Email from a reader: Your retirement account grew by $120,000 in 2015? Bull!

Email from a reader: Your retirement account grew by $120,000 in 2015? Bull!

I received an email from a reader who expressed disbelief that my investments grew by a whopping $120k this year - and the year isn't even over yet.

Email from a reader: Your retirement account grew by $120,000 in 2015?  Bull!

    I received an email a couple weeks ago from a reader who expressed disbelief that my "retirement account" (read: investments) grew by a whopping $120k this year - and the year isn't even over, yet. I love this email.  It gives me the opportunity to point out how powerful a high savings rate can be to your net worth.

    The exact email:

    It is not believable that your retirement account grew by $120,000 so far in 2015.

    If you take a look at our net worth numbers over on the right hand side of the page, it's true.  We started the year at $514,495.43.  At the end of last month, we were at a pleasant $641,177.31, which represents a growth of $126.681.88.

    Note: At the beginning of the year, we inadvertently missed one of our financial accounts that had around $10k in it that we found in may, so technically, our beginning balance was probably around $524k, bringing our growth down to $116,000.

    Either way, not too bad.  Adding around $120k to our portfolio in 10 month's time would set nearly anyone up for early retirement in short order, and believe it or not, it's just not that tough to do.

    To address the disbeliever's email, how could anyone increase their "retirement account" by that much? Am I just full of shit instead?  Well, I certainly don't think so...though possible!

    Savings vault

    It works through the magic of saving, my friends. Our net worth did not grow $120k based solely on stock market growth alone.  Our net worth grew due to a combination of market growth and an aggressive savings rate.  Truthfully, it was more the saving than the growth.

    Look back through our published budgets.  We save around 70% of our income every month. Both my wife and I work and bring home two salaries.  We have no kids.  We don't take expensive vacations.  We don't eat out a lot, and when we do, we order water to drink!

    We sold our Honda Ridgeline a few months ago.  I ride a motorcycle that gets 50 MPG.  I also completely eliminated my commute by finding a job that allows me to work 100% from home.

    We buy new clothes maybe once a year, if that.  We don't have expensive television service or unlimited cell phone plans - in fact, I use the most basic Android phone there is (the Android Core Prime).  We keep the house warm in the summer and cool in the winter, which keeps our bills low.

    We close windows to retain the heat and A/C inside the house.  We turn off lights when we're not using them.  I mean, pretty basic stuff.

    We also have no debt other than our mortgage, and that will be going away next year.

    To top it off, we eat better now than we ever have before.  We spend a few hundred a month buying some of the freshest vegetables around and make healthy, nutrient-packed dinners every night.  We can (and do!) eat until we're completely full and never gain a pound.  Our calories are high quality and thoroughly tasty.  We buy in bulk to save cash, freeze foods when necessary and keep the fridge stocked with just the foods that we plan to eat in the next couple days.

    My wife and I are happier and healthier than ever, and it hasn't taken a huge wad of cash to make all that happen. In fact, it doesn't take all that much at all.

    How can anyone increase their investment savings by $120,000 in 10 month's time and still live in the lap of luxury?  Believe it or not, it is not hard.  It happens by living sensibly and being mindful about the things that truly bring happiness into your life - and then saving the rest.  Two incomes help, but it's the saving itself that accounts the most for our ability to grow our net worth.

    And this year is not done yet.  I hope to flirt with the $140k mark by year's end.

    Exploding your net worth is possible through a combination of controlling expenses and saving as much as possible. Neither my wife or I feel like we are depriving ourselves of anything. The fact is we have everything that we could possibly imagine.  In truth, we have more than we need, including our home.

    And we are just two 30-somethings living in the desert southwest with a goal of early retirement. If we can pull this off, anyone can.  Your growth rate might be different, but it doesn't matter.  This isn't a race.

    Remember, we don't have a money goal for retirement.  Instead, my wife and I are fully prepared to design our lifestyle around our financial picture at that point in time by streamlining our expenses to meet our investment portfolio's limits.

    We have a date goal - as you can see on the upper right of every page of this blog. December of 2016 is the date that we will begin our journey into our next life. I will be 35. My wife will be 32. And we will both be happier than ever.

    Does anyone call B.S. on your position in life?


    Steve Adcock

    774 posts

    Steves a 38-year-old early retiree who writes about the intersection of happiness and financial independence.