – 28.8%
- 2010 – 20.9%
- 2011 – 7.0%
- 2012 – 15.9%
- 2013 – 19.5%
- 2014 – 9.2%
- 2015 – 2.6%
Some thoughts on these:
- Average annual compound growth rate of 13.86%. Not bad.
- Lots of variation. Best year was up 28.8%. Worst year down -15.7% (back-to-back years, by the way). Five years over 20% return and three years below 5% gain.
- Great growth since financial collapse in 2008.
- 2015 was the second-worst year on record.
In the early years, results are driven by saving a ton of money. Then as my assets grew, investment values determined how good or bad the year was.
2016 Goals
My plans for the next five years are to add a very conservative 6% in net worth each year. If I do that, I will achieve my financial freedom goals.
As you might imagine, I have a plan to achieve this. The details:
- I should earn enough from my rental properties to equate to a 1.9% net worth gain.
- I should be able to save enough from my salary (including 401k contributions) to equate to a 1.3% net worth gain.
- If the stock market shows up at all and just has a nominal gain, I should be able to hit 6%.
So those are my results and plans. What are your 2016 net worth goals and plans?
M. Interview #2 says
HI ESI,
Really great to have you back, you were missed! Very much looking forward to see how ESI money evolves.
Market was not my friend last year, so most of the growth came from my savings and rental property income. I also hold the value of my rental property fixed to the purchase price.
From a Goals & Plans standpoint, I’m getting closer and closer to some minimum retirement numbers but given my age (39, 40 in April), young children (still have 3!), and my current happy state (a lot has changed, we are now living in Milan, Italy!), I am looking into alternate investment options (private equity opportunities) versus slowing down. This would be a very small part of my portfolio, 5-10%. From what I am learning, these types of deals are out there but require to be “super accredited” in many cases (I did not even know that existed…). In addition, I am also out there looking for passive income streams. So your posts on Dividends & P2P lending are interesting given the current interest rate environment.
I’ll keep reading and enjoying, you know I don’t comment much, but wanted to start ESI off right by sharing something since you share so much!
N.W. Trend:
– 2015 = 14.7%
– 2014 = 21.6%
– 2013 = 28.5%
– 2012 = 23.5%
– 2011 = 17.7%
– 2010 = 29.3%
Also, special thanks for turning me on to Financial Samurai.
ESI says
Wow! Milan, huh? I’m sure there’s a great story behind that!
I have a post on P2P slotted for a month or so from now. I’m getting better results than expected and am anxious to get readers’ thoughts on plans and next steps.
That’s a pretty nice NW trend. If you can keep it up, you’ll be set in no time.
FS is one of the blogs I read for myself (versus just for ideas/thoughts/etc. to share here). I regularly find something insightful there.
Concojones says
My financial goal for 2016 is to start investing properly. I’ll continue to save the better part of my net salary, this has never been a problem as I keep a low cost structure. But I need to move from active stock investing (which I stopped doing after significant losses due to not staying on top of things) and (more recently) cash to passive index investing.
John B says
It’s interesting seeing year end results that many investor’s have here. My returns are the results of not investing in the stock market (exited 3/09), no P2P lending (there has been a shortage of borrowers and an oversupply of institutional money to lend when i was looking into it) but i am a landlord of a couple of apartments with my brother and my own private lending (both ROTH IRA and non-IRA). Also, since i don’t invest in the stock market i no longer own any index funds or dividend paying stocks. I retired 2 years ago and am comfortably living off my earnings w/o touching my principal. Instead the principal is growing consistently nice and i comfortably believe i won’t outlive my assets. ๐
2009 โ 50.18%
2010 โ 27.31%
2011 โ 18.90%
2012 โ 20.50%
2013 โ 20.94%
2014 โ 8.61%
2015 โ 15.74
Res @ happylater.com says
Well done on your growth, what’s really impressive it has always been positive!
I believe you can expand this in a full other post “How I plan to have a 6% growth rate in the next five years.”
My plan for 2016, is to invest more conservatively. Do not invest in individual stocks, strictly low cost ETFs and diversify as much as I can. I also plan to invest in “no touch” real estate opportunities where I can.
Thanks for this post, excellent inspiration!
John B says
Thanks Res. Although i no longer invest in the stock market (its too schizophrenic for me), I used to spread my investments among various index funds that gave me domestic and international diversity in large, medium and small cap. It was a more passive investment that occasionally needed some re-balancing but the commisions were much much lower than paying for a higher, more actively managed porfolio to someone whose guesses were no better than mine and who, frankly, would make his commissions whether i made money or not.
I now will not do any business transaction unless it demonstrates a win/win for both parties. In my humble opinion the stock market does not do that. It’s a zero sum game where when one party wins the other party loses and the broker gets paid both directions.
JayCeezy says
1997 27.25%
1998 32.35%
1999 27.28%
2000 10.31%
2001 9.82%
2002 8.59%
2003 42.73%
2004 22.47%
2005 13.43%
2006 17.12%
2007 8.34%
2008 -37.33%
2009 38.12%
2010 12.49%
2011 -0.87%
2012 5.89%
2013 3.03%
2014 4.23%
2015 3.19%
2016 1.49%
About half my NW is due to savings. My investments are currently 91% in fixed income cash instruments. My big wallop in 2008 (-37.33%) does not reflect a nadir of -57%, but life goes on whether you go with it, or not.:-) 2016 is amazing already, simply due to the decline in long-term interest rates; I don’t expect it to last, and like you and your properties, ESI, I keep it on the books at cost. Am loving your meticulous attention to performance and detail, thank you!
DIY$ says
2015 was a good year for our net worth. It grew by 14.5% and crossed over the $500k mark.
Glad to to see the new site up, excited to see what’s coming!
Jason says
2015 was a great year. I crossed $1mm NW by the EOY.
Date NW (YoY)
2004 32.10%
2005 16.63%
2006 33.68%
2007 9.08%
2008 -17.46%
2009 55.32%
2010 25.45%
2011 5.75%
2012 40.70%
2013 14.87%
2014 18.94%
2015 9.72%
As you can see, I poured money into the market during the 2008 downturn and came roaring back in 2009 and 2010. ๐
ESI says
Congrats on joining the millionaire club!!!!