I Have Hit a Personal Finance Milestone!

This month I have hit a personal finance blog milestone. As you know the focus of this blog is to track my journey to financial freedom. I have defined this goal as a net worth of $2 million plus the value of my primary residence. Since I currently don’t own my primary residence I have to roughly estimate my future primary residence will be worth around $250,000. I am happy to announce I have achieved a net worth that is roughly 10% of my $2,250,000 goal; my net worth has recently surpassed $225,000!

This is a big moment for me as it has taken over 4 years of steady focus in regular saving and cost cutting to reach this point. I always thought the first 10% of my goal would be the hardest because I had no base to build off of and most of my net worth accumulation would have to come from savings and cost cutting.

I wonder where the next 4 years will take me. I hope I will be able to reach a net worth of $750,000 before then. I wonder if I will be able to maintain my annual savings rates or will I be to find other ways to improve my net worth.

Now that I have a good foundation I hope the growth of my net worth will accelerate. Each year more and more of my annual growth will be come from investment returns and less from savings and cost cutting.

This is a concern for me. I don’t know if I consider myself a good investor espically given the recent discovery I reported that my total return for 2005 was a measily $2,094. I need to spend more time and effort improving my investment returns.

In the past, I have been able to make steady progress by saving more to offset poor investment returns. As investment returns comprise more and more of my annual net worth growth, no amount of additional savings will be able to offset years with poor investment returns.