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TXTransplant
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In reply to YouBet • 11:54a, 12/28/23
It truly is amazing…somehow there is always room for more, but no matter how much you purge, the closet still looks full.

I think the explanation might be found in the second law of thermodynamics - the entropy (ie, disorder) of our closets is always increasing and never decreasing.

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Hoyt Ag
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12:07p, 12/28/23
AG
I hit net $1mm early this year in investments and home equity. 40, single and no kids. I started a side business in 2021 that I sold this year and put that into long term investments. Unfortunately I only have my regular job for 3-4 more years due to coal dissapearing from US power generation. So after that I will need to move or come up with a plan. Between now and then, it is focused on saving, experiences and prayer. After we close down, I am probably headed to Korea or somewhere of the like to teach abroad and see more of the world. My hope is I can land an expat job, but that is a long way off still. I have learned the last 3 years how cheap I can live and have purged a lot of 'stuff'. I had a garage sale and a month of selling things on FB and made almost $25K on that. It was all stuff I just didnt need or use any longer.

My dad is 72 and seeing him this Christmas gave me a reminder to travel more early on and to also not save your entire life and not live. He has plenty of money but his health is not good. So he is very limited on what he can do, if anything. Every trip I take, my dad spends hours looking at where I am going, asking me questions and living vicariously through me. I spent 6 weeks in SEA this summer for around $3500 total. He was amazed at the low cost and all that I did. We spent an entire day over Christmas talking about food, diving, hikes and other things I did and I have not seen that happy in a few years. It was a great day, but also sad because I know how much he wishes he could go.
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sirhc
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In reply to Cyp0111 • 2:15p, 12/28/23
AG
It sounds like your income currently vastly exceeds your expenses...

Are you dumping the excess just into brokerage/retirement accounts? Are you looking at other forms of alternative investments?

Curious what strategy is once someone is exceeding retirement accounts and putting a healthy amt into brokerage.
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Kansas Kid
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In reply to sirhc • 2:18p, 12/28/23
sirhc said:
It sounds like your income currently vastly exceeds your expenses...

Are you dumping the excess just into brokerage/retirement accounts? Are you looking at other forms of alternative investments?

Curious what strategy is once someone is exceeding retirement accounts and putting a healthy amt into brokerage.

If you plan to retire early, it is key to keep a substantial amount of money in non retirement accounts. To defer taxes as long as possible, I keep mine in low dividend paying index funds I can hold for a long time. I put in the high dividend payers and the shorter hold securities in my retirement accounts to minimize current taxes.
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Cyp0111
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In reply to sirhc • 2:41p, 12/28/23
The last 4 years, my income has grown higher than I ever expected in a W2 role. I've tried as much as possible to keep spending in check but we did buy a new house last year and kids in expensive pre-school. My growth in income has been entirely my bonus structure and it's quite volatile.

I've tried to build my spending around what my wife and I make, plus drawing 1.5% of investable assets to cover vacations or other items. The 1.5% was a concession to my wife who wasn't as focused on savings as I've been and wants to spend some now and live.

I generally split the excess below which is usually roughly 80% of my variable comp.

30% into Vanguard via ETFs, nothing fancy.
25% into bonds with focus on bonds for income lately to fund investment as they come up
25% into cash/money market bucket as I want to buy a business in the next few years as my second career (or start one) and building a stockpile to do it.
10% into private investments with LP investments in real estate and some into our cattle operation the focus. The cattle stuff loses money, however, when married, it's a joint decision.
10% Extra paydown on mortgage of house

We did the rental house thing but it's honestly not something we have the time or complimentary skillset to run well. We've sold 4 houses over the past 2+ years and essentially rolled a good chunk of that into a larger down payment onto our new house.


From an overall portfolio, I generally am a big fan of Morgan Housel and have spent quite a bit of time finding the optimal portfolio for my wife and I and what I sleep well with at night. I'm sure I'm giving up returns but personal finance is well... personal.


50% stocks, mostly ETFs but 20% of allocation in single stock names
20% cash and fixed income
25% real estate including primary residence and a few small LP investments
5% in various assets, cattle, royalty interests and a few other small things


My goal over time is to increase the stock allocation to 60% and drop the cash to 20%, that will depend on the 2nd career
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AgDrone14
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In reply to AgDrone14 • 3:20p, 12/28/23
AgDrone14 said:
Still hanging in there, pretty busy chart admittedly

https://imgur.com/bqz7nQc
Looks like Net Worth will finish ~$300K up this year compared to last year as I approach 32 years old in the next couple of months. ~$1.4M NW.

Not bad but certainly could've improved more if I wasn't so heavily allocated for cash waiting to purchase the right property. Cash is currently around 17%
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TXTransplant
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4:06p, 12/28/23
For those of you earlier in the game who are mostly just contributing to long-term retirement/investment accounts, I'll post some milestones that will hopefully reinforce that you're doing the right thing…

I hit $500k in retirement/cash savings (I'm excluding home equity) in mid-2016. Got to $1 MM in mid-2020 (despite Covid), $1.2 in early 2021, and $1.3 in mid-2021.

I couldn't believe the growth…seemed almost too good to be true (and it kind of was)! I didn't hit $1.4 until late this year. I was hoping to be well past $1.5 at this point but the stock market had other plans. Home equity adds probably another $300-$350k to my total, but I have no plans to sell any time soon, so I sort of ignore that.

As I said in one of my other posts, I stayed the course the entire time. I've been maxing out my 401k for over 10 years and have been maxing out my HSA for almost that long. I have a Roth that I put a lump-sum contribution in every year until this last one (switched to a mega backdoor Roth).

I have been frustrated by the lack of growth the last couple of years, but I never really lost money - because I kept contributing. It just didn't grow as fast as I wanted.

The downside to all of this is most of the growth has been in retirement accounts. My personal investments/savings are now a smaller percentage of the total. I have some leverage if I want to retire early - a pension that will be available at age 55, principle from the Roth, and the HSA - but I am tied to my corporate job at least to my mid-50s. Thankfully, I enjoy what I do, so it's not a problem (hopefully that doesn't change).

I was reading some of my older posts and had forgotten that I'd set a goal of $3 MM by age 48. That was a good reminder I need to get serious about reducing personal spending and growing my cash savings this year!
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themissinglink
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6:08p, 12/28/23
AG
Wife and I (both 35) hit over $1m in liquid net worth (including tax deferred accounts) right after the COVID run up in the stock market and are sitting at ~$1.4m right now (plus another $400k in home equity). We're both pretty big savers and have resisted the temptation to upgrade cars every few years and kept our housing expenses manageable. We did get some family help though. Neither of us had student loans thanks to parents who generously paid for college so we weren't starting our careers in the negative and her dad owned a business and stashed probably ~$25k into a Roth during her late high school/college years. Even without family help, I still feel pretty confident we'd be north of $1m, though the extra security in our early 20s (and now) was very nice. The biggest factors for us were (again, excluding family help):

1) Keep the big expenses small. We both drove fairly inexpensive cars for 10-12 years. On housing, I rented from a friend who owned a house at a fairly low rate. My wife didn't have quite as good of deal, but wasn't renting in the nicest, most hip part of town. When we got married, we bought a house well within our budget and are still able to save at a relatively high savings rate.

2) Finding a partner with a similar approach to finances/savings. My wife and I both lived relatively frugally before we met and though our expenses have grown, there aren't a ton of unnecessary target runs in there.

To be frank, I've been much less diligent about budgeting the past couple of years because saving a few thousand more each year won't materially impact our financial outlook. Our financial future is more about ensuring we avoid major financial mistakes and letting our savings compound.
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cgh1999
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7:31a, 12/29/23
AG
I'm extremely fortunate that as a relatively frugal person, I married an even more frugal wife! We live a very comfortable life, but have saved significantly more than we have spent. We are comfortably over the $1MM threshold and were actively pushing to be able to retire early and enjoy life. (I'm 46 now and hoping to retire around 56 when my last kid should be finishing college).

My son (16) is really into cars and keeps telling me "what's the point of having money if you don't spend/enjoy it?" He sends me links to sports cars or tricked out jeeps all the time.

His point did resonate recently where we decided that we needed to spend more money on making memories with the kids on vacations. My goal for 2024 and beyond is to use the blessings I've been given to maximize life. Not stuff.
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Kansas Kid
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In reply to cgh1999 • 8:44a, 12/29/23
cgh1999 said:
I'm extremely fortunate that as a relatively frugal person, I married an even more frugal wife! We live a very comfortable life, but have saved significantly more than we have spent. We are comfortably over the $1MM threshold and were actively pushing to be able to retire early and enjoy life. (I'm 46 now and hoping to retire around 56 when my last kid should be finishing college).

My son (16) is really into cars and keeps telling me "what's the point of having money if you don't spend/enjoy it?" He sends me links to sports cars or tricked out jeeps all the time.

His point did resonate recently where we decided that we needed to spend more money on making memories with the kids on vacations. My goal for 2024 and beyond is to use the blessings I've been given to maximize life. Not stuff.

I like your 2024 goal. The one regret I have was not doing more of the memory making with my kids when they were living at home. The key is you don't need to go overboard on luxury vacations all the time. Simple trips to area attractions can make some great memories without blowing the budget.
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Cyp0111
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9:10a, 12/29/23
my best memories as a kid were skiing and going to Destin, Florida. We were able to do these as we always drove, didnt eat out too much and my parents and two other families would split a 3 bdr condo and all the kids slept in the den.

Very economical and likely the reason we were able to travel
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Ag CPA
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12:26p, 12/29/23
AG
Funny to look back to the beginning of this thread and the guy complaining about nice cars costing $50K.
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YouBet
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In reply to Ag CPA • 1:24p, 12/29/23
AG
Ag CPA said:
Funny to look back to the beginning of this thread and the guy complaining about nice cars costing $50K.


Ha. Which is now close to the average price of all new cars.
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Cyp0111
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9:13a, 12/30/23
One thing to add on this. I was certainly guilty of this and think it is sage advice. Do not expect money insecurities/anxiety to go away when you hit your number. Learning and dealing with route cause is important, I think I realized my dad was always stressing about money and it is something that even though he didnt verbalize it growing up, passed on to me.

Focus on what the goal gets you, optionality of time/what you do. Find a budget that works for you. I think a good frame of reference, run a 3-4 % withdraw rate against your number and see if it provides the cash flows needed for your life.
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YouBet
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In reply to Cyp0111 • 10:43a, 12/30/23
AG
Cyp0111 said:
One thing to add on this. I was certainly guilty of this and think it is sage advice. Do not expect money insecurities/anxiety to go away when you hit your number. Learning and dealing with route cause is important, I think I realized my dad was always stressing about money and it is something that even though he didnt verbalize it growing up, passed on to me.

Focus on what the goal gets you, optionality of time/what you do. Find a budget that works for you. I think a good frame of reference, run a 3-4 % withdraw rate against your number and see if it provides the cash flows needed for your life.
I'm guilty of this. We are high net worth, but I grew up in a CPA household with Silent Generation parents who were frugal as hell so it's in my DNA. I'm not as bad as my mother but I'm still fairly conservative and plan for worst case.

Whenever we review our finances, my wife and FA look at me like I'm insane when I start talking about contingencies and things that could go wrong....because they will and we need to be prepared.
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themissinglink
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In reply to Jack Boyett • 6:47p, 12/31/23
AG
Jack Boyett said:
Don't just be satisfied with "the stock market has returned x% over the last 100 years". That doesn't tell you anything about the next 10.
Funny enough, the 10 year S&P500 return was over 12% (9% real return). I wouldn't count on another 12% decade, but long term stock market returns seem to be pretty predictable.

Was reading back through this thread and found it a very interesting and informative read one decade in the rear view.
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Herknav
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7:14a, 1/1/24
AG
//Best advice I got is to pay yourself first; don't have the most expensive house in the neighborhood, they all appreciate at the same rate; have a job you can relate too/continue to work at it till you can't (job loss/retirement/health) and asprire to leadership/management at younger ages, while more a consultant in elder years. Retired military w/pension, A&M grad, family with 4 kids and 8 grandkids, home and about 2.5 mill net worth. But @71 still work (part time)with Home Depot; still participate with church & Bible fellowship; Masonic Lodge, travel and Ag athletics & Astros games annually. Don't quit on yourself or your family.//just my thoughts.//
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bjork
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In reply to Kansas Kid • 9:43a, 1/1/24
Kansas Kid said:
sirhc said:
It sounds like your income currently vastly exceeds your expenses...

Are you dumping the excess just into brokerage/retirement accounts? Are you looking at other forms of alternative investments?

Curious what strategy is once someone is exceeding retirement accounts and putting a healthy amt into brokerage.

If you plan to retire early, it is key to keep a substantial amount of money in non retirement accounts. To defer taxes as long as possible, I keep mine in low dividend paying index funds I can hold for a long time. I put in the high dividend payers and the shorter hold securities in my retirement accounts to minimize current taxes.


We're FI and plan to RE in a few years at 40. We have a good size taxable account, but most is in tax-advantage Roth, IRAs or 401ks.

You do not need to focus on tax advantage. You can ladder a Roth conversion or 72(T) exchange.
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SW AG80
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10:54a, 1/1/24
AG
I posted on this topic in January 2013. My how things have changed.

Thanks to another thread on TexAgs, in 2009 I bought $24,000 of LVS at around $4.40/share. When I sold those shares (some in 2013 I think and some in 2014) that $24,000 investment turned into $440,000. And for a win/win, that was in my IRA/SEP. Also made some good money on ROKU, again thanks to TexAgs.

In 2014 we bought a second house in Aggieland and still have it. Use it a fair amount and it has turned into a very good investment. And no, we do not rent it out as a VRBO!! And we will pay it off in about 2 years.

It also helped getting both kids out of college. And starting in 2009 I handled most of my own investments. As a friend of mine told me back then, no one cares about our financial future more than I do.

Counting the equity in our home, which is paid off, our net worth is over $2M.

Not world beaters by any means, but I did get to do what I wanted in life and got to live in a part of the state I wanted to live in.

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wcb
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12:17p, 1/1/24
AG

Quote:
Also made some good money on ROKU, again thanks to TexAgs.

Congrats. Bought on the way down and it continued to drop. Currently down 50% on them. :-(

That said, looks like we crossed the mark this past year with $600k in retirement and $400k in equity. So none of it is liquid but I'll celebrate the small victories.
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SW AG80
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In reply to wcb • 1:03p, 1/1/24
AG
I left a lot of $$ on the table with ROKU. I sold around $80/share I think. Bought at $33/share.

I think ROKU got up to $500-$600/share. That is a lot of money I left on the table. But as the saying goes, you never go broke taking a profit.
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LMCane
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In reply to TXTransplant • 8:51a, 1/4/24
incorrect

I organize my closets by type

(dress pants / dress shirts / ties) in one closet

other closet is blue jeans / polos / workout attire and shoes.
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LMCane
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8:53a, 1/4/24
I'm nearly to accredited investor status, hopefully in the next year if the markets don't tank.

1. how many of you then begin to invest in things that are only open to accredited investors?

2. and what types of investments?
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Cyp0111
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In reply to LMCane • 9:19a, 1/4/24
I've largely stuck to LP investments in real estate. Be careful though and do a lot of diligence on the project and GP.
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Kansas Kid
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In reply to LMCane • 9:28a, 1/4/24
LMCane said:
I'm nearly to accredited investor status, hopefully in the next year if the markets don't tank.

1. how many of you then begin to invest in things that are only open to accredited investors?

2. and what types of investments?

While I started actually right before I was an accredited investor officially (I stretched the metrics a little), I had a unique opportunity to invest in a private company and don't recommend it right out of the gate. I think for most people, just because you are an accredited investor doesn't mean you should invest in deals only for them. They tend to be illiquid with poor disclosures and limited diligence. If you want to do private placements, find a mentor that will help guide you and let you co-invest with them while you learn the ropes. I think the best deals tend to be in established private companies and real estate deals.
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Kansas Kid
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9:42a, 1/4/24
Don't forget, the accredited investor rule was originally done in 1982 and the metrics to qualify haven't changed except now your primary residence is excluded. I am generally speaking a "let the buyer beware" type but there and hate government regulations. That said, in this case, ask yourself if you really are knowledgeable enough to properly evaluate these investments. Just because you meet the financial requirements doesn't mean you suddenly have a lot more knowledge about investing. If you do think you have the knowledge, good luck. I hope you hit it out of the park.
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EvenPar
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In reply to LMCane • 2:18p, 1/4/24
AG
My criteria for what it's worth:

1) Cashflow Cashflow Cashflow
2) Monthly or Quarterly pref
3) If it's real estate look for deals that pass cost segs, accelerated and bonus depreciation to the investor.
4) Low/fair management fees
5) How much of the deal is De-risked
6) Invested Capital return in 5 years or less, preferably 3
7) Transparency
8) Sponsors with experienced and successful track record
9) Sponsors must have skin in the game
10) Investors get capital back before the sponsors share in the deal
11) Waterfall/promote of at least 70% to the investor
12) No red flags or a deal too complex to understand
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Cyp0111
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In reply to EvenPar • 2:43p, 1/4/24
13) Understand how they're going to finance the deal, learn about basic real estate finance. Ask ?s on plan for debt, is it bridge with 3 year maturity.
14) Is there a heavy value add component, can they execute
15) Look at pro-forma, does deal work with keeping rent flat and escalation to costs.
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Red Pear Luke (BCS)
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In reply to Cyp0111 • 4:40p, 1/4/24
Sponsor
AG
Cyp0111 said:
13) Understand how they're going to finance the deal, learn about basic real estate finance. Ask ?s on plan for debt, is it bridge with 3 year maturity.
14) Is there a heavy value add component, can they execute
15) Look at pro-forma, does deal work with keeping rent flat and escalation to costs.
With respect to 14 - you also need to understand their timeline.

When and how many units do they want to renovate? Goal for a solid renovation is $8,000/unit or higher. Ask if it is interior focused renovations or exterior?

Are they renovating units as they turn? or are they going to mass evict the property and work to complete an aggressive renovation?

If it's mass evict and turnaround - then you need to understand their asset management prowess because they will need to retenant the property.
  • This is what is currently chapping the asses of many operators right now because they overpaid for a property in a suspect location. Kicked out all the tenants, spent millions of dollars on renovating and then trying to lease up the property where they are likely not hitting their projected asking rents.
  • This is all important because if they used a bridge loan and did the above, you are essentially capping yourself on how they can refinance out of the bridge loan.
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DonaldFDraper
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4:57p, 1/4/24
AG
Not to derail the thread but can someone share the reasons to become an "accredited investor"?

Then once registered, where do you find investment opportunities?
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Kansas Kid
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In reply to DonaldFDraper • 5:21p, 1/4/24
DonaldFDraper said:
Not to derail the thread but can someone share the reasons to become an "accredited investor"?

Then once registered, where do you find investment opportunities?

There is no registration. When you invest in a deal that requires you to be one, you have to make a representation that you meet one or more of the criteria. On a very rare occasion, a sponsor may require proof.

The reason to do it is you can invest in deals not available to the average investor. The theory is you can get higher returns but it comes with higher risk due to the lack of protections afforded to the investor. The SEC disclosure rules don't apply so you have to do your own diligence and each deal has its own investment contract, terms and conditions.

As to how to find them, there are a number of ways from investment advisors, friends, calling up investment managers, etc. For real estate deals where you will do it all yourself, you can get on Crexi or other similar sites or get a real estate agent that specializes in the type of deal you want. Others can throw out how they find their deals.
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Wrec86 Ag
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1:08p, 1/5/24
Been a while since I checked in here. My wife and I are in an interesting spot right now.

We hit $1M of net worth at 33
Just hit $2M of net worth at 36. Stock market has been great for us the past year or two, so wouldn't be surprised to see it dip back below at some point.

But we made a house purchase last year, which has tied up almost all of our equity.
- Real Estate Equity : $977k (2 properties, $1.77M value vs $660k debt)
- Retirement investments : $991k
- Liquid assets : $50k

We'll build back up quickly, but I don't love the risk.
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aggiebq03+
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1:15p, 1/5/24
Looking back through some previous posts on this thread from 10 years ago was surreal. Hard to believe how things have gone since then.

We've been fortunate that my career took us overseas two times, and still on our second time. While it's not as lucrative as I've been told it once was, it's allowed us to have my wife stay home with the kids, and focus on both travel (outside COVID times) and also on funding 529 accounts for our 3 kids to the level I wanted. We could have stayed in TX and done this with us both working engineering jobs, but happy things have been going how they have and my wife could stay home. Have also managed to travel to probably 25 counties with our kids over the years, and adding another 2-3 this year.

We are at a point now where we are finally getting to enjoy how the early career savings has started to really pay off in 401k accounts, so won't need to worry much about savings rate for that going forward. Expect between the 401ks and some Roth IRAs it will end up in the 5-7M range depending on the market next 20-25 years.

So now we are looking to continue building investments outside retirement accounts to fund a house when moving back stateside and being able to walk away from full time office job before age 60. It was nice to see our net worth towards the end of 2023 push us into multi-millionaire status. Doesn't feel any different, but it's nice to know our hard work and dedication to saving over the years is paying off.

I'll finish by saying, it may not feel early on like you are getting any traction. The $10-20k you are saving instead of spending on trips, or nicer cars, or a bigger house, or more fun toys will hurt if you dwell on it. So don't think about it. Make it automatic. Don't check your account (other than to rebalance). And look at it 15-20 years later and be glad you don't have to spend the second half of your career stressing, but instead thinking about how you can maybe cut 5-10 years off your "work life".

Hope I'm still around to post on this thread in another 10 years.
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LMCane
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In reply to Kansas Kid • 1:16p, 1/5/24
Kansas Kid said:
sirhc said:
It sounds like your income currently vastly exceeds your expenses...

Are you dumping the excess just into brokerage/retirement accounts? Are you looking at other forms of alternative investments?

Curious what strategy is once someone is exceeding retirement accounts and putting a healthy amt into brokerage.

If you plan to retire early, it is key to keep a substantial amount of money in non retirement accounts. To defer taxes as long as possible, I keep mine in low dividend paying index funds I can hold for a long time. I put in the high dividend payers and the shorter hold securities in my retirement accounts to minimize current taxes.
I assume you are talking about trying to avoid penalties for early withdrawal?

because the taxes you pay on capital gains in a private brokerage are going to be more than the taxes in a Roth or corporate 401K correct?
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In reply to Cyp0111 • 1:17p, 1/5/24
Cyp0111 said:
I've largely stuck to LP investments in real estate. Be careful though and do a lot of diligence on the project and GP.
can you provide more details on this?

my best friend from the Air Force made his fortune in developing real estate, and tells me all the time to not even buy a house in Florida but to rent and invest everything in the S&P index!
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