How I Grew a 7 Figure Portfolio With Index Funds in 6 Years

J. Money

United States
Index Funds
Long-Term Investor

Who are you and what’s your story?

Hey guys! J. Money here from BudgetsAreSexy.com and Rockstar Finance – two sites I’ve since retired from, but had loads of fun getting people excited about their $$$!

I stumbled across the financial community over a decade ago when I bought a house at the peak of the market with no money down and no real budget (hah), and it was personal finance blogs that really got me to stop and PAY ATTENTION more.

Mainly because they were *real* people sharing *real* life numbers which made it all easier to understand and get motivated by. 

I was working a number of different jobs before doing the blog full-time (over 40), most recently working as a customer service director and graphic designer for a local start-up company.

I started my own blog to have some fun and hold myself accountable, and here we are 12 years later having both my finances and life changed due to this community!

I love it!

Here’s where my net worth was in early 2008 ($58,769.65) and then here’s where it ended in 2019 when I eventually sold my blog ($1,131,601.03). It’s all about the tracking!!

[NOTE: somewhere in the middle of this my wife and I started combining our finances so now this net worth is really *both* of ours – not just mine]

When it comes to investing, I would consider myself somewhere between an amateur investor and a mediocre investor.

An amateur in that I don’t know the ins and outs still of a lot of the different types of investments out there, but I do know enough about the areas I *do* invest in which I’d like to think are doing pretty well 🙂 Mainly in the area of index funds. 

But most important of all – I’m an expert in *knowing myself!* which is key to not falling into danger zones and sleeping peacefully at night. You have to know where your limits are and what you ultimately want in the end, else you’ll chase all kinds of schemes and burn out before you even have a chance.

Once I realized “slow and steady” was the name of the game for me it’s gotten MUCH easier for me over the years…I’m not going to get rich over night, but I am going to get rich 😉

What do you invest in and why did you start investing

I invest almost all of my money in index funds. Particularly, VTSAX – Vanguard Total Stock Market Index Fund (Admiral shares) which tracks the overall market vs a specific company or industry. This brings about average returns, which as mentioned above hits my goal of slow growth over time.

I’ve only been doing this for about 6 years, however, after finally being convinced by other FIRE lovers out there 🙂 Specifically JL Collins and folks like Mad Fientist and MMM. Before that, I was trying all kinds of cockamamy strategies and finally just got exhausted by it all, lol..

At one point I was just copying Warren Buffett and buying whatever he was buying, and then another time I was scooping up recommended stocks from a Wall Street analyst friend of mine. 

Interestingly both strategies worked pretty decently, but in either case it required a lot of buying and selling of individual stocks at the right moment, and I knew they weren’t great long-term plans. 

So I eventually sucked it up and took the time to really evaluate my overall goals and comfort levels, and then finally landed on indexing after reading (and talking) to a lot of FIRE friends.

Here were the main reasons I made the change, in no particular order:

  • I wanted to be lazier
  • I wanted to be lazier with low fees
  • I wanted to know exactly what these low fees were
  • I wanted to easily be able to transfer in money without worrying about additional fees (USAA charges you a hefty fee if you want to invest in Vanguard funds through them)
  • I like the way Jack Bogle thinks
  • I wanted to get a much better snapshot of my retirement money
  • And I wanted to do it at a place that specializes in just that – no offense to USAA (If we’re talking car insurance or online banking, they’re pretty much the pioneers).

You can read more about my shift in mindset and process by checking out the two articles linked to at the end of this interview.

And then here’s the last snapshot I shared publicly of my Vanguard account which shows the performance since moving to indexing… Not going to be switching this up anytime soon!

And then here’s a snapshot of my overall Net Worth from late last year as well…

You’ll see that outside of our retirement accounts where these index funds live, the only other “assets” there are our house and cars which actually do nothing but *take* money vs earn it 😉

Though we have in recent months started contributing back to our non-retirement brokerage account again to better diversify more…

Walk us through your process of identifying and executing on investment opportunities?

My investment strategy is pretty simple – just keep throwing money in whenever I can and then forget about it!

I don’t like getting into technical stuff, and I certainly don’t like trying to time the market to try and eke out the best %’s I can get.

I’m perfectly fine with average returns, and especially since it’s money we won’t need to tap for decades to come. I just throw the money in and then hold on ‘til the end! 

Since you first started, what have you learned that has had the biggest impact on your success and the growth of your portfolio?

I learned over the years that I’m a much better “set it and forget it” type of person. I only check my investments once a month when I sit down to update our net worth, and then I feel good or bad for a hot second before promptly forgetting about it again 🙂

For the past 10 years I’ve also made it my #1 mission to max out my retirement accounts *no matter what happens* in life.

I remember a friend telling me years ago that if you did just that one thing year in and year out (especially if you get free matches from your employer!), there’s no way you can’t save a million dollars over the years. It’s just time and compounding!

So that’s been a guiding light throughout the years as well for us… 

Here are some of the extreme ups and downs from over the past 12 years since tracking this stuff:

  • Aug, 2019: +$190,000 (Sold my blog!)
  • May, 2019: -$40,000 (Markets crash…)
  • Jan, 2019: +$57,000 (Markets explode!)
  • Dec, 2018: -$61,000 (MARKET MELTDOWN)
  • Oct, 2018: -$60,000 (MARKET SPIRAL!!!))
  • Feb, 2018: -$29,000 (Markets crash)
  • Dec, 2017: +$93,000 (Sold a website)
  • Dec, 2016: +$75,000 (Sold equity stake in my blog)
  • Mar, 2016: +$48,000 (Markets rebound + tax refund + gift)
  • Jan, 2016: -$51,000 (Sold house at a loss + markets crash)
  • Oct, 2013: +$62,000 (Sold a portfolio of sites)
  • Jun, 2013: -$40,000 (Renovated house + lost income + markets down + moved) 
  • Oct, 2011: +$60,000 (Mad hustlin’ + inheritance)

These are *net worth* fluctuations and not investment-specific btw, however as you can see a good number of these were affected by the markets.

What books, platforms or resources have you found useful?

The financial blog community is really the only place I hang out and learn from, particularly the FIRE niche since it’s much more aligned with my goals and mindset.

I learn much better from real life examples of this stuff, and even more so when they’re paired with personal stories and adventures. Finance doesn’t have to be as boring as people make it out to be!

Here’s a list of some of my favorite books

The Millionaire Next Door by Thomas J. Stanley & William D. Danko

 

I Will Teach You to Be Rich by Ramit Sethi

 

The Automatic Millionaire by David Bach

 

Essentialism: The Disciplined Pursuit of Less by Greg McKeown

 

The Power of Less by Leo Babauta

 

A Guide Book of United States Coins 2021 by Jeses Garrett

 

And I have gathered a lot of other great resources over the years, you can find more about that here –   jmoney.biz/favorites

What advice would you give to someone who’s just starting out in investing?

The biggest thing I’ve probably learned over this past decade is that the point of paying attention to your money really isn’t about the money itself, but what IT GIVES YOU in the end. Which in essence is the ability to craft your ideal lifestyle.

When I first started blogging all I cared about was trying to reach a million dollars cuz I thought it would be cool (and it is kinda cool!!) but as we all know money doesn’t magically make your life better. You have to dive deep and figure YOURSELF out in the process so you have the best chance of living a happy life. Maybe it means you do need a million dollars or two, or maybe you could be just fine with $100,000?! But ultimately it’ll come down to your ideal lifestyle and how hard you’re willing to work for it.

So my advice to everyone reading this is to

  1. First stop and figure out what you want in life first before just chasing the almighty dollar, and then…
  2. Work backwards and see what needs to happen in order to eventually reach that goal. Some other things that have really worked for me as noted above is tracking my net worth month in and month out (over 150 months in a row now!), and then maxing out my retirement accounts each and every year which I also haven’t missed in over a decade.

Outside of that, I haven’t really done anything too special or complicated! I just show up each and every day and do my part and it eventually compounds.

And btw, I’m 41 now whereas when I started I was 27. So while my #’s here might look good to some people, keep in mind it’s taken me over a 1/4th of my life to get to this point! And now have 12 years less to live!! 🙂

So try your best not to *rush* through the process and speed up your life either just for the $$$… You’ll eventually get there, and when you do you’ll probably prefer having your youth back instead of all those savings sitting there in your account! Everyone wants Warren Buffett’s billions, but would you swap being 90 years old in return for it? 

So do your best to actually LIVE your life along the way, and trust the process you’ve set up that’ll eventually lead you to your goals.

What investment opportunities are you excited about at the moment?

I don’t dare speculate on such things 🙂

All I know is that people will continue to live and breath and buy stuff, and so long as I’m invested in the general markets (and pending an apocalypse!) my investments will be just fine.

I’ve tried Crypto and other more niche specific trading over the years, but each time I end up cashing out and going back to what makes me most comfortable.

Which isn’t to say I shouldn’t diversify more as I probably should, but just that I don’t try attaching my success to the forecasts of anyone – including myself!

Can you share a story about an investment opportunity that you passed on and went on to grow beyond your expectations?

Basically all the Apples and Teslas and Amazons out there! Lol… Although I technically do own bits and pieces of them through indexing which pushes up the average.

But since I don’t pick up individual stocks anymore I certainly miss out on the *larger* gains others see in doing so.

I’ve also missed out on real estate and other business opportunities over the years, some of which have gone on to skyrocket, and others that ended up crashing and burning!, but ultimately I’ve been happy with where it’s all led me. You lose some and win some, but as long as your wins outpace the losses then it’s hard to complain 🙂

A little birdy told me that you collect coins. Would that be considered a good investment strategy?

Yup – I love coins! Though more for their beauty and history than an “investment”. Most people tend to collect them as a hobby or even a hedge since many of them are made of bullion (gold, silver, etc), but to really gain an income off them you’d need to do some serious flipping or investing in more high-end *rare* coins that can require some major capital. And even then the rate of return isn’t as comparable to other investments out there. 

That being said, it sure is nice to be able to cash in your coins when you’re done with them vs other hobbies that just suck your money dry! 😉 So I do track their relative values in a spreadsheet next to my Net Worth, but I don’t include them in there or count on them for anything but a fun diversion.

Here’s a blog I started on collecting if anyone’s interested in learning more or getting started – it’s a great quarantine hobby! Lol… CoinThrill.com. I also help people evaluate and sell coin collections they’ve inherited from loved ones, so if you ever need any help just shout!

Where can readers go to learn more about you?

You can find me at jmoney.biz where a lot of my projects and “resume” resides, as well as on Twitter (@BudgetsAreSexy) where I tend to hang out most during the day. 

If you want to read more about my shift in mindset and process check out these two articles:

I also do some fintech consulting on the side and help people buy and sell blogs too. Here’s my personal newsletter if anyone wants to stay connected and learn more about my projects: jmoney.biz/newsletter

Reach out anytime and say hi!

Thanks to
J. Money

 for doing this interview.

If you have any questions or comments, leave a reply below.

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One Response

  1. Great example of the “simplest path to wealth!” I’ve made money from individual stocks (special shout out to Apple!) and mutual funds, including index funds. Index funds are a great way to set it and forget it and watch it grow. Well done, J Money!! Thank you for sharing!

    Lastly, wise advice:
    “For the past 10 years I’ve also made it my #1 mission to max out my retirement accounts *no matter what happens* in life.”

    Ever since I made this change to maxing out my 403b and Roth, I’ve seen my net worth explode. It seems like exponential growth because that’s what it becomes.

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