Despite market losses, we’re up over $150k in 2015

Published January 13, 2016   Posted in How to Save

In the beginning of 2015, things were humming along normally. The market was doing well, just like it had been since 2012. We were enjoying solid monthly increases to our net worth on the order of $15k to $30k some months.

How we saved $150,000 even in a bad economyWe were set to retire by the end of 2016, thinking that we’d have more than enough invested green if everything continued as it has been.

Then, September happened.

The mini-crash of September, 2015 ushered in the start of what some expected to be a “recession”. Most believed the market to be overvalued and due for a correction. Oil is tanking. Stocks are volatile, at best. All in all, market conditions are looking, well, interesting.

We lost $10s of thousands of dollars in earning potential over the last 5 months of 2015. Checking my Vanguard account, our capital gains had all been wiped clean. Instead, Vanguard showed a -1.2% rate of return for 2015. Boo!

Vanguard screen shot of 2015 performance

Note: Vanguard does not hold 100% of our investments, but does represent the trend of our money well

But we still ended up over $150,000 richer in 2015 ($154,132 to be exact). With such a poor market in the latter half of 2015, how did we throw another $150Gs into our investments?

The power of contributions

We dumped as much money as we possibly could into our investments over the year, averaging around 70% savings rate from month to month. Both my wife and I work full time and make respectable salaries. We have no kids. We have lots of room to save.

And save we did. In fact, we save 100% of my wife’s salary and a portion of mine beyond our living expenses.

Even though our market returns over the year were slightly negative, we still managed to pack a solid wad of cash on to our net worth through meticulous (and automatic) contributions into our retirement accounts. We don’t have to think about it – through automated systems, the money gets saved where we want it.

And that’s the key – make saving automatic! That means we never see the money that we intend to save, and therefore, we are never tempted to spend it.

Both my wife and I maxed out our 401ks. We dumped anything extra into a Vanguard brokerage account. We also have an Ally savings account where we keep our emergency fund as well as money that will eventually go towards the purchase of our truck and Airstream.

We also made uncomfortable decisions that prioritized our future retirement over our current selves, like:

  • Nixing our expensive cable television package
  • Downgrading my cell phone to the cheapest Android device available
  • Cooking at home almost every night rather than going out
  • Saying “no” to restaurant or vacation invitations
  • Generally not buying shit that we don’t truly need
  • Craigslisting stuff that we haven’t used in over a year
  • Selling our Honda Ridgeline

In the end, although it was a rough negative growth year, saving as much cash as possible remains to be the most effective way to increase your net worth. We are proof of that!

Check out our monthly net worth progress in 2015

  • December 2015$718,627.95
  • November 2015$717,730.58
  • October 2015$709,750.69
  • September 2015: $691,177.31
  • August 2015: $676,489.00
  • July 2015$685,012.22
  • June 2015$671,637.00
  • May 2015$671,460.66
  • April 2015$604,683.22
  • March 2015: $594,485.48
  • February 2015$598,295.21
  • January 2015$564,495

How did you do in 2015? Did you manage to squeak out some capitals gains growth in the volatile latter half of 2015? 

We track our net worth using Personal Capital


28 responses to “Despite market losses, we’re up over $150k in 2015”

  1. This is awesome Steve – first of all, congrats!

    Secondly, I couldn’t agree more, even as a novice investor. I actually have a pretty interesting (and totally unintentional) experiment going on with my investments right now, thanks to the way Canada structures their tax-advantaged savings accounts. One of them is much more beneficial from a tax perspective for me right now, so since I invested with a robo-advisor in August (great timing, I know!) I’ve kept up monthly contributions to one account, and not contributed anything to the other.

    Even just based on the graphs – not to mention the average rate of return – I’ve stumbled into a perfect example of the benefit of contributing regularly and as much as you can, and a great example of dollar cost averaging in action. Actually, it makes me think I should share the graphs as part of a post sometime! (They’re starkly different, haha, and one looks way less stressful than the other!)

    • Steve says:

      Amen to that, Des! And yeah, definitely show any graphs that you are comfortable with sharing. It’s actually kinda fun…in a strange kind of way. 🙂

  2. Nice job, you guys! I know you got some ignorant comments when you shared your story on BI, but you (and we!) are proof that you can raise your net worth quickly without one iota of market help if you’re just determined to save. I think our market gains for the year were like 0.04%, but we still boosted our net worth tons by saving every single month, no matter what, and socking away 100% of our bonuses (except the portion we loaned out — a different kind of investment which we do still count in our net worth since we “own” the principle). Here’s to more of the same in 2016!

    • Steve says:

      Thanks ONL – and congrats for at least not having a negative period of performance during 2015! It’s truly amazing how much we can amass when we just…save instead of spend. I think you guys also have us beat in the final number, too.

  3. Great post and attitude.

    I think that people seriously underestimate the power of contributions. Very few people make it to a million without significant contributions. If you’re one of the lucky few who can turn $100k into a million in a decade, good for you. I want your secret recipe (unless it’s insider trading, then I don’t).
    We’re just starting this process and contributions added roughly 40-50% to our net worth this year. I can’t make returns like that in the market.

    The fall swoon is similar in many ways to what’s happening right now. Everybody (mainstream and financial media) are all running around screaming the sky is falling and you better stock up on canned goods and toilet paper. I’m thinking, “Hmm…5% off is alright but I would prefer 30-40% off.” The only limit in down that I want to see is me keeping my current job or better. As long as my wife and I are employed, we’ll have significant cash to invest.

    Dollar cost averaging and deferred taxes are a powerful thing!

    • Steve says:

      Agreed, they are a powerful thing! And adding 50% to your net worth in a year’s time is absolutely awesome. Most people don’t do that in 10 years, much less a single year.

  4. As usual, I commend you guys! Another solid example of how possible this whole thing actually is. We can’t put in nearly that much every year, but that’s alright…. we’re inching up in our savings percentages and definitely seeing the difference in our savings despite the market.

    • Steve says:

      Thanks Maggie. And inching up is definitely better than most people could say about their overall net worth movement, especially as of late with the volatile stock market. Good on you guys for making a positive contribution to your future!

  5. Awesome progress! I have to remind myself, it’s all about a long term strategy and funneling money into investments. Slowly and surely 🙂

    • Steve says:

      Yup, sometimes I need to remind myself of that as well. It’s easy to get down on the market when it’s acting so poorly. I keep telling myself that stocks are on sale right now. Cheaper buys!

  6. My gains in 2015 were due to contributions. And that’s A.O.K. There are years the equity markets will go down, be flat, and climb. We’re just lucky that historically they climb a lot more than they do the other two things.

    • Steve says:

      Yup, very, very true. And the market will climb again, eventually. Sometimes markets spend a couple of years down, but that only makes those gains that much more significant once it gets going again.

  7. Tawcan says:

    Our gains in 2015 are mostly from real estate and our savings. Investment went south but the new capital has allowed us to buy shares at a discount. I’m OK with that.

  8. Nice progress for the year, Steve! This showcases another benefit of having a high savings rate: except in an insanely volatile year, contributions to investment accounts are far more impactful than market returns. 2015 was still very much a positive year here thanks to continued contributions and some real estate appreciation.

    With my final paycheck rapidly approaching, I’ll be more subject to market volatility this year, but I’m still amused at all the panicking going on with the decline we’ve seen so far in 2016. In my mind, that’s just part of the ride. If the market collapses by 50% or more, I won’t exactly be thrilled, but I can flex down my spending, ramp up some side projects for additional income, and wait it out.

    • Steve says:

      I agree that contributions are generally more impactful than market gains, at least over a year’s time. And those contributions set you up for longer term gains after you’re through contributing, which makes the deal that much sweeter.

      You have the right attitude about adjusting your spending and just generally be flexible. We are right there with you, especially as our retirement dates from full time work loom in the near future.

  9. John says:

    With your high savings rate, it really works to your long term advantage that the market has been flat. We invested all throughout the “lost decade” of the 2000’s. It was anything but a lost decade if you KEPT INVESTING. We bought a lot more shares at low(er) prices that grew rapidly when the market started to recover in 2009. Enjoy your time buying shares at favorable prices!

    Great job and thanks for sharing.


    • Steve says:

      You’re spot on, John. If you keep investing even though the market is down, you’re buying into the market when prices are low(er). Buy low, sell high – basic, yet strangely uncommon with some people.

  10. It seems that your hard work is definitely paying off. I just started tracking my net worth but I can say for sure that it has increased exponentially this year because my income was much higher than usual. Unfortunately like many others the little market hit at the end of the year didn’t help my portfolio of stocks.

    • Steve says:

      Thanks FF. Yeah, the end of 2015 definitely didn’t help us, either, but it’s always nice to see a climbing net worth, even if it has to come at the hands of pure contributions rather than market gains. You’re buying into the market low, and you’ll be smiling from ear to ear once it picks back up again. Count on it! 🙂

  11. I didn’t realize the raw power of savings until hearing stories like this on other blogs and now on yours. I’m sure at points it could be slightly frustrating working the whole year and only being up a little, but I have to keep reminding myself that those years are discount buys!

    I can’t wait to see what your adventure in your Airstream looks like since we’re thinking the same thing in the future.

    • Steve says:

      Thanks Seeking Saturdays! We are eager to get into that lifestyle and start reporting on it, believe me. It’ll be very much a learning process for us, and our goal is to describe it in such a way where it doesn’t just sound like one big vacation, cause we know it won’t be! 🙂

  12. We did okay. The rate of return was slightly negative at -1.3%, but I think we were pretty “lucky” at timing the market (maybe “strategic” is a better word).

    I sold a small five figure position at $36 per share in the spring to pay off the rest of our small mortgage balance. The mortgage interest rate was only 1.99%, but I figured it only had 2 years left on the amortization so I might as well sell and pay it off. In hindsight, it was a genius move because the ETF I sold barely went above $36 after that, and it’s sitting at $30 right now.

    Then I bought about $20k of ETFs during the August 24 2015 flash crash (instant 25%-30% profit). 99% luck in that I happened to be in front of a computer with my portfolio tracker up on the screen at exactly 9:30 AM. 1% genius that I recognized what was happening and put in as many orders as I could cover with cash on hand.

    In the last quarter of 2015 I maxed our IRAs and put a big chunk into my solo 401k. I didn’t quite hit the bottom (which would be Aug 24 or yesterday) but got in relatively cheap for 2015.

    My goal during retirement is to try to sell stuff and raise cash when things are going up and looking very positive and buy stuff when it’s rocky and stuff is crashing (if we have extra cash on hand). I didn’t execute perfectly in 2015 but my trial run of gut-based market timing got the directions correct (buy when low, sell when high).

    But like you, I’m more of a fan of automatic continuous routine investments, and that’s how we did it when we were working. Much easier and less stressful to do that. 🙂

    Congrats on the huge up year in 2015, and here’s to hoping the market stays low in 2016 for you so you can buy cheap (then retire into an up market).

    • Steve says:

      Truth! We accidentally timed the market okay with a couple of our “out of cycle investments”, but honestly, it was a lot more luck than it was skill. For the most part we just let our automatic processes do the heavy lifting of making sure our money gets meticulously invested every pay period.

      So far, it’s looking interesting for 2016. Lots of low-cost buying opportunities for sure. Hopefully we accidentally time our retirement for when the market finally starts to consistently tick upwards. 🙂

  13. You guys are rocking! You’ve positioned yourself to leverage your earnings and make them work for you – in spite of the downturn. But you didn’t stop there. You cut expenses where could, picked up a side hustle or two, and started a successful blog.


    • Steve says:

      Thanks Laura, appreciate the kind words. I’m certainly not the only one making progress, though – we are all in this together, slowly but surely accomplishing our financial goals. 🙂

  14. Very cool you guys saved 100% of your wife’s income! Saving one spouses income is always a great strategy but I highly recommend. I often forget how much I save in my solo 401k and SEP IRA bc it all seems like funny money until 60.

    My savings plan is on the afterburners now as I Think things will be ugly for the next several years. The good times are over and it’s back to the salt mines!


    • Steve says:

      Ha! Yeah, it’s going to be interesting over the next couple of years with how the markets treat our investment stash and our looming retirement. I am hopeful that 2016 will be the worst of it and we’ll jettison ourselves into retirement as the market comes back to life. Hopeful. 🙂

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