My Secret FIRE Charts From 2022

Lifestyle

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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.

Happiness chart

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!

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

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.