Where Did The Money Go? – Reader Challenge


It’s easy to look back on all of the money you’ve made over the years and wonder “Where did the money go?”  It’s a common thought – that we have squandered years of toil and trouble at work, and now have very little to show for it.

But is that true?  Do we really have nothing to show for (in my case) almost 27 years of work?  I recently looked back at a list of tax records to see how much money my dear wife and I have brought home in our paychecks over the years.  I’m not counting money that was paid in for taxes, because we never saw those bucks, just our pay minus taxes.

I was quite surprised by the results.  I expected to see some fraction of our earnings was left over, but our current net worth was actually 15% GREATER than all of the money we had been paid for our work.  How could that be?  It’s not that we hadn’t spent anything since we started working in 1989, so that means our savings and growth from “passive income” (investments) has more than offset our spending for almost three decades.  It was hard to believe, so I had to look at it several times.

If you are a fan of the book Your Money or Your Life, you know that their concept of financial independence is when your passive income is enough to fully cover your desired retirement lifestyle.  By this definition, we’ve somehow achieved this RETROACTIVELY.

We were good savers from early in our careers.  We maxed out our 401k plans right away when we started working, and paid off all of our student loan & a couple small car loan within a few years.  We had help from parents in covering half the down payment of our first home and also did a good job keeping our lifestyle in check relative to our growing income.

Don’t get me wrong, we’re not “frugal living” devotees – but we have banked quite a few raises and invested about 100% of our annual bonuses and income from a long-term stock plans.  Clearly keeping what we earned, instead of immediately spending it got us off to a great start and the appreciation of these savings has made a huge difference.  It has more than offset everything we had spent over more than a quarter century.

I don’t think I have ever read about anyone analyzing their net worth this way, so I’ll make this into a reader challenge (if you are comfortable sharing):  Where are you at on this measure of “Where Did The Money Go?”

Add up all of the money you’ve earned (less taxes) over your career and compare it to your current net worth.  At what % do you sit today?  Are you close to 50%? 75%? Over 100%?  

Why do you think that is?

Image Credit: Pixabay

11 thoughts on “Where Did The Money Go? – Reader Challenge

  1. I happened to run this calculation for myself a few months ago, and it was right about 100%. That thought you mention, “that we have squandered years of toil and trouble at work and now have very little to show for it,” was one of the big fears that drove me to start saving big from day one. I guess I always knew I didn’t want to be trapped in a job forever.

    Liked by 2 people

    1. It’s an interesting perspective isn’t it? I think it was only in the last 5 years or so when it reached (and surpassed) 100% for us. Earlier in our careers it wouldn’t have looked that way.


  2. This is a very great challenge & one I would need to do and get back to you! Since I graduated in 2012 and have only been in the post-grad work force for 4 years (unfortunately, I barely saved anything from my high school jobs, which in hindsight truly makes me sad), I could imagine I may not even be close to 50%. Maybe close right now, but a lot of that money is getting put away for a home downpayment to be utilized eventually – unless we continue to rent for as long as possible. That’s amazing that retroactively you have surpassed financial independence!


  3. Very interesting perspective on things. I’m only two years into my “career,” nearing $30k in investments, having invested minimally while in college and, most unfortunately, not at all in high school. We have backed off investing, sticking with my 5% to get my full match, and currently running our debt snowball to become debt free. Then it’ll be full stream ahead with maxing out investments. I’ll have to look back at tax records but I would estimate I’m at about 15% right now. Lots of work to do. Thanks for the eye opener!


    1. It’s the passive income that makes the difference in the long run. Once you pay off your debt you’ll be able to ramp up investing. I won’t take long if you’re spending frugally!


      1. It’s true; debt freedom in the next couple years will mean essentially next-to-zero monthly outflow. We don’t have a mortgage and are in no rush to take one either. Living on the road in the next few years will allow for some crazy saving/investing levels, helping us reach our FI mark, hourly, by the time I’m somewhere between 40 to 45 (29 now.) I’m glad I have a grasp on these concepts now, but oh what I’d give to go back and have a chat with my sixteen year old self! haha

        Liked by 1 person

      2. You might be surprised by how quickly your financial situation improves. Estimates I did in my last 20s/early 30s look positively quaint compared to how fast our nest egg grew. Dave Ramsey talks about this all the time. Stay focused and good things happen! 🙂

        Liked by 1 person

  4. Great post – really shows the power of investing and passive income. I think this statement probably sums it up “good savers from early in our careers”. Starting early is good and keeping the habit going too.

    Liked by 1 person

    1. Yes – starting early makes a huge difference. It’s hard to catch up to the power of compounding!


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