$500K net worth: How minimalism and investing helped me get there

November 11, 2014

Finance, Philosophy

10 years after my savings journey began in 2004, I officially hit the halfway point of my $1 million net worth goal.

Screen Shot 2014-07-01 at 9.38.04 PM

Along the way, I’ve internalized two concepts that I believe were instrumental in helping me get to this point — minimalism and investing.


To me, minimalism is the philosophy of owning what you use on a regular basis and not much else. In a consumerist society where we’re constantly bombarded with advertisements to buy stuff we don’t need, we’ve become people who end up becoming overburdened by these very possessions. You may get a temporary moment of happiness every time you buy something, but the feeling soon goes away. Adam Baker, who created the blog Man vs. Debt has a very inspiring TED talk about how he was a part of this vicious cycle until he sold all his stuff and starting living the life he wanted.

As a single man in the military having to move every three years, the cost of having too much stuff comes in the form of unnecessary stress every time I have to move. No thanks. At my first duty station in Hawaii, I rented a fully furnished apartment, so I didn’t even have any furniture. When the movers came, they were in and out in about 30 minutes. Compare that to your average family who owns a house and may need multiple days to move. The feeling of freedom that comes with being able to move to another location at a moment’s notice can’t be bought. If your goal is to one day travel the world, it will become increasingly important to take note of your possessions and start paring down to only what you use consistently. One technique that I use is to look around my apartment as if I was going to move the very next day. If that was the case, what would I give away and what would I keep? If I would get rid of it, I sell it or give it away to a thrift store immediately. There’s no use in procrastinating this exercise until moving day when you will be more stressed. Cleansing myself of useless items gives me a sense of freedom the moment I part with it. The battle with clutter is a constant process, not something that you just do once. I recommend doing this at least once a month.

The direct financial benefits of a minimalist lifestyle are obvious. When you don’t feel the need to constantly buy things, you will have more disposable income. More disposable income means you have more money to invest. More money to invest and lower spending means that you can achieve financial independence much earlier. However, it’s the second and third order effects of not having many possessions that pay dividends.


Most of our income is spent on housing. The more stuff we accumulate, the bigger our residence needs to be to fit all of our stuff. Soon, we end up having garages full of stuff and when that gets full, we pay a storage company to keep the rest of that stuff.

Not having many possessions means that you don’t need as much room and can live comfortably in a smaller residence. I fully internalized this after a year-long deployment to Afghanistan. For an entire year, I lived in a room that was only big enough to house a bed, a small desk and a small dresser. That’s it. And guess what? I was completely fine. My current 400 sq. ft. studio feels enormous by comparison.

Having a smaller residence means that I pay less in rent, utilities, and maintenance (if I owned). The savings that I achieve in housing is no small thing. A lot of people try to save money by doing things like cooking at home instead of eating out and avoiding activities that cost a lot of money. While I am not bashing these strategies, many people would be better served by looking at how much they pay for housing first. When I first moved to Norfolk, I had 10 days to find a place to live. After looking at a bunch of apartments in the area, I had to option of selecting places that ranged from $600/month all the way up to luxury apartments hovering close to $1,500/month. Although my military housing allowance would cover any of these scenarios, I settled with an apartment that cost $725/month. Had I selected an apartment that cost $1,500/month, I would have to spend $775 less per month in other areas right off the bat just to match my level of expenditure paying rent at $725/month. Now, I don’t know about you, but $775/month ($9,300/year) is not easy to reduce. I would essential have to stop taking classes I enjoy, rarely eat out, and probably even eliminate the overseas trip I take every year in order get to that level. However, because my housing bill is so low, I can still do all the things I enjoy and still save 60% of my paycheck with relative ease. I don’t take pleasure in paying double the price for a super nice place when all I really need is a clean and safe living space at a reasonable price. I take pleasure in the experiences I have in life.

When it comes to saving money, I’m definitely no expert. I spend a lot of money on travel, eating out, and taking classes in activities that I enjoy such as salsa and Muay Thai. However, I can do those things and still save because I don’t spend much money on rent and buying things.


So what do you do with all that disposable income after adopting a minimalist lifestyle? Simply leaving it in a savings account or tying it up in a CD with low interest rates will do you no good. You need to make those savings work for you.

I’ve talked at length about my investment strategy in prior posts, so I won’t belabor the point. I’ll simply show you a screenshot of my Vanguard account that has been representative of what I’ve done consistently over the past 10 years.

Screen Shot 2014-11-11 at 4.21.48 PM

It doesn’t get much simpler than that. Month after month, I buy shares in a Vanguard Target Retirement fund. Market goes up, I buy. Market crashes, I buy. There’s a saying that people use in powerlifting that goes, “Shut up and squat.” As far as investing goes, the saying should be, “Shut up and buy.”

“But isn’t the market due for a correction?”

“Shut up and buy.”

Listen, I don’t know what the market is going to do and neither do you. All I know is that if you are investing for the long term, there is no better place for your money to grow. And I’m not talking about buying shares in the latest IPO you read about either. I’m talking about low cost, boring-ass index funds. Last year, I contributed about $40K to my investment accounts, but my overall net worth grew by over $100K. If you’re starting out with $5K or $10K in investment accounts, it will be slow going at first. Once you hit a certain point, though, your investments start growing at a rate that will boggle your mind. Think about about it. If you have $500K and the market appreciates at a reasonable rate of 7%, you’ve earned $35K passively right there. But to get there, you need to establish a solid base for those investments to grow. That comes from forming the habit of saving and investing CONSISTENTLY over many years. If you’re the type to take out your money as soon as there is a sign of trouble in the market, it is definitely not for you. The more you have, the more you will see your net worth swing up and down. If you can stomach that — and many people really can’t — then the stock market is still be best way for you to grow your wealth.

28 Comments on “$500K net worth: How minimalism and investing helped me get there”

  1. eugene leung Says:

    Raymond, didn’t know about your blog, really enjoying your writing, let me know when you’re ever in the Bay Area, I’m living near Moy. I certainly share some of your financial values and appreciate you sharing.


  2. Online bingo for money Says:

    Have you nkticed your admireres tend to bee more aand more eager to see everything you arrive up with


  3. Derek@LifeAndMyFinances Says:

    Very cool Raymond! This has to be incredibly exciting for you. And, the best part is that while you’re at the half-way point with the dollars, you’re WAY past halfway in the time aspect. Chances are that it will only take you 5-6 more years to hit a million since your money is compounding on a larger amount of dollars.

    One thing that bothers be though – it seems that all your money is tied up in the market. While it is technically diversified in your Target Vanguard fund, it’s still all in the market. If the economy tanks, you might take quite the hit. Have you ever thought about investing in a business or real estate? Or at least some other way to invest outside of the stock market to be truly diversified?


    • raymondtung Says:


      Thanks for the comment. I definitely hope to hit $1M within 5 years. We shall see. Personally, I’m not a very big fan of real estate. I don’t like the idea of having my funds tied up in an illiquid asset and prefer investments that will allow me to structure a location independent life. I do have about 10%-15% of my assets invested in a REIT, which I believe further adds to my diversification without having to actually purchase real estate.


      • Michael F Carpino Says:

        Hi Raymond,

        First good for you and awesome job. You remind me of myself in some ways. Discipline with savings and investing works, your article proves that. I have no doubt you will become a millionaire. One thing that would have be nice to show in your article was what you were making when you started and what your income is today. And I’m referring to your net after taxes just to show that just about anyone can do what you did.

        Like you I’m not a fan of real estate and here’s my reference. When I was 26 I got married and bought my first house, I put $26,000 down. Yes I’m a saver and proud of it. I was living in Omaha at the time and I was studying investing and the Buffett ways. Had I simply not bought my house and instead bought Berkshire Hathaway stock which was trading around $800 a share I’d have around $6,987,500.

        But that’s life we can look in the rear-view mirror and it looks easy then but true investing takes discipline over months, years and decades.

        And thanks for serving,


  4. lphie Says:

    Very sound strategies and behavior. Good for you and great job!


  5. Courtney Says:

    Great work! I love your take on minimalism and completely agree. My husband and I are slowly getting rid of stuff and saving like crazy in the hopes that in a few years we can move to where we want to live and significantly downsize. One additional benefit of living in a small space is the time spend up keeping it. We currently have a house that is way to big for the two of us and keeping it clean is a chore. Who needs extra rooms we almost never use? Certainly not us.


  6. Dee @ Color Me Frugal Says:

    Love this! We downsized to a smaller home when we moved in 2012, and that is easily one of the best decisions we have ever made. Smaller mortgage, smaller utility bills, no HOA fees, and less time to clean! And our net worth has reaped the benefits 🙂


    • raymondtung Says:


      Glad to hear it. Downsizing is always a win-win situation. I wish you continued success in your journey.


  7. Mustachian Post Says:

    Very interesting reading, in particular the part on housing.
    Just to get another point of view that mine: what is your ideal home size for a family of 4 (2 adults + 2 children)?

    Also, if you publish regularly your savings rate, I would be happy to count you on the #BSRI Gold Badass Savers category (more infos here http://www.mustachianpost.com/blogger-savings-rate-index/).

    Good luck for your second half way to the million!!!


    • raymondtung Says:


      Thanks for the encouragement. I wish I could give you an answer on an ideal home size, but I can’t really say until I’m in that situation. I can only say what I’m comfortable with as a single guy. Right now, it happens to be right around 400 sq. ft. Thanks for stopping by.


      • traveltravelandretire Says:

        Sorry to chime in as you did not ask me but I often think about this. I read that 400 – 500sq feet per per person is the ideal. For me 2,100 square feet is enough for 5 of us 2 kids, 2 adults plus grandma! We had 1600 square feet for 4 and it was plenty esp with a park next to us.

        Of course it also depends on how your house is structured. I dislike wasted spaces (formal rooms that i never use) and am partial to open spaces that are usable.

        Without kids we were super happy with a less than 600 square foot place and HAPPIEST year ever in gradschool, we lived in a 750 square foot one bed and one suitcase only for an entire year. That feeling of freedom I want to get back when kids grow up (they add so much ‘stuff’ to our house, though we have done really well at trying to help them just have a few things at once – we rotate toys for example).

  8. Michael Mota @ NTPNW Says:

    Great article! I enjoyed reading it and just to let you know I too agree with your approach to living a simple life.


  9. Stephen Says:

    Really enjoyed this article. This is the first article I’ve read on this site so forgive me if you’ve mentioned your age elsewhere, but I’m guessing you’re 30 or so.

    With that in mind, my question is regarding your selection of Target Retirement 2045. The last time I checked the glide path for the Target Retirement funds, the increase in allocation to bonds/other fixed income begins at 25 years out and reaches a 45% fixed income allocation rate by the time it hits the target date. More specifically, at 15 years out, the fund is a little over 22% in bonds, which is a little too safe IMO.

    I’d love to know if you’ve paid this any consideration and what your thoughts are on the matter.

    I’m personally 100% in VTSAX (which is 62.2% of the Target Retirement 2045 fund) and have declined any international exposure based partially on the reasoning presented by Jack Bogle himself in his December 2014 interview with Bloomberg (http://www.bloomberg.com/news/2014-12-08/jack-bogle-i-wouldn-t-risk-investing-outside-the-u-s-.html).

    At this time, i don’t ever see myself adjusting this aggressive allocation because I only plan on a 3-4% annual withdraw which would allow me to weather through any recessionary cycles.


    • raymondtung Says:


      I’m currently 34 years old. Regarding my choice of the Target Retirement 2045, I opted for a fund that will gradually reduce my risk exposure as I get older, which seems to be conventional wisdom in most of the financial literature I come across. Also of note, about half of my investments are in the Thrift Savings Plan (government 401k) which is entirely composed of equities. By itself, the 2045 fund might be a bit conservative as you mentioned, but when I factor both my accounts together, I feel that I am fairly aggressive when it comes to my investment strategy.


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    I recently launched a Net Worth Blog at;

    Please check it out, any tips/help is appreciated.



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