I'm calling it early, it's a Recession.

While others are holding on to dwindling hopes, I rather call the Recession early. Buckle up because it’s going to be a bumpy and violent ride. High cost will slow down but the Feds won’t be able to bring it down to pre-2020. This is the new normal, unfortunately.

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The first Quarter of 2022 came in at Negative 1.4%, We are halfway to a Recession

The US economy shrunk by 1.4% in the first quarter. While it might not sound like much, economists are concerned about this headwind. The latest forecast has the rate of growth for the year at 6.9%, in contrast to inflation at an average of 7%.

Translation for regular folks?

It’s going to cost an extra $6,000 to $10,000 in total household expenses this year. Gas, Groceries, Travel, and Energy are all up while consumer sentiment wanes.

To combat rising prices, most tend to do two things that are equally bad. One spends more on credit to subsidize the appearance of lifestyle, and secondly cuts back on investments for the year.

Any solutions?

Fortunately, the same solutions during times of uncertainty; draft and follow your goals, manage where your money is going, and invest the difference. It comes down to having a financial plan.

A Better Financial Plan Pre-, During, and Post Recession

My wife and I hit the $700,000+ Net Worth in April 2022.

To think that as of April 2020, we were hovering north of $220,000. This is wild proof that sticking through works over time. To be frank, IT WAS NOT EASY. However, the journey was made easier by not overleveraging before the pandemic way back in 2016.

If you are new here, this article is the TNFG monthly Net Worth Breakdown for April 2022. You are in the right place to see if we can make money, and make sense. Additionally, there are always usable financial nuggets that might help you along the way. Our goal is to show you what we did so that you can do it better.

The best way to survive the next recession is with a great financial plan.

Don’t be Afraid of the Word, Recession!

On Monday, May 2, 2022, Roger Ferguson, vice chairman of the Business Council and trustee of the conference board, and former Federal Reserve vice chairman, broke down his outlook for a potential U.S. recession in 2023.

“The probability of a recession is very high.”

Americans are growing weary of prices at the pump and grocery stores respectively. Inflation hit a 40-year high and stocks are dropping like a rock.

What’s a recession though?

A recession is a period of declining economic performance across an entire economy that lasts for several months. In this situation, the declines are coming at the heels of a global pandemic that persists in China, labor and supply shortages, high inflation, anxious citizens, and Russian occupation.

Wall Street experts and pundits are looking at a “hard landing” in 2023 beyond the Federal Reserve’s moves to hike interest rates.

All that noted, economists expect the 2nd quarter’s Gross Domestic Production (GDP) to increase by 2.9%, according to FactSet.

The boost will come at the expense of consumers in terms of discretionary, energy, and utilities.

The goal is to close out the year with +3.3% overall while the Fed chair is signaling 6.9%. The best thing I can say to all this is to prepare for the storm. Lifestyles will trend downward and gloomy until around late 2024 with the boom in 2025.

As such, BUY LOW where you can.

Recession Woes – Half Way There?

Initially, we wanted to reach $750,000+ but the way things are going, it’s gonna take a while.

Beyond mandatory renovations on the primary, we are getting two new puppies in Q2. On top of that, the waifu went in for major surgery. After a short stint in the hospital, she is free and clear. It’s all recovery for now. This health care change meant that her mom was in town which means great food but costly grocery bills.

The Bloody Red Market is a sign of an upcoming Recession

The unexpected always seems to happen. Ultimately, when it’s all said and done, It’s not the money that counts but our health and happiness.

My wife and I also found SpyxFamily which is an absolute gem of anime.

With everything in motion, I’m just securing the financial fortress when everything goes down in smoke.

Will we survive the stock apocalypse? Only time will tell.

In contrast, Black Americans are jumping ship toward crypto but it’s proving to be a risky bet. A seismic amount of wealth was lost from 2020-2021 “paper wins,” and the community will be reeling from this in negative financial waves. Leading to the median Black wealth reaching zero by 2042 (by my estimates).

Barely Reaching Goals

Investments Wavered Yet Again but Overall Positive

To start, we took a big hit of over $60,000 so far this year in investments. I really should have moved from a bunch of tech positions at the start of this year. But greed got the best of me.

What’s the current strategy?

Since we still owe $7,500, we are going aggressive with credit card payoff while investing with a priority in the ROTH IRAs. While things are cheaper, time to lock in Netflix, Amazon, and Google stocks. I still use these companies even if they lover over $250 billion in market valuation.

Besides that, we will pick up more High-dividend ETF stocks like $FDVV, Travel, and Consumer Staples. People are brewing to send us back to a booming economy. And, we are here to support their urge to spend.

What Happens Next!

The world is still changing post-pandemic. It will be a while before we feel a sense of ease. There is still a rise in mental health issues that we will all have to contend with.

All in all +2.03% after a massive investment sell-off. It’s better to be positive over a negative month. I did get featured in an article, so check out the link below.

How to Budget for Returning to the Office

Our Expenses for April 2022

Food costs went through the roof but those taxes though

Inflation is a real thing. People are finally feeling it after all this time. I was warned about this in 2021.

We used to spend almost $1,045 on groceries. That amount uses to be an average of less than $600 per month.

On top of that, we had to fork over $22,000 for taxes this year. About $16,000 for us and $7,000 for my mom who took out a distribution due to retirement. That’s a whole other story. But it was net of tax services for others.

We do need to look out for Amazon $AMZN, they are taking a bite out of our wealth each month.

One major car issue cost us $500 to fix. But we offset the cost with additional passive income and we also received a discount for the old starter. I kinda don’t remember how I figured my way out of this mess. The Passive income from the consultation is stated as Business Services net of any Business Expenses. So it was positive this money i.e. negative (inverse).

It’s been a long month.

Right now, my mind is juggling travel for the year, new puppies, bedroom renovations, a new AC, windows, bathroom and etc…

It’s a lot of upgrades but that’s how opportunities and choices come at you. You have to be five steps ahead to capitalize on the future.

Got to mitigate the future with mental preparation.

We have to get that number back to $2,500 in our bank savings account but we have our Acid Emergency Financial Plan to cover the rest.

Pumping the Breaks on Spending to Prepare for Whatever Comes Next

With a Recession on the way, getting to the $750k Net Worth Just Got Harder. TNFG's April Net Worth Analysis and Household Expenses Breakdown.

With prices peaking, it’s best to step back and not overspend where we can. We had to have a serious talk about our goals and re-centered on how we will get there.

Remember these key metrics of wealth, “Stop equating happiness and social acceptance based on the money you spend.“

Beyond that here are our overarching goals for 2022 going into 2023:

Investing up to $80,000 for the year. Including $15,000 in our M1 Finance Brokerage. Check out our Starter Kit x10 portfolio in real-time. If you like the platform and want to start investing, I have the $10 for $10 referral if you need it – https://m1.finance/SYdqDJ2SyADC.
Shooting for a sustained investment rate with the push for a $1 Million net worth in 2023. To help monitor your savings, cash flow, net worth, investments, retirement, and freer with Personal Capital! Sign up with my link & get a $20 Amazon gift card. *Terms apply. https://pcap.rocks/lawrencegonz
After earning $3,000 in April for 5-hrs of financial workshop consultations (clients included NASA and NABA), It’s time to focus on the plan to become a Certified Financial Planner (CFP). For just $5,000, I can take the course in 2-3 months and resurface with the CFP accreditation. A bit of effort for more money in the long run.