30 Years of Net Worth Data, Half a Decade at a Time

I started tracking expenditure, income, and net worth in Australian Dollar terms when I moved to Australia for the first time in October 1996. My accounts from before that date are in Pounds Sterling or US Dollars and I wasn't investing. So, the base net worth for rate of return calculations was September 1996. We now have 30 years of data. I thought it would be interesting to track progress five years at a time. I think I got the idea from some Berkshire Hathaway report that tracked progress in a similar way. 

All numbers are in Australian Dollars. Investment profit is post implicit superannuation taxes but the accumulation index is pre-tax. Net worth growth rate and annual rate of return are compound growth rates over the five years previous to the date on the left.

Overall, net worth increased by about 800 times and investment achieved a 6x multiple. But each half-decade was unique. September 2001 was before the worst of the tech wreck. Profit and net worth were already down from their peaks but I still had achieved an average 7.8% annual rate of return and a 67% net worth growth rate and had saved over $130k, which is pretty impressive on a salary of about $50-60k per year.

In September 2006, I was back in the US and markets were a year from their pre-GFC peak. Returns were weaker at 5.4% per year because of the losses in 2001-2003. I had added another $160k to saving. My salary was higher in the US, but I dissaved a lot in 2001-2002 when I was unemployed and travelling to find a new academic job. Net worth grew an average of 23% per year.

In September 2011, I was now married and back in Australia. I had recently got a continuing position as full professor. However, the previous five years included the GFC. So the average rate of return was negative at -7.9%. Moominmama was a post-doc fellow and I only had a job for part of the time. But we still managed to increase net worth by 2% per year by saving $223k! 

The next decade saw net worth grow by 28% per year and investment returns were above 10% per annum. In September 2016, we had reached millionaire status in both Australian and US Dollar terms by saving more than $600k and adding $1/2 million in investment returns. This was the best 5-year period for investing with an average return of 12.5% per annum.

By September 2021, we were in the post-COVID stock market rally. Net worth was over $5 million after saving another $400k, receiving the main inheritance, of $1.8 million, and adding close to $2 million in investment returns.

Finally this month, net worth is over $8.5 million. We can no longer grow net worth as rapidly. We continued to save after the inheritance–including the boost from the redundancy package and despite the beginning of retirement dissaving this year. We added another two and a half million of investment returns. Returns were lower at 8.6% per annum. They are still 1% per annum ahead of our target portfolio and 3% p.a. ahead of a Vanguard Australian Dollar 60/40 passive benchmark. It might come as a surprise, but major stock indices also grew more slowly in the last five years than in the previous five.