Inflation is Here to Stay. Investing is Not Optional Anymore, it’s Mandatory.
The Neighborhood Finance Guy writes about financial literacy topics: Financial Planning, Inflation, Millennial Money Management, Investing strategies, Retirement tips and more. The goal is to help you make effective decisions and set S.M.A.R.T.E.R. goals with your money. The information is free but the struggle is not sold separately. And, if you are into this sort of thing; the blog is PLUTUS nominated, I studied Accounting with a Specialization in Taxation, served in the US Marine Corps and now work as an Auditor. I’m also big on Traveling and watching Anime.
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Inflation peaked and Investing is Mandatory
Contrary to popular opinion on social media and the ideas of the Great Resignation generation would like you to think, the American Dream isn’t dead.
Well not, just yet.
I’ll level with you; ninety percent of Americans aren’t handling their money effective. Most Americans panic at the sight of math. So much so there was a study for it.
Approximately 93% of Americans report experiencing some level of math anxiety and it’s estimated that nearly one in five US adults suffer from high levels of math anxiety.
A 2016 study found that 11% of university students exhibited “high enough levels of mathematics anxiety to be in need of counseling.”
It makes sense why some many are struggling with saving and investing.
High Prices and even more reasons why investing is mandatory going forward
With price increases every where, inflation is here to stay. Traders bet on an aggressive Fed and predict half-point rate hikes in May and June. No matter what the Federal Reserve does, the Business Cycle will cycle.
By 2050, the average retiree will have to cough up as much as $100,000 per year to keep their current lifestyle due to normal inflation. Basically, now is the time for you to work on your own economy.
The world is changing.
The tech prosperity bubble just burst and the world is snapping back to a new order. As such, investing in the future is mandatory and not optional anymore. Retirement will cost over $1.7 Million to be sustainable for the average millennial, all while the majority of Boomers will need support.
Simple enough -> YOU HAVE TO INVEST in all caps.
There are ground rules to be successful at investing
If you need financial or investing assistance to fight through inflation, I would recommend that you refer to a fee-only financial advisor who has a fiduciary responsibility to their clients.
Since investments can trigger taxes, you might want to refer to a Certified Public Accountant (CPA) as well. And if you don’t have a lot of money, just start with a financial plan.
No need to play with your future. With all these uncertainties, remember the goal is to avoid being average and retiring broke. Seriously, over 60% are retiring broke.
No matter where investments go, the fundamentals holds true. Know your risk profile, understand your time horizon and plan for the long term.
And finally, try to avoid bad information especially on social media.
Investing in America is Mandatory to Build Wealth Fast beyond Inflation
This time around I created a portfolio based most people use day to day. Furthermore, I plugged the companies using M1 Finance’s create a pie feature.
And voila, the All-American Pie was created. This pie is a snapshot as of March 22, 2022 (see Graphics #3).
Keep in mind that the 5-year return for the S&P which is mirror by the Vanguard 500 Index Fund ETF $VOO netted almost 91% for the same period (see Graphics #2).
One thing for sure, this is still better than 0.01% in a savings account getting shredded by inflation north of +7% this year.
So What’s the Breakdown of this All-American Portfolio Tracker?
The TNFG All-American Tracker (see Table #1) is a 3-part portfolio with growth, value and dividend equities for the long term. I considered companies that are often used like Google through YouTube, Amazon for retail, CVS for health and etc. In my opinion, these companies represent the average high volume and high traffic consumer staples.
Additionally, these companies weathered the storm of market downturns and the pandemic. The goal of this mix is to buy into growth, sales and daily spending patterns while the market is down about 7% YTD as of March 2022.
This aligns with the mandatory investing outlook that out performs inflation.
Table 1. TNFG’s All-American Holdings and 1-yr Averages
| Company | Market Cap | Dividend Yield (if Any) | *Market Growth For the Last 12-Months | *Current Price Per Share | Avg Target Price | *M1 Slice Weight | Upside? |
| Alphabet $GOOGL | 1.84T | 0.00% | +34.29% | $2,803.91 | $3,323.59 | 10% | +18.53% |
| Amazon $AMZN | 1.64T | 0.00% | +5.04% | $3,306.18 | $4,215.65 | 9% | +27.65% |
| Apple inc. $AAPL | 2.69T | 0.53% | +37.83% | $168.87 | $190.28 | 9% | +12.64% |
| CVS $CVS | 140.95B | 1.89% | +46.75% | $107.12 | $114.05 | 9% | +6.38% |
| Costco Wholesale Corp $COST | 246.22B | 2.49% | +68.90% | $557.85 | $556.08 | 9% | -0.23% |
| *Disney $DIS | 252.37B | 0.05% | -27.48% | $140.57 | $191.25 | 9% | +35.90% |
| *Visa $V | 478.35B | 0.64% | +4.90% | $218.10 | $269.30 | 9% | +23.53% |
| United Health Group Inc. $UNH | 477.65B | 1.14% | +38.86% | $506.04 | $505.76 | 9% | -0.10% |
| McDonald’s Corp $MCD | 174.98B | 2.25% | +5.79% | $238.00 | $279.75 | 9% | +17.59% |
| Lowe’s Cos, Inc. $LOW | 153.34B | 1.31% | +26.80% | $228.71 | $267.24 | 9% | +16.62% |
| Exxon Mobil Corp. $XOM | 348.00B | 4.18% | +45.51% | $81.81 | $77.07 | 9% | -5.89% |
| Avg | 1.126% | +26.65% |
All-American’s Mandatory Investing Portfolio Hit over 150% in the last 5 Years!
After plugging in the numbers in M1, we can see this All-American portfolio is robust and versatile. Even based on the industry estimates, there are plenty of upsides. There are a few drops but this is a buy and hold portfolio, the lagers make up the difference with consistent dividends (see graphics #3).
Over 25% rate of return on your investment for the last 12-months and over 150% for the last 5 years. That’s an impossible 30% average per year. I wish I picked this All-American in 2017. The opportunity to invest requires that you set SMART+ER goals and dollar cost average your way into success.
If you want to follow this pie, click here. It’s a link to my M1 pie. This is yet another reason why I love investing with M1 since we can easily share these portfolios to each other.
If you want the $30-for-30 referral, click here.
Investing in these three holdings to fight inflation. Here’s How they are Tracking:
- Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. 5-yr growth 390.24%
- Apple Inc. is an American multinational technology company that designs, develops, and sells consumer electronics, computer software, and online services. It is considered one of the Big Five companies in the U.S. information technology industry, along with Amazon, Google, Microsoft, and Facebook. 5-yr growth 502.96%
- CVS Health is a diversified health services company united around a common purpose of helping people on their path to better health. In an increasingly connected and digital world, it is meeting people wherever they are and changing health care to meet their needs. 5-yr growth 42.83%
Final Thoughts
As price inflation and income stagnation hit record highs, investing your money is the only way to go. The bottom 70% of the US are supporting the economy through spending. The top 30% are injecting money through investment and getting better returns.
One segment is losing and the other segment is gaining speed.
Turns out 2040 will be way more expensive than 2020. In order for the average person to keep their current $60,000 annual expenses lifestyle, they will have to up the levels to about $100,000. If you are feeling the pinch now, just know it will not be easier later.
Invest to hit your millennial millionaire mark, it’s less heavy lifting than you think. I dished out my Million+retirement strategies all the time. Feel free to read up on it.
Other great write ups include:
- How to Build a 5-yr Portfolio w/over 500% growth potential,
- US Congress members invest their money to make millions, and even
- How to FIRE up your post-presidential election investment portfolio.
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