Thanks to the stock market’s continued upward trajectory, I eclipsed the elusive $300,000 net worth mark today! I am proud of this achievement at age 27 with less than five years in the working world with my “career” job.
My favorite fact about this is that my gross earnings have only been in the $340,000-$350,000 range over this nearly five-year span for an average around $72,000 per year. Deducting income taxes at 25% average leaves around $260,000 net income; so my net worth today exceeds my total amount of net income received by a healthy margin!
This is a testament to the power of frugality. I have employed savings rates during the span between the upper 60% to low 80% of my net income by keeping my lifestyle similar to my college lifestyle despite my newfound earnings.
Another key contributor to this accomplishment is timing. I started my career in July 2008 when the Dow Jones industrial average had just fallen below the 14,000 high mark it established that year. The stock market was a turbulent roller coaster downward over the next six months dropping into the 6,000’s. There have been few occasions more opportune to begin saving and investing as I’ve been socking away money consistently into various investment instruments over the past five years including 401(k), Roth IRA, Vanguard index funds, and individual stocks as the market has more than doubled in this short duration.
Looking forward I am leery of the exuberance and helium in the stock market, and will look to allocate my investments accordingly. But, I am thrilled with where I’m at today. Even better, my net worth snowball will continue to gain faster and faster as compounding will have more impact on my portfolio and the appreciation aspect of my net worth catches up to the amount of funds I’m contributing.