Finally, a fun title, right? Labor day has just ended and I am writing this article, as I have recently updated my portfolio and just smiled at what has occurred. As the community may remember, I have been writing about my new strategies that I have put in place on my portfolio, and the results are quite pleasing. This article, I am hoping, will show you the actual impact on my portfolio from the actions I have taken and to also share my progress towards financial freedom. Remember – I am trying to keep as much money in our pocket from our income, to maximize the amount of assets we can buy, to decrease this thing called “time” that we are counting down towards financial freedom!
Hopping on the Skyrocket
My portfolio has skyrocketed to new levels in the last two months. How is that possible? One or two (maybe more?) of you may ask that question. I also may be too excited seeing my portfolio grow without even thinking about it. It is very, very simple, however, why my portfolio has hopped on the skyrocket. Remember those tax maximization strategies that I had talked about? Well, it turns out that it is ultra fuel to pump your portfolio to untouched levels and it also has provided a consistent, stabilization means to increasing my dividend income.
I will paint you two pictures to illustrate the time period of the strategy results, thus far. The first time period is my portfolio as of June 30, 2016 and the other being today, September 5th, 2016. Therefore, the time is approximately 1.5 full months (as it took 0.50 months, which equates to 3 contribution rounds) of doing these three items:
1.) Maximizing my 401(k) – Pre-tax
2.) Maximizing my Health Savings Account (HSA, also pre-tax)
3.) Additional contribution to Traditional IRA (pre-tax)
The portfolio figures as of June 30, 2016: Portfolio value of $197,869 with Projected Dividend Income of $7,153.
The portfolio figures as of September 5, 2016: Portfolio value of $212,534 with Projected dividend Income of $7,421.
What did this even tell me?!
Those metrics above break down to a few items. My portfolio has increased by $14,700 with an additional $270 in income over that span. These are not phenomenal numbers, but this has been from full automation. My paychecks are hilarious. Since I wasn’t maximizing the 401 (k) through mid-July (that’s 6.5 months!), I have had to catch up, which means I have over $2,900 per month going into there. This is the same situation in regards to the HSA, which has almost $520 going in there per month. The odd part is, since this is all pre-tax contributions, I actually am still able to save money and gear up for other investments in my personal IRA and/or the taxable investment account. Given that not too many investments have become/shown favorable metrics, the consistent contributions from my paycheck in the 401 (k) and the HSA, still have fueled my ownership of shares, which equates to income. Automation has been so wonderful, and knowing that no matter what the market is doing, the automated machine is working for me in Vanguard’s Institutional Index Fund (VINIX) and Vanguard’s Total Market Index Fund (VTSMX) diversifying the investment for me as well.
This has taken another important element out of the equation with the automation – emotion, which is not to mention me trying to “time” the market – if you remember my article on why I definitely don’t try to time that. This has been exhilarating and quite exciting to see, and gives me actually something to look forward to every 15 days. What is that? Consistent investing into more shares that produce income, which will in turn buy more shares that produces even more income. The market has increased in the last 60 days, a little over 4%. Why do I state that here? Because one cannot time the market! Therefore, I am still not purchasing investments at it’s peak, but I have taken the emotion out of guessing when/where that is.
How i’m able to skyrocket
Looking back, though, I am very lucky I have the options to maximize these accounts and invest so, so much to build this skyrocket. I see how I am able to – I am lucky to make the moderate income that I do as a CPA. I also do other things to an almost extreme level. What is that? One word. Save. I save like crazy. I try to make every dollar count, whenever I can – not only on spending & saving, but on maximizing the benefit I am receiving when I am in my frugal state of mind. Bert has showed us ways to make saving a part of your daily routine, as well as fun ways to make money & save while traveling. It all counts and matters. When my contributions are going up to enable the portfolio to skyrocket, it doesn’t hurt my monthly experiences due to the power/ability of saving. I am thankful that I have these easy habits etched and also live in an area of Ohio that isn’t too costly.
This skyrocket is fueled. It is fueled from saving, hard work, automation and taking the emotion out. I am so lucky. The impact, thus far, has been real and I cannot wait for September dividends to come rolling in. Excited to see what VINIX and VTSMX provide this quarter, and the shares it will reinvest into. Stay tuned for that post to come up, I have a feeling that my September dividend income will skyrocket, as well : ) Please share your thoughts, feelings, suggestions and comments below, I truly appreciate the stop by!
-Lanny