Actual Investment Returns

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Nomad
Posts: 202
Joined: Wed May 16, 2018 5:23 pm
Location: UK

Actual Investment Returns

Post by Nomad » Tue Jul 23, 2019 4:46 pm

Being fairly impatient to quit work and identify as FI,
I have determined that the crucial variables are spending amount and percentage investment returns.
I am curious what percentage returns people have achieved in the real world for an extended time period with their investments?
Also, is this in growth mode or drawdown mode?

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unemployable
Posts: 479
Joined: Mon Jan 08, 2018 11:36 am
Location: Homeless

Re: Actual Investment Returns

Post by unemployable » Tue Jul 23, 2019 4:59 pm

Since quitting at the end of June 2010, my net worth is up almost exactly 40%.

That's nine years, so annualizing it, (1.4)^(1/9) = 3.81%.

My withdrawal rate has averaged in the high 4's/low 5's (it's lower now), and I've had a slight amount of 1099 income, so say 4.6%.

(1.0381)(1.046) = 8.59% annualized, say 8½.

Sources of portfolio drag include: tilt towards international stocks which have basically sucked; small allocation to TIPS in the early years which went nowhere; significant allocation to series I savings bonds, which serve as diversification and are inadvisable to sell for multiple reasons; active stock portfolio consists mostly of low-beta defensive stocks, which underperform in bull markets. Wasn't really set up for a full retirement portfolio back then, but excuses don't talk, money does.

Nomad
Posts: 202
Joined: Wed May 16, 2018 5:23 pm
Location: UK

Re: Actual Investment Returns

Post by Nomad » Tue Jul 23, 2019 5:29 pm

@unemployable
I put the years 2010-2019 into an online tool. Actually, for that period, the interest rate was only 17.5%, so you are comfortably up in real terms.
Does your net worth include property or is everything invested in stock markets?

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unemployable
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Re: Actual Investment Returns

Post by unemployable » Tue Jul 23, 2019 5:36 pm

Zero real property. I've gone from 12 years' living expenses to 25-28. My personal CPI has been slightly negative. The original plan was to take one summer off, but a favorable stock market combined with a long series of failed job interviews motivated me to get to 4% WR and below.

Nomad
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Joined: Wed May 16, 2018 5:23 pm
Location: UK

Re: Actual Investment Returns

Post by Nomad » Tue Jul 23, 2019 6:20 pm

That is quite a story, do you think the fact you took the Summer off was related to failing the job interviews? Do employers assume you are going to quit at the drop of a hat?

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unemployable
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Re: Actual Investment Returns

Post by unemployable » Tue Jul 23, 2019 6:25 pm

Well I can't read their minds and they won't tell you, but getting to the finalist stage of interviews was never the problem, by which point they should have been well aware. These were jobs paying 100k+, not like Wal-Mart.

classical_Liberal
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Re: Actual Investment Returns

Post by classical_Liberal » Tue Jul 23, 2019 6:33 pm

Sorry OP for a quick off topic.

@unemployable
It seems you have a very backstory, at least from a FI/financial/work standpoint. I would love to read it sometime.

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unemployable
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Location: Homeless

Re: Actual Investment Returns

Post by unemployable » Tue Jul 23, 2019 6:36 pm

I don't have a problem telling it at some point, but this isn't the right context.

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