On the fifteenth of every month I put all of my account information into a spreadsheet. This spreadsheet calculates my current bills, my current balances, and my time to FI at current rates. It also plots my net worth on a chart. I’ve only been doing this for about three years, and I’m not inclined to go back through all of that data to plot previous years, so it’s rare that I consider what my net worth may have been, say, ten years ago.
It was only as I was reflecting on my upcoming ten year wedding anniversary that I decided to look back at where I really was financially around that time, and I was shocked when I saw how bad it was.
Shortly after my honeymoon, my wife and I listed our condo and started looking at houses, because that’s what people do. We had gotten into a super saver mindset over the previous two years while scraping together $35k to pay for our wedding and honeymoon in cash, paying down student loans, and paying off a new HVAC system.
Less than a year later we were in a big house in a great area. A year after that I had a fancy new job, we had new furniture and a new car, a new boiler (after a puff back incident ended the life of our old boiler) and solar being bolted to our roof. This translated to a big mortgage, a car payment where previously I had none, more utility bills, a solar loan, a boiler loan, and still having student loans.
On the flip side, I had a small emergency fund and a 401k that I’d been contributing to for twelve years. On the surface, I was doing great. My friends and family started to see me as being successful in my life and career, and they let me know it. But boy oh boy was I BROKE! Just seven short years ago, with my big house, new car, and fancy six figure job, my net worth was -$378,000!
This number may not be shocking to you. You may look at it and say “So what, that’s about the average price of a nice house.” And it probably is. However I arrived at this number with $10k in my checking account, $85k in my 401k, and with a $150k+ salary. Looking at just the positive side of the equation, I was killing it…as long as I remained gainfully employed. That -$378k was a heavy yolk around my neck just waiting for an opportunity to pull me down.
It took years of saving, investing, and paying things off just to turn that -$378k into a zero. And that’s with us still having a sizeable mortgage. Today I’m happy to report we have a greater than $1M net worth. We still have a ways to go on the mortgage (as I never seem to shut up about), but despite the stock market downturn our investment strategy has paid off nicely and I’m not as concerned about the mortgage as I once was. To the untrained eye, my life hasn’t changed all that much from seven years ago. I’ve added kids and bigger cars, and done some renovations, but everything else looks more or less the same. I’ve gone from secretly broke to a secret millionaire in under ten years.
Freed by 50 