2025 Update: Portfolio, Job Change, Outlook

In 2025, our net worth rose by 25.92% to $245,127 in USD and 11.56% in EUR to €208,619.

2025 was an enormous year for us. Our wealth has settled above $200,000, and I’ve changed employers after years of feeling economically underappreciated. In this year of contrasts, I earned some of my best money while also taking a substantial pay cut for the hope of a brighter future.

Net Worth Change

2025 generated significant returns in the markets for us, as it did for nearly anyone who held financial assets. We were net savers this year, yes, but it was the markets that did the heavy lifting.

Last year I wrote:

May we call a spade a spade? US large caps are in a bubble. Investors in US large caps are ignoring major risks to valuations. Even ignoring those risks, the overvaluation becomes undeniable when I look objectively at the outrageous outperformance of the S&P 500, the Nasdaq 100, and the hyper-focused growth and technology funds.

Adding to this discomfort is the knowledge that it's impossible to time the bubble's bursting. Any actions taken now will likely languish in relative underperformance while the market valuation churns upwards.

My action plan was:

I've decided to sell Apple and am debating Lowe's.

...within the Wiseguy Portfolio, I've reduced exposure to large-cap growth and raised small-cap value. I may increase exposure to bonds and gold, but I haven't decided yet.

I did all of the things I said I would definitely do and none of the things I thought I might do. How’d that work?

Individual Stocks

Selling Apple was, at least in the short term, the right call. Apple had trouble near the start of 2025 and ultimately underperformed despite having an up year. The largest purchase I made with the proceeds was AVDV (Avantis ex-US Small Cap Value ETF), which went on to have an incredible year. I also purchased a little more SGOL (Aberdeen Physical Gold Shares ETF), which, as part of the broader gold story, also had a great year.

My individual stock holdings did very well in the first quarter of the year (led by Berkshire Hathaway), only to trade range-bound until the end of the year, leading to a 11.82% return. I underestimated the effect of tariffs on companies like Green Brick Partners, Dutch Bros, and Lowe’s, and the announcement of Warren Buffett’s retirement led to trendless price action from Berkshire.

The Wiseguy Portfolio

Indeed, the Wiseguy Portfolio outperformed the S&P 500 24.13% to 17.82% (with dividends reinvested). The reduced growth-stocks version of it I adopted at the beginning of 2025 did even slightly better than that at 24.69%, but I’m not certain the juice was worth the squeeze. However, my actual performance was 23.22%, which is more than acceptable.

A reminder. The Wiseguy Portfolio, as originally conceived, is:

• 25% Large Cap Growth Stocks
• 50% Small Cap Value Stocks (divided equally between US and ex-US)
• 20% Long Term Bonds
• 5% Gold

An updated version, called Wiseguy 2.0, is:

• 25% Large Cap Growth
• 50% Small Cap Value
• 10% REITs (US and ex-US)
• 10% Long Term Bonds
• 5% Gold

The Wiseguy Portfolio outperformed because of gold (SGOL was up 63.99%) and ex-US small-cap value (AVDV’s return was 49.37%). Both assets had an incredible year, and we may have entered a period of alternative asset outperformance for which portfolios like the Wiseguy were built.

U.S. small-cap value remains a lagging factor. I won’t pretend to know why, but I hope that one day, the small value factor will once again shine in the U.S. as it has abroad.

That said, although I’m happy Wiseguy outperformed this year, my expectation is not that it will always outperform. The point of the portfolio is to increase the likelihood that I’m exposed to winning assets/factors in any given year, to reduce risk, and to reduce the possibility of prolonged negative performance or “lost decades” while also, more or less, achieving a market return.

Job Change

In 2019, I wrote “Out of Levers at My Current Job” where I expressed concern that there wasn’t anything else in my job I could do to meaningfully move the needle professionally. I felt frustrated that there was almost no amount of extra effort I could put in to improve our economic situation. I had reached the top at that job, and the only future improvements I could see would come from seniority raises, unionized negotiations, and side gigs, which were limited due to the time constraints of my job.

When the pandemic hit, I began looking in a different direction, and although it took years of effort, it paid off in 2024. I wrote at the end of last year:

I'm deliberately vague here about what I do for a living, but in 2024, I took some steps that have already had meaningful results for my life. Whether or not they translate to extra money is uncertain, but I do feel like I've been overly cautious career-wise for too long, and 2024 was the proof.

At the beginning of 2025, negotiations were still ongoing, but I landed the new job in January. This is one reason I haven’t been writing: my life has been consumed with change this year, and it’s been hard to find the mental space to write. Indeed, as I began to write this review, I was suddenly engaged in some extra work that devoured my attention.

The irony of my new life is this: I’ve taken a pay cut. My life is higher risk right now, but for the time being, it’s not higher reward. It might become so one day, but for now we’re having to buy groceries a little more carefully and be more judicious with our extravagance, which was never that extravagant.

At the very least, I am more satisfied with my work, which gives me a greater sense of purpose.

2026 Anticipations and Fears

Last year, I ended my yearly update with:

I am currently pessimistic about the direction of the world. This shift right-ward both in the US and in Europe threatens stability. Much of what we value about the world exists due to international order and the rule of law. The safety of shipping, the low barriers to trade, and the patchwork of friendly nations working together to solve problems has been imperfect but prosperity making. This new order threatens all of that while offering very little in return.

The events of the last year have reinforced those fears. Throughout 2025, President Trump threatened and bullied other countries with tariffs and trade policy and threat of takeover. He bombed Iran in June and Nigeria on Christmas Day. On January 2, 2026, he attacked Venezuela and kidnapped Nicolás Maduro, which was followed by threats to other countries, including Greenland/Denmark. Moreover, there has been rampant corruption in the White House.

In 2026, I am afraid of war, both an American civil war as well as war between the US and other countries, especially its allies. The ongoing threat to Taiwan from China remains, and the possibility of greater escalation in Ukraine also exists.

Truthfully, I don’t know what a portfolio can do to protect against this. I have no idea how Germany will react if the U.S. truly becomes hostile to Europe or invades Greenland. I don’t know if the U.S. will become even more hostile towards its citizens living abroad. Within the Wiseguy Portfolio, I have been adding foreign large-cap stocks to the large-cap growth allocation, and I’ve added world bonds to the bond allocation.

Let’s get real, though: if the United States truly turns into a rogue state, all bets are off. I called my portfolio the Wiseguy Portfolio because I was trying to control the uncontrollable. I wanted to always have something working within the portfolio, and I wanted it to be ready for nearly all situations. However, a complete breakdown of the world order is beyond any portfolio. Financial assets are merely a series of contracts, and contracts require a functioning legal order. The current president threatens that legal order. Godspeed to the protesters.

All of that hangs over what is otherwise a bright time in my life. It is difficult to know how to feel as I celebrate personal successes, even as there is increasing chaos in the background threatening to force its way to the foreground.

On that depressing note, I nevertheless wish you a healthy and happy 2026. Look for the value of things politics can’t touch.

December 2022: Update and Full Year Summary

December was a great month. We had family visit us from the US over Christmas for the very first time. We traveled some. We ate some great meals and had a lot of laughs.

However, December was also the first time that our net worth was down in every metric that I track. There are four comparisons at the top of my spreadsheet: USD month over month, EUR month over month, USD year over year, and EUR year over year. For the first time, all of these metrics were negative.

Just like the stock market isn't the economy, your net worth isn't your life. But since this is a money blog, let's focus on the money part of things.

Net Worth Changes

Image: chart of our net worth in USD over time

In December, our net worth fell to $125,071/€116,780, which represents the following changes:

Metric	Percentage
Y/Y USD	-14.23%
Y/Y EUR	-8.79
M/M USD	-2.53%
M/M EUR	-5.71%

Maybe I can assuage my disappointment by creating a new metric: quarter over quarter. How's that look?

Metric	Percentage
Q/Q USD	6.83%
Q/Q EUR	-2.25%

So now one metric shows improvement. I'll take the win where I can I guess.

Our liquid net worth stood at $95,876/€89,521.

So what's up?

Inflation Devours All

The obvious big story is this:

• Due to the war, supply chain, stimulus programs, and energy shocks, inflation rose drastically.
• The Federal Reserve and other major central banks raised their benchmark interest rates to counteract this.
• Since the present value of equities is all future cash flows discounted to the present, both the discount rate and the - assumed - poorer quality of those cash flows put downward pressure on the value of stocks.
• Rising interest rates caused bond prices to fall.

We were not spared from this, and I took some serious hits on the large number of growth companies I had in my portfolio. They weren't the worst growth companies to have owned, but they were hit very hard anyway.

I took some steps to protect myself. In my IRAs, I sold in February due to trend following rules being triggered, which protected us there. I decided to reduce my exposure to individual companies and create the Wiseguy Portfolio, which is a kind of "all seasons" portfolio.

Image: Chart of portfolios in 2022: Green is my IRA, teal is my ETF account containing the Wiseguy Portfolio (started in May), red is S&P 500 benchmark, black is all portfolios together, yellow is individual stocks.

Finally, the effect of rising interest rates has caused a reduction in the estimated value of my pension. Since the pension is discounted at the rate of the 10 year treasury, rising rates reduce the future value. In a sense, this value is both real and imaginary; I'll never be able to pull out all this cash one way or the other, but I do have a guaranteed income stream in addition to government social security. It has value.

Spending

I've created a Sankey diagram that documents the flow of our money. For practical reasons, the numbers are slightly different in some cases compared to our actual budget, but overall this represents money received and spent/allocated well.

Image: A Sankey diagram showing the flow of money from income sources to spending categories.

Excluding tax, social security, and health insurance costs, our largest expenses fall into these categories:

• Rent (warm) (€10956.81)
• Groceries (€5984.66)
• My BLOW money (€4605.97)
• Travel costs (€3532.05)
• Her BLOW money (€3532.05)

A reminder: BLOW is anything we buy that is personal and doesn't require discussing with the other partner.

You can see the mark of inflation on our two largest household expenses. Our rent was raised in August, which was a bummer that upset my equilibrium for a while. Our grocery bill for the year rose from €5,158.22 in 2021 to €5984.66, which is a ~16% jump. Some of that could be carelessness on our part, but some is definitely climbing prices.

Our travel costs included a trip to the US for her, a trip to the US for me, a few weeks of fun in Europe in the summer, and a late year trip with the family who visited us over the holidays. As much as I'd like this number to be lower, there's a reality that an expat who has good relationships with his family will also likely have recurring large travel expenses to contend with.

Image: Chart of the EURUSD price in 2022

Unfortunately, my US trip coincided with a weak period for the euro against the dollar. This made the trip much more painful than it otherwise might have been.

Mindset Changes

There were three major changes in how I view our financial goals in 2022.

Cash

At several points, I felt hemmed in and without options. The most acute phase of this happened when we had our rent raised, but it was a recurring theme in the second half of the year. Yes, we had stock assets, but should we ever actually experience and emergency, our stock wealth would have to be sold off to actually give us flexibility. This increasingly felt intolerable to me, since I was sort of mentally double spending that money: it was both meant as a long term savings but also potentially a bail out, emergency, house, career change fund. It was untenable.

So we are now allocating much more towards cash. Savings accounts both in the US and Germany actually pay something now (though it's still crazy low in Germany). This allows us to pursue opportunities the way a big stock allocation can't.

The Implausibility of FIRE

It is unlikely that we will be able to retire early in any significant way. Perhaps that will change, but it won't change in the next few years, and in acknowledging that reality, I have to ask some questions.

For example, are there other career paths that might be more rewarding? If we have to work anyway, then why not do something that is genuinely enjoyable during that time? Perhaps staying put is the best option, but I should create the space where that's a choice rather than mandatory.

So much of the online financial world is fixated on this idea, that to acknowledge it may never be reality for us feels like a failure. However, my desire is to keep working. It always was, and the FIRE idea was mostly a way to give myself permission to pursue avenues that I find more fulfilling.

Stock Picking

Until this year, I'd exclusively been a stock picker. The US extraterritorial taxation regime has made the purchase of mutual funds tricky, and I'd believed I'd be able to handle individual stocks as the container for all our long term wealth.

It's safe to say that I was wrong.

I've grown as an investor, but I still make silly mistakes that should probably make it clear that stock picking ought not be my primary savings strategy. Yes, I've become less trigger happy, but I'm still too damned trigger happy. Just in the past few months, I sold several securities too early and missed out on rebounds. And my analysis is often rudimentary at best.

I've also discovered that focusing on stocks is not the best use of my time from a "quality of life" point of view. It's stressful and distracting. I have better questions to focus on and better uses of my time than worrying about whether such and such company faces an existential threat or is just going through a rough patch.

My returns thus far - while not catastrophic - align with returns I could more easily achieve by buying ETFs, and so that's what I'm mostly doing now. I just hope that the US/Germany thing doesn't bite me in the ass; if Germany adopts a PFIC type punitive taxation regime again for foreign mutual funds, I'm SOL. But best to save those worries for the future.

2023

The four big questions hanging over me now and likely throughout the year are as follows:

• Do I change jobs and potentially enter a riskier line of work in the hopes of greater life satisfaction and potential long term economic benefits? Or do I remain as I am now: basking in the weird safety of my current position, but potentially plagued by long term doubts around what might have been?
• How do I allocate limited savings for a potential risky life change?
• Do we participate in an expensive vacation that my family has planned out? We participated this year in Europe, but in summer 2023, it's further away and likely much more expensive. This is part of a larger question around family expectations and travel. I should probably write about this, but in general, I feel a lot of pressure to travel to see family, even though the prices are often higher for me, and my income is lower than the other people participating in the trip.
• Does the ticking time bomb of my poor Baby Boomer parent finally explode. There have been indications just in the past month that it might.

One change to the blog is that I will switch to quarterly updates rather than monthly. I find that I repeat myself too often month to month in these updates, and the movements within a month are often noisy.

With that, I leave you for now and wish you a happy and healthy 2023 full of great moments that let you forget about any financial stress you may have.

2021 Wrap Up: Net Worth and Investments

2021 was another strange year. Both of our incomes were depressed, and there was noticeable inflation is many of the staples we buy. In Germany, many of the activities we would have taken part in were curtailed by pandemic rules. My small side incomes sources shriveled to nothing as projects were cancelled or simply not planned.

Despite these challenges, our net worth rose year over year by 43% in USD and 53% in EUR to $124,045 and €109,697 respectively. In December, that represents a respective monthly rise of 6.65% and 6%. Our liquid net worth stood at $104,269/€91,544.

Investments in 2021

The power of compounding assets that work in the background is amazing and shocking. Yes, we made money this year. Yes, we saved money this year. But this relentless background grind of our assets - primarily in stocks, both taxable and tax-advantaged - overwhelmed whatever other forces were working on our lives.

And this was the case, despite the fact that my portfolio only returned around 20% against the S&P 500's 27%. I underperformed overall when compared to that benchmark, and still I'm surprised by how well it works.

In the period between January 7, 2021 (the date the Brexit transition hit my IB account) and December 31, 2021, our investments made a total of $15,752.53 within the taxable account. That includes $504 of dividends, with the rest being a mixture of realized and unrealized gains.

My primary contribution to this result was having some amount of fortitude to withstand all the fears hurled at us investors in 2021. The biggest gains were in positions that I'd bought in prior years and held. That's not to say that I did nothing.

In general, my decisions to sell were, at least in the short term, correct decisions. My decision to sell Square - now Block - was a good call. I sold Cloudflare, which was early but basically correct, and bought back in, which was not correct. I briefly owned a number of foreign growth stocks, but I realized their valuations were beyond comprehension, and I bailed on them. That turned out to have been a good call, though I held Alibaba too long and lost some money on that.

In May, I made big bets on Facebook - now Meta - and Amazon, which have been basically flat since then. I figured those were at least five year bets, so I'm holding without thinking about them too much. I did not expect my Apple position to continue to grow so well, but I can't complain. I also added a lot to Berkshire Hathaway and bought another share of Alphabet, both of which have paid off.

Late in the year, I took out a €30,000 loan with which to buy stocks. My largest single purchase was AbbVie, which was a terrible immediate-term pick since it declined 10% within 15 minutes, but since then has nearly returned enough on its own to pay for the entire interest cost of the loan. Other smaller picks like Intel and Enbridge have been flat but volatile. Greenbrick Partners is volatile but has given a good return so far. Likewise, small positions like Bank of America, D.H. Horton, and Pulte have all done well.

I entered the cryptocurrency space early in 2021, exited after becoming disillusioned, and then I re-entered just as a correction was starting. It's been an uncomfortable few months as my new purchases get swallowed up, but I view the space as promising enough to buy a little bit every month. However, I might be wrong, but I'm strictly using my personal allowance money (BLOW) to pay for these purchases.

On the last trading day of the year, my portfolio looked like this:

The Vanguard All World Stock Index Fund was my largest single holding since that's the entirety of my U.S. tax-advantaged accounts. The largest positions after that are Apple, Amazon, and Berkshire Hathaway, each larger than 10% of the entire investment pool. Some of that is due to deliberate position sizing, while in the case of Apple, that position simply became dominant despite a much lower cost basis.

Final Thoughts: Finding Yourself as an Investor

I have a friend who got an inheritance windfall in 2015. He basically knew nothing about investing, but he knew that he wanted to buy cheap stocks that had promising futures. Like me, he's an American in Europe, so he had to buy individual securities, and he bought around 40.

His performance has been quite good, having bought a mix of growth and value. Some choices turned out to be under performers, and they've have been cut. But he's been admirably steady in his positions even when they grow very large.

It's taken me years to "find myself" as an investor. I bounced from all sorts of styles, but what seems to work best is to be more like him: buy reasonably priced companies that have good odds of doing well in the future. Get convinced ahead of time that the purchase is a good one. It's ok to have some speculative stuff, as long as you're aware it's speculative stuff. And then for the most part let it ride.

Letting it ride is hard, but I'm getting better at it. Over the past month, the market has been rough, but my tendency to want to sell has been quiet. Likewise, I'm trying to get past the need to find the perfect investment or investment style. If I achieved greater than 10% returns annually over time, that would be an achievement.

I plan on writing more about 2021, especially about our income sand saving. Until then, stay healthy. May your 2022 be full of happiness and good fortune.

December, 2018 Net Worth Update and Year End Review

UPDATE: I made a mistake when I initially posted this. In my spreadsheet, I double counted one of our credit card liabilities. We were still down for the month, but not quite as much as I originally wrote here. The updated numbers are $37,014.97 and €32,497.78 respectively. I'll leave the post as-is though since from a high level it remains correct.

Our net worth dropped in December to $36,153.59 or €31,741.52. That's a one month change of about -4.75%.

Since the majority of whatever wealth we have is in the form of stocks, we were hit hard by the sell-off in equities. Anyone paying attention to the markets this past month would have seen the kind of fast paced elevator down that market pundits have been scaring us about for years. Our savings rate didn't spare us from the damage.

We're still well up from a year ago though, and that's the perspective I want to keep in mind. Equities are for long-terms positions. I'm not a trader, and month to month moves whether up or down can only cause heartbreak if you get too emotionally invested in them.

This month had a few novel transactions worth mentioning. I got my Christmas bonus, which I always appreciate. At the same time, we had to pay our estimated taxes to the German government for the fourth quarter, so it was basically a wash. We also received a bit of Christmas money from relatives and a larger sum from a relative specifically earmarked to support a hobby of my wife's.

Year-End Review

So how'd we do this year? Our net worth is up around 33% in dollars from one year ago. That's entirely savings-rate based since our equity positions have been all over the place. As that net worth number grows, any year over year growth is going to come increasingly from investment performance.

Investment Performance

And my investment performance this year was bad at a YTD drop of 13% (I'm only considering my taxable brokerage account). Some of it was just the way the markets moved. For people following the US markets, it was a volatile year with big drops in February and then the last months of the year, but if you were invested in just about anything outside of the US, ho ho ho, you had a rough year.

How could I have known that at the exact moment I'd begin investing in German companies, it was at the peak of the German market? I began buying in October 2017, and this chart is the daily chart of the DAX from the past year:

It's actually uncanny how some of my German purchases happened at the exact tops of their cycles. The companies seemed cheap when I bought them, and they seem cheaper now, but that doesn't mean anything in the near term. The German companies were a drag on my performance over the whole year, even when I was doing well in other parts of the portfolio.

Some of the bad performance was from me trying things and discovering I don't have the temperament for them. I tried shorting some stocks, and I tried day-trading a few times. They're not my thing, and I'll avoid those activities in the future. Doing either triggers too much adrenaline and fear in me. Regardless of investment performance, I just don't want to live like that.

I also changed investment strategies in the middle of the year. I did a lot of backtesting and research to come up with a reasonable strategy, and I implemented it. I'm trying to control risk as best I can with smart position sizing and clear sell rules, but I do recognize that this strategy can be extremely volatile. As we get older, I have some ideas for how to reduce risk further within this current strategy, but for now, I'm being aggressive within my rules.

Recognizing my previous mistakes, I wrote a long document explaining the strategy and the rules. I've already referred to this document at times when I doubted my current approach, which makes this one of the best decisions I've made all year money-wise.

Savings

For our savings, we were somewhere around 25%. It's not exceptional, but it's not horrible either. I'd like to get this number up in 2019, but there are some genuinely life-improving expenses that may need to take priority if they become a possibility.

In 2018, the big overarching expenses were our rent as well as a trip we took to the US. Moving doesn't feel worth it. Rents are going up in Germany, and by staying put, we get to keep our rent stable while prices rise around us. I've looked at smaller apartments in our neighborhood, and their prices are approaching ours despite their smaller size. We could move further away, but our life satisfaction would plunge. Plus, my wife doesn't want to move, and neither do I.

After deliberation, I am going to the US this summer. I bought tickets using credit card points, and my wife and I will take our trips separately. I'm not thrilled about that entirely, to be honest, but the cost savings are enormous to having more focused trips back rather than larger multi-family tours. She can also work while I'm in the US and vice versa, so there's less opportunity cost.

We saved a bit on our tax preparation costs too. There are some tax people recommended to expats like us who speak English, but ouch they can charge a lot. They're very good, so don't get me wrong, but at some point you have to ask if what you're getting is worth the unusually high price. In our case, we were getting our taxes back in two weeks (fast) and we could communicate in English. But we speak German, so why not find someone less expensive who's good enough?

We could also do our own taxes, but for now I'm more comfortable with a professional in Germany on our side, and I'll keep doing my own US tax return.

So there's a wrap-up of the year for this abroad saver. I've learned a lot this year, and here's hoping for a more effective and smarter 2019. Cheers and have a happy new year.