How I Beat the S&P500 in 2024 by 73%

My annual personal finance review

Treating yourself like a company is an underrated life hack. This is a much broader topic that I might elaborate on some other time.

Listed companies review their financial performance in public each quarter, or at least annually. I think more people would benefit from doing this.

At least for me, talking publicly about such a sensitive topic helps me commit to growing in ways that doing it in private cannot.

So, here’s my financial review for 2024:

Net Worth

• End year: $1.22M

• Beginning of year: $861K

• % change: +41.7%

I’ve been fortunate this year, given that the S&P 500 returned 24%. Outperforming the market is an elusive holy grail that most active asset managers struggle to accomplish regularly.

Even among the industry of people who are paid millions to do this for a living, only a small handful of firms and traders globally have been able to do better than just buying the S&P 500. Especially over many years.

Beating a benchmark index by 73% was not something on my 2024 checklist. I don’t expect to be able to accomplish this feat year after year for decades. But it is certainly a nice feeling.

Growth Drivers

What contributed to the growth in my net worth?

I save around 30% of my income, which amounts to ~$28K pre-investment growth. This only accounts for 8% of the ~$349,000 growth in my net worth in 2024.

92% of the growth in my net worth came from the capital gains on my investments - it was a great year for the markets.

It is difficult to overstate how important investing is to your net worth over time. This is a good example of that in action. If you haven’t already invested most of your savings, the best time was yesterday, and the second-best time is today.

Asset Allocation

Which were the biggest winners and losers in my investment portfolio?

2024 was a great year for tech. My biggest winners were the shares I received from previous big tech companies that I worked for, plus emerging tech companies like Palantir.

Bitcoin has also been the best-performing asset class in recent history, buoyed even more this year by political change in the US.

• PLTR: +218%

• GOOGL: +40%

• AMZN: +48%

• BTC: +131%

But investing by definition involves taking on risk for a return. And not every trade is a winner. Here are my biggest losers for 2024:

• AMD: -27%

  • I feel like the market has been quite unfair to AMD as a stock. One of the hardest lessons to learn as an investor is that “the company is not the stock”.

  • They have been performing well as a business, especially as AI continues to gain new ground in nearly every aspect of work and life. But the stock has been overshadowed by NVIDIA.

  • Entry price matters as well. I bought in at a high price, and sometimes that results in taking the L on a pullback.
    

• TSLA: Missing the rally

  • TSLA climbed an additional 84% - right after I sold in October. I’m still up 13x from the time I bought it, so I’m not complaining.

  • But unless you spend every waking moment trading for a living, these things are hard to predict - and act on in time (especially around Musk’s role in the Trump election victory, and some decent recent earnings).

  • Despite the long-term hype, I’m still convinced of the challenges it faces. Tesla is still a car company with low margins, and it isn’t a leader in self-driving just yet.

Concluding Thoughts

I have three learnings from this exercise:

• Invest as much as you save. You cannot save your way to financial freedom.

• Investing is learning. Such is the nature of investing sometimes. You will be wrong nearly as often as you are right. What matters is learning, and sizing your bets according to your confidence levels.

• You don’t have to rawdog your personal finances. Copy-pasting information from statements from bank accounts, brokerages, crypto wallets, and exchanges is a nightmare. Since I launched Peek, I’ve been able to spend less time on the admin stuff, and focus more on creative, strategic thinking.

If you’re interested in trying out our AI-powered CFO to manage your personal finances, check out: https://peek.money/