Time goes by, we work, do our daily activities, earn money and sometimes we just forget about how things are advancing. Last month, I suddenly realized I hit one of the most memorable milestones in my investing career. The €100,000 net worth mark.
€103,000 to be exactly.
How did I suddenly reach that mark? As my portfolio says, I only have €47,500 invested in stocks. Well…
- Stocks: €47,500
- Personal savings + emergency fund: €21,500
- Bonds & Obligations: €8,000
- Retirement & tax plan: €4,500
- Parents piggy bank: €21,500
–> Total net worth: €103,000
Let’s put every section under the scope.
My stocks are pretty clear, the paycheck almost completely goes there. My precious babies :D.
Personal savings: I am not a fan of putting money in the bank without it working for you. Although, sometimes, you need a soft pillow to fall on if necessary. Future doesn’t look too bad for me, so it might not be necessary. But, I have another point of view on this. My current dividend growth strategy consists of buying each month stocks that look undervalued in my opinion. Now, what if the markets go down for a longer time? What if we witness a major stock market crash like the one in 2002 or 2008? I would only be able to buy for let’s say €1,500 a month. So, the real advantage for me would then be to transfer the money and start buying big. Let’s call it some kind of crash insurance. When there’s blood on the streets…
Bonds & Obligations: When I was 16 years old, my dad bought some obligations with my spare money. These yield around 3,2% net a year. These expire in August 2018 and with that money I will most likely buy stocks too. I am not a fan of obligations and don’t plan to buy any myself. Dads make mistakes too, you know :D.
Retirement and tax plan: Belgian people have the possibility to do some kind of retirement saving plan, which leads to less taxes to pay. More concretely, I invest a small €2,000 yearly which are put on a seperate account. These deposits make sure I have to pay €500-€600 less taxes a year. Pretty nice return on investment. Of course this has some disadvantages too, like paying taxes on the end amount when you finally retire. This is a bit too much offroad to go more in detail.
Parents piggy bank: Say what?! In Belgium, some parents decide to save up a small amount of money each month to put it on a seperate bank account in benefit of their kid(s). Knowing this started when I was born, this piled up to a nice sum of €21,500. Normally this plan will continue untill I am 24 years old, but if really necessary I can access it. It feels a bit like dividends coming from the parents every month.
Knowing that I just turned 21 years old, I am very happy that I reach this memorable milestone so early. Of course this is thanks to the fact that I started getting a salary since I were 18.