Disappointed in Missing a Long Term Financial Goal

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OldSport
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Disappointed in Missing a Long Term Financial Goal

Post by OldSport » Sun Jan 07, 2018 5:45 pm

It has been a goal of mine to be a 'millionaire' by the time I'm 40 since as long as I can remember, but its looking like this goal will be hard to achieve.

We are saving more than we've ever been and should be on track for a decent retirement, but it hurts to miss a long-time goal I've had since before I was legally allowed to invest.

If I can count home equity it puts us closer, but still highly unlikely with lower expected returns and a bear market in somewhere in this time frame.

Current Portfolio: $500k 80/20 AA
Annual Contributions: ~$50k maxing tax advanted space. HSA excluded from this.

Current home equity: ~$150k

I have ~4.5 years left to meet this long time goal. My spouse has 7 years, so there's a better chance my spouse will make this goal.

livesoft
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Re: Disappointed in Missing a Long Term Financial Goal

Post by livesoft » Sun Jan 07, 2018 5:48 pm

Jeez, I thought you had blown it. I don't think so. Check back in 4.5 years.
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TwstdSista
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Re: Disappointed in Missing a Long Term Financial Goal

Post by TwstdSista » Sun Jan 07, 2018 5:49 pm

I'm bummed for you -- but hopeful that things may improve in the next 4.5 years! You might surprise yourself!

I once heard "by the time you are 50, you should be worth $500,000" -- so that's kinda my goal, although doubled since the husband and I = two 1/2 millions. We have a shot for my 50th in a few years, but not for the husband's fiftieth next year....

grandmacassie
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Re: Disappointed in Missing a Long Term Financial Goal

Post by grandmacassie » Sun Jan 07, 2018 5:56 pm

Please don’t be concerned about some arbitrary goal. Keep on living below your means, and meeting your saving/investing plans. You are doing well for your age. Play the long game.

BogleMelon
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Re: Disappointed in Missing a Long Term Financial Goal

Post by BogleMelon » Sun Jan 07, 2018 6:00 pm

Money is a means not a goal in itself. It can buy you early freedom (early retirement), and other valuable stuff. At least that is how I think of my goals, the freedom and the stuff I could buy later (delayed gratification). If you are on track it wouldn't really make a difference if you reach a solid round number or not. For example, you can reach $1 Mil in your net worth but inflation could spike and make your $1 Mil worth way less in today's money. And vise versa..
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

epictetus
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Re: Disappointed in Missing a Long Term Financial Goal

Post by epictetus » Sun Jan 07, 2018 6:03 pm

you will get further by having goals than by not having goals.

but don't get too hung up on the specific goal.

the process you are using to work to reach your goal is really more important than if you hit that arbitrary goal or not.

you are doing very well and will continue to if you keep on using that process.
Focus on what you can control

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sergeant
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Re: Disappointed in Missing a Long Term Financial Goal

Post by sergeant » Sun Jan 07, 2018 6:42 pm

Maybe you would be better served by having different financial goals. My goals were always reachable. I always had a goal to contribute max to our IRA's and 457b accounts each year. No matter what the market did those were achievable goals. I never had a specific dollar goal.
Lincoln 3 EOW!

OldSport
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Re: Disappointed in Missing a Long Term Financial Goal

Post by OldSport » Sun Jan 07, 2018 7:59 pm

sergeant wrote:
Sun Jan 07, 2018 6:42 pm
Maybe you would be better served by having different financial goals. My goals were always reachable. I always had a goal to contribute max to our IRA's and 457b accounts each year. No matter what the market did those were achievable goals. I never had a specific dollar goal.
Good point. I do have those and am doing those: contributing as much as possible, maximizing tax advantaged space, LBYM, staying the course with AA, etc. Those goals are achievable and working well.

The millionaire by 40 was more a 'childhood dream' that was made long before I was a legal adult.

If I include home equity - which I plan to count, as I worked hard to save for that down payment - it may happen, but its not likely to happen, given todays high equity valuations.

Sadly, I expect a bear sometime between late 2018 and early 2021, but I have no idea when.

bubbadog
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Re: Disappointed in Missing a Long Term Financial Goal

Post by bubbadog » Sun Jan 07, 2018 8:09 pm

650K net worth, 4.5 years to go, way too early to say you are going to miss your goal. Hang in there! :sharebeer

Krischi
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Re: Disappointed in Missing a Long Term Financial Goal

Post by Krischi » Sun Jan 07, 2018 8:15 pm

I agree with the other posters. This is still very achievable even considering that 2017 had outsized returns. With a similar rate of savings as you, I've added over $100K in investable assets in the past 12 months, starting with way less than what you have at the beginning of 2017.

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cfs
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Re: Disappointed in Missing a Long Term Financial Goal

Post by cfs » Sun Jan 07, 2018 8:24 pm

You are in good shape. Hang in there and continue investing slowly and for the long run. Let me check the crystal ball . . . checking . . . checking . . . checking . . . yes, I see you joining the two-comma club in just a couple of years. Good luck with your portfolio, and thanks for reading ~cfs~
~ Your Money, Your Portfolio, Your Decision ~

DVMResident
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Re: Disappointed in Missing a Long Term Financial Goal

Post by DVMResident » Sun Jan 07, 2018 8:46 pm

Shockingly similar numbers here. My excel sheet doesn't have us hitting two commas for another 7 years. You're almost at that tipping point where Mr Market has more to say than you: you are going to add ~10% in 2018 and the market will do what the market will do. Mr. Market may add more or take more. :confused

Hang in there. The second million is easier than the first!

arsenalfan
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Re: Disappointed in Missing a Long Term Financial Goal

Post by arsenalfan » Sun Jan 07, 2018 8:48 pm

Wow.
My childhood dream was to buy the entire Transformers collection and hang out with Kelly McGillis, Maverick, Goose and Ponch and John from CHiPs.
Ideally all in the same afternoon.

GoldenFinch
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Re: Disappointed in Missing a Long Term Financial Goal

Post by GoldenFinch » Sun Jan 07, 2018 8:50 pm

Just keep doing what you’re doing. At least you have a plan, which is half the work.

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dodecahedron
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Re: Disappointed in Missing a Long Term Financial Goal

Post by dodecahedron » Sun Jan 07, 2018 8:56 pm

The goal of being a "millionaire" by 40 is pretty arbitrary since I assume you are not adjusting that goal for inflation.

Even if you don't hit a million in nominal dollars by age 40, you might well find that your real (adjusted for inflation) net worth at age 40 is higher than you would have gotten with a million in nominal had inflation not been so unusually low (by historic standards) in recent years.

Given that a lot of things in the tax code are not indexed for inflation, I am happier with real gains representing modest nominal growth and modest inflation adjustments vs. more aggressive nominal growth and steeper inflation adjustments.

KlangFool
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Re: Disappointed in Missing a Long Term Financial Goal

Post by KlangFool » Sun Jan 07, 2018 8:59 pm

OP,

Come on. Are you saying that you will be unhappy if you are $999,999 versus $1,000,000 by 40? Or, the difference of $10? Or, the difference of $100? Or, the difference of $1,000? It is just a number.

KlangFool

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celia
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Re: Disappointed in Missing a Long Term Financial Goal

Post by celia » Sun Jan 07, 2018 9:05 pm

I wouldn't blame the savings rate or market gyrations for not making your goal. I think the "problem" is you're just aging faster than you expected. Slow down and enjoy each day. :D

BuckyBadger
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Re: Disappointed in Missing a Long Term Financial Goal

Post by BuckyBadger » Mon Jan 08, 2018 7:38 am

I could never understand people making total value goals. Total value is something you have no control over if you have investments in the market.

Contribution goals make sense to me, since you can actually control those.

Most people don't have the ability to suddenly contribute extra thousands and thousands of dollars to meet a total value goal if the market doesn't do what you want it to, so making that sort of thing a goal seems like nothing more than setting yourself up for failure and disappointment.

My opinion, of course.

Dottie57
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Re: Disappointed in Missing a Long Term Financial Goal

Post by Dottie57 » Mon Jan 08, 2018 8:30 am

+1

Best to focus on what you can control. Spending and contributions come to mind.

Nearly A Moose
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Re: Disappointed in Missing a Long Term Financial Goal

Post by Nearly A Moose » Mon Jan 08, 2018 8:43 am

You may or may not make it. But keep trying. The market will probably have more say than you given that this is a relatively short time-horizon goal at this point. And remember that the "bank account size" goal is a proxy for something else. I'm going to guess that your younger self picked $1M because that seemed "rich" (or something to that effect). So, at 40, check your net worth and see if you've hit $1M. But also "do I feel rich?" "Do I feel like I'm on the path to significant wealth and the life I want?". Based on what you've described, I'm going to guess that you will be able to say "yes" to question 2.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

Shallowpockets
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Re: Disappointed in Missing a Long Term Financial Goal

Post by Shallowpockets » Mon Jan 08, 2018 8:49 am

Not for lack of trying there. Don't beat yourself up on such a thing. Don't 'poor me' yourself when so many are not even that close.

exigent
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Re: Disappointed in Missing a Long Term Financial Goal

Post by exigent » Mon Jan 08, 2018 8:55 am

I would suggest setting goals that you actually have control over. Hitting an aribtrary number for net worth depends on a lot of things that are beyond your control. Instead, focus on saving $X/month and investing in Y way. That sort of thing. You actually have control over that, so if you fail to meet that goal, then you have my permission to feel bad and beat yourself up.

DJP1944
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Re: Disappointed in Missing a Long Term Financial Goal

Post by DJP1944 » Mon Jan 08, 2018 9:38 am

OldSport wrote:
Sun Jan 07, 2018 5:45 pm
It has been a goal of mine to be a 'millionaire' by the time I'm 40 since as long as I can remember, but its looking like this goal will be hard to achieve.

We are saving more than we've ever been and should be on track for a decent retirement, but it hurts to miss a long-time goal I've had since before I was legally allowed to invest.

If I can count home equity it puts us closer, but still highly unlikely with lower expected returns and a bear market in somewhere in this time frame.

Current Portfolio: $500k 80/20 AA
Annual Contributions: ~$50k maxing tax advanted space. HSA excluded from this.

Current home equity: ~$150k

I have ~4.5 years left to meet this long time goal. My spouse has 7 years, so there's a better chance my spouse will make this goal.
Is it a goal, an aspiration, or a dream?

If it's a goal i'd argue that it's specifically written down and you can articulate your process or plan to obtain it. I largely disagree with posters who dissuade specific goals. "Being worth $1M by the my 40th birthday" to me is very specific and depending on your circumstance obtainable. If, at the moment you feel off track from goal obtainment then it may be time to re-assess and augment your strategy...that's assuming that this is a real goal that you really want to achieve.

There are a lot of things that can be done in four years to make up for the nominal difference that seems to exist in your current projection.

Now, if it's merely a dream or an aspiration...then that's fine too, I'd just argue those are different than a goal.

nguy44
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Re: Disappointed in Missing a Long Term Financial Goal

Post by nguy44 » Mon Jan 08, 2018 9:50 am

To the OP, IMHO you are way too early in the cycle to be worried about this.

We were paper millionaires before I was fifty. Then Guess what? 2008-2009 happened. So much for being a paper millionaire.

We didn't get "bummed out", we just continued on the path of "we'll keep saving/investing as best we can, eventually we will hit the target again" - and we did.

No problem having a specific goal - but no need to get bummed out if you do not reach it in YOUR timeframe. As long as you keep doing the right things to move towards that goal, that is what is important. You will eventually reach it.

There are sadly many today who have goals but either are not taking any actions toward them, or a hoping that someone or something will come out of the blue and achieve their goal (e.g. wanting to be a millionaire by buying lottery tickets). Just do not fall into that mindset.

MotoTrojan
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Re: Disappointed in Missing a Long Term Financial Goal

Post by MotoTrojan » Mon Jan 08, 2018 10:02 am

OldSport wrote:
Sun Jan 07, 2018 7:59 pm

Sadly, I expect a bear sometime between late 2018 and early 2021, but I have no idea when.
Let me fix this for you.
Sadly, I have no idea when the bear will be.
Keep chugging along. If you plan to retire in your 50-60s, a near-term bear might be great for you.

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JamesSFO
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Re: Disappointed in Missing a Long Term Financial Goal

Post by JamesSFO » Mon Jan 08, 2018 10:09 am

FWIW, I can empathize. I really wanted to pay off my mortgage before I turned 40, I paid it off WHILE I was still 40 but felt some disappointment. You have ~5 years to stay the course and work on this, see what happens.

dziuniek
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Re: Disappointed in Missing a Long Term Financial Goal

Post by dziuniek » Mon Jan 08, 2018 10:30 am

OldSport wrote:
Sun Jan 07, 2018 5:45 pm
It has been a goal of mine to be a 'millionaire' by the time I'm 40 since as long as I can remember, but its looking like this goal will be hard to achieve.

We are saving more than we've ever been and should be on track for a decent retirement, but it hurts to miss a long-time goal I've had since before I was legally allowed to invest.

If I can count home equity it puts us closer, but still highly unlikely with lower expected returns and a bear market in somewhere in this time frame.

Current Portfolio: $500k 80/20 AA
Annual Contributions: ~$50k maxing tax advanted space. HSA excluded from this.

Current home equity: ~$150k

I have ~4.5 years left to meet this long time goal. My spouse has 7 years, so there's a better chance my spouse will make this goal.

beg of year 4% Growth contribution
1 $500,000.00 $20,000.00 $50,000.00
2 $570,000.00 $22,800.00 $50,000.00
3 $642,800.00 $25,712.00 $50,000.00
4 $718,512.00 $28,740.48 $50,000.00
4.5 $797,252.48 $15,945.05 $25,000.00

Total: $838,197.53
$150,000.00 house

$988,197.53

$11,802.47 few k in H to the S to the A.

$1,000,000.00 Well, Boo-hoo.

Quick and dirty.

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djpeteski
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Re: Disappointed in Missing a Long Term Financial Goal

Post by djpeteski » Mon Jan 08, 2018 10:35 am

Anytime you miss, or even hit a goal one needs to examine the things one can control and the things one can't. Only then can you evaluate if you did a good, poor, or mediocre job. Also you can learn to get better at setting goals in the future.

For example, lets say your desire is to increase your retirement savings by 50K this year, and that you already have 500K in your savings. If we have a average market this year the goal is easy. All you need is 10% returns and a small contribution to cover the fees. Done. A great market and nothing needs to be done. However, if we are down by even a small amount the goal is impossible. You cannot contribute enough to put into retirement to make up for a loss or even a flat market. Those things are beyond your control.

One can do a poor job, and accomplish this goal; or a really good job and miss completely. A better goal to write is: Contribute 18.5K to retirement this year. That is mostly in your control, but could also come unhinged by job loss or reduction in income.

While you may or may not miss your goal, all you can do is judge the job you have done in the past. Even if there were periods where you made poor financial decisions, did you learn from your mistakes? Are you no longer making them?

Most of all forty is still very young and does it really matter, at that point, if you have a 950K net worth or a 1.1m net worth? It doesn't. You are on the right track and you will get there. You are so much further ahead of the average citizen and you will reap rewards that many will be envious. Compared to some bogleheads you are "behind", but most of us are in "rarefied air" and you have certainly earned your place.

Be thankful for the progress you have made and keep up the good fight.

clutchied
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Re: Disappointed in Missing a Long Term Financial Goal

Post by clutchied » Mon Jan 08, 2018 10:51 am

OldSport wrote:
Sun Jan 07, 2018 5:45 pm
It has been a goal of mine to be a 'millionaire' by the time I'm 40 since as long as I can remember, but its looking like this goal will be hard to achieve.

We are saving more than we've ever been and should be on track for a decent retirement, but it hurts to miss a long-time goal I've had since before I was legally allowed to invest.

If I can count home equity it puts us closer, but still highly unlikely with lower expected returns and a bear market in somewhere in this time frame.

Current Portfolio: $500k 80/20 AA
Annual Contributions: ~$50k maxing tax advanted space. HSA excluded from this.

Current home equity: ~$150k

I have ~4.5 years left to meet this long time goal. My spouse has 7 years, so there's a better chance my spouse will make this goal.
that's a long time to be disappointed already.

I think you're in good shape! Stay the course!

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Top99%
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Re: Disappointed in Missing a Long Term Financial Goal

Post by Top99% » Mon Jan 08, 2018 11:43 am

I agree with many others: Your savings rate is good and you are really at the mercy of Mr Market. The only thing I might consider and which we did during the 01-02 and 09-10 "sales" is when the next "stock market sale" comes temporarily becoming even more frugal to take advantage of the sale. But, in my opinion you are doing great as is.
Adapt or perish

JGoneRiding
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Re: Disappointed in Missing a Long Term Financial Goal

Post by JGoneRiding » Mon Jan 08, 2018 11:15 pm

bubbadog wrote:
Sun Jan 07, 2018 8:09 pm
650K net worth, 4.5 years to go, way too early to say you are going to miss your goal. Hang in there! :sharebeer
Yeah that. I mean it's going to be up to the markets but there is still a very good chance. And I totally think you should count it as net worth and then be generous in your definition

Why exclude the HSA it's just savings with a different name. Include it and the checking acct and the emergency fund I bet you will be very close

OldSport
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Re: Disappointed in Missing a Long Term Financial Goal

Post by OldSport » Mon Jan 08, 2018 11:38 pm

dziuniek wrote:
Mon Jan 08, 2018 10:30 am
OldSport wrote:
Sun Jan 07, 2018 5:45 pm
It has been a goal of mine to be a 'millionaire' by the time I'm 40 since as long as I can remember, but its looking like this goal will be hard to achieve.

We are saving more than we've ever been and should be on track for a decent retirement, but it hurts to miss a long-time goal I've had since before I was legally allowed to invest.

If I can count home equity it puts us closer, but still highly unlikely with lower expected returns and a bear market in somewhere in this time frame.

Current Portfolio: $500k 80/20 AA
Annual Contributions: ~$50k maxing tax advanted space. HSA excluded from this.

Current home equity: ~$150k

I have ~4.5 years left to meet this long time goal. My spouse has 7 years, so there's a better chance my spouse will make this goal.

beg of year 4% Growth contribution
1 $500,000.00 $20,000.00 $50,000.00
2 $570,000.00 $22,800.00 $50,000.00
3 $642,800.00 $25,712.00 $50,000.00
4 $718,512.00 $28,740.48 $50,000.00
4.5 $797,252.48 $15,945.05 $25,000.00

Total: $838,197.53
$150,000.00 house

$988,197.53

$11,802.47 few k in H to the S to the A.

$1,000,000.00 Well, Boo-hoo.

Quick and dirty.
The $150k is current home equity. I am paying on a mortgage. I should have at least $30k more equity by then even if the home doesn't appreciate a dime.

What I can do to increase savings is keep the same vehicles at least until I turn 40 unless a 'black swan' event occurs where I have to replace them. I will have them both paid off this year. I am not counting on this until it happens.

Thanks for putting this into perspective. So I have a ~50% chance of reaching that based on the whim of the market.

I feel better even if it doesn't happen.

dziuniek
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Re: Disappointed in Missing a Long Term Financial Goal

Post by dziuniek » Tue Jan 09, 2018 3:15 pm

OldSport wrote:
Mon Jan 08, 2018 11:38 pm
dziuniek wrote:
Mon Jan 08, 2018 10:30 am
OldSport wrote:
Sun Jan 07, 2018 5:45 pm
It has been a goal of mine to be a 'millionaire' by the time I'm 40 since as long as I can remember, but its looking like this goal will be hard to achieve.

We are saving more than we've ever been and should be on track for a decent retirement, but it hurts to miss a long-time goal I've had since before I was legally allowed to invest.

If I can count home equity it puts us closer, but still highly unlikely with lower expected returns and a bear market in somewhere in this time frame.

Current Portfolio: $500k 80/20 AA
Annual Contributions: ~$50k maxing tax advanted space. HSA excluded from this.

Current home equity: ~$150k

I have ~4.5 years left to meet this long time goal. My spouse has 7 years, so there's a better chance my spouse will make this goal.

beg of year 4% Growth contribution
1 $500,000.00 $20,000.00 $50,000.00
2 $570,000.00 $22,800.00 $50,000.00
3 $642,800.00 $25,712.00 $50,000.00
4 $718,512.00 $28,740.48 $50,000.00
4.5 $797,252.48 $15,945.05 $25,000.00

Total: $838,197.53
$150,000.00 house

$988,197.53

$11,802.47 few k in H to the S to the A.

$1,000,000.00 Well, Boo-hoo.

Quick and dirty.
The $150k is current home equity. I am paying on a mortgage. I should have at least $30k more equity by then even if the home doesn't appreciate a dime.

What I can do to increase savings is keep the same vehicles at least until I turn 40 unless a 'black swan' event occurs where I have to replace them. I will have them both paid off this year. I am not counting on this until it happens.

Thanks for putting this into perspective. So I have a ~50% chance of reaching that based on the whim of the market.

I feel better even if it doesn't happen.
You have a heck of a better chance at it than I do and my goal is the same.
If a black swan occours and it's not a prolonged one, it could increase your chances of hitting your goal.

Just look at the 'Share your networth' thread.

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