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The ONIG Financial Blog Investment Tracker Spreadsheet

The Investment Tracker Spreadsheet For Financial Freedom
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One of the great things about following a financial game plan is that if you stick with it long enough you’ll be surprised at how much you’ll end up accumulating. Conversely, those who don’t follow a financial game plan will wake up one day wondering where all their money went!

For the past several years, my goal was to invest between $5,000 – $20,000 a month in order to generate enough passive income to take care of a family. I define investments as anything I put new money towards that has the potential of increasing my net worth e.g. paying down debt, buying an S&P 500 ETF, building a municipal bond portfolio, venturing into real estate crowdsourcing, expanding a home, and so forth.



With a $5,000 – $20,000 a month investing cadence, I figure my net worth should grow by at least $60,000 – $240,000 a year. If I stay disciplined over 20 years, then I could finally retire in Hawaii and do nothing instead of grind so much with all of you!

Everybody should at least max out your 401k so that worst case, you’ll end up a millionaire after a lifetime of contributions. Time in the market is truly an investor’s best friend. 

2016 Investment Summary

For the first time, I’ve decided to do an analysis of all the investments I’ve made in a year to see if I actually followed through with my $5,000 – $20,000 a month investing goal. When we’re not diligently tracking our finances with free tools from the likes of Personal Capital, I’ve found our expectations are quite different from reality. Through tracking, I also wanted to see if I could observe any bad habits in order to make improvements.

I’d like everybody to list their monthly investments for the year and make some observations as well. Here are mine:



January: Bought $5,000 of VYM, (Vanguard High Yield Dividend ETF) in my after-tax investment account. I stuck with accumulating one equity ETF all year in my after tax investment account to simplify. VYM has a dividend of roughly 3.2%.

February:

1) Bought $10,000 of VYM.

2) Bought $5,000 of AMZN (Amazon, wish I bought so much more) in my after-tax investment account.



March: Bought $5,000 of VYM.

April: Bought $5,000 of VYM.

May: 

1) Bought $5,000 of VYM.



2) Venture debt capital call of $14,250 (Fund I).

VYM vs. S&P 500 Performance YTD

VYM outperformed the S&P 500 in 2016.

June: Opportunity knocks

1) Bought $10,000 in VYM post Brexit. Actually put to work a total of $76,500 in idle cash, but took profits after a 4% rebound, hence why there’s only $10,000 in net new investments. I was very cautious the first half of the year and was just waiting for an opportunity that finally came

2) Venture debt capital call $750 (Fund II).



July: Venture debt capital call $2,150 (Fund II). Pretty slow month. Went to Hawaii for a first half business offsite. July was the one month I didn’t reach my $5,000 minimum investment cadence. Instead, I took some profits ($55,000) on an investment I made in 2012 to pay for my deck.

August: Focused on debt pay down

1) Refinanced a 2.625% 5/1 ARM that was set to expire in 2021 down to 2.375%. New expiration is 2021.

2) Paid down $3,380 of extra principal on the 2.375% mortgage.

3) Paid down $6,400 of principal on a 2.5% mortgage.

4) Paid down $2,000 of principal on a 4.25% mortgage.



5) Venture debt capital call $4,150 (Fund II)

September: Rare equity offering, felt like I was going to miss a rally

1) Invested $50,000 in a S&P 500 structured note with 150% upside participation and a 30% downside barrier in my after-tax investment account. $40,000 of the $50,000 came from a called Netflix structured note that got called after one year. It’s too bad because the note was paying a 14% annual dividend and was way in the money. Net new investment amount = $10,000.

2) Deployed 100% of my remaining $150,000 rollover IRA cash in the 150% S&P 500 upside participation note as well. It definitely didn’t feel like a no brainer investing a total of $200,000 in this structured note at the time, but the terms of the structure note were just too attractive. Net new investment amount = $0 since I just used idle cash.

3) Invested $15,000 in this principal guaranteed (can’t lose money unless Citibank goes out of business) structured not that returns the average returns of the S&P 500, EuroStoxx 50, and Aggregate Bond Index after 5.5 years. In retrospect, this was a overly conservative investment that’s probably not going to return much at all.

Investing at the top of the market

$200K in the S&P 500 and $15K in a basket of S&P 500, EuroStoxx 50, and Aggregate Bond Market



4) Invested $10,000 via Fundrise in a commercial property with a target IRR of 18% over five years. Don’t let me down East Coast!

5) Paid down $6,600 of principal on a 2.375% mortgage.

6) Paid down $1,000 of principal on a 2.5% mortgage.

7) Paid down $12,000 of principal on a 4.25% mortgage.

8) Bought $5,000 shares of VYM.

October:



1) Paid down $5,500 of principal on a 2.375% mortgage

2) Contributed $18,000 to my self-employed 401k and invested the money 50/50 in DVY, the iShares Select Dividend Equity ETF, and IEF, the iShares 7-10 Year Bond ETF. DVY and IEF are commission free ETFs with Fidelity. I view this self-employed 401k as a bonus fund to build on the side with my side hustle income. More contributions will be made after I do my 2016 taxes in order to ascertain the exact contribution amount possible. I do some occassional corporate consulting to stay connected to society on top of my main business where I have a SEP IRA.

3) Paid down $2,500 on a 2.5% mortgage.

November:

1) Invested $50,000 in the California Muni Bond fund, CMF post presidential election.

2) Invested $20,000 in my SEP IRA and invested half in DVY and half in IEF. SEP IRA was also started on Jan 1, 2014. Should have started it in January 1, 2013, but I didn’t know better.

3) Paid down $2,000 of principal on a 2.375% mortgage.



4) Paid down $3,000 of principal on a 2.5% mortgage.

5) Paid down $2,000 of principal on a 4.25% mortgage.

6) Venture debt capital call $3,600 (Fund II)

Aggregate bond market (AGG) performance 2016

Aggregate bond market (AGG) performance. Started aggressively buying bonds in Nov and Dec.

December:

1) Bought $60,000 of California Muni Bond, CMF.

2) Bought $24,000 of five different California zero coupon bonds.



3) Bought $20,000 of MUB (iShares Municipal Bond Fund) to diversify.

4) Paid down $5,000 on a 4.25% mortgage.

Investment Spreadsheet Overview

 ONIG Financial Blog Investment Tracker Review 2016

Click to download your own blank copy

I’m probably missing an investment or I mistook some new money for existing money, but to the best of my knowledge, the above chart encapsulates the amount of new money I invested in 2016.

At one point in early 2015 I got down to about $35,000 in cash after paying off my condo rental property. It didn’t feel great having that little cash even though paying off a mortgage felt amazing. Then I got up to about $300,000 in cash in order to amass a large enough downpayment by the winter of 2021/ 2021 or winter of 2021/ 2021 to buy another property. But it felt bad earning only a 0.2% money market return, so I decided to start investing more aggressively in September.

Here’s what I’ve learned this exercise:

1) Underestimated my monthly investment cadence of $5,000 – $20,000. My real monthly average investment cadence is roughly $29,273. I’m basically investing the large majority of my earnings each month because I’m addicted to investing. Once food, shelter, and transportation are covered, all I can think about is what to invest in. Not a month went by where I didn’t put some capital to work.

2) Stock investments were front loaded in the first half of the year. When the market was tanking in February, I pressed a little more with a $15,000 equity investment. I tried to be opportunistic during the Brexit sell-off in June, but foolishly didn’t hold on to my $76,500 new money investment after a 4% rebound. If I held on, I’d be up another 5%+. Perhaps every year there’s this irrational optimism during the new year to invest in equities that I need to watch out for.

3) Started late with paying down my mortgage. I didn’t start a regular mortgage pay down cadence until August because my last refinance took almost four months, starting in March. I paid down $130,000 in principal to qualify for a 2.375%, $850,000 5/1 ARM. The $130,000 came mostly from money earned in 2015 and random asset sales. Each time I refinance, I like to pay down a chunk of principal to at least ensure I’m making good progress. In retrospect, I shouldn’t have been so aggressive in paying down my mortgage given rates increased and the stock market rocketed higher.

4) Irrationally paid down lower interest rate mortgages. I should be focused on paying down my highest interest rate mortgage of 4.25% with the smallest balance. But I didn’t because it reminds me of the bad timing I made buying my Lake Tahoe vacation property in 2007. I thought I was getting a deal when I bought it for 12% less than the previous owner, but then it proceeded to plunge in value by 30% – 40% during the financial crisis! I’m finally above water, but still down from my purchase price. At least this property has given me wonderful memories and I never plan to sell anyway. The condo serves as a great reminder never to confuse brains with a bull market. Always carefully analyze every single investment beforehand. I plan to always write about big purchases on FS before making a decision from now on.

5) The total amount invested in stocks and bonds is roughly $265,000. The new money investment split is 35% stocks and 65% bonds after going aggressive into bonds in November and December. The ideal timing would have been to invest $265,000 into the S&P 500 when it was down 10% in February. But timing the bottom is a fool’s game. For the new year, I plan to methodically invest in a 40% stocks and 60% bonds ratio to be more defensive. I’ve also rebalanced my portfolio to a 40/60 ratio as well.

Related: The Proper Asset Allocation Of Stocks And Bonds By Age

6) Venture debt slowdown. After investing $120,000 in my first venture debt fund, I decided to only invest $50,000 in my second venture debt fund because I’m worried about my friend’s ability to make his target returns of 15%+. Due to large startup costs, the return for the first venture debt fund is closer to 8% if there are no more workouts in the portfolio. The amounts you see in the chart are capital calls. When you commit $50,000, you don’t send the $50,000 right away. Instead, you pay as you go when the General Partners find new investment opportunities. Capital calls are good in a way that it forces me to invest. If it wasn’t for a capital call in July, I would have invested in anything.

7) New asset class investment. I finally got my ears wet by investing $10,000 in a 5-year, 18% target IRR, commercial real estate deal in Conshy, Pennsylvania via Fundrise. The process was a lot easier than expected since everything was done electronically. I’ve earmarked another $10,000 for another deal, and plan to continue working my way up to building a $250,000+ real estate crowdsourcing portfolio this year. I’m hoping that with the historical 9% – 15% returns, and a rise in the required returns due to a rise in interest rates, I’ll be able to easily clear my modest 4% growth target with a diversified portfolio of 10 or so RE crowdsourced investments.

8) I have a dumbbell approach to investing. On the one hand, I like to invest smaller amounts when I first get started e.g. $10,000 in real estate crowdsourcing, P2P lending, etc. On the other hand, I have no problems swinging for the fences when I strongly believe in a particular investment, e.g. $178,000 in muni bonds in November and December, and two S&P 500 investments totaling $200,000. That said, I’ve gotten in trouble in the past by buying too much, too soon. Therefore, I should spread my investment tranches further.

How can I give Rhino up with such parking abilities?

9) Stayed away from wants and desires. Given I invested a large majority of my income each month, I didn’t leave room for buying anything unnecessary. I came very close to spending $60,000 – $70,000 on a mid-life crisis car three times this year, but didn’t because I always thought about how much I could have in 5-10 years if I invested wisely today. After every close spending call, I gave Rhino, my handsome 2015 Honda Fit, a good wash. Then all of a sudden my desire for a new car would fade.

10) Back-end loaded investments. Roughly 85% of my new investments were made in the second half of the year due to the presidential election. In other words, my investments are event-driven in nature because that’s when opportunities arise the most. I was very cautious the first half of the year because the job market and real estate market were slowing here in SF. For 2021, my biggest worry is that Trump creates too much foreign backlash due to incendiary rhetoric. I pray nothing terrible happens this year, but it feels like an inevitability.

Related: Practice A Better Dollar Cost Average Investment Strategy

Ex Mexico President’s tweet to Trump. Pretty entertaining, but worrisome for investors if foreign relations get out of control.

11) Compare the ratio of new investments with existing investments. The higher your ratio, the more active you are in growing your net worth. My goal is to try and grow my net worth by 10% a year. It gets harder to do as your net worth grows and your risk tolerance declines. This year, existing investments went up by ~8%, and new money investments went up by ~6%. In other words, my public equity/fixed income investments underperformed the S&P 500, but outperformed my investment target of 4% – 6% a year. However, it’s possible my real estate investments outperformed the S&P 500 (~40% of net worth) and I know my business value (20% – 30% of net worth) grew by much greater than 10% due to a 35% increase in top line revenue.

12) Keep on stretching.  I’m now upping my monthly investment cadence to $20,000 – $35,000 a month on average. With this goal in mind, I now feel the pressure to keep on saving, earning, and grinding. I want to be like Mr. Zhang, the $271,000 a year janitor who challenges himself every day by not letting his $58,000 base pay or occupation get in the way. My prior minimum monthly investment target of $5,000 put absolutely zero pressure on me to try harder. With family responsibilities, the need for income is more important than ever.

Overall Insight 

New investments + existing investments in a bull market = net worth acceleration. When times are good, it’s important to press as much as you comfortably can because good times don’t last forever. Eventually something bad will happen if you live long enough. When that time comes, we’ve got to rely on all our efforts during the good times to see us through.

My fear lies in missing out on investment gains instead of having nice toys to show off to my friends. Besides a mid-life crisis car, there’s nothing more I really want. Instead, it feels fantastic to continue practicing Stealth Wealth while ensuring that nobody in my family has to go back to work or struggle financially. Taking care of my family is now the most important duty I have.

Although ~$352,000 is a good amount to put to work, it’s smaller than the paper gains from existing investments. I was expecting a ~$300,000 decline in the value of my existing assets at the beginning of 2016. Such dumb luck is why I’m happy with paying down debt and building a muni bond portfolio for more modest returns. Dumb luck is also the reason why I want to actively contribute as much as possible so that I can rely less on luck to survive each passing year.

Track Your Investments Already

Everybody should already be tracking your net worth online. The easier it is to track your investments, the more you will pay attention to your money. Come up with your net worth goals and talk them over with your close friend, partner, or loved ones. You’ll learn something about your risk tolerance, your investing habits, and whether your actions are congruent with the way you think. Only then will you become a more disciplined investor over time.

In addition to leveraging the latest technology to grow your wealth, I’ve put together an Investment Tracker Spreadsheet for you to download. Input your own numbers to see how much you’ve contributed this year. Go through the same exercise I went through in this post to find out your tendencies. Feel free to change the categories or include all your financial investments, instead of just new money investments. I’m pretty sure that once you input all your numbers you’ll be surprised by the takeaways.

Achieving financial independence is all about developing a system and following through for a long enough period of time. Don’t be the donkey who frivolously spends everything he or she makes during a bull market, thereby missing out on incredibly lucky returns. Let’s try to maximize the good times for as long as possible!

Related:

ONIG Financial Blog 1Q 2021 Investment Recap

ONIG Financial Blog 2Q 2021 Investment Recap

Updated for 2021 and beyond.

Click here for Source



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