1. Net worth up 23% in 2006 to 5.6 NW/AI (net worth/annual income) versus goal of 19%. 2. Annualized gain in picked stocks (tax/IRA/401k) was 25.5%! vs. 12% S&P500.3. Biggest winners were BWLD, BMY, WLT, NUAN. Biggest loser SCSS. Go BMW Method + Hidden Gems!4. Moved portion of my 401k into picked stocks to take advantage of the returns I have been yielding the past ~6 years.Current Portfolio: 46% Picked Stocks (Top 4: BMY, BWLD, SBUX, NUAN)14% 401k Mutual Funds (42% S&P500)33% Real Estate (House Value*0.93-mortgage)7% Fixed Income (T-bills, CA-exempt MM)Graph of past few years of net worth progress. Most of our net worth growth this year came in Q1 and Q4.http://pic40.picturetrail.com/VOL362/677161/9280113/219196799.jpg2007 should be a bit less stressful than the previous year, but I am also fully prepared for a serious pullback in the stock market. We have been spoiled by this market the past few years. Our net worth goal for 2007 is a 17% increase, which would bring us to 6.5 NW/AI.I really have no prediction of when we will FIRE. It now appears that 10NW/AI won't be enough as I have a son now at age 1, and possibly another in the future. My goal is still at age 40, 8 years from now, which at 11% stock market returns would put us at ~16 NW/AI, a comfortable retirement.--whyohwhyoh2005 Update: NW/AI=4.5http://boards.fool.com/Message.asp?mid=235078902004 Update: NW/AI=3.0http://boards.fool.com/Message.asp?mid=218426762003 Update: NW/AI=1.5http://boards.fool.com/Message.asp?mid=20380221
Nice.My FIRE accounts were up 20.1% for the year, including returns and investments. I'll take that. Note: This is only investable assets. It does not include house, cars, kids 529 accounts, etc.FI is a little less than a year away.FIRE is 6.5 years away.Note: Above dates depend on market returns, price of tea in China, asteroids, lottery tickets, super volcanoes, goat entrails, etc. etc.
I really have no prediction of when we will FIRE. It now appears that 10NW/AI won't be enough as I have a son now at age 1, and possibly another in the future. My goal is still at age 40, 8 years from now, which at 11% stock market returns would put us at ~16 NW/AI, a comfortable retirement.--whyohwhyohI am going to pick on this metric a little bit. I don't intend to be critical or contentious but in the spirit of helping a fellow Fool, I want to give you some things to think about. First of all, you are to be commended for having a plan, keeping records, setting goals, measuring against those goals. That puts you way ahead of many.But getting to the root of the matter, your NW/AI metric is puzzling to me. For instance, if your income goes up $50K, your NW needs to go up by $280K just to stay at your current 5.6 NW/AI ratio. Even if you save the entire $50K and it earns another $50K, the $100K addition to your NW would still pull down your NW/AI ratio.A more conventional metric would be shoot for a NW = 25 * AE. Where AE is your estimated annual post retirement living expense whch may be more or less than your current AI.Just something to think about ....Best wishes.... bhm
A more conventional metric would be shoot for a NW = 25 * AE. Where AE is your estimated annual post retirement living expense I started using NW/AI since it has been mentioned quite a bit on this board as a good metric to follow.Estimated annual living expenses is more difficult to determine, and would most likely fluctuate more than my current AI. My AI is quite stable now after 9 years in my career and easier to quantify. As I get closer to FIRE, I may switch to "AE" as in the future I may be able to better estimate those expenses.But something to start thinking about.--whyohwhyoh
Do you use gross AI, or net AI?
Do you use gross AI, or net AI? Gross AI, base salary. But don't include bonuses... which some years can be 10-20% and is directed directly into additional savings.--whyohwhyoh
Great progress whyohwhyoh! I hope to duplicate this FIRE process in the future myself. Until then, I will keep setting goals and reaching them!bdgf06Who has a full page of typed up goals for 2007 ;)
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