We Did It!

That’s right. We officially added another comma to our net worth at the end of February. Though how long we are going to stay there is another story, this is the moment we want to celebrate.

As you know, I have stoppped posting monthly update early last year. The main reason for not sharing all the details is that it’s kind of boring to cut and past an article every month with only slight changes in the number. So in stead I choose to post an update on an annual basis or when a milestone is reached. But I still keep my spreadsheet and do the calculation on the last day of the month to check the progress toward our goal, which in the near term is to reach the $1,000,000 mark. Early this year, when I did my 2010 year-in review, which was the last time I posted an update of our net worth (no exact number though), we were quite close. At that time, I thought we would be lucky if the breakthrough comes before the tax deadline as we expected to owe some taxes. Fortunately, the stock markets were quite cooperatives in the past two months (it could have been better had the heavy selling not occurred last week) and we ended February with less than $10,000 above the magic number, not even including changes in our pockets Of course, the number doesn’t mean as much now than we first started 10 years ago and will likely mean even less 10 years from now when we hope to add at least another $1M, but it’s still a milestone that we are happy to reach.

When I first came to this country as a student in 1997, I had $150 in my pocket which I exchanged using my savings after having to ask my parents to pay for the fee that my employer in China charged me to let me go. Then I borrowed $500 from my friend before the school year began to open a bank account and everything started from there.

• After four years in school, I got my degree and started to work with a nice salary. But the burst of the dot com bubble didn’t treat me well and I lost my job in early 2002.
• The following few years were pretty tough for the telecom industry in which both of us were employed, but some time in 2005, our net worth reach the first milestone of $250,000 (I didn’t start monthly tracking until 2006).
• Things started to get better in 2005 and two years later we reached another milestone. In early May 2007, I declared that we were half-millionaire.  But it did take us nearly 10 years to go from nothing to $500,000.
• In October 2007, our net worth reached another all time high. But just as we were happy with how things were going, the recession started and our net worth took a big hit. At the end of February 2009, it reached the low point since December 2006.
• As now we look back, we know the stock markets bottomed in early March 2009, so did our net worth. From there, a rather speedy recovery occurred. In July 2009, we surpassed our previous peak, nearly tow years after reaching it.
• In October 2009, we reached our third milestone, though it was largely unnoticed, with the help of a large check from selling our townhouse in New Jersey. That money, however, was earmarked for our next house dowanpayment.
• We were very close to the $1M mark at the end of March 2010 before taking out nearly 20% of all we had for the downpayment of our current house in April 2010. That caused a deep drop once again, but we weren’t concerned because the money wasn’t *lost*, it was just not included in the calculation.
• Three months short of four years, we doubled what we had in May 2007 and finally broke through $1,000,000.

So how we did it? The answer is the stock markets because we have more than 90% of what we have invested in stocks, in various accounts like brokerage, IRA, 401(K) and 529 accounts. Through the good times and bad, we make investing a priority on our spending list by paying ourselves first and never bailed out, even when the markets tanked. As long as we have jobs, we always contribute regularly to our investment accounts. Sure, it was a pain to see our number shrink by nearly 50% between November 2008 and February 2009, but if we hadn’t kept adding new money throughout the downturn, we wouldn’t have had the strong recovery since March 2009. And without the gains in the stock markets, we wouldn’t be at where we are today for sure

Related posts:

1. A Half-Millionaire?
2. February 2008 Score Card — Part I: Net Worth
3. March 2007 Score Card — Part I: Net Worth
4. December 2009 Score Card — Part I: Net Worth
5. March 2010 Score Card — Part I: Net Worth

Original Post on The Sun’s Financial Diary

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We Did It!

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