Saturday, November 1, 2014

What Does Net Worth Say About Your Life's Story?

 I had the idea for this post long before I even started this blog. The basic question I wanted to answer was: What does my net work history say about me? Can you tell all of the significant events (financially speaking) in my life just from a graph of my net worth?

Well I put together my net worth history as best I could to try to answer these questions. It was harder than I thought to obtain all of the information I needed. This was especially true for my student loan information; information on student loans I paid off years ago was unavailable and one of the student loan servicing companies for my current loans is completely worthless at doing anything other than automatically deducting from my account each month.

Well here is a look at my net worth from August 2005 to September 2014:


And here is look with the sources of my net worth: Cash, Investment, 401k, Student Loans, and my Car loan.

There are several key events that I want to highlight: 
11. August 2005 - May 2009 My College Years
It would have been nice to start this from 2004 giving me a nice even 10 years of data but I could not find anything past August 2005. But this was actually a great time to start as August '05 is when I left home to start my undergraduate degree. As you can see I did not have a lot of money in the bank and right away the student loans started and didn't stop increasing for the next 4 years. My cash bounced around a lot, peaking each summer due to my various summer jobs: pest control, intern with the City's construction management department, and intern with a small structural engineering firm. I also worked various jobs during school: laborer with the maintenance department, painter, tutor, research assistant, and lab assistant. These jobs did little to offset the growing student loans and so my net worth mirrored my student loan debt.
  2.  May/Jun 2009 – From Graduate to World Traveler to Working Stiff
This was my lowest net worth ever, and rightfully so, I had just graduated with my Bachelor’s in Civil Engineering so my student loan debt was peaking. To make matters worse, my roommate and I decided to go to Europe for three weeks further depleting my limited cash reserves. But I wouldn’t trade that experience for anything, in the years since I have plenty of money but no time so I have not gone travelling to that scale since. After getting back from Europe I immediately started my new engineering job. You can see from here on my net worth started improving dramatically; my 401k was slowly but steadily growing, and I made paying off loans a priority so while my cash and investments were still small my net worth was improving.
  3.  February 2010 – Debt Free!!
As I mentioned above, I had made paying down my debt and in less than a year of working I have paid off over $23,000 in student loans. Up to this point in time I don’t think I made many financial mistakes, sure my students loans were a lot of debt (but not that much compared to a lot of people) but they were necessary for me to attend school and I got a job out of it. But now that I was debt free I made my biggest financial mistake: I didn’t invest I just kept all of my money in cash. For the next year or so I saved diligently and was able to put away over $40,000, unfortunately all in cash. At the time I had my sights set on buying a house so that piggy bank was meant for a down payment, but it still would have been better to at least start investing, especially since I did not end up buying a house. Alas, the best time to invest is always in the past.
  4.  August 2011 – Back to School and Back in Debt
In 2011 I decided to go back to school and get my Master’s in Civil Engineering. At the time I thought it would be a good bridge between my job in aerospace industry and my desire to be in a more traditional civil engineering setting, although that didn’t end up happening. So, my girlfriend and I literally drove across the country (I-90 all the way) to Boston so I could attend MIT. My experience at MIT was fantastic; I had an amazing education, met some of the most wonderful people, and loved my time in Boston (it helps that it was one of the mildest winters ever). But my amazing experience came with an equally amazing price tag: in the 9 months I was there I spent over $60,000 on tuition and living. It both exhausted my bank account and put me $30,000 in debt. My experience was amazing so I will never regret my time at MIT but I’ll be the first to admit that financially there were better options.
  5.  June 2012 – Graduation
I graduated from MIT in June of 2012 but didn’t start work (back at my old company) until August. In the mean time we spent about a month driving the long way home from Boston to Seattle visiting NYC, D.C., Georgia, Jacksonville, New Orleans, Austin, the Grand Canyon, and Las Vegas, before making a final long push for home. As you can see, all of that traveling without any income did not bode well for my net worth.
  6.  August 2012 – Back to Working Stiff
Back at work you can see that my cash, 401k, and net worth started to increase steadily, although this time I did not make paying down loans my priority so my students loans started gathering interest.
  7.  December 2012 – Financial Mistake #2: A New Car
It’s funny how when you start looking for a car your price range slowly increases until all of a sudden you find yourself thinking that a brand new car makes perfect sense. I had some very good reasons to buy my car, the biggest of them being that what I wanted did not exist in the used market place. But between my $10k down payment (my choice) and the loan, my net worth took quite a hit.
  8.  March 2013 – My First Foray Into Investing
At this time I was actually saving up for a down payment for a house so I had some cash in the bank and during this time is when I first stumbled on Dividend Mantra’s blog and after a lot of reading and some thought I decided I should start at least some investing. I didn’t know what I was doing at the time (I still don’t) but my basic criteria was that a company needed to be a company I liked as a customer and be on one of David Fish’s Dividend Champion, Challenger, or Contender lists. So I ended up buying shares in FedEx, Sherwin Williams, Target, Lowes, Coca Cola, and Johnson and Johnson.
  9.  September 2013 – All In On Investing
As I mentioned above, I had been saving money as a down payment for a house, but after several months of looking and one (thankfully) rejected offer I decided I was tired of looking so I moved into to an apartment in Seattle. I immediately put all of my cash into investments and you can see that reflected as my “cash” and “investment” lines cross paths.
  10.  March 2014 –Paying it Down
I had originally intended to pay off my student loans slowly and invest any excess capital I had. But after filing my 2013 taxes I realized that 1) I was paying almost 8% interest on my student loans and 2) I was not able to claim my student loan interest due to my income level so I immediately put all my effort into paying down this debt, as you can see by the sharp upward trend in my student loans.
  11.  Today
My net work graph ends September 2014 and tops out at a personal high of $107,400. I have paid down a large portion of my debt and in the next couple of years even more will be coming of the books. So from now on I hope that every month I will be sporting a new high in net worth. Net worth is not the most important thing to me but it is great to see such a positive trend over the last couple of years.

Well this was a fun a little experiment and I enjoyed being able to see how well my net worth has reflected greater aspects of my live and I hoped you enjoyed it as well.
What about you? What does your net worth history look like?

Thanks for stopping by,




  1. Really interesting read, mate. Must be awesome to see how your life plays out via that. I haven't kept track of mine for very long. The only real spike or deviation I saw was from my own sign-on bonus when I started my current job. I remember it because it went straight into TGT right after the credit breach fiasco. The rest was a general upward trend, no real blips or anything. I expect it will change in the future with kids, marriage, house, a car when mine breaks down permanently. Should be a really interesting exercise to do in 10, 15 years.

    1. Yeah it was a fun little project to see how it turned out. I agree though that for a lot a people their net worth probably just shows a steady upward trend, if I had not got back to school my net worth history would have turned out the same but throwing a wrench in the works makes things interesting.