Hello! It has been a minute. I really appreciate all of the readers who keep coming by my site even though I’ve been dormant of late. I’ve had a lot going on with family and work commitments. I am hoping to post more regularly now as my youngest is getting a bit more independent.
I have continued to track my investment performance and growth of my accounts. In this post, I will attempt to update my estimated total net worth as of the end of 2024.
As a reminder, my estimated of total net worth was $703,000 as of the end of 2022 (apparently, the last time I updated the figure on this blog). Total savings (basically accounts with stocks and bonds in them) reached about $437,000 as of the end of 2022. This is the main category that I track.
While I think tracking this is a useful “forcing function” to make me stay on top of things, I intend to stop tracking the total on the blog once I hit my goal of $1 million invested assets. I think that I will then just track investing returns and maybe transition to some more general personal finance posts.
CURRENT PORTFOLIO
First, let’s update my investments.
Value Based Asset Allocation
In my largest account, I allow myself to allocate between 50% and 100% to stocks (equally split about 1/3rd each between equivalents of the ETFs: SPY, VXF, and VXUS). I make these decisions based on valuation and the related expected future returns. This “asset allocation” account is my largest and comprises about 60% of my total liquid investments.
In 2024, the account was allocated 30% in VXUS and 15% each in VXF and SPY. The remainder was in T bills/stable value. This account was up 9.10% in 2024.
Actively Participating in CAPITALISM
I’ve got about 20% in accounts where I actively pick stocks. This includes the “Fun Fund” account.
I’ve been doing some stuff but I’ll talk about that in a separate post. I was up 11.26% in the account in 2024.
VALUE + TREND/FEAR AND GREED FUND
I also manage some of my portfolio based on a very simplistic, systematic trend and value strategy. I am workshoping a new name for this “strategy.” The “Fear and Greed Fund” (to be clear, it’s just my personal fund and not a security or investment product available for purchase). This account is about 20% of my overall portfolio. I have ceased contributions to the account for the time being but some of my family relations are shifting some funds to this strategy.
When long, the account is divided equally: 33% each to the S&P 500 (SPY), the Dow Jones Completion Index (VXF), and foreign stocks (VXUS) (I’m also experimenting with some different allocations in other accounts, adding small-cap value and/or REITs for example).
Basically, if the valuation of one of these indices/funds is rich (as determined by me, based on a somewhat discretionary “process”), then I apply a simple moving average trend-following rule.
The idea is to have some risk management in place when stocks are expensive by selling when they have negative time-series momentum (for example, when stocks are down over the last 12 months or below the long-term moving average). I am trying to limit exposure to the market environments where greed turns to fear (i.e., expensive and time series momentum craters).
When stocks aren’t expensive, I just want to be long and strong (so no trend-following overlay). I only allow changes once a month in an effort to limit the number of “whipsaws”(when I sell and later buy back into the equity fund at a higher price than I sold, because the trend rule says so, resulting in a loss).
If you’re interested in learning more about trend following in general, I would recommend you start by searching for info on the Alpha Architect and Meb Faber sites. Jeremy Siegel also touched upon the subject of trend a little bit in Stocks for the Long Run.
As of 12/31/2024, this account was 100% long (33% in each SPY, VXF, and VXUS). For 2024, this account was up 13.90% (take all my numbers with a huge grain of salt as they are extremely unaudited).
The account under-performed the SPY’s 25.02% in 2024. There were no changes made during 2024 (the moving average rule was never triggered). So I attribute this underperformance to diversification into smaller stocks and (mainly) international stocks. VXUS and VXF were only up about 5.08% and 16.89% in 2024, respectively.
I think moderate or growth allocation funds are better benchmarks for the Fear and Greed Fund. I’ve been using AOR and and AOA, two allocation ETFs from Blackrock as my comps. AOR is about a 60-40 stock and bond allocation fund with international diversification. AOA runs about 80-20 between stocks and bonds. My 13.90% percent beat both of these by a hair (AOR did 10.68% and AOA was up 13.55%).
I recently calculated the real dollar investment performance (growth of $10,000) since the 2019 inception of this strategy. It came out nicely ahead of the allocation funds and is losing to pure SPY: $18,111 to $25,799. The Fear and Greed Fund smoked all of my benchmarks in 2022 and lost to SPY by less than a point in 2020 (but the ride was MUCH less harrowing for me in real time). I really like that performance and will continue to experiment with this fund/idea.
STASH STATS
As of June 30, 2024 my investments were at about $550,000.
Since that date, I have continued to automatically save (albeit at a reduce rate). Automating my savings is my strategy for managing my behavior (and limiting the willpower required to stay on plan). I save/pay myself first, then deal with the consequences in the rest of my budget.
I have been saving about $2,000 per month automatically into my relevant accounts.
The portfolio balance as of the end of Q2 2024 was about $600,000.
HOW FAST IS My STASH GROWING?
In 2021, I started tracking the rate growth including both savings and investing gains (or…losses). This is an odd metric for most use cases, but it is easy to compute, and reflects both saving and investing (the two levers that I am trying to use here).
Thanks to an idea from a twitter friend (@DadInvest follow him if you don’t), I also started tracking the 5-year trailing CAGR for my total invested assets (this also includes both gains and contributions….Beardstown Ladies style (Google it)).
First, my percentage increase in the stash from saving and investing from June 30, 2024 to December 31, 2024 was 9% (50/550). The five year trailing portfolio/savings CAGR is 18.57% (12/31/2019 to 12/31/2024). This 5 year CAGR is much lower than the almost 40% rate when I computed this at year end 2021. It has also dropped from when I computed it back in June 2024 (21.64%).
Total Net Worth
Most of my assets are in my investments, so the rest of the post shouldn’t be long.
First, I own a small house. I ran a couple of “scenarios” (basically using different assumptions for market values for the property). Using Zillow estimates and taking a look at rents and using a capitalization rate. The most conservative value was based off the property tax assessment of value of my home.
This leads me to an estimated equity of $200,000. I don’t want this figure to be overly impacted by real estate fluctuations over which I have no control, but I also don’t want to totally ignore the impact of real estate on my balance sheet (especially the value of the rent I am avoiding/hedging by owning my home).
In addition to the real estate, I have a little deferred compensation plan via my employer. It is basically a deferred income annuity (or defined benefit plan). I took my “vested” benefits and used an annuity premium estimator on a couple of annuity sales/insurer websites to get a value.
This assumes I don’t accrue any more benefits and that I start drawing on the annuity at 65. I provided my birth date (so they can estimate my longevity). The calculators did not share their assumptions, but two calculators both came up with estimates of ~$160,000.
That’s probably a conservative estimate of the value, as as these are quotes to sell me a fixed annuity (with a built in assumption of profit for the seller of the annuity).
One thing to note is that the current value of these type of annuities goes up when rates go down (because the “discount rate” is related to what the issuer can earn on the premium you pay upfront and from which they pay you back in the future). So, this figure went up a lot from last year probably because I accrued more benefits by working another year and rates came down some.
To sum that up, we’ve got $600,000 (stonks and bills) + $200,000 (RE equity) + $160,000 (deferred comp). So, my 12/31/24 guesstimate of my net worth is $960,000.
Increase from Last Estimate (2022)
It looks like I didn’t do a total net worth calculation or post for 2023. So, we will have to compare against 2022.
At the end of 2022, I estimated my total net worth to be $708,000. This was comprised of $437,000 in investments, $160,000 in real estate equity, and $106,000 in deferred comp value. So we’re up $163,000 in investments, $40,000 in real estate equity, and $54,000 in deferred comp value. That’s a total increase of about $250,000.
I think that seems reasonable and encouraging. The real estate equity really increased a lot from 2022, but that seems pretty consistent with the overall real estate market. The deferred compensation change is pretty large but that includes two more years of earnings (with salary increases), two fewer years to discount the future value, and (I think) some interest rate moves that increased the discounted present value.
The investments figure is the balance I have the highest degree of confidence in. The compounded growth to go from $437K to $600K over two years is about 17%. That includes contributions though, so it’s nothing amazing (heck SPY has done better than 20%).
I think it’s an example of compounding starting to kick in. If I earn 10% on my $600K in 2025, that’s $60,000 (hang with my high level mathematics if you’re able). If I’m able to get back to my automatic $3K per month in savings that’s an additional (almost) $100,000 without anything really remarkable happening.
As I recall, the total net worth figure didn’t move up much from 2020 through 2022 with the impact of higher rates on my deferred compensation estimate and some other changes. So it is nice to see some positive movement! I guess I’ll just keep swimming.
I think my next post will either be a Munger-inspired (I think based on a misquote of him on Twitter) strategy that I’m trying out in yet another account. It basically involves buying “great” businesses when they’re cross above a long term moving average trend line (meaning you’re likely buying a likely enduring franchise after a period of negative sentiment/momentum with a chance that it is turning). I recently bought some Starbucks under this strategy.
Or I might post about a couple of special situations I’m invested in: $LBRDA or $MODG or maybe something else. I bought $LBRDA near the bottom. But I didn’t buy nearly enough. I also didn’t sell at $100. I’ve been scaling into $MODG as well. I’ve also been kicking the tires on $TD lately. Might be a good home for my remaining $WFC investments if its gets around tangible book (now that Wells is @ like 2 times; that worked out just fine).
If you have a preference, let me know in the comments or on social media (I’m on Twitter and Blue sky).
Thanks for reading!