Congratulations! So (being a new reader) can you summarize what you did right this year to exceed your goals so stunningly?

Posted by Anne | December 28, 2006 12:53 PM

A 10% net worth return is a difficult hurdle, considering how much of your net worth is tied up in real estate. Maybe you could establish a more realistic growth rate by using a weighted average; eg. 3% for real estate, 5% for your cash and cash equivalents, and 12% for equities.

Posted by CPA1298 | December 28, 2006 7:19 PM

The S&P 500 is up 16.5% including dividends this year. Have you analysed how you could get a higher rate of return than you are?

Posted by moom | December 28, 2006 7:26 PM

CPA - I like that idea in retrospect. I'm going to dig into the 2006 numbers in a few weeks and see how I faired and then go from there. This could be a possibility if I decided I need to recalculate things.

Posted by 2 million | December 28, 2006 11:01 PM

You have done a great job while setting realistic goals. Those goals are just enough of a push to keep you disciplined--which is good.

Posted by Nagel | December 29, 2006 8:07 AM

Seeing progress like that is really inspiring! I would definitely agree with CPA1298, though, that you need to reconsider your long range growth model.

It's probably better to officially revise the plan than to try to fake it out by "pushing" harder to increase your net worth in other ways. You could easily include the additional "pushing" measures as part of a new, more realistic plan.

Posted by Dan Lynch | December 29, 2006 3:15 PM

well scratch that - a bit of back of the hand calculations tells me I probably have a > 10% rate of return for 2006. My return last year was so miserable I figured there was no way I could get it this year, but I have done better than I thought. Now I an eager to start calculating my returns

Posted by 2 million | December 29, 2006 4:40 PM

I wouldn't be surprised if you did 10% this year; as moom said the S&P was up ~ 15%, and you have significant exposure to large caps. Based on your November financials, it looks like it would take about a 15% gain in your investments to generate a portfolio-wide 10%. I don't blame you for being pessimistic after last year, when the broad market was up only around 3 or 4%.

Maybe you could also think about your return as it relates to inflation; for example, you could try to beat the CPI by 7% or 8%.

Posted by CPA1298 | December 29, 2006 7:28 PM

Nice work, I've got a way to go to catch up :)

Good luck in 2007.

Posted by Nick | December 29, 2006 9:57 PM

Great post. I have done an analysis of net worth in general on my own using a neat little rule I found in a book I'm reading. Check it out.

Posted by SAM | December 31, 2006 3:57 PM

Hey, I like your blog. I was wondering what area of NC you're from? I currently live in Charlotte, but I am originally from Fayetteville. Heads up if you ever want to talk stocks and options, check out my blog for my daily P/L and Futures trading adventure! Thanks

Posted by CalTrader | January 1, 2007 12:03 PM

Im currently in Raleigh - Futures trading is a bit out of my league at this point - once I can establish a reliable 10%+ rate of return on my net worth maybe I'll look into something more fancy for my investments.

Posted by 2 million | January 1, 2007 7:07 PM

2mil - would you mind adding a column for your age on the table? I can't remember how old you are; I assume 22 yrs old in 2001? I'm 26 and have a net worth of $115k, so you've got me beat by quite a bit. I glad that you were able to start your working/investing career at the low point of a very strong 5 yr bull market. I'm curious to see how the blogosphere reacts to the bull market when it finally happens.

Posted by CPA1298 | January 1, 2007 7:28 PM

wow!..kool site. I love all the ideas. If you like, we can trade links. Email me. thanks.

Posted by hustlermoneyblog | January 1, 2007 11:59 PM

CPA - you are way ahed of me by the age comparison. I was 26 in 2002, 30 in 2006, etc.

Posted by 2 million | January 2, 2007 9:59 AM

Congratulations on your hard work--what a great passion to have.

Have you considered doing the same (concrete goal setting, tracking, blog, etc.) for your health? From an energy and nutrient perspective as a system, the human body isn't much different than a cashflow/investing model. Income = eating, calories burned = expense, net worth = weight/health. It's just a really complex system. From a well-duh perspective, the two things you don't have much choice in experiencing are your health and wealth. And the two are connected--your aging is an accruing liability that's in your control to some extent. Lots of people think of it negatively, as potentially living so long that their retirement savings run short. Another way to look at it though is being around and in good health long enough to enjoy the compounding that will shortly take over your savings.

Posted by Joseph Mark Jarvis | January 2, 2007 11:25 AM

I think the 10% rate of return is something to strive for but in reality might be hard to achieve year in year out. I think that the overall average will probably end up around that.

Regardless the financial numbers you've posted are very impressive, keep it up and you'll be at your goal before you know it.

Posted by Matt | January 2, 2007 5:06 PM

2mil - thanks for the info. I hope I can report a net worth of ~ $314,000 when I'm 30 years old. That will be tough, as my wife will be going part-time in about two years when we start a family. We're going to save hard between now and then, though, and I think we can put away about $60k/yr before the income drops off.

In my previous post I meant to say that it will be interesting to see how all the PF bloggers handle the BEAR market when it finally comes. I think some of you have invested very well, while others have not.

Posted by CPA1298 | January 2, 2007 11:35 PM

Wow, you had a great year! Congratulations!

Posted by Madame X | January 4, 2007 5:01 PM

Ever think about putting up a table showing 8 percent return (would be curious if you are on pace since you have hinted that may be more reasonable)..

Eric

Posted by Eric | January 8, 2007 10:21 AM

$2m,
Your breazing through your goals. I'm sure your frugal lifestyle is making a substantial contribution overall (beyond your investment performance) - in other words, your savings are helping you exceed a 10% investment gain each year.
Honestly, I think you should raise your goals. You're not challenging yourself if you're surpassing them so easily.
Second, you might differentiate savings goals from investment performance goals.
Third, as your assets grow, savings will make-up an increasingly smaller percentage of your annual growth (well for the average person, at least).
Regards,
makingourway

PS Do you link to your $2m savings plan from the home page - good idea to do so.

Posted by makingourway | January 9, 2007 4:35 PM

The great thing about property is the leverage - you can buy $100 worth of house with a $20 downpayment and $80 mortgage (leverage of 5 to 1). Then, even if the house itself appreciates at 3%, your net worth appreciates at 5 * 3% = 15%!

Posted by Leverage | January 15, 2007 11:08 AM