How to Rekindle Love and Wealth During an AI Bull Market
All is Fair in Love, Inflation, and Nvidia. What started like a normal February, kicked off an AI Bull Market. As great as it was, the question is will it last through February 2025? I think it could, and I’m beating we end of 2024 with the S&P500 hitting 5,454 (+15% year). But time will tell.
Super Tuesday will likely be the start of a gloomy mid-year correction. With the election reaching mid-frenzy, we will have market turbulence until we settle for a joyous Q4. So many what-if scenarios. Inflation is sticking around a bit longer but the new prices are here.
Let me take a crack at explaining inflation.
The first thing people get wrong is that inflation is a universal constant. It’s not a new idea. It just so happens that every once in a while the news remembers to cover it for views. Fear sells and there is nothing more reliable than an under-informed person. Clicks and conversations pay bills.
Secondly, inflation may slow down but it isn’t disinflation.
That means prices won’t miraculously go down. For example, take something that cost $100 in 2020 that went up 9% in 2021, 5% in 2022, and finally 3% in 2023. The new price is $117.88. Even if inflation goes down to 2% in 2024, the new price is $120.24. You are looking at a 20% increase. The only thing that cuts prices in a good way is bold innovation. [Thus the AI craze]
Finally, inflation means that your current annual expenses in 2023 of $70,000 will cost as much as $150,000 by 2050.
Why? Because humans operate on limited resources. The fewer items we have, the more people want them; the more expensive it becomes. Spending and access are now global. This means emerging middle classes in India, China, and South America will want access to the same goods that Americans had for the last 50 years. These are the new prices, and years from now, they will be the cheap prices.
Here’s hoping you don’t get swept up under a wave of unnecessary spending at the detriment of your future wealth. Over the last 50 years, a lot has changed. It stands to reason that by 2050, we will likely even more drastic changes. The average American household needs to become more mindful of its cash flow.
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With all the love talk aside, time to get Back into the Financial Driver’s Seat
Welcome back to the TNFG’s monthly breakdown where I dish out all the secrets on the way to becoming a millionaire household in this lifetime. Disclaimer: like all married men, I have to get approval from the Mrs to say, write and do anything. And even then, my actions can be repealed or sanctioned.
On a personal note, this month was harsh. Was it the cold or the news, I felt burned out. Coming off end-of-the-year vacations and back into the cold sucks.
I miss Brazil and can’t wait to go back in 2026. With the cold easing and the sunshine coming back, it’s time to get back to running. Need to see more than the meta verse to survive.
Check out QuadFi’s “Why Exercise is a Good Financial Investment.”
Our net worth goal hit $1M (by August). Now my wife said our next goal should be $2M so that we can technically both be millionaires by Fall 2025. I think she just says stuff to challenge me. But then again, we have never seen anyone that looks like us, shift from poor working class (household making under $40,000 per year) to millionaire status in one lifetime.
Anything is possible.
Inflated Prices and more Supply Chain Issues Requires Us to Change
An ongoing benefit of tracking our household spending, we found even more financial leaks. Food costs have increased since 2019 but so have our tastes and appetites. People are spending as much as $1,200 per month on meal deliveries to their homes, before groceries and going out. That’s almost $15,000 per year.
It’s a massive problem.
One that too many are uncomfortable addressing since it would require them to change. Starting with just $500 on January 1, 2019, even a monthly investment of $500 in Nvidia $NVDA would have padded your pockets to the tune of $261,102.71. A return of 724.27% (average annualized return of 50.98%).
Other people are giving too much to friends and charity. The worst part is that they don’t even have the money to give.
On top of that, February was a massive financial reset for a lot of families dealing with high prices on all goods and services purchased over the holidays. This is like digging your own financial grave twice.
These overages cost most families as much as $7,500 per year. Back in 2023, Fox reported that High inflation cost Americans an extra $395 a month.
Singles are having a tough and more expensive time. The average cost to take someone out to dinner and a movie in 2024 averages $165, according to MoneyGeek. My wife and I can easily spend over $150 on a date night in the DMV. If you are considering starting a family, each kid is expected to set you back over $300,000 (nearly $1,500 per month) through age 17.
For context, if you invested $1,500 per month for the same amount of time, you would have $629,470. Instead, you have a lovely child headed to college. Nice! This is why it’s crucial to invest versus sitting on large cash reserves. It’s getting very expensive.
Here’s hoping that March doesn’t dissolve into madness with the next Federal Reserve interest rate pause.
Here’s our Monthly Net Worth Summary:
Market Swings with Turbulence Scheduled, Look Out Ahead!
Now that we have passed the cocaine Bear market, we’ve entered the AI Bull run. Keep your hands inside the ride, extreme highs and lows as the wealth gap in America increases. The future belongs to long-term investors. There are no shortcuts and avoid FOMO.
At this stage, it is best to plan for the future and continue long-term investing while the market continues these violent up-and-down mood swings. Costs are only slated to rise by 2040. The only hedge against that is investing for the long term.
Overall our investment portfolio jumped 6.41%. We are beating bank savings accounts sitting at 0.01% and the high-interest account at 3.5%. We are also outperforming the copy-and-paste “invest and forget it” folks. It pays to not follow the crowd and get better at investing.
Check out our Google Sheet.
We are sticking it our net max financial plan and betting on the next 14 years til we retire. Fortunately, we got active and purchased more Health Tech stocks while the market retreated for a few weeks. You have to be proactive in this game. When we get within five years of our retirement goal (2038), I might change some of our strategies.
Spending a bit too much on everything
With prices up on just about everything, we didn’t love our February spending but we offset the cost with our income. Our net cash flow was $4,005.74, an increase of $4,475.87 over January 2024. The name of the game is cash flow management.
We have chronic medical expenses due to my wife’s type-1 diabetes but we are fortunate for the care provided. It’s not easy for the patients or the specialists. One day we hope to give back to help others with their expenses.
We had a huge jump in the Bills/Utilities section because I failed to winterize the home. Coming from Brazil summer also meant that we ran the heater hotter and longer to acclimate. Our monthly Bills and Utilities were higher than average at $753.69.
We are still spending a lot on the new car (monthly payments of $859) and it’s still in the shop for repairs after the two tires and rims incidents. Our food & dining held at $857 whereas it was sub $500 (CY 2019). This is nearly double and I’m eating way more salads. And we will be going to a different grocery store for most of our items. Wegmans is too expensive and Giants have more options.
We are doing a lot better with our Amazon purchases. I had to cut down on those unnecessary subscriptions.
We put money down on travel ($462.41) as well as three tickets for a soccer match in June for $516.30. Additionally, we have a new nephew in town. My sister-in-law had her first child. A bubbly baby boy filled with poop and joy. Mrs. TNFG took the trip and I’ll see him later on.
At the end of the month, a quick $NVDA upswing helped our net worth settle north of $1.2M. A positive growth of 4.66% – a cash gain of $56,086.70. We will take any breaks we can get.
As for Love and Wealth, What is the Next Step for Us?
Since our love language includes retiring early and traveling the world, here are our overarching goals this year:
- Add more date nights by the Mrs.’s request. No point having perfect credit, solid net worth, and decent emergency savings, if we aren’t looking at our mental health and connecting on a personal level.
- Even though financial resources are low, Investing at least $833.33 per month in M1 Finance Brokerage focused on Growth and Dividend Income that generates at least $1,000 per month in passive income in 2025, is still the goal.
- 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 – https://m1.finance/SYdqDJ2SyADC.
- Shooting for a sustained investment rate of $7,167 per month.
- 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
- We hit 10,000 followers on IG so I guess we need to move the goal post and make an extra $10,000 in passive income through financial consultation.
- Work on blog consistency while adding eBooks (at some point).
- Pushing to build out for the next year until we hit a $2,000,000 net worth as of December 2026.
- Sharp changes to our Investment Strategy – Create a 10% buffer in ROTH accounts and M1 for future buying opportunities.
- That’s $25,000 on standby for future buying opportunities to close out 2024.
- We are selling $XOM and $FDX while Buying $LLY, $CTRE and $NVO.
- High growth through this early phase augmented by Health Tech.
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