Putting the Lens on Black Wealth – How We Are Reaching F.I.R.E.
Although completely unhinged, August 2023 was a good enough month for wealth creation for the Neighborhood Finance Guy (TNFG) household. The Cocaine Bear Economy is back!
My wife and I kicked off the month of August with a trip to Mexico for a wedding, paid for car repairs, and settled in with a severe cold (or maybe Covid 4.0). With four more months left, this inconvenient reset is just what the doctor ordered. The rest of the year is all about health and wellness-focused until our anniversary trip to South America.
Additionally, with a new nephew on the way, I’m now an Uncle-in-Law or officially Uncle Law. Wait a minute, forgot one more thing. My Public Student Loan Forgiveness (PSLF) was finally processed. Nearly $89,000 debt forgiven turned us into Black first-generation millennial millionaires!
Table of Contents
The 10-yr Journey from Negative to Happy. New Milestones on the Horizon.
For context, let’s go back in time.
My Wife and I hit zero net worth in January 2018. Zero is still one of the best feelings in the world. It doesn’t mean that we didn’t have liabilities (aka debt). Think of it like a breakeven point when your Assets match your Liabilities.
At the start of the pandemic, our net worth plunged a clean $50,000 to $200,000 (March 2020). We stayed the course and luckily kept our job albeit remote. By April 2021, our wealth skyrocketed to $500,000 which led to a feature on Business Insider. Three years later, we hit over $1,000,000+.
“We are truly a far cry from where we started”
A very long way from counting every dollar of the $1k per month I was making, and stretching it to cover bills and pay off debts (March 2012). Being Poor was a traumatic experience that fortunately didn’t kill my willpower. The things that helped:
- Free financial apps: Mint.com and/or Empower (formally Personal Capital)
- Podcasts: The Money Guy Show with Bryan and Bo, Journey to Launch with Jamilla Souffrant, and Marriage Kids and Money with Andy Hill
- Strategies: the Financial Order of Operations, and the Net Max Financial Plan
In the end, this is just more proof that life can change drastically. If you are struggling right now, it doesn’t mean you will struggle forever. Either way, you have to do more today to help move you forward.
Massive Repairs, Travel, and High Prices Couldn’t Stop Us
Wait did the COVID pandemic randomly restart? Sure did, The U.S. is seeing a late-summer spike in COVID cases, prompting some schools, hospitals, and businesses to encourage — or even require — people to start masking up again.
Coming back from the Mexico trip, we got hit with the severe cold and flu going around the DMV. Or was it a new COVID? Either way, my wife and I were down for a solid 2 weeks.
Besides the investment market drama, Trump and Company got indicted over and over again. This, for some reason, merely hypes up his base. While older politicians on both sides are really showing their age. Will Biden stumble again? Or will the Republican guy freeze again? Come on Mitch, you can’t keep rebooting midday.
No matter how you spin it, it’s getting hard so check up on your friends.
High prices outside, means more opportunity to focus on health and wellness inside. You don’t need more money to start building better habits. Check out TNFG’s Top 3 Best SMART+Er Goal books for inspiration.
Don’t let disaster strike again without a response. Cut back on unnecessary expenses and double down on getting an emergency savings plan. You deserve more than to struggle.
New to TNFG?
If you are new to my content, this blog post showcases the TNFG monthly Net Worth Breakdown for August 2023. There are always usable financial nuggets and aha moments that might help you along the way.
I’ve also been known to be the most transparent financial literacy person on social media, check out how our wealth has been growing since January 1, 2023 (below):
A Million and One Limiting Beliefs in August
“The Man who says he can, and the man who says he can not… Are both correct?” Confucius
He said this over 2,000 years ago. There is truly nothing new under the sun, the rest is merely acceptance. You don’t have to be the strongest, fastest, or most creative. You merely have to be willing to put in the work. Most people obsess about other people. Overly concerned with what they don’t have while neglecting what they do have.
Life is unfair and unbalanced.
Even though the game is unfair, there are always rules. If there are rules, there is always a trick to the game. My wife and I learned that hard and challenging times, are par for the course. They will happen. To mitigate them, you have to start vigilant and work towards better outcomes today.
You will have to challenge yourself to Limiting Beliefs to change your trajectory. Check out the video (below) for tips on how and why:
Going Backwards into Non-Debt Free Territory for an Electrical Repair and Stolen Tires
We were hit with the HVAC aka Heating, ventilation, and air conditioning repair for $9,000 last year and doubled down with a $7,000 electrical repair this year. Don’t worry, we knew about the electrical stuff for years. It’s now up to code. We still need to fix the holes in the walls.
All these changes are improving our utility bills thus far. We are slated to pump an extra $30,000 or less to update the main bathroom and both bedrooms. The end goal is a more liveable space while we look for a forever home, and then rent this place out.
On another note, I found out that since 2016; we spent over $40,000 on Amazon deliveries. Have you ever done a review of your purchases? If $500 per month was invested into Amazon $AMZN or $VOO for the same period, I would have?
Under the Amazon scenario, our wealth would have grown by +$75,581. While the Vanguard Total Stock Market ETF approach would be up +63,490. Either way, that’s a wealth differential of +$100,000.
It really makes you think. And no, I don’t expect you to stop spending money on Amazon. I’m pointing out the little costs that add up. I’m sure that at least $10,000 was frivolous spending.
Our Investments were Down for the Month But Still Up +20% YTD
As you can see above, our household portfolio dropped twice this year. The first time in March and again in August. But at least, we are beating the general S&P. It’s been a drag but this is where winners buckle down, and level up.
To think, I started with a $500 rollover into my 401k in 2014 when I got to DC. The portfolio is around $500k now, the net/max financial plan and our strategy is still the same (see breakdown below):
- Investing to match in the 401k,
- Paid down credit card debt aggressively,
- Increase our 401k contributions until max (i.e. limit $22.5k per person for 2023),
- Started to invest in a Traditional IRA (i.e. limit $6.5k per person for 2023) and Health Savings Account (i.e. limit $3.85k per person for 2023),
- Got more money back during tax season,
- Nab some dividends if available, and
- Reinvest whenever possible.
Intentional Living – Investing while Paying Off Debt in 2023
| Tax Deferred or Tax-Free | Matching Contribution | Total | ||
| His and Hers 401ks | Tax Deferred | $45,000 | $10,550 | $55,550 |
| Hs and Hers ROTH IRAs | Tax-Free | $13,000 | $13,000 | |
| His and Hers ROTH IRAs | *Tax Free | $7,850 | **$800 | $8,650 |
| After-Tax Brokerages M1 Finance | Taxable | $10,000 | $10,000 | |
| Total Investment Contributions | $87,200 |
*Triple Tax Advantage
**Health Insurance Plan Kick Back
Dwindling Wealth. Here’s the market screenshot so far (below)
More Winners than Losers (for now?). Keep buying low and #HODL (Hold for Dear Life):
Investing Goal remaining from September to December 2023
Since we are investing while paying off debt, it’s a long way to Victory but it’s been rewarding. The goal by the end of this year is about +$84,000 in investment contributions. We are investing a ton mainly because it reduces our tax liability for the year.
My wife and I aren’t skipping on fun and jumping back to our end-of-the-year international trip.
Here’s the Monthly Wealth Summary:
There was a moment when I thought we were going to close at $960,000. And then, the market held and the PSLF worked. August might have been a mess on the investment side (of $6,637.89), but it was a resounding win overall.
We saw an increase in August of 7.87% or $82,669. Home valuation is holding. People are still fighting over home ownership. There are more benefits to owning your home vs. Renting. Especially with rent going up at least 30% from last year while the national average is up to $2,500.
The financial nerds hint at the S&P recapturing an extra +4% toward year-end. No matter what happens next, you need a great financial plan that helps you build generational wealth.
What’s working toward wealth creation and what’s working against it?
Prices are going up just about everywhere. The Federal Reserve still has quite a few rate hikes but it doesn’t seem like inflation is slowing down. Why? Turns out Americans are spending a lot. This is becoming a game of attrition.
We spent $10,000, of which $7,000 was for housing costs, travel, car expenses, and food. Money is flowing in and out of our hands. It is getting better though.
Even more, expenses work against building wealth
Thankfully, our rental tenants renewed. I didn’t have to do an extra trip out of state this year for turnover and repairs.
Having tenants that you treat right, can lead to a great relationship over the long term. They are likely to stay for one more year.
Overall, happy that the net/max plan is keeping us provisioned thus far.
For the last 8 months, our YTD investments hit $56,733 while our total debt repayments were $77,719. Sounds outlandish but we generally run all expenses on credit cards.
Oh yeah, Brownie is a picky eater now so pet expenses went up. He really needs to pull his weight.
Takeaways for August and the wealth journey in 2023
Growing Up is hard, so let your destination match your mindset.
While it might sound mean, in truth, we will all have to grow up one day. Make today the day when you start to believe in yourself, your family, and your trajectory. For good or for bad, you have to act because all the world is a stage.
No one is going to do it for you
In 2021, China restricted video games for their kids for only three hours per week from Friday night to Sunday Night. They realized that sometimes you have to change your entertainment lifestyle to change the wealth and prosperity outcome.
No matter if you like their approach or not, they figured it out. You have to learn to police your own financial weaknesses.
What are our next wealth-building steps to close out the year?
I have to bring in more passive income and brush up on Spanish and Portuguese in four months. We are headed to Brazil and Argentina for our wedding anniversary. Should be an amazing end cap to a long year. We really look forward to these trips.
Travel is our drug of choice.
Beyond that here are our overarching goals for 2023:
- Keeping our expenses where they should be. All about, “Not equating happiness and social acceptance based on the money you spend.“
- Add $7,500 in M1 Finance focusing on Growth and Passive Income that generates at least $5,000 in dividends in 2024. Check out the 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. *Terms apply – https://m1.finance/SYdqDJ2SyADC.
- Shooting for a sustained investment rate with the push for a $1 Million investment portfolio in 2 Years (by YE 2025). To help monitor your savings, cash flow, net worth, investments, retirement, and more FREE with Personal Capital! Sign up with my link & get a $20 Amazon gift card. *Terms apply. https://pcap.rocks/lawrencegonz
- Head back to school in 2025-2026? to eventually study for the Certified Financial Planner designation. I’m sure I know this stuff but this will add more credibility to my online news features.
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