After checking my balance sheet for the month of August I realized that the value of all my assets is worth $1,006,200. Great Scott! For the first time in my life I own a million dollars worth of stuff! 🙂
According to the official Oxford Dictionaries website, a millionaire is “a person whose assets are worth one million dollars or more.” The word “assets” is commonly defined as any owned items or properties that have financial value. So according to this official definition I am now technically a millionaire! ? Gosh almighty! Below is my reaction right now.
I started investing about 8 years ago. I mostly just buy a wide range of investments and use diversification to lower my risk. I also intend to hold my investments until I retire. It sounds like a simple strategy, but it works for me. 🙂 Some readers may think I’m a good stock picker. But that’s not true.
In the last 7 years falling interest rates have pushed up asset prices across the board for stocks, bonds, and real estate. The S&P 500 index in the U.S. returned over 150% to investors since 2009. 😀 Good heavens!
My point is anyone could have randomly invested in a basket of different securities starting in 2009 and would likely see similar appreciation in their assets as I have. 😉 So I didn’t get lucky choosing stocks. But I am lucky to have started investing near the bottom of the great recession in 2008.
I’m also a fan of using other people’s money to work for me. For example, my 8x leverage in farmland has earned me the equivalent of 8 years of returns in just one single year! 🙂 The leverage used when buying my primary residence was even more extreme as my down payment was only 6% of the purchase price.
By maintaining a high savings rate, and borrowing cheaply to invest in a prolonged bull market, it didn’t take long before I saw the effects of compounding returns!
The graph below shows my historical balance sheet. The data for 2016 is only an estimation.
There’s no point in having money if we don’t spend it right? 😉 So with my new found wealth I plan to increase my expenses through lifestyle inflation that will create positive experiences. For example, from now on I will say YES to guacamole with my order at Chipotle, even though it will cost extra. I will also choose premium seating at the movie theater for the extra leg room. 🙂
Do you guys remember the classic song “If I had $1,000,000” by the Barenaked Ladies? We don’t need a BMW or a Rolex to be happy. Sometimes it’s the little things in life that can bring the most joy. 😉 Here’s a blurb from the song.
If I had a million dollars
(We wouldn’t have to eat Kraft dinner)
But we would eat Kraft dinner
(Of course we would, we’d just eat more)
And buy really expensive ketchups with it
(That’s right, all the fanciest – Dijon ketchups)
The first verse of the song also claims that you can buy a house with a million dollars. Ah-haha! ? That’s funny because according to the real estate board of Vancouver, the benchmark price for a house around here is $1.51 million, lol. But to be fair the song was produced in the late 1980s. Jeepers. Now I feel old.
Of course having a million dollars worth of assets isn’t necessarily the same as having a million dollars in net worth, or being a liquid millionaire. So my next big goal is to build up 1 million dollars in tangible net worth. 🙂 I think it will take me 6 more years to hit that milestone. By that time I will turn 35 years old and become financially independent, hence this blog’s name. 😀
Random Useless Fact:
Anything can become fascinating if we’re bored enough.