Looking back through some old files I had laying around on the computer I found something of interest to myself. I found the very first time I took the time to calculate my net worth all the way back in October of 2017!
Back then I didn’t know that I would start a blog writing about my personal finance journey, or what the future would hold in terms of progress. What I did know was that I’d read the very act of tracking your net worth somehow magically helped you raise it at an elevated rate to what you would without tracking it so I thought I’d give it a try.
The very first entry was a pretty good one, I would have been 28 years old at the time and had a positive net worth of $49,191.00 after finally paying off a lot of those dumb debts I’d picked up over the years, you know the new car, student loans, putting a TV and bed on credit etc. the usual mistakes we all make at younger ages.
What’s surprised me is the rate at which the net worth has been accumulating. Although I have kept with the act of tracking this net worth month over month I can’t say I’ve ever done a real look back over time to see the bigger picture. What I found when I did truly shocked me.
What this graph is showing is that from mid October 2017 ($49,121) until our most recent net worth update in November 2019 (25 months later) our net worth has been growing at a staggering rate of right around $100,000.00 per year!
If you read our recent reports you would have seen that the exact 2 month mark back in October was about $259,000 and our November report showed $274,000 and looking back at it that is just crazy to us both.
An even better part of this trend is when compared to linear growth (the light green straight line) we are actually slowly snowballing this net worth and growing it at a faster and faster rate!
So, what have been our keys to getting this kind of sustained growth?
1 – Being on the same page
This is our number one reason for the success we’ve been reaching. Having you and your space on the same page, being open, honest and driven with your personal finances can take you to new heights that would be much more difficult to achieve by ones self. Reason being is when you have someone who you trust and can work together with, not only are you splitting costs on housing, food, bills etc. etc. but you’re also combining your earning power and your shovel (thanks Dave Ramsey) gets so much larger for throwing money at things like retirement accounts and mortgages that it really helps the process take off.
2 – Income
Yes, we have good incomes between the two of us. But – we are in no way making anything close to doctor money or lawyer money, we earn in 6 figures which is an obvious help but without remaining on a plan and motivated with our finances these funds could very easily turn into more cars, boats, campers, motorcycles etc. the “normal” things people do with their excess cash. Instead, we’ve remained living at roughly the same level in spite of receiving pay raises and have instead upped our savings rate to 50+ %.
3 – Market Returns
2019 has been a really solid year for our portfolio and has no doubt helped us reach this accelerated growth, but getting good returns on relatively small sums of money only helps so much – and we never really had very much invested until we piled money into the markets over the past year+.
I’d also note that “a lot” or “a little” invested is very much in the eye of the beholder as $100k could be mind boggling to one person while it’s a fraction of someone else’s account. So try and keep your progress and achievements personal to yourself and don’t compare what you’re progression is doing compared to the neighbours, it doesn’t help.
Wrap Up
Our goal from this point forward is to maintain our net worth beating that linear line on the graph, as we want to grow and accelerate our nest egg as we move forward.
The only way we can make that happen is first and foremost focusing on point #1 and remaining committed to each other and our goals we’ve laid out together, after that the things that we don’t have as much control over like our income and market returns will be the forces propelling us to new personal bests and ultimately on to being financially independent and retiring early!
If you have any questions or comments please leave them below or over on our Instagram page @FindependenceCanada and we’ll be sure to get back to you.
Thanks for stopping by,
FIC.