The Value of My Retirement Portfolio

Portfolio ValueDuring the course of writing my book and running this blog, I have occasionally asked the question of myself, “How much personal information should I share with readers?”

During early drafts of my book, I spoke a little about the period preceding my divorce, but not in detail.

A friend – that was aware of some of the steps I had taken in the face of financial difficulties – read an early draft and suggested I include more personal information as a way to engage readers a little more.

Similar to early drafts of my book, during the course of running this site I haven’t really delved too deeply into personal information. However, that changes a little bit today. As you can see below, I am sharing the value of my – and wife’s – retirement portfolio. Why? There are basically three reasons I feel sharing this information is a good idea at this time.

First, legitimacy. By legitimacy I  am referring to the idea an individual that is writing about personal finance and retirement planning should be able to offer readers some insight into their own financial lives; some sort of ‘proof’ so to speak. Short of posting copies of my various annual statements, I figured this is a good way to share. Interestingly, when I was writing the book, a co-worker asked why should people trust me, what credentials do I have?

As I note in the book, I will say again, I do not possess (or desire) any finance related credentials. While I took some finance related classes during the pursuit of my undergraduate degree and MBA, most of my personal finance education is a result of reading books, newspapers, magazines, websites, my own experiences, and talking with some savvy friends.

Second, related to the fact that I do not have any credentials, is the idea that I truly believe most people are capable of developing and executing a savings/investment plan without being, or hiring, a professional. The book and this site are the results of that belief. I feel compelled to share with people what I know to be true.

Third, while I know my portfolio has grown every year, I did not recall the value at the end of some of the early years. I took some time to go back and review old statements and account information online (2001 and every two years thereafter), did the math, and got totals for those years. Until now I have never looked at the growth of my portfolio in the form of a line chart. It certainly is interesting to see it in this way.

Update: As of August 2014

Portfolio Value - August 2014

Some notes and recognition of key activities:

  • This is an illustration of my retirement portfolio which is comprised of savings and investment accounts, the largest of which are the TSP (401k) and IRA accounts for me and my wife
  • 2000 – The year my first wife and I separated and the recognition that I needed to get my sh** together; get financially savvy. Balance = $0
  • 2001 – My divorce was finalized and I started contributing to my Roth IRA
  • 2003 – I started contributing to my uniformed (active duty) TSP account
  • 2005 – Retired from active duty and started contributing to my civilian (federal employee) TSP account
  • 2007 – My wife, then girlfriend, started contributing to her Roth IRA
  • 2008 – Remarried.  My new wife had $41,067.42 in her TSP account the day we were married.  As you can deduce from the chart, I had ~ $60,000 in savings/investment accounts
  • These numbers do not include our primary residence, or our rental property (equity in both); our vehicles (both paid for); credit card debt (minimal); or pensions. This is strictly a look at the money that will be the source of our retirement portfolio income.

How confident are you in your ability to develop a retirement plan, execute it, and ultimately conduct long-term management of your retirement portfolio?

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7 comments on “The Value of My Retirement Portfolio
  1. I’m also hesitant to put the specifics of my financial situation out there for the world to see, but I enjoy being able to peer into the finances of others! I think your third reason for doing this is a valuable one. It made me think I might want to go back and look at how my retirement savings have grown over time as well. I do have one question (I apologize if you have answered this already elsewhere) but in about how many years do you anticipate retiring?

    • SavvyJames says:

      No doubt that you have to be careful about how much you share. My wife was a little surprised, but supportive, that I was willing to share that information. However, I think the people you are trying to reach should be able have a minimum level of confidence that you practice what you preach and get a peek at the results of those practices.

      Another reason I shared – even though I don’t address it in the post – is because my experience has been that we don’t talk enough about our finances. Finances (particularly things like salary and net worth) is one of those topics people tend to avoid; and too many people are pretending that things are alright, when in fact, either they aren’t or they could be a whole lot better. I truly believe one of the smartest things I did 14 years ago was open up to a couple friends and acknowledge that I had no idea where to start. Thanks to some sound advice and encouragement, I got my act together. Now, that is not to suggest that you should lay all your cards on the table 15 minutes after meeting someone, but I would suggest that a lot of people would be better served by acknowledging their financial literacy is lacking, talk to trusted friends/family and take advantage of all of the free resources at their disposal.

      With regards to the last question, I plan to retire in 13 years.

  2. Karen says:

    WOW, you are brazen to put your information out there like that, but I do understand the reasoning behind it. People should not be ashamed of what they have, and if talking about it makes people better understand the concept of time and compound, then put it out there.

    • SavvyJames says:

      Really not that brazen. At the end of the day, as you note, it should help people understand the impact that time and compound interest can have on money. While some people will get caught up in the numbers on the y-axis — some might think it is quite a bit, while it might strike others as quite average — I’m hopeful that people just put the numbers out of their heads for a moment and simply consider the slope of the line. That is compound interest working.

  3. Al says:

    James,
    Thank you so much for your post and the sharing of your personal information. I’m not exactly money savvy but your post are definitely educating me and guiding my money sense in the right direction. Thanks again for all your help.

    • SavvyJames says:

      Thanks for taking the time to stop by, Al. I’m glad you are finding some value in the site and improving your financial literacy. With regards to this post in particular, while the number at the top of the y-axis will likely get the attention of a lot of people, at least on initial viewing of the chart, the feedback that I have received so far indicates that most people are ultimately more focused on the slope of the line, which is where the focus should be. As I often like to tell people, building wealth is kind of like rolling a snow ball for a snowman. It starts out small but as the surface area grows, it attracts more snow and begins to grow larger, faster. Similarly, it takes a little time to see growth in a portfolio; however, as it grows larger, money attracts more money (compound interest) and you start to see exponential growth…right about 2009 in the chart.

  4. SavvyJames says:

    A Google+ reader asks, “What’s the magic number? When do you stop?”

    My reply? My two magic numbers are a portfolio value of $2,235,000 – I’m currently ahead of pace, looking at about $3,000,000 – and an annual retirement income of $225,000.

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