Investing through the Next Decade

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Vanguard recently published a forecast with projections for returns for domestic and international stocks and bonds over the next decade.

Investing through the Next Decade www.thethreeyearexperiment.com

“The chances of a recession by the end of 2020 are mounting. And the prospects for the American stock market in the next decade have worsened appreciably,” writes Jeff Sommer in the New York Times. That’s a fun paragraph to read.

Vanguard would never make predictions about actual returns, but suggests it’s highly likely the US will have a recession by the end of the decade.

More interestingly, in my opinion, are the projections for securities.

Vanguard projects that US (domestic) stocks will return 3.9 percent annualized over the next ten years.  Continue reading “Investing through the Next Decade”

Can Optimism and Hope Increase Your Wealth?

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Is it possible to increase your net worth through optimism and hope? Last week, I was listening to this episode of the Australian All in the Mind podcast featuring American positive psychologist Martin Seligman, speaking on the power of positive psychology and optimism in changing our outcomes.

Can Optimism and Hope Increase Your Wealth? www.thethreeyearexperiment.com

One of the reasons I was drawn to this podcast was because Seligman is an academician. He’s interested in quantifiable research in neuroscience that psychologists can use to improve people’s outcomes, that is, their happiness levels. Seligman is the Director of the Penn Positive Psychology Center at the University of Pennsylvania and is widely known as the founder of positive psychology (here’s a TED talk he did from 2004).

In the podcast, Seligman shares how early on in his career, he realized that his colleagues were focused on the alleviation of misery and suffering, but he was interested in how to increase happiness: “I said, look, when you lie in bed at night you are generally not thinking about how to go from -8 to -5, you’re thinking about how to go from +3 to +6 in life. Psychologists have never worked on this, we’ve never worked on happiness, well-being, the stuff that is above zero.”

It became his mission to figure out how to teach optimism. Continue reading “Can Optimism and Hope Increase Your Wealth?”

June Net Worth Update

Hi! I missed you last week. First, we had a joint work conference for Mr. ThreeYear, then we spent one day loading the moving truck, then one day cleaning the house, two days traveling from New Hampshire to North Carolina, and one day prepping for our close. By the time you’re reading this, we’ll be homeowners once again, this time in North Carolina.

June Net Worth Update www.thethreeyearexperiment.com

I wanted to blog so much but it wasn’t happening.

I’ve never been so tired. Maybe after having the kids. Definitely after having the kids. But man, this is a close second. Moving is hard. Of course, we know it will be amazing once we get moved in and settled down, but for now, not knowing where my pjs are, or Mr. ThreeYear’s iPad, or pretty much anything, is disconcerting. Throw a mandatory joint work conference, an 8-year-old birthday party, and a graduate class with tons of work into the mix, and I was fried.

Charlotte sign www.thethreeyearexperiment.com
Seeing that sign after two full days in a car felt very good.

Also, yesterday, my sister thought she’d speed up my transition into North Carolina living, by taking me to a yoga class on someone’s back porch in 88 degree weather. Ten minutes into class, there was a puddle of sweat on my mat. And I think (ok, I know!) I belong in the beginner yoga class. These ladies were popping up into headstands on a dime. It’s a really good thing there’s no picture of that.

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Since we’ve achieved the latter goal, we’ll be primarily focused on the former in each of these reports going forward. Each month, I record our progress on our net worth and our spending. Last year, we increased our net worth by 32% over the year before. This year, we’re trying to increase it by more than 65% from where we started in December 2016. Given the wild ride the market’s likely to take us on this year, I’m not sure it’s doable. But we’re going to try.

This month’s net worth report will be a little strange. It will take into account the (massive) loss of equity in our net worth from the move. We paid for realtors’ fees, closing costs, repairs, the move itself, attorneys’ fees, hotel stays, eating out, and the other myriad costs to move. Was it worth it? 100%! We’re living our dream of location independence (very firmly in one location, but hey, that’s what we want). It is a little hard to write down in black and white, though. Continue reading “June Net Worth Update”

May Net Worth Update

We’re well into June now, and the end of school is almost here. Our school year ends Wednesday, and then we’ll be spending entire days packing and getting ready for our big move to North Carolina. The weather in New Hampshire has been beautiful–cool mornings and warm days, with lots of sunshine. This time of year always has the power to hypnotize you with its beauty and leave you wondering why you were ever complaining about the weather.

May Net Worth Update www.thethreeyearexperiment.com

On the home front, I’ve been finishing school work, packing, and doing graduate work (I have three courses more in my master’s program and I’m taking one in June and July). I’m so frayed that I’ve let all the non-important stuff go (you know, like dishes and laundry). Our house looks like we hosted a college frat party, minus all the empty bottles. We have all these random items in our corner, waiting for a yard sale, and there’s a dresser standing on its head in our entry, waiting for its Facebook buyer to come pick it up.

Mountain of moving boxes May Net Worth Update www.thethreeyearexperiment.com
The mountain of boxes in our basement.

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Each month, I record our progress on our net worth and our spending. Last year, we increased our net worth by 32% over the year before. This year, we’re trying to increase it by more than 65% from where we started in December 2016. Given the wild ride the market’s likely to take us on this year, I’m not sure it’s doable. But we’re going to try.

May showed us more steady growth. Much of our financial progress was on autopilot last month, as we found a buyer for our house and looked for places to live in our new town. We know that our net worth will take a big dip when we sell the house, so I’m enjoying these numbers while we can.

Continue reading “May Net Worth Update”

Will This Plan Give You More Money in Retirement?

I recently ran across a USA Today article called “How Not to Run Out of Money in Retirement.” In it, the author shares the details of a new retirement plan, the brainchild of an actuary who’s been studying retirement for three decades.

Will This Plan Give You More Money in Retirement? www.thethreeyearexperiment.com

It’s called the “Spend Safely in Retirement” plan, and the premise is simply that you wait until age 70 to claim Social Security and use the IRS’s required minimum distribution table to determine how much to take from savings each year. The Stanford Center on Longevity, working with the Society of Actuaries, published a study of hundreds of ways to create income in retirement, and this plan, one of the simplest, ended up being the most sound (surprise, simple things work well. Who knew?). Continue reading “Will This Plan Give You More Money in Retirement?”

The Boon of Investing Early

Mr. ThreeYear and I have made plenty of mistakes during our financial journey, but one thing we did right was to start investing early. That boon of investing money early has given us a much higher net worth than we would have otherwise had.

The Boon of Investing Early www.thethreeyearexperiment.com

The Early Years

I began to learn about investing in college. Unfortunately, I hadn’t yet learned about IRAs and didn’t save any of my job earnings. But, I did begin to learn about investing in individual stocks. This was around the time that Scottrade was founded, and my dad began to make individual stock investments. I did a very small amount of research and began to invest some of the money I had in individual stocks, which were mainly blue chips, or well-established companies that paid a higher dividend each year, like Coca-Cola, Johnson & Johnson, and energy companies. I began my portfolio with about $4000 and slowly added to it during college. I did minimal trading and practiced the buy and hold strategy.  Continue reading “The Boon of Investing Early”

March Net Worth Update

It’s raining right now, which is a small hint that Spring is making its way, slowly, to New England. The start of April signifies that we’ve entered the fourth month of the year and our experiment continues.

March Net Worth Update www.thethreeyearexperiment.com

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Each month, I record our progress on our net worth and our spending (gulp!). Last year, we increased our net worth by 32% over the year before! This year, we’re trying to increase it by more than 65% from where we started in December 2016. Given the wild ride the market’s likely to take us on this year, I’m not sure it’s doable. But we’re going to try.

March is always my least-favorite month of the year. The rest of the country is enjoying the first signs of Spring, and we’re still covered under snow. This year, March lived up to the adage, and came in like a lion, with storm after storm that buffeted us with snow and left the skies gray and damp. It went out like a lamb, with a few days at the tail end full of blue skies and (slightly warmer) temps. But April has brought wind storms, more cold weather, and a reminder that here in New England, there is no such thing as Spring.

Spring New England town church www.thethreeyearexperiment.com
A view of our small New England town from the library. This is what Spring looks like.

Continue reading “March Net Worth Update”

Building Wealth for Freedom

I’ve written a lot about getting out of debt. That was the first step for Mr. ThreeYear and me on our journey to financial and location independence.

Or maybe it wasn’t.

Fishing on the beach building wealth freedom www.thethreeyearexperiment.com

When I was in college, my dad started reading a lot about stocks. I was curious, and began reading a bit myself about investing.

I knew nothing about the saving side of the equation, but investing extra money had me curious. I opened my first Ameritrade investing account when I was a senior in college. I invested the money I received as a graduation gift into this account, in some stocks that my parents and grandparents recommended (Coca-Cola, MedImmune, and some others I can’t remember). I picked up the occasional book on investing, such as The Only Investment Guide You’ll Ever Need, and The Little Book that Beat the Market.  I left my money to grow and forgot about it. Continue reading “Building Wealth for Freedom”

Ladies, Time to Figure Out Your Worth #WomenRockMoney

It’s International Women’s Day. Go women!
 Women rock money—www.thethreeyearexperiment.com
Do you know why women are awesome? Well, here are a couple of facts:
  • More than half a billion women have joined the world’s labor force over the past 30 years, and women now account for more than 40 percent of workers worldwide (IMF, 2012).
  • When a mother has control over her family’s money in the world’s poorest countries, her children are 20% more likely to survive (Melinda Gates).
  • 90% of married women identified themselves as the principle household shopper in their household (Statistic Brain). #mamacontrolsthemoneyhoney
Women have come so far in the last fifty years! It is amazing. However, in the areas of financial literacy and business development, we still have a ways to go.

Continue reading “Ladies, Time to Figure Out Your Worth #WomenRockMoney”