How to Kick-Off Your Finances for the New Year

Kick-Off Season, The 1st 31 days

Finally a post-pandemic New Year’s Ball drop. With the loss of the Queen, Pope Benedict XVI, and Barbara Walters, it feels like the world is changing. In 2021, we lost Betty White, in a similar way. The old guard is being replaced as we usher in something new.

Hopefully no more influencers.

Stocks skyrocketed in January despite fears of recession. The DOW gained nearly 3% in January. The S&P 500 rose 6% and the tech-heavy NASDAQ soared almost 11%. This marks a full pivot from the somber end to 2022. The Feds aka the Federal Reserve is expected to keep interest rate hikes to a minimum until March 2024.

Economists and investing experts believe a recession is likely to begin mid-Q2 into Q3. Investors are cautioned to ease back from being too overly optimistic. 

As such, the TNFG household was stuck in the happy middle. Our portfolio went up by nearly $60,000 in our portfolio. This is still a better start than 2021. Read the recap of our $50,000 tumble.

“We can now say I think for the first time,” he said, “that the disinflationary process has started,” said Federal Chair Jerome Powell.

Welcome Back! New Season, and More Information

Welcome back to a new year with TNFG’s monthly breakdowns. Our household’s 2022 Net Worth crossed $750,000. We are on our way to $1,000,000. My wife and I also hit the $500,000 investment portfolio which is always amazing since this is where compounding interest really starts carrying its own load.

This is like having a toddler help you with groceries. It’s progress. Imagine this. Even if we don’t invest another time, our investments would be worth $3,424,238. After-tax on withdrawal, that’s just shy of $3,000,000. That’s a lot of money. Basically COAST FIRE ready.

This is proving that “Building wealth is cheaper and easier than advertised.“

Although the Net Worth jumped up, It’s Important to Stick to the Plan

Although very aggressive, we are hoping to hit the millionaire mark by April 2024. With seven more payments to make under the Public Student Loan Forgiveness program, things are looking brighter.

I’ll have to get creative with how we re-balance our investments by Q3. On top of that, we will have to put $15,000 into our Acid Emergency Savings Plan. It’s a lot to consider in one year. But it’s doable.

If you are starting brand new, don’t worry. It all starts with a financial plan. Click to download one for you and your friends.

We started at the bottom too. Sharing the journey is important because we have never seen anyone that looks like our shift from the poor working class to millionaire status in one lifetime. The US is still one of the few countries with an incredible upward mobility social class slope if you do it correctly.

Building your Financial Intelligence through diligence and effort is the golden ticket.

Kick-Off Your Best Year with SMART+ER Objectives for the First 90 Days

Wealth comes down to three easy steps; 1. Decrease your expenses, 2. Increase your income and 3. Invest in the Difference. However, before you get there, create a 3-year vision and construct the plan. Be specific; the plan should have objectives and can be evaluated in 12-week intervals.

This will improve your life by 400%. If you aren’t addressing your smarter goals, you are merely working backward. Here are TNFG’s top three books to alter your life toward wealth.

After a Drop in Q4 2022, Happy to See Our Net Worth Back Up

In the end, our net worth went is up 6.53% – a cash value of $52,754. There is always a bit of discrepancy between the last-day number and the first-day numbers slightly fluctuating. Or there are late banking adjustments.  

We were really saved by the broad growth across the market, particularly tech. Since we are over-weight in that sector, we will be looking to offset this with more healthcare and consumer staples throughout the year. Apple $APPLE earnings came in lower but that was expected. We are watching a VTI position in my wife’s ROTH IRA. It hasn’t been doing much and it’s better for us to push in the healthcare side and hold some cash for later.

Increasing our overall dividend yield is fun. And it seems that quality companies are at a discount. Read through the Fidelity Quarterly Outlook – Q1 2023 for ideas.

Travel, Groceries, and More Fees

My wife is always wondering, “when will we feel rich?” The answer is that we are rich together. But the real answer is, never! Just kidding.

For my household, the goal for 2023 is to hit $925,000 by December 2023. Though markets are fluctuating, it’s worth putting it out into the universe.

If everything aligns, we will likely be millionaires by the Spring of 2024. Beyond that, we front-loaded our travel costs for the year, which accounts for $1,517 of the estimated $22,500.

My wife found out that grocery pick-ups though convenient were costing us. It turns out the app’s prices are different from the in-store prices. They marked up items anywhere from $1 to $3.

We are going to cut down and strategize how to reign in this issue.

We also dined in twice so our food cost is obviously through the roof. I guess adding extra logs into the fireplace helped our gas for the month. Diving right into fixing loose ends, we paid off extra medical debts and outstanding debts, which added an extra $700 to the Fees and Charges.

The rest of the costs were pretty standard.

Our January Net Worth Running Back – Investments

Our investment went on a run in January. While we were down 19% in 2022, we recouped nearly 10%. We aren’t out of the fire just yet. We expect a correction in Q2 2023. For now, we will take the early wins and the extremely late Santa Claus rally. See graph below.

Volatility will happen more and more through 2025 so we don’t expect record-breakers like this. The rebound spared us for this month but retail investors will find a way to mess things ups.

For the average American, it’s an unequal recovery. If you aren’t investing, you are missing out. It’s the reversion to the means for the middle class. At this rate, you will have to fight for every inch of a better life.

Savings for Credit Card Payments?

We did a thing.

To lower our upcoming interest fees for the next couple of months, we withdrew $4,500 from our basic savings account (earning 0.01%) to pay off credit cards (that have +20% interest rates). Why? Well, that’s because we save way more money in the short and long run.

If we held $5,000 in that savings account, we would have netted 25 cents after six months. Yep, a massive 25 cents. On the opposite end, even if we made an estimated $833.33 payments per month on $12,000; we would still have $8,040.19 to go. While that doesn’t sound so bad, we would have incurred $1,038.18 worth of interest.

This is why it pays to be financially aware. If you have a lot of money sitting in savings, you might need to take a second look at your finances. You can use that money to carve our interest debt or invest in dividend income and long-term capital gains.

How will TNFG Ride This Solid Kick-Off?

First, got to look out for false stock positives. Can’t get too over-optimistic.

Time to readjust away from low-performing stocks and stock up 10% dry powder for the next low. That’s our strategy moving forward.

Beyond that, we are paying down debts and investing:

1. 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.
2. Shooting for a sustained investment rate with the push for a $900,000 net worth by year-end. 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
3. If we hit 10,000 followers on IG, I’ll be running Quarterly Investment Workshops for 2023. You really can’t save yourself from wealth. You have to learn to invest for the long term. This is far from day trading or getting rich overnight.
4. Work on blog consistency while adding eBooks (at some point). Pushing to build out for the next year until we hit a $1,000,000 net worth as of April 2024.

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