My 2024 Year-End Review
Happy New Year, readers! After the close of every year, it’s a good time to review how your investments fared compared to the overall market, myself included. In 2024, investors had a great year, with the S&P 500 returning 24.48%. The tech-heavy Nasdaq blew past it with a 31.02% return! In this post, I will look back at the year and review my various investments to see how they performed in comparison. Let’s dive in!
A Closer Look at Overall Stock Market Returns
In a previous post, I noted that despite 2023’s impressive 24.2% return, its gains simply recovered from the 19.44% loss in 2022. With a 24.48% return in 2024, let’s see how $100,000 invested at the start of 2022 would’ve turned out.
2022 (-19.44%): $100,000 x (100% - 19.44%) = $80,560
2023 (+24.2%): $80,560 x 124.2% = $100,055.52
2024 (+24.48%): $100,055.52 x 124.48% = $124,549.11
This means that over the past 3 years, the S&P 500 has returned roughly 7.59% each year, which is more or less the average rate of return of the stock market. So, while the past 2 years’ returns were astronomical in absolute terms, we must remain humble because it just took 1 big down year to average out their returns.
How My Investments Performed in 2024
My investment accounts, both taxable and retirement accounts, had returns between 24.7% and 56.47%. That means that I met or exceeded the overall market returns. Not surprisingly, the accounts closer to the lower end of the range were heavily weighted in index funds and, therefore, had similar returns to the overall market. Accounts with the highest return had more individual stocks with behemoths like Nvidia, which outperformed the broader market. While impressive, a large part of me dislikes holding individual stocks that can make or break a portfolio by themselves. I’ll talk more about this in a future blog post, so stay tuned!
Taking Advantage of the Mega Backdoor Roth
While the 401(k) max employee contribution was $23,000 in 2024, my partner exceeded that threshold thanks to the availability of the Mega Backdoor Roth:
Employee contributions: $57,469.90
Employer contributions: $11,530.10
If you’re wondering how to do this, check out my guide.
Like the past few years, I will continue maxing out all retirement accounts available to me in 2025, including the Mega Backdoor Roth with $70,000 total contributions and two Roth IRAs via Backdoor Roth conversions with $7,000 each.
Real Estate Investments
Last year, I sold a money-losing short-term rental I owned in Dallas, TX. I embarked upon this experiment a couple of years ago but I decided it was time to cut my losses.
In 2022, I entered into contract on 2 new constructions intended to be rental properties. One of them finally closed days before Christmas 2024 and will soon be rented out. The 2nd new construction is still slated for completion in early 2025.
Lastly, I entered into contract on a 4-plex new construction in Indiana. The projected numbers look solid, and I hope to close on it by the end of the year!
Net Worth Change
My FIRE goal was originally to retire with $10 million by age 40 in Silicon Valley, California. That number excluded equity in my primary home and all my retirement accounts. It’s a lofty goal and one that I still hope to reach, despite moving to a lower cost of living area. That being said, the past few years have had some truly wild swings in net worth that moved in the same direction as the stock market:
| S&P 500 Return (% change) | Net Worth ($ change) | |
|---|---|---|
| 2022 | -19.44% | -$1.7 million |
| 2023 | +24.2% | +$2 million |
| 2024 | +24.48% | $3.6 million |
Fortunately, because of the last 2 years' growth, my goal has become much more attainable. Based on some rough calculations, I am roughly two years ahead of schedule!
Final Assessment
Overall, I am very pleased with the results of my investments in 2024. However, I think there’s always room for improvement. For example, I would like to continue to simplify my stock portfolio by reallocating funds from individual stock holdings to index funds. I also want to continue diversifying my investments to reduce volatility and improve cash flow.
I didn’t post much in 2024, but I plan to change that this year! Stay tuned for some interesting blog posts, and share below how your 2024 fared and some of your 2025 goals!
