Here is my most recent net worth update. Admittedly it’s not something I care much about anymore but that might only be because I have built a high net worth. Regardless, I think the numbers are less important than the trend and methods I used to accumulate wealth.
This chart shows my net worth from 2013 until now, 2021. I started out with a negative net worth in 2012 and by 2013 it was around $50,000.
By 2014 my net worth was larger than my student loan balance – you can see that where the red line (net worth) transects the blue line (student loans).
The yellow line is my private brokerage. I included it because it’s where I keep the money I play around with. In 2015, for example, I cashed a bit portion of it out and bought my condo in Portland.
2016-2018 my investments grew exponentially. And I didn’t keep track from 2019 until 2021, that’s why there is a big spike when I entered the new values.
Exponential Growth
Investments grow exponentially because you’re getting returns on returns. This is why the curve isn’t linear but goes up steeply. The sooner you start investing the more time your investments have to grow.
Diversification of those investments is another reason why exponential growth happens. You have bonds which go up when stocks don’t fare too well. And you have real estate which appreciates when your bonds flatten out.
Then there is cryptocurrency, peer-to-peer lending, and your income. All of these are sources which add to the overall net worth.
Net Worth in 2021
This net worth is sitting somewhere around $1,200,000. It’s a mix of everything I mentioned above. And it will likely continue to grow.
I’m 43 years old and if this continues at some average of its past growth over the next 20 years I suspect I’ll have somewhere around $4-5 million.
It could also all come down to zero. I know that’s a fear many have. I understand it but I file that fear in with the fear of me getting cancer tomorrow.
Net Worth Growth Strategy
I believe that this net worth came from investing conservatively and in a diversified manner. And because I always invested even when the economy wasn’t so hot.
I also avoided debt and had a high savings rate. Consuming less than you generate is a foolproof method of building a strong net worth.
The Hype of a Net Worth
After nearly a decade of writing about net worths and investing I am convinced that it’s a bit of hype. Do I really need this much money?
The reality is that I will continue working for as long as I am able to. Barring any major illness that will be somewhere into my late 70’s.
Even in case of major illness, I would likely get by on very little. I would get disability income, social security income, and likely have a paid-off house to live in.
And that’s the point – if you have a house you can pay off over your working years an emergency fund then that should be all you need.
Retirement Planning
I was obsessed with retirement planning for so long it’s hard to switch gears. That was because I wanted to desperately find a way out of medicine. Or at least practice without needing the income.
We understand retirement planning to be saving for retirement. But over the years I learned that retirement planning is more about asking myself the tough questions.
I now know the kind of life I want to live and where I’m willing to live. It’s clear to me what I can go without (A/C, a car) and what amenities are somewhat essential to me (good produce).
I can save millions and millions of dollars and still suffer in retirement. Or I can save nothing but enjoy the work that I do and have an income which I can sustainably earn forever.