How We Grew Our Net Worth by 139.47% in 3 Years

Reading Time: 9 minutes

Everyone who owns stocks has seen a nice, fast rise in their net worth lately. Just when many thought that the market could only go down after the Dow Jones hit the symbolic 20,000, it proceeded to reach another record high of 21,000 in a very short time. The market timers are probably confused and might make the wrong moves feeling the euphoria. I smell greed in the air.

We are not magicians and don’t pretend to predict what the market will do. Nevertheless, we know exactly what to do when we have new money to invest. We have a magic ball called “net worth allocation”.

Our net worth allocation is our greed and fear gauge because it keeps us from buying too much of a particular asset when it’s high and not buying enough when it’s low. Knowing what to do with your money based on logic as opposed to emotions is a great remedy for bad decisions. Sticking to our allocation keeps any irrational behavior at bay.

We’re in it for the long term

We’re in this for the long term. Is the market going to increase by another 5,000 points before it comes down crashing? We don’t know and we don’t care. Is it going to come down crashing to 16,000 points over the next couple of years? We don’t know and we don’t care. We just don’t care. We can make a song out of this. Musica, maestro! WE DON’T CARE…NO WEEEEE DON’T!

We only care about how much risk we should be taking. We care that our assets are properly allocated. We care when a good Latin singer concert comes to our tri-state area. We care about what’s for dinner since it involves my intervention in the kitchen. 🙂  Above all, we care about being happy, and being happy means that we don’t put extra energy on things that we can’t control, like fluctuations in the market.

Net worth progress

When negative financial news come our way, we can combat it by looking at how much progress we’ve made. Our investments have grown nicely over time. They survived the Great Recession even though they were relatively small back then. Then, they grew exponentially because we didn’t panic during the recession, kept buying low and reaped the benefits of when the market began to climb again. How much money did we make?

That amounts to …… ahhhhh…. hmmm…. Fooled ya! We’re so not ready to be disclosing amounts.

Brave are those souls that…

We’re not like those brave souls that expose their net worth on RockStar Finance’s net worth tracker. There are some revealing numbers in there. Bloggers Amber and Danny Masters, from Red Two Green, have a $-532k net worth. Wow, that’s not a typo, that is a negative sign! They racked up some serious student loan debt. James Dahle, another blogger that goes as The White Coat Investor, holds the highest net worth on that list with a net worth of $5 million. So, we fall somewhere in between those two bloggers but really far from the white coat guy. 🙂

Net worth percentage change

Back to our percentage tracking. In 2014, I created a spreadsheet which we use to track our net worth and that helped with the reporting of our Freedom Fund updates. We’ve been making tweaks along the way and, by just tracking the net worth every month, we can populate a ton of data automatically. For example, we can tell that our net worth increased by 14% in just four months since October of 2016. We can credit a big slice of those gains to the stock market rally. At times, these increases seem surreal as we continue with our plan of early retirement.

Our net worth is composed of income-producing assets. Some dollars work harder than others, but all are set up to provide us with a comfortable lifestyle. As we became financially independent in January of 2017, we fulfilled the bucket that will sustain our lifestyles indefinitely. The part of the net worth that we’re now growing with new money is the one that will help us either buy or build our house. The house, in turn, is bound to become an income-producing investment as well, if we buy/build a duplex and rent one unit out.

Here’s a sample of how the last 12 months look for us from the tracking spreadsheet.

Net Worth Percentage Change – Past 12 Months
MonthPercent Change
March 20169%
January 20174.6%

Percent change by year

We also estimate our net worth increase for the following year, based on the expected income for that year plus a cumulative 7% return on investments. Here’s how last three years looked like.

Net Worth Change – Past 3 Years
YearEstimated Percentage ChangeActual Percentage Change

It’s amazing how the numbers turned out. Based on the previous annual income and an expected return of 7% from our investments, we predicted a 33% increase in net worth for 2014 and got a 49% increase. The extra bump came from a combination of lower expenses and some stock market growth.

For 2015, we predicted a 37% increase but got a 23% increase instead. 2015 was a flat year for us, as far as stock returns concerns. Our portfolio of stocks and bonds returned a negative $843 for that year.

For 2016, our estimates were fairly close, we were only off by 1% at 31% of actual growth. The market performed well for us last year.

Net worth increase in 3 years

By looking at the chart below, we increased our net worth by 139% during the last three calendar years. The numbers were off by less than a percent from the total cumulative estimated increase. The way you read the table below is as follows: we estimated our net worth to increase by 33% from 2013 to 2014, by 83% from 2013 to 2015, etc.

Cumulative Net Worth Increase – Past 3 Years
YearCumulative Estimated Percentage Increase Cumulative Actual Percentage Increase

How the hell did we accomplish this feat?

Here’s the short version: To start with a clean slate, I paid off all of my debt before we got married, except for the mortgage on the investment property. After we tied the knot, we kept life simple, budgeted together and continued to track our expenses. Instead of moving into a bigger place right away or buying a house, we stayed in Mrs. Enchumbao’s old apartment, that wasn’t even up to code, for an extra year.

We didn’t let lifestyle inflation take away from our savings. Not taking any more debt was also crucial to our success. We kept investing any surplus, cut unnecessary expenses that didn’t add value to our happiness, downsized to one car, and moved extremely close to work, while the investments kept growing along the way.

Now, this is against the backdrop of a bull market. Part of our net worth could or will be decreased with the next bear market. Part of it could also be affected with a real estate cool off. With interest rates on the rise, our bond funds will most likely lose value. However, while some investments are down, others will most likely be up. No need to panic and just stay the course. After all, investing is about taking risks to reap rewards. The key is to take calculated risks.

All investments are subject to price fluctuations

Any investment goes up and down in price almost every day, even your home. Just because your home decreases in value, doesn’t mean you’ll go out and sell it right away at a loss. It’s the same for the stock market. Imagine if your home value was being advertised on a screen every day, along with other houses in the world.

Breaking News!
Raul Gastador’s home value is down by 10% today due to an overnight pedestrian accident two blocks away. The neighborhood is on sale!

Are you going to sell your home the next day based on this news? That’ll be very unlikely. Raul Gastador would probably think about it, but you and I know that your home will still provide you and your family with a shelter, the lawn will still grow every spring, and watching a movie by the fireplace will still be as cozy and as enjoyable as it was the night before.

It’s the same for stocks. Even if the price goes down, it’s an unrealized loss, you still own the same amount of shares in the company and you will get your dividends. For people like us, that are investing for the long term, the downs in the stock market are temporary pot holes along the way and an opportunity to buy more. We will still get to our destination. We don’t worry about them much and we’ll get to the why in a minute.

The fact that our net worth increase calculations were so close with only three years of tracking is very reassuring. It means that our ways of calculating these were very precise. The next three years could and might look very different. Let’s see which assets make up our net worth and how we try to minimize risks.

Net worth allocation

A friend of mine asked me the other day: How do you protect yourself from a stock market crash? I think he was thinking more along the lines of at what point do we sell to avoid incuring losses as opposed to riding it out. The simple answer is that we don’t sell to try to time the market, but invest according to how much risk we can afford to take. Whenever we have new money to invest, we take a look at our net worth allocation and see which assets are underweight and buy accordingly.

We don’t go thinking: hmmm, the market is up big time. Let’s sell and wait on the sidelines until it cools off and then we’ll invest it again and make more money than the fools that follow a buy-and-hold strategy. The people that stayed on the sidelines, 4-6 years ago, thinking that the market already had a good run, are probably hitting their heads against the wall for not staying the course.

net worth

The chart below shows how our assets are currently allocated. This portfolio already brings us over $18,000 annually in dividends. 

net worth

The following chart shows what we want our allocation to be prior to retirement.

net worth

This allocation is our guideline and is not set in stone. If we change plans along the way, then we’ll rethink our allocation mix.

Assets in our net worth allocation


Our current allocation to bonds is over 12%, but we want to have a 9% allocation by the time we retire. It’s not a big deal that we’re overweighted, since we’re still in the accumulating stage, and the current allocation percentage will decrease as we invest more in other asset types.


Based on our intended net worth allocation, we should have around 57% of our assets allocated to stocks. It’s not 90% in the good times or 30% in the bad times due to market timing. That shit is hard to accomplish as you need to be right twice, when you get in and when you get out.

We haven’t invested any new money in stock funds since late last year because our allocation shows that it’s been growing aggressively on its own while we grow other investments. This is the reason why the net worth jumped much higher than expected in the last four months. We’ll resume buying once stocks make up less than 57% of our net worth.

Since we haven’t had a major correction in ages and a bear market is more probable as times goes by, there’s a big chance that our current stock allocation will drop. What would we do? Again, we would check our net worth allocation and rebalance accordingly.


We’d like to have around 7% of our net worth allocated to REITs by the time we retire. We have some REITs in our brokerage account, but we mostly buy them in our Roth IRAs to avoid paying taxes on the distributions, so we’re limited by the annual contribution limit set by the IRS. Next time we’ll be buying REITs will be in January 2018 unless they outperform other assets in the portfolio the same way stocks are up now.

Investment Property

We have an investment property that yields nice returns. It’s a two-apartment house with a low vacancy rate. It became profitable after I turned it into two apartments.

House Fund Savings

The new asset category we started saving for since last year is the House Fund Savings. We’re at a point where we need to start saving aggressively (when don’t we) for a house. We plan to explore places like the Dominican Republic (my birth country) and, if it makes sense, make it our home during the first leg of our retirement.

We keep this money in a risk-free account. Now, we’ve been renting for a quite a while and, if at some point we don’t feel that buying a house is our best choice, we’d rethink our strategy. We have options and it will be good to do a pulse check upon retirement to make sure that it’s still the choice that would make us happiest.


This asset appears first on the Projected Net Worth Allocation Chart. After we sell the rental property (R.E. – Investment Property asset) the money will go to this bucket. We plan to have about 6% of our net worth in savings. This money will represent first three years of core living expenses in retirement and funds to buy a car abroad.

Final thoughts

One thing that I love about blogging is that by explaining a topic or our plan of action we ensure that our i’s are dotted and our t’s are crossed. Everyone that is pursuing a goal in life should blog about it. It makes your goals much more clear and attainable.

Our net worth increase over the past three years has been a result of sound investment principles and an aggressive saving strategy without deprivation, built out of a strong desire to break the chains of needing jobs to pay the bills and become financially free. This desire led us to become in tune with ourselves and helped define what really brings happiness to our lives.

I built what I think is a fancy spreadsheet to track these numbers, but remember that you don’t need to spend time working on fancy charts and spreadsheets to achieve financial independence. This kind of unnecessary nerdy stuff is simply what I enjoy working on. All you need is to get out of debt, optimize your spending and invest the surplus. The path to wealth is that simple.

What do you think about our net worth allocation? How do you track your net worth?

Featured image by: Comfreak
Boxing photo by: dfbailey

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Mr. Enchumbao

I work for a large investment management company helping people save for traditional retirement. During my spare time, I write about our FIRE journey here, at Enchumbao. My journey to FI began in 2012. I was in a lot of debt back then, but I turned things around and became debt free a few years later. My wife and I reached financial independence in 2017 and are preparing to retire soon.

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8 Responses

  1. Wow, congrats! Especially 2015 was a tough year with essentially flat equity returns. Our net worth growth has definitely slowed down in 2014/15/16, compared to 2011/12/13! Well, even in a flat year we’d get growth from additional savings, but it’s getting a smaller and smaller percentage once the portfolio grows.
    Also totally agree with the “don’t time the market” attitude. It’s best to keep making the regular contributions, rain or shine. Some of my best investments were the ones I made when everybody else panicked and sold. 🙂
    Good luck in 2017!

    • Thanks! I think we reached our peak percentage growth per year in 2015. We’re approaching your stage of 2014 where our salaries won’t move the dial as much. With a 7% return on our investments, we estimate our net worth to grow by another 25% this year from last year. Thanks for commenting.

  2. I love your worry-free approach to managing your net worth and congrats on the crazy year-over-year increases. We’re still on the road to FI but we have a similar philosophy to you. We’ve switched more to cash recently but not because of the market – because we want a cash buffer as we prepare to sell our house.

  3. Thanks Julie!
    That’s the right mindset – adjust your investments according to your plans and not just because of market swings.
    Good luck on selling your house! Not sure how the real estate market looks in your area but it’s looking better in PA than last year. Hope it’s the same for you. Thanks for stopping by.

  4. I was horrified by the half a mill net worth that couple has. It would give me a heart attack for sure. It just validates my theory that you should always do a cost benefit analysis on everything you do or buy even if it means education. Congrats on increasing your “nest egg” steadily, diversifying your investments and readjusting your allocation based on your needs. We have a little more agressive portfolio than you for our retirement accounts with less than 5% in bonds because our 401ks may not even be touched during retirement. We plan to fund it with a combination of pension ( old school) , savings, dividends on non- retirement accounts and income from rental property. Of course, we also plan on living in a lower cost country for a couple years right away, letting our “nest egg” grow even more before needing to touch it. I estimate we would actually be able to save more than we do now in the first two years of retirement just by moving to a cheaper country. Isn’t that crazy?

    • Hi Jana –
      Thanks! Since we reached our numbers much earlier than expected and are still predicting to work until 2019 we’re going to end up with a bigger portfolio so the bond allocation is really the extra money that is accumulating. (there are days like today when I do lose corporate patience and rethink this) That amount is about 6 years of basic living expenses. We’ve been investing part of it in a high-yield corporate bond fund so it’s providing a nice monthly income.
      Living in a place with a lower cost of living definitely makes a big difference. That’s a great idea to let your investments grow while you travel. That’s one of the reasons why we plan to move after we retire. We can live like kings on a lower budget without decreasing the quality of life elsewhere. Thanks for stopping by!

  5. EL says:

    Hey thats a good return on net worth. If you focus, reinvest, and save a big portion of income FI is just around the corner. Why are you willing to sell a profitable rental in retirement? As the cash flow will help you not tap into the principle of your investments.

    • Yeah, that rental property has proven to be a hell of a good investment after all. I initially purchased it for $70k and invested about another $17K to turn it into a 2-apartment house and get a gross income of $1,350 a month.
      One issue is that we’d need to get a reliable property manager and I’m not sure I want to deal with that headache after moving much further away. But it is a nice cash flow, we’ll revisit it next year and see if we want to give it a try with a property manager. Maybe we try a property manager while we’re here to see if it works out. I just don’t have faith in finding reliable people in the area. Good point!

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