A while back the Money Blog Network asked other bloggers to share what their finances were like 10 years ago. I’d forgotten about this group project until I read one at Can I Get Rich On A Salary who did an amazing job of improving his finances over $1 million in 10 years!
Photo by fabiola via Flickr
10 years ago was June 1998. I was 24 years old and single. I was working the graveyard shift as a graphic design department supervisor. My grasp on personal finance concepts was poor at best. I didn’t keep track of my net worth. Although, I do remember that I’d just paid off my student loan and car loan. I also remember that I helped my parents paid off about $10,000 in credit card debt (I was living in their apartment, so that was the least I could do for them).
As far as investing, I didn’t have my 401k yet because I was still a contract worker. I just started a traditional IRA account a year earlier with Charles Schwab — there was no Roth IRA back then. I was terrible at investing. For example, I only managed to break even on the years that S&P500 gained 32% (1997) and 29% (1998). The only account that was making some money was a small account with Dean Witter (full service brokerage firm) where I held some shares of Staples and a Dogs of the Dow fund.
About this time in 1998, my parents were encouraging me to buy a house. That was a really good thing because average price for a single family home was only $200,000 back then. Luckily, we did decide on a house and bought it at a low low price of $185,000.
10 years later, I am now 34 years old, married, has a 6 months old baby boy, and working as an IT operation manager. In addition to my full-time job, I also own several web businesses that are projected to earn about 15% of my salary this year.
I am also much better at money management and investing. I have solid financial goals and keep track of my net worth on a monthly basis. My net worth is approximately $765,000. This includes a $630,000 house (yes, it more than tripled in price), $132,000 mortgage, and $244,000 in various type of accounts.
As far as investing goes, I’ve managed to beat the S&P 500 for the past 6 of 7 years. I no longer trade individual stocks and came to believe that the best way to invest for the long-term is to build a globally diversified investment portfolio using low cost, passively managed funds or ETFs, contribute to that portfolio regularly, and rebalance at least once a year.
It’s not a million dollar, but I came quite a long way during the last 10 years.
Some of you may be curious about how I improved my finances over the past 10 years. Luck was a big part of the equations, but here are some of the things that worked well for me:
Here are other articles in the series:
Please share your story and let us know how your finances was 10 years ago and what it is like now.