Build Wealth: How I Grew My Investments from $11k to $212k in 3 Years

After 705 days of obsessively tracking my credit card debt, I stared at an empty cell, B707. I didn’t need to enter data into cell B707. I had paid off over $20,000 in credit card debt in the past 705 days. The crisis had passed.

Now what?

The spreadsheet offered me no direction nor advice on where to go from here. I hadn’t planned beyond a debt balance of zero.

I got into trouble with debt by trying to get out of the rat race with “get rich quick” fantasies:

  • Penny stock trading
  • Online poker
  • Selling sports collectibles on eBay

My motivation to work hard and earn more had been satiated by crushing my debt. I still had student loan debt but it was at a low fixed rate that I’d pay off in less than five years.

Frustratingly, I was back to my original problem of not understanding my introversion. The workday was draining me and I wanted to pursue intellectual and challenging hobbies that did not pay the bill.

I needed my next mission. My next worthwhile pursuit.

I’m Out of Debt. Now What? Spend.

My new motivation was eventually financial independence. I did not know it yet.

This is the part where I tell you I slashed my expenses, invested in low-cost index funds, and rode the bull market to prosperity.

Not exactly.

I actually had to spend money at this stage in my journey. Poker and paying off credit cards brings no tangible value. I still didn’t value money.

To motivate myself to a worthwhile goal, I had to find things I valued and learn how money could help me access or create that value.

Some things I started to spend money on that improved my life:

  • Skiing out west
  • Going to National Parks
  • Guitar
  • CrossFit
  • Getting involved in committed relationships
    (Not that this costs money, but the relative stability in career and finances allowed me to open up to long-term relationships.)

Increasing Income and Taking Risks

Now that I saw money as a means to add value and reclaim time, I endeavored to build wealth in a sustainable way. I was no longer just making money and paying down debt.

A large part of my wealth building was taking risks and making investments in myself. Some are advisable, other are not. The point is I took actions that I thought would help first pay down debt and then build wealth.  Here is a brief summary:

Action Income Impact Age
Quit job in 2010 to pursue a new field while in grad school (100%) 29*
Took internship in new field of interest while in grad school. Later negotiated a salary for three days a week of work (48%) from previous job 30*
Joined a small consulting firm of three people in new field of interest in which I had very little experience +50% 31*
Worked hard and long hours while going to grad school to learn new field and provide value on small team +33% 32*
Finished grad school with two advanced degrees and another year of experience at small firm +25% 33*+
After realizing I had no chance of equity in the consulting firm after being there 3.5 years, and the firm growing around me, left the firm for a new organization in a niche field that I had been slightly exposed to as a consultant. Worked long hours under a lot of stress to learn new industry and develop strong relationships. +40% 34+
Raise at current organization after taking on more responsibility and hiring a team +18% 35
Under stress of external and internal factors, left organization to pursue position more in line with long-term interests and stability. (24%) 36+
Small end of year raise +0.5% 36
In second half of 2017, negotiated to work as a contractor for current organization and consult for new organization in the niche from previous job. Earned almost two full-time salaries for second half of 2017. +61% 37

* Denotes years with no access to a 401(k). Traditional IRA contributions only.
+ Denotes years I drove Uber at times back when it was highly profitable before drivers flooded the market. Point is, nothing was below me to earn some income to attack my debt and build wealth.

Main Takeaways from Increasing Income:

  • I took risks to better align my interests with my career – including some drastic salary reductions and leaving stable jobs.
  • Sometimes you don’t know exactly what you are preparing for as you work your plan. I took some detours that seemed unrelated but ultimately got me the two contracts I have now. The most menial of tasks should be done with pride and competence.
  • I got those two contracts through making and maintaining high-quality relationships. Your reputation and integrity are vital to people hiring you at higher and higher levels. Add value on the way up and treat everyone with respect, including yourself. Note to fellow introverts: This took a lot of effort.

The Frugality Part of the Equation

If I had simply inflated my lifestyle at each step, I would 1) not have been able to take the risks I did and 2) not been able to save money to increase investments.

In 2015, I found Mr. Money Mustache. I devoured every blog post. My mindset on ordering takeout food, the need for cable, and being a smart and more patient consumer changed drastically. To be honest, I was probably too restrictive to where it depressed me for awhile as I was “catching up” (to who?).

I have now found a good balance between frugality and consumption. That balance is valuism.

For example, I place tremendous value on spending income on a personal trainer because I view it as an investment in my (and my wife’s) future self. He is our coach. He keeps us accountable and strong. What is the point of financial independence if I cannot ski, surf, hike, walk my dog, and wrestle with my kids?

An Investment Plan. Not a Good One. But a Plan.

Looking back on it is laughable. I set up a spreadsheet and using compound interest figured out that I needed to only trade my principal balance 150 times at 3% to get to a million dollars.

I figured I could do this in about ten years. At the time, I didn’t realize what an amazing feat this would be if actually accomplished. Ignorance and luck kept me afloat.

For a few years while I had no 401(k), I traded the measly $14,000 I had left over from when I cashed out my IRA to go to grad school.

I followed a biotech investor that seemed to do no wrong and basically copied his trades and built that balance up.

Luck turned my way on one of the biotech investments. My balance was still pretty low after that trade (~$60,000) but I had had enough of gambling on biotechs. I’d been convinced low cost index investing was the way to go.

Riding the Bull with Low Cost Index Investing

Now that I had a solid income and no debt, I started to max out my 401(k) and make contribution to my IRA.

I used FutureAdivsor (not an affiliate link) to determine which low cost index funds to put my money in and how to allocate my assets. I’ve stuck with this method to the present day. I made the trades in my E*TRADE account myself, which was cheaper than paying the roboadvisor fee.

Following the advice of FutureAdvisor was a big mindset shift. I had to let go of the thought that I could trade into riches and that I somehow knew better than other people.

What’s the prayer that they use in AA? I think its pretty appropriate when it comes to investing.

God, grant me the serenity to accept the things I cannot change, Courage to change the things I can, And wisdom to know the difference.

Low cost index fund investing was the way to go. Timing the market was impossible. Picking individual biotech stocks was gambling. It was time to be a disciplined index fund investor.

Index fund investing helps me sleep at night, focus on the things in life that I value, and increase my income production, something that is much more in my control than the movements of the stock market.

Negotiating the arrangement to work for two organizations certainly has allowed me to save a lot of my income over the past several months. Setting up a Solo 401(k) allowed me to put a large portion of my income into the tax advantaged account. I am both the employee and employer in the Solo 401(k) and so I can put in the employee deferral of $18,000 and an employer deferral of 25% of my net income up to a total of $55,000.  The Solo 401(k) is an absolutely huge wealth building tool! (Look into it for your side hustles as well)

I am hopeful the arrangement lasts through 2018 (and beyond?) I only can control how much value I bring to each organization. External factors and internal politics are beyond my control.

4 Steps to Creating Wealth

Okay, so what did that story have to do with you? Let me break down the content above into four easy and actionable steps for you to build wealth.

  1. Refinance and pay off debts.
  2. Increase income by taking risks that align with your professional interests, becoming competent and demonstrating value, acting with integrity to build and maintain relationships.
  3. Spend less than you earn so that you have the flexibility to take risks and reduce income.
  4. Work an investment plan. The easiest and most likely for success is low cost index investing.

There you have it. That is how I built a some wealth from nothing in three short years.

Do I wish I had started earlier? Of course. I also wish I’d bought Bitcoin a year and a half ago.

Dwelling on the past, your stage in life, or circumstances will not build wealth. Working the four steps above will.

Get after it!


17 comments Add yours
  1. Yes! Pay off debt, maximize your income, mind the gap between spending and savings, and invest wisely. You’ll be financially independent in no time 🙂

  2. Really enjoyed reading this post. Increasing the income I feel is often overlooked. I will see people ask or talk about how to save a few dollars on toilet paper, yet never look to increase income. Like you said I believe there is a balance between increasing the income and living a bit more intentional where we spend our money.

    1. Thank you David. I appreciate the feedback. Our minds and relationships are our best assets. Everyone can earn more and take on more leadership. In my next post I’ll argue why it is a moral obligation to do so.

  3. Thanks for the good info. What index funds did you use or still use? If you don’t mind me asking. Do you think dollar cost averaging is a good idea? How did u go about it? Was the original 11k the only amount you put in?

    1. Lucas – Thanks for reading and your comment.

      1) The index funds I used and the allocation of funds to each were determined by linking my retirement accounts to I then made the trades in my brokerage account. When I added new funds, the software would tell me where to allocate the cash. The following is not investment advice and you should do your own research. These are the index funds I am currently invested in: BNDX, EFV, SCHC, SCHV, VB, VEA, VNQ, VNQI, VTI, VTIP, VTV, VWO, SCHZ, FNDF.

      2) You have three options when you have cash to invest. Let’s say you get a $10,000 bonus. You can a) Try to time the market to buy at an optimal time; b) invest the $10,000 immediately regardless of where the market is; c) put $500 in on the 1st and 15th of each month for 10 months (or some other schedule). Option A is the worst because market timing is impossible. You should choose either option B or C based on your comfort level. I personally just invest the whole amount and forget about it (even right now with equity values so high). I feel comfortable doing this because even if I bought at the market high in 2007 I would have doubled your money by 2017. Plus, I would have been buying that whole time at market lows so I would have done even better than 100% return. Therefore, I am not scared of buying the top. It is not the last money I will put in and it is not catastrophic to my returns.

      3) No, most of the money from $11k to $210k is savings. I maxed out my 401(k)s once I had access to one ($18,000), I maxed out my IRAs ($5,500), and this year I maxed out my Solo 401(k). You invest savings to achieve this growth. The bigger your balance gets the faster it grows.

      Let me know if you have any other questions. Thanks again for reading and commenting.

      Get some!

      1. Thank you for the reply, so I noticed all the funds you put are ETFs. Did the FutureAdvisor suggest those funds or did you research those on your own? And what do you think is the best way to go mutual index funds or ETFs?

        1. Yes, FutureAdvisor suggested those funds. I do not have much of an opinion on whether to go with mutual funds or ETFs. I think the most important thing is to get in the market and minimize fees. If a mutual fund is equivalent to an ETF and has a lower cost, then I’d say go with the mutual fund (and vice versa).

  4. Hey there, as a fellow introvert, I had to check out your blog – and I’m glad I did.

    Congrats on your debt payoff. That’s a huge accomplishment to tackle it head-on.

    When I started seeking out resources in 2013 for a way out of the rat race I turned to Early Retirement Extreme (ERE), like you with MMM, I ate it up really focusing on the ones that touched on the viability of ER and the calcs – I wanted to know if it was attainable for me. A few years later, there have been speed bumps which makes for an uncertain chapter coming up.

    GJ + keep it up!

    1. Thank you HP! Speed bumps are part of life. My journey has been bumpy because life is bumpy. Keep up the great work. Let me know if you have any suggestions for topics on this blog for the introvert’s FI journey.

    1. Hi Arielle – Thank you!

      It doesn’t seem the person is active publicly anymore. Biotech investing was too volatile for me. Happy to be in low cost index funds. I don’t have to watch the market, which makes me more productive at work.

  5. Wow, that’s amazing that you grew your wealth by 200k in only 3 years!! Wonderful job!!

    Your income increases each year are pretty incredible. Congrats on the 61% increase this past year!

    Looks like you made the right move by switching over to index funds! I still invest in some individual stocks, but I also invest in index funds. The individual stocks do add a bit more stress. My approach is to buy solid stocks and hold them. We’ll see how that goes!

    Just wondering, are the large increases in your portfolio from returns or investing a large sum of money? For example, in Jun 2016, it looks like your balance jumped from ~$78k to ~$130k.

    Thanks for sharing such useful information! Keep up the great work! 😀

    1. Hi Cyn – Good question. I looked back at my spreadsheets. The large increase from June to July 2015 was the biotech gamble that paid off to the tune of a $37,000 gain on one trade. Unreal to look back at that! It looks like my balance was $60,000 after that.

      In June 2016, I rolled over my 401(k) into my IRA. So that is why there is a big jump there, but it was more gradual of an increase because I had been saving.

      I’d say most of the gains are from saving in pre-tax accounts. Though recently the gains have been unbelievable with the way the stock market has been going. I plan on doing an investment update soon.

      Thanks for reading and your comments. Keep up the great work with your goals and blog!

  6. That’s really great. Investing in index funds like the S&P 500 is a good way to let your money grow without actively managing it. I like passive income. It seems to last longer.


    1. Thank you for reading and commenting Greenbacks. Not watching individual stocks during the day makes me better at work. Being more valuable at work allows me to earn more. Earning more allows for greater investments. Educated passive index fund investing is the way to go for me.

  7. I like that your path wasn’t just a straight increase in salary – there are more important things than just chasing the bigger income. Even if that income shaves 5-10 years off your FI path, is it worth it to be miserable during those years? I don’t think so.

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