Hey everyone! 2022 was a tough year for the Retire by 40 blog. I was away from home for over 6 months last year, making it difficult to focus. It’s hard to write about personal finance when we were lounging around in the Maldives. First-world problem, eh? Actually, the bigger problem was the stress from my my mom’s health problems. My motivation was quite low last year.
Anyway, I plan to write more this year and see if the blog traffic can rebound a little bit. Unfortunately, I’m not too hopeful because I think blogging is dying. People just don’t have the attention span to read anymore. However, workers are heading back to the office so maybe we still have a shot. Who knows? Anyway, I plan to publish a new finance-focused blog post on Monday. Then, I’ll post a shorter one on Thursday. We’ll see how it goes.
Today, I’ll share some of my personal charts. I think they are fascinating and I hope you find them interesting too.
Year-over-year net worth growth rate
The first chart I’d like to share is our year-over-year net worth growth rate.
The formula = current month net worth / net worth 12 months ago
This shows the growth rate of our net worth. Ideally, it would be 110% to 120% every year. However, the reality is far bumpier.
Ouch! 2022 was a tough year for our net worth. It was the first time our net worth suffered a sustained downward trend. Anything below 100% means our net worth lost value.
Actually, 2008 might have been worse. But, I didn’t keep track of our net worth every month back then so I don’t have the data.
For 2023, I hope the growth rate rises above 100% and stays there. Spending another year under the 100% threshold would be bad.
Passive income vs expense
This chart is just our annual passive income divided by expenses.
Alright! This one looks good. Our passive income surpassed our expenses in 2018 and we kept it up since then. 2022 was a pretty good year. We widen the gap! That’s very exciting if you’re a personal finance nerd.
For 2023, I’m not sure if we can sustain that level of passive income. We had a big payout from a real estate crowdfunding project last year. It probably won’t be as good this year. Our annual expenses probably will decrease a bit, though. We’ll have to see how it goes.
RB40 household Lifetime Wealth Ratio chart
This is our cumulated income vs our net worth.
I have a post about the lifetime wealth ratio here – Are you worth more than you earned?
It is very difficult for your net worth to increase above your cumulative earning. Your investments have to do pretty well to overcome the drag on your earnings (taxes and cost of living.)
Our net worth rose above our cumulative earnings in 2020, but it came back down in 2022. Noooo!!! Let’s hope our investments perform better in 2023.
This one is completely subjective. I score how I feel every month on my FIRE update posts.
In 2022, I found that happiness is very transitory, unlike inflation. Hahaha, a personal finance dad joke. Admit it, you got a chuckle out of this one.
Looking at the chart, I was very happy for the first 8 months of 2022. The last 4 months were pretty bad due to the health issues of various family members. As it turns out, the average happiness score was 8.3. Overall, this means I should be quite happy about 2022.
However, I felt pretty terrible on December 31, 2022. Several months of stress and lowish happiness erased good memories from earlier. It’s only when I check this chart that I remember 2022 was a pretty good year. I didn’t expect the average score to be 8.3. That’s high.
Anyway, this malaise will pass. I’ll get back to being happy again soon and forget about all these health problems. FYI, getting old really sucks.
That’s it for my first short post this year. I hope you enjoy my charts. Do you keep any interesting charts? I’d love to add a few more nerdy personal finance charts.
*Passive income is the key to early retirement. These days, I’m investing in commercial properties with CrowdStreet. They have many projects across the United States. It’s been working so well that I’m planning to sell our rental condo so I can invest more. Go check them out!
Disclosure: We may receive a referral fee if you purchase or signup for a service through the links on this page.
Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!
Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.
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17 thoughts on “My Secret FIRE Charts From 2022”
I think that podcasts and other video/audio formats are great for consuming certain types of content for the reasons you stated. And they probably do lessen the demand for certain types of blogs and blog posts. Personally, I still enjoy reading blogs when they contain detailed information (including charts and figure) that require more attention and thought. I realize the cost/benefit of creating this type of content probably doesn’t make much sense from a business standpoint though.
There is another chart that I like to track in my own NW sheet, which is actually just a supplement to your ‘passive income vs expenses’ chart. On my passive income chart, I also plot a “3% and 4%” passive income line. Since indexes pay limited dividends, it doesn’t necessarily reflect a target withdrawal rate for FIRE. To create those curves, I consider cash and equity positions to come up with a total, and multiply by 3% and 4% respectively. I don’t consider registered investments in there, but some may choose to do that depending on age, access to those accounts etc.
It’s something for people to consider as generating 1.3% dividends in the S&P500 doesn’t promote an early FIRE approach, although it generally provides a higher overall return compared to a dividend strategy (in bull markets!).
That sounds like a good idea. Our passive income is below 3%. Once we retire fully, we’ll try to increase it.
Happy New Year! I want to share that one of the things I appreciate about your blog is that you post regularly/consistently, and your posts are timely. By timely I mean for example, you post each months as the month ends and you do this consistently. This makes following and reading your blog and posts an enjoyable experience. In our world of constant change, such consistency is meaningful and grounding. Keep up the good work.
These are great charts Joe, as a ‘data nerd’ I really appreciate them! Hope for a better 2023 for you and your family!
I do love your use of charts, although I’ll admit I haven’t been keeping charts per se.
Rather the # I’ve been tracking is what I’ll call my “Freedom Number” which is income from sources outside of our W2. It’s definitely been up and down over the last 2 years.
I could also probably track down some net worth ones as well.
Do you plan on continuing with crowdstreet this year as well?
hang in there, joe. you said it best with “this malaise shall pass.” i look forward to reading more from you in the coming year.
I see that you have a breakdown of how you generate passive income, but I am confused by how you calculate the (monthly or yearly) passive income for your 401k plans:
“Tax-advantaged accounts – Lastly, I count the income from our retirement accounts as a part of our passive income as well.”
Let’s say we currently have an X amount total in our 401k’s, how do we calculate the passive income? Can you elaborate on that?
I just look at the distribution (dividend) from those accounts. The money is reinvested, but it is income.
Yay to writing more! I’m on (at least) the 12th year of hearing that blogging is dying. I know a bunch who stopped in 2011. You’re right though – it’s getting tougher. People only have so much time to consume and other platforms like TikTok are social media have a bigger piece of that pie now. I like your idea of shorter posts. I think there will always be room for regular article-length, written word content. As you can tell, I have a lot of thoughts on this and I’m happy to chat more on it.
I have my alternative income charts, which I know are a bit convoluted. They work for me when it comes to lumpy* things like real estate expenses and dividends. I would love to see what other bloggers’ numbers are using the same methods.
* I’m stealing “lumpy” from you describe volatile income. It’s awesome.
I think the big problem is you can’t multitask when you’re reading. Young people can’t focus on one thing anymore.
I’ll write short posts on Thursday unless I run out of topics. Then, I’ll update an old post.
Nice charts Joe, and ’22 was an inevitable year after a decade plus of bull market returns including the 2020 pandemic year. As for blogging, you’re not the only one. My audience keeps shrinking and I’ve seen some others say the same, though not everyone. It sucks, and for me it takes a lot of the fun out of it. I don’t think blogs will ever be “dead” as people will always read, but they are definitely not what they were.
I hope 2023 will be a better year for our investments. The stock market probably will drop more, but I hope it’ll recover by the end of the year. Blogging really is slowing down.
I like to track my net worth vs the S&P 500. The difference between the two is a measure of my “financial genius”. I’ve beat the the S&P 500 most years with the help of my leveraged real estate investments. This year my NW was even up a little even though the S&P 500 was down 20%. I had an unusually large cash position due to several cash out refis which mitigated losses investing in PATH, TSLA, ARKK, SNAP, etc.
Wow, it’s great that you can beat the S&P 500. I track that too and I only beat the S&P 500 during the bear markets.
You ask, “Do you keep any interesting charts? I’d love to add a few more nerdy personal finance charts.”
Not really. The only thing I have done is create speadsheets of my annual business income, my total income, amount of income tax I paid, and the amount I give to charities.
I like to have these figures handy when someone says something stupid like, “Ernie, you are one of most subsidized individuals I know.” Certain of the babbling bozos, pathological critics, and sad-sack socialists say, “Ernie, why don’t you ever spend your money?” These are often people who I have invited to my dinner celebrations where I have spent over $1,500 on one meal.
That’s all you really need. I like charts because they are interesting to me. I like the visual.