Post your 2020 Year in Review and 2021 Plans

[EntrepreneurMD]

2020 was an unusually good year probably for most.

Investment: New milestone of a 7 figure appreciation in 1 year in retirement accounts (even excluding contributions), mid-career, thanks to a roughly 50% return overall despite the March pandemic recession and a cash drag in retirement accounts. My biggest holding (swelling to about 33% of portfolio) on the cusp of a 100% YTD return.

CRE: Paid off $1.5M remaining balance on a $2.3M office building construction loan taken out in 2016-2017. Paid for with both income and reserves. Debt free again yeah! Per the local property appraiser's office both residential and commercial properties appreciated nicely in 2020.

Business: Despite pandemic slow-down, business re-accelerated and household income on track to increase generously YOY. Got a business appraisal in 2020 with a nice surprise valuation close to 8 figures.

Biggest deal is that I learn so much from everyone here. Love it when the critics tell me I'm an idiot (yes I am!) - feedback is an opportunity that I may have otherwise not taken to reassess/tweak my strategy to minimize my many errors. Understanding better the psychology that leads to better versus poor results. Treasure trove of information from jfoxcpacfp, Andrew Musbach, spiritrider, @stevenpodnos, @whitebearddoc, Hatton, jacoavlu, Tim and others really really helped me better myself in 2020!

2021 AA? Wherever the opportunities may be. Goal is to figure out what to do with reserves and new income saved outside of retirement accounts, after increasing charity accordingly of course.

[JBME]

I was going to say the same-this family is doing awesome. It goes to show you that any family with a doc can do it, you just need to plan. To be sure, the earlier you start the better but even if you're a late starter, like 40s, you can do very well if you are focused and don't burn out too soon

[TheDangerZone]

wow from -6 figures to 2 comma club in 3 years- congrats, you're killing it!

Thank you, I appreciate that. Have learned a lot from WCI, here, bogleheads and books like the Simple Path to Wealth. Really fortunate to have a ton of excellent resources to continually lean on and to serve as inspiration.

[Nysoz]

Net worth 12/1/2019 was $500k and on 12/1/2020 was $2.4M

Start of 2019 I already had a fair amount in TSLA and the rest in index funds. During the TSLA first run up at the start of the year, learned about selling options in order to potentially re-balance out of TSLA and into index funds. Started to learn how profitable it could be.

Biggest change I made was on 3/23 TLH all my index funds and went into a portfolio of 12 stock picks with varying weights. TSLA, V, MSFT, COST, WM, AMZN, GOOG, DIS, BRK.B, JNJ, PG, VZ. Essentially tried to pick a company I liked/used on a daily basis that I thought were the best/stable in their sectors (admittedly tech heavy). My thought was that I didn't see a lot of companies/sectors recovering easily so why hold all those companies that I, or most others, aren't going to use for a while. Also started selling options on all of these as well.

Q2 results for TSLA was another big pivot for me. With all the analysts thinking it was going to be a dismal quarter, and things I looked at suggested otherwise for the quarter and going forward, I found a good opportunity to buy a decent amount of calls/leaps options which is what really started to make my portfolio explode.

In August I started to learn about was the use of margin while selling options and profiting from theta decay. With how profitable selling options can be, cheap margin interest can be a useful tool when used responsibly. Started to dip my toes in here when it makes sense to me and it's been pretty profitable as well (currently on track to make as much as my annual W2 salary). I always try to keep my margin use reasonable to avoid margin call.

Goals for 2021. I hit my FI number ~7 years earlier than I thought I would but still aiming for fatFI numbers. Since I know another 400% year isn't going to happen, going to keep working and see how sustainable my investing strategy is going forward in a hopefully not crazy year.

[JBME]

Net worth 12/1/2019 was $500k and on 12/1/2020 was $2.4M

Start of 2019 I already had a fair amount in TSLA and the rest in index funds. During the TSLA first run up at the start of the year, learned about selling options in order to potentially re-balance out of TSLA and into index funds. Started to learn how profitable it could be.

Biggest change I made was on 3/23 TLH all my index funds and went into a portfolio of 12 stock picks with varying weights. TSLA, V, MSFT, COST, WM, AMZN, GOOG, DIS, BRK.B, JNJ, PG, VZ. Essentially tried to pick a company I liked/used on a daily basis that I thought were the best/stable in their sectors (admittedly tech heavy). My thought was that I didn't see a lot of companies/sectors recovering easily so why hold all those companies that I, or most others, aren't going to use for a while. Also started selling options on all of these as well.

Q2 results for TSLA was another big pivot for me. With all the analysts thinking it was going to be a dismal quarter, and things I looked at suggested otherwise for the quarter and going forward, I found a good opportunity to buy a decent amount of calls/leaps options which is what really started to make my portfolio explode.

In August I started to learn about was the use of margin while selling options and profiting from theta decay. With how profitable selling options can be, cheap margin interest can be a useful tool when used responsibly. Started to dip my toes in here when it makes sense to me and it's been pretty profitable as well (currently on track to make as much as my annual W2 salary). I always try to keep my margin use reasonable to avoid margin call.

Goals for 2021. I hit my FI number ~7 years earlier than I thought I would but still aiming for fatFI numbers. Since I know another 400% year isn't going to happen, going to keep working and see how sustainable my investing strategy is going forward in a hopefully not crazy year.

holy moly. yeah, I'd lock in those gains at this point and just claim you won the game

[Random1]

After many years of putting money into equities, I decided to trim down to a 65 stock/35 bond mix. I waited for the market to recover before making adjustments in my 401k plan. I figured that since I am a that point in life , capital preservation is more important than hitting a home run. Whether I retire next year or 5 years from now , I want to retire on my own terms. Next year , the goal will be to work less than this year.

[Hatton]

That is a super solid performance NYSOZ. In reviewing things this morning I find that my Vanguard accounts are up $1.2 million in the last year which is amazing since I am retired and have significant bond holdings. I also donated over 100k to charity. The lesson here is save and invest as much as you can in your 30-40s and then the compounding effect will carry you in your retirement. I plan to tweak things next year. I am finally biting the bullet and selling off some active funds that I bought early in my career that have huge gains. I am doing this because they pay out large distributions every year which is limiting my ability to do Roth conversions. They would probably result in higher Medicare premiums down the road too.

[FIREshrink]

That is a super solid performance NYSOZ. In reviewing things this morning I find that my Vanguard accounts are up $1.2 million in the last year which is amazing since I am retired and have significant bond holdings. I also donated over 100k to charity. The lesson here is save and invest as much as you can in your 30-40s and then the compounding effect will carry you in your retirement. I plan to tweak things next year. I am finally biting the bullet and selling off some active funds that I bought early in my career that have huge gains. I am doing this because they pay out large distributions every year which is limiting my ability to do Roth conversions. They would probably result in higher Medicare premiums down the road too.

You could donate those and avoid paying any taxes. There's how we got rid of our last active funds and individual stocks.

[TheDangerZone]

Net worth 12/1/2019 was $500k and on 12/1/2020 was $2.4M

Start of 2019 I already had a fair amount in TSLA and the rest in index funds. During the TSLA first run up at the start of the year, learned about selling options in order to potentially re-balance out of TSLA and into index funds. Started to learn how profitable it could be.

Biggest change I made was on 3/23 TLH all my index funds and went into a portfolio of 12 stock picks with varying weights. TSLA, V, MSFT, COST, WM, AMZN, GOOG, DIS, BRK.B, JNJ, PG, VZ. Essentially tried to pick a company I liked/used on a daily basis that I thought were the best/stable in their sectors (admittedly tech heavy). My thought was that I didn't see a lot of companies/sectors recovering easily so why hold all those companies that I, or most others, aren't going to use for a while. Also started selling options on all of these as well.

Q2 results for TSLA was another big pivot for me. With all the analysts thinking it was going to be a dismal quarter, and things I looked at suggested otherwise for the quarter and going forward, I found a good opportunity to buy a decent amount of calls/leaps options which is what really started to make my portfolio explode.

In August I started to learn about was the use of margin while selling options and profiting from theta decay. With how profitable selling options can be, cheap margin interest can be a useful tool when used responsibly. Started to dip my toes in here when it makes sense to me and it's been pretty profitable as well (currently on track to make as much as my annual W2 salary). I always try to keep my margin use reasonable to avoid margin call.

Goals for 2021. I hit my FI number ~7 years earlier than I thought I would but still aiming for fatFI numbers. Since I know another 400% year isn't going to happen, going to keep working and see how sustainable my investing strategy is going forward in a hopefully not crazy year.

Congratulations on your returns this year. I would push back on the statement that you tax loss harvested in March. What you did was sell low on index funds and converted that in to a wildly different asset, individual stocks which have done very well. While you locked in losses, TLH is a formal strategy where you redeploy that capital right back in to a very similar holding and are thus still in the same asset.

Again, congratulations. When I read your summary, I see a lot of variables that worked out well but could have easily turned out the other way if Lady Luck was not so kind. I would not be sleeping well if a dozen companies controlled my portfolio.

I would lock in those gains but can understand if you feel differently from your vantage point.

[hebel]

Wow, really impressive guys! Here's some of my much less exciting highlights from someone at a different stage as an attending of ~6 months:

- graduated residency in June.

- made a financial plan.

- finalized/adjusted/or added all the necessary insurances (life, disability, umbrella, etc).

- paid off about 15K in CC debt. PGY4 was expensive paying for licensing, boards, moving expenses, security deposits, etc. I only carried this balance for a total of about 2 months. I generally never carry any CC debt.

- caught up with some relatively more expensive life expenses like getting a couch (ours was a cheap Big Lots couch we bought as newlyweds 8 years ago), matresses for my kids (transitioning from cribs), needed car maintenance x2, etc.

- paid off 3 of my wife's private undergrad loans, totalling about 20k.

- caught up with 403b contributions to max out at 19.5k for 2020. A decent portion of this was matched by employer. (Total balance is about 50k. I had some money saved during residency that I rolled over).

- will catch up with backdoor Roth contributions for 2020 in January 2021.

- built up Emergency Fund of about 20k.

- I have a remaining loan balance of about 300k which is under REPAYE and at 0% for now. Have about 5.5 years left until forgiven.

- Major 2021 goals are to max out all tax protected accounts (403b, 457, and bdroth) while saving for home down payment. Any extra savings will go into a taxable account that will serve as a PSLF side fund for now. If we don't need large down payment for house, will use that saved money to pay for wife's remaining undergrad debt that is currently at 0% as well.

- while doing the above I will download the Robinhood app and get rich from options trading (joking).

[gasdoc86]

Love reading everyone's stories.

2020 was a great year for me on the financial front. Started year with a NW of around 400K, now pushing 725K. I bought my first house with my wife and we moved in in June. We're pregnant and expecting our first child next June! Very exciting. We hold no debt except for our mortgage which is a 30yr at 3%. I'm maxing all tax deferred accounts and backdoor Roth x2. I started my taxable account in June and I enjoy putting a nice chunk into the market every month on top of my other accounts. Not putting any extra on the mortgage at this point.

Goal for 2021: two comma club. Starting to knock on the door, depending on how the market does next year I can probably get there.

[Nysoz]

Congratulations on your returns this year. I would push back on the statement that you tax loss harvested in March. What you did was sell low on index funds and converted that in to a wildly different asset, individual stocks which have done very well. While you locked in losses, TLH is a formal strategy where you redeploy that capital right back in to a very similar holding and are thus still in the same asset.

TLH, from what I understand, is selling to realize a loss to offset capital gains. It technically doesn't matter where you redeploy your capital into as long as it's substantially different. If I sold ford at a loss to buy gm or an index fund, it's still tax loss harvesting. Index investors just use other similar (but different) index funds to meet their goals while maintaining their AA.

[TheDangerZone]

TLH, from what I understand, is selling to realize a loss to offset capital gains. It technically doesn't matter where you redeploy your capital into as long as it's substantially different. If I sold ford at a loss to buy gm or an index fund, it's still tax loss harvesting. Index investors just use other similar (but different) index funds to meet their goals while maintaining their AA.

You booked losses from index funds but switched asset classes in to individual stocks with very different risk (and upside) profiles. TLH is a specific strategy that refers to taking losses but swapping into a very similar asset. True TLH has essentially zero risk as your risk profile should not change.

Anyone can sell at a loss and buy something else, but that is not really tax loss harvesting and no one reading this should get the impression that selling during a downturn and buying something else that catches their eye is what everyone else is referring to.

Investopedia:

“With tax-loss harvesting, an investment that has an unrealized loss is sold allowing a credit against any realized gains that occurred in the portfolio. The asset sold is then replaced with a similar asset to maintain the portfolio's asset allocation and expected risk and return levels.”

https://www.investopedia.com/terms/t...harvesting.asp

Fidelity:

”Tax-loss harvesting allows you to sell investments that are down, replace them with reasonably similar investments, and then offset realized investment gains with those losses.”

https://www.fidelity.com/viewpoints/...oss-harvesting

[Peds]

TLH, from what I understand, is selling to realize a loss to offset capital gains. It technically doesn't matter where you redeploy your capital into as long as it's substantially different. If I sold ford at a loss to buy gm or an index fund, it's still tax loss harvesting. Index investors just use other similar (but different) index funds to meet their goals while maintaining their AA.

correct.

[Peds]

You booked losses from index funds but switched asset classes in to individual stocks with very different risk (and upside) profiles. TLH is a specific strategy that refers to taking losses but swapping into a very similar asset. True TLH has essentially zero risk as your risk profile should not change.

Anyone can sell at a loss and buy something else, but that is not really tax loss harvesting and no one reading this should get the impression that selling during a downturn and buying something else that catches their eye is what everyone else is referring to.

Investopedia:

“With tax-loss harvesting, an investment that has an unrealized loss is sold allowing a credit against any realized gains that occurred in the portfolio. The asset sold is then replaced with a similar asset to maintain the portfolio's asset allocation and expected risk and return levels.”

https://www.investopedia.com/terms/t...harvesting.asp

Fidelity:

”Tax-loss harvesting allows you to sell investments that are down, replace them with reasonably similar investments, and then offset realized investment gains with those losses.”

https://www.fidelity.com/viewpoints/...oss-harvesting

you are reading too much into the weeds.
he is harvesting his losses for tax purposes. thats it. thats TLH. nothing more.


now yes, changing AA, changing investment plans, sitting in cash, buying a tesla, etc are changes in risk and will lead to better/worse returns. but have nothing to do with the operation of TLH.