Net Worth Explosion
Hello everyone! Thanks for checking out The Green Swan. Since I started this blog in March 2016, I’ve certainly learned a lot. And I’ve definitely grown to appreciate all the hard work it takes to build a blog. At this point I feel I owe my viewers a bit more transparency into my net worth and what it has taken to get here. So let’s check out The Green Swan’s Net Worth Explosion!
I understand that readers want not only great content, ideas to improve their personal finances, and actionable steps to reach financial independence and early retirement. But it also helps to understand the source. I want you to know that the topics I write come from experience and significant research. And you can trust it because I’ve lived it. The Green Swan is a lifestyle, it has worked for my wife and I, and it can work for you.
Along my life journey, I’ve looked to maximize net worth. My goal was to try and double my net worth every four years and to keep that up as long as possible. Granted that is relatively easy early on given the law of small numbers.
How did I choose a goal of four years? There was not a whole lot of science behind it. I knew that if I could average an 8% return on my investments that would correlate to a “doubling time” of nine years. Using the Rule of 72, you can determine the doubling time by dividing 72 by the expected return or divide by a target number of years to determine the required portfolio growth. So nine years was the baseline given the expected long-term portfolio return of 8%, and to shrink that to four years I would have to make significant ongoing contributions into my portfolio. And the contributions would have to increase each year to keep doubling every four years.
The fact that my ongoing contributions would have to keep increasing over time translated to another goal: to make more money year after year by growing, learning and advancing my career while continuing to live a frugal life.
So there it was, my goal of doubling my net worth every four years. How have I done? Let’s take a look. Below is a chart mapping our combined net worth over the last 10 ½ years.
- Starting in 2006, with a net worth of approximately $60K, it took us 2 2/3 years to double and reach $120K (around August 2009).
- To reach $240K, it took another 2 years (around August 2011) thanks in part to a strong uptick in the markets.
- To reach the next doubling point of $480K it took 1 2/3 years (April 2013) attributable partly to a good stock market and also a continued ramp up of our salaries (and therefore more cash to invest).
- And most recently, in March 2016, we reached $960K which was the next doubling point. This took right around 3 years.
The growth in our net worth is attributable to The Green Swan lifestyle. We’ve both successfully advanced our careers which has led to decent increases in our take-home pay year after year. I graduated with my MBA in December 2010 which led to a new job opportunity and a significant increase in pay in the following years. This has all culminated in a major milestone my wife and I just reached, in April 2016, of having a net worth over $1,000,000!
We’ve kept our lifestyle inflation in check. Meaning even though we have had increases in our take-home pay, we have maintained a relatively low cost of living. It is not as though we still live like college kids, we are very comfortable, but we have always managed our expenses very closely.
And lastly, the markets have cooperated, more or less. We have invested in an all stock portfolio. It definitely took a hit in the ’08 economic recession, but we powered through, continuing to contribute more money (buying low at that time) and benefited when the market rebounded the next couple years.
We have successfully doubled 4 times, all in less than four years so our goal remains intact. This next “doubling time period” may prove more challenging given the significant jump we will have to make and I’m not so certain our salaries (and investment contributions) will continue to climb as fast as they have in recent years. It may eventually take 5 or more years, but do not count us out yet, we are trying hard and hoping the markets continue to cooperate.
The Green Swan Book Release
Our “Net Worth Explosion” is the product of The Green Swan lifestyle at work; all Three Key Principles. It is time to make it work for you too and I hope you continue to read The Green Swan to help you reach financial independence and early retirement. To help you become well rounded in The Green Swan lifestyle, check out The Green Swan eBook.
The Million Dollar Club
The Net Worth Explosion now puts The Green Swan in The Million Dollar Club! Never heard of The Million Dollar Club? Well check out J$’s site “Budgets Are Sexy”. He started The Million Dollar Club for all those who wish to one day be a millionaire (you don’t need a million to join). As part of being in the club, I will post my Pledge later in the week. Going forward, I will proudly display The Million Dollar Club Seal on my homepage!
Let me know what you think of the “four year goal”. Do you have a “doubling goal” of your own? Did you set goals initially and stick with them or adjust over the years? If you have your own goal, please share in the comments below.
Thanks for taking a look.
The Green Swan
Work Harder, Work Smarter, Retire Earlier and Find Your Beach