I have always been interested in saving money as a young kid and I had a savings account growing up. After I graduated from college, I moved to Boston, MA and started working in the mutual fund industry where I combined my savings skills with mutual fund investing. I remember my first mutual fund purchase was the Scudder Global Fund in the late eighties. I later ended up working for Scudder funds and started to form my early investment plan which was to save as much for retirement in my 401(k) as I could afford.
My wife and I married in 1994 with a couple of thousands dollars in cash and about $26K in my 401(k) plan. This is how we started out and we worked together to set some goals for our investing. We started tracking our net worth for the first time in June 1999 and we had a net worth of $264,751. I then started tracking our net worth twice a year at the end of June and December using an Excel spreadsheet.
These days I enter our net worth each month on NetworthIQ. This is a great site to see how you compare to your peers and you can tell as little or as much about yourself as you like. You can compare your net worth to others by income, age, state and many others factors. Tracking ones net worth each month might be a little too much but it is fun to see how it has changed from the previous month. You can take a look at our net worth graph to see how we are doing.
I now have a more formal plan to determine how much we will need at retirement which I update at the end of each year. I currently use the Retirement Planner on Bloomberg to give me an idea of what I need to save each year and how much I will need to have at retirement age. I am on track to retire at age 61 with $2M in retirement assets including mutual funds and stocks. I assume a rate of return of 8% for before and during retirement as well contributing 20% of our income each year and 3% salary increases.
One of my additional goals is to have $40,000 in income from my dividend stocks in my taxable account at retirement. I started building a dividend portfolio using different investing styles several years ago to create extra income. I now have a solid portfolio of dividend stocks that provides over $9,900 a year in income which I will grown to provide extra income in retirement.
One of my favorite expressions about investing is that retirement investing is an experiment that we each will take on and we will only know the final results when we reach retirement. So let's hope this dividend investment experiment works out well. And remember, it's hard to achieve your goals without a solid plan of action in place.
4 comments:
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I am most impressed at your whole approach to this. I can't tell you how helpful it is for me to read this log of your investing and your net worth status over time. Thank you for telling all the details. Seeing the whole picture is the only way one can get a handle on where you are coming from and what you are doing. I made decent money but never watched over it... always left that to others, and it was neglected. The 2008 slide woke me up. Now I am trying to learn, with only shards of my retirement fund left. And I'm 63! I have learned the hard way Proverbs 27:23 "Know well the condition of your flocks, and pay attention to your herds; for riches are not forever"
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