Looking Back: My Finances 10 Years Ago

By Pinyo, on June 16, 2008

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!

My Finances 10 Years Ago

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.

My Finances Now

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.

How I Got Here

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:

• Marry a good spouse – Believe it or not, this factor alone could make or break your finances and more…
• Supportive family – Once I bought the house, my parents moved in with me (this is typical for a Thai family). This living arrangement is not for everyone, but it certainly helped me. Since my parents pay for almost all of the food expenses, this allowed me to save more money over the years.
• Learn about better money management – Building wealth is a desire for me, so I’ve spent quite a bit of time learning about various aspects of personal finance, investing, and money management. Knowledge is power.
• Bought a house at the right time – Buying a house is not always the right financial decision. However, I was lucky enough to buy my house before the price sky-rocketed. Now, the house is the bulk of my wealth.
• Save Money Automatically — I have been contributing the maximum amounts to my IRA since 1997 and 401k since 1999.
• Living Frugally – My mortgage and retirement savings make up about 70% of my net income. This forced me to live well below my means, and helped my finances tremendously.

Here are other articles in the series:

• Wise Bread: Money management lessons: Not quite 10 years to life
• No Credit Needed: Looking back 10 years ago
• Mighty Bargain Hunter: My finances ten years back
• Five Cent Nickel: Stepping back in time: Our life ten years ago
• Free Money Finance: My finances 10 years ago and now
• All Financial Matters: Then and now: What our finances looked like 10 years ago compared to now
• Consumerism Commentary: Looking back: The difference 9 years makes
• Get Rich Slowly: Now and Then: How My Current Financial Situation Compares With A Decade Ago
• Blunt Money: What A Contrast
• Blueprint for Financial Prosperity: My Personal Finances Ten Years Ago
• Personal Finance Analyst: My Ten Year Financial Retrospective
• Blogging Away Debt: The 10th Anniversary Of Our Windfall

Please share your story and let us know how your finances was 10 years ago and what it is like now.

Photo by fabiola via flickr

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

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