my expected retirement date if nothing were to change is 6 years. assume 410k starting net worth for jan 2020, 35k savings, 11.75% return. and thats 1.06m at age 37, though tbh i may consider retiring at 800k back to my home country at 35. it really all depends on where we are in market cycle around that time, how much i save in the us vs how much i save in philippines when compared to all income , how much i love my job. whether i can convicne my wife and kids. Earlier the better. if im single, or unemployed this will be an easy move since my expenses will be 15k per year. anyways my goal is this place below. ignore the 2k per month. my auntie has a couple places there and will rent it to me for 400 bucks, market rate is really 600 bucks. i wont need a car cuz everything is walking distance. also poor ppl are not allowed.
my increase in net worth without taking contribution into account was roughly 22 percent since 2012 vs 13% for the spy index. this is just an average return as i am lazy. anyways it was a lot higher because of 2 things.
leverage from real estate, i literally turned 15k to 115k. due to a 3.5% down hsa loan. its cash flow positive i rent it out cuz its too far from work. roughly 3.5 hrs a day of driving roundtrip. anyways just on appreciation thats a 34% CAGR. with its current valuation 100k valuation net of debt, a 3% inflation on its 215k zillow price is roughly 7k, its 3k net cash flow and 3k cash payments. we are looking at 13% returns moving forward.
tax deductions from 401k/ira before saved me 35% in taxes at start and would also make up a larger part of my net worth. a 2012 contirbution for example would yield a 13% market CAGR vs 18% CAGR with tax deduction. since my contribution are a now only a very small part its essentially whatever the market return is moving forward so lets say 10%.
you are right that my returns are a lot lower now and that my expectations are much lower. i am trying to up my returns through stock picking, i am hoping 15% returns min. i actually have a spreadsheet where all my money is. what i project them to do for next year. i do this to calculate the expected growth which I the use on my expected net worth sheet. i also pull up contribution from projected budget sheet for expected net worth.