How We Improved Our Wealth Cash Flow for March
March madness finally concluded however the world is still dragging post-pandemic.
Looking back at this time last year, Will Smith slapped Chris Rock at the Oscars. This year, Chris slapped Will with a $40M payday from NetFlix. France jumped to provide free annual therapy sessions in 2022, and then things got progressively worse. They are now in full riot and protest mode over two more years before retirement.
Inflation is wrecking countries like Venezuela, Argentina, and Europe. While OPEC and China continue to add economic pressure on the US which directly translates to higher costs for American households. All of this, along with the perfect storm of Americans 1. cutting back on savings, 2. spending more on credit, and 3. not investing.
One thing we all can agree on is that the world is headed toward a paradigm shift with the de-dollarization of the world, BRICS and TikTok.
Table of Contents
Inflation Madness, TikTok Zaddy Emerges, and the Russian-Ukraine Conflict?
This March was a Bear (stock market pun intended). The stock market swung up and down. I’m happy we settled on up to return to February levels.
Retail traders have grown even more unstoppable but at least they are recouping their losses from 2022. The inverted yield curve is tilted, leading experts to call this a “Rolling Recession” which is terrifyingly unequal and uneven. Even though the Russian-Ukraine conflict persists, the West has grown apathetic with energy and other costs soaring. The people want this to end and return to the good old day? Make America great again-ish. And finally, Trump got indicted to his detractors’ joy. I guess their personal balance has been restored.
Will TikTok finally be banned and will Trump get arrested, it’s all up in the air. If we were honest, it’s tiring. Instead let’s allow the Chinese Trojan Horse app, to crush our adolescents’ productivity and attention span slowly. In all of history, I’ve never seen a group of people root for another nation to beat their own. Well, other countries are banning the app. China, all but admits that they don’t even carry the addictive version of the app in their country.
Suffice it to say, it was an eventful March! And I didn’t even mention the whole Bank Run (Silicon Valley Bank – SVG and Credit Suisse situations) which could have stopped us all in our tracks.
Time-out, what is an inverted yield curve?
Don’t worry I got you.
An inverted yield curve describes the unusual drop of yields on longer-term debt below yields on short-term debt of the same credit quality. The yield on the 2-year Treasury note traded above the yield on the 10-year note, the deepest since 1981.
Basically, it means that investors think that the long run sucks and we have a ways to go. When short-term rates increase, US banks raise benchmark rates for a wide range of consumer and commercial loans, including small business loans and credit cards, making borrowing more costly for consumers. Mortgage rates also rise.
The average American saw an increase of about $6,000 in their total annual expenses since 2022. Unfortunately, this will be sustained if we can’t get people to stop spending on credit and stop trading on margins.
At least the 2nd Quarter and Pedro Pascal are here?!
All about Inflation Madness and the Cost-of-Living Crisis Pot of Gold
This is our TNFG monthly Net Worth Breakdown for March 2023.
Every month, we share our numbers to see if we can make cents for all the nonsense. Additionally, I drop gold nuggets and hints to improve your financial understanding.
The goal of sharing monthly is to disprove others; It’s not impossible to grow wealthy. Building wealth works, even when the world seems to be in a dire place.
In the end, consistency matters so put in the time. You will find that the journey is one of self-discovery and change.
It’s not the money at the end of the rainbow; you will come to realize that it was always about your time. Furthermore, try not to get too hammered down about situations that you have no control over.
March 2023 – Inflation, Prices on Goods and Gas are definitely going up; everything else not so much.
Our next household financial goals are to hit $900,000 by the end of December 2023 and $1M by April 2024.
Unanticipated costs are coming out of the woodwork to make this difficult, but we will manage. We even picked up a new car with a note of $51k at 5.04 percent to pay off in 72 months. We anticipate clearing this mark by the end of 2026. On top of that, our travel costs for the year were estimated lower but are coming in HOT!
With upcoming electrical repairs and other renovations totaling just under $10k, the BlackRock CEO was right, millennials are going to learn hard lessons. The Russia-Ukraine war is ending globalization which has ushered in the Global Reversion to the mean and the end of American dominance.
Like a lot of Americans, we are feeling squeezed. However, unlike others, we know that any financial crisis comes in waves. It’s best to prepare and stay the course. So how did we do for this March in route to close the year?
See our ending Net Worth as of March 31, 2023 (below)
Investments bounced back post Federal decision but it can’t stop a Recession
Wall Street on Friday ended the quarter better than I thought. Investors drove stock prices higher in the first quarter of 2023, seemingly unfazed by inflation, another interest-rate hike, and a regional bank crisis that is leading to tighter credit conditions and raising financial stability concerns.
For Q1, the S&P 500 and Nasdaq were up 7.03% and 16.77%, respectively. Tech had its best quarter since 2020. However, the Dow ended the period with a 0.38% increase. For the month, the S&P 500 and Nasdaq have gained 3.51% and 6.69%, respectively. The Dow, meanwhile, advanced 1.89% to the end of March.
Our portfolio is up 10% for the quarter. Yet, it’s still way too early to celebrate.
Damn Market is Decent in the Final Minutes
Sometimes the finish line is better than the race.
Our first goal for the quarter was to fix the Credit score for Mrs. TNFG. After that, get a new credit card and knock down credit card debt.
We were able to manage all of that and more.
Taxes are due on April 15, 2023. We expect to pay around $6,000 for what’s owed this year. If we luck out, it will be slightly less.
This year has less Passive Income but the Mrs. received a 3% raise. Well, it’s better than nothing.
Our savings are going back up with a grand total of $7,500 by the end of the year. Down from our lofty $12,500 due to the April car purchase. We don’t tend to keep too much inflation savings on hand since it’s technically losing purchasing power. Instead, we opt for an active cash flow management approach. However, we have a robust Acid Emergency strategy instead.
All in all +3.17% in a month is better than nothing (a dollar value of over $25,000).
Our Household Expenses for March 2023
Gone are the months of +2k net passive income support
Our Cousin-in-law is getting married in August so we are spending in the festivities and travel.
Followed by more travel purchases for our anniversary trip at the end of the year. We spent $2k so far with at least $7k more to go.
For the kids’ section, my God kids went to Universal Orlando so we dropped an extra $200 as a surprise. There was some other spending on the family through gifts, but all in all no real damage.
Car insurance came in so that’s where the $1k is coming from. Insuring 3 people and 2 cars is quite costly semi-annually.
And, old faithful the 2009 Nissan Versa took a stumble. This cost us an extra $700 in repairs and it still died, again. Our shopping spree at Amazon.com is finally getting subsidized with the Amazon credit card. At least we will get 5% cashback. But we are making cuts to our ‘subscribe-and-save’ to ease this monthly expense.
You should really look at how much you spent at Amazon over the last decade.
Loosening Up in March
With unanticipated prices ie cars, AC, a roof, and medical; it’s best to loosen up.
Prior to being financially active and literate, we would stress and panic. The extra stress didn’t help. We have since learned to take it in strides and be more proactive. Utilities and all other companies are adjusting to the inflation cycle by passing the cost to the consumers. Pay attention to how you are spending and cut back on waste, and adjust alongside them. People are now tipping north of 20%, we stop going out casually.
You have to be mindful of the experience and the tacked-on costs. We rather spend it all on travel instead. Besides, travel is our love language.
Home, Food, and Health!
As the cost of housing goes up, we are doubling down on necessities and creativity. Trader Joe’s is a great space to get quality wine for less. Back in 2015, I was buying $30 bottles of wine, now I can get one for $6.99. The frozen section is amazing too. Pizzas and other baked goods are a welcomed change of pace and will elevate your date night.
Our food cost overall is up nearly 50% since 2019. It may as well be $1,000.
The best thing to do now is to spend differently. If the cost of eggs is up, eat something else. Find the adjustment. Finally, calm your investment nerves. Stocks are low and so is your portfolio, but you are still better off investing wisely.
Just know you aren’t the only household feeling the impact. Unfortunately, the high cost of putting food on the table is not going down any time soon, GAO report says.
The Power of Cash Flow Management
Our net worth still went up by 3.17% but that’s likely because we are always improving our cash flow.
While I see a lot of people pushing the Debt Free Journey or the FIRE movement, I’m just seating on the side with the Net Max Financial plan and doing both. Why? Because that’s the opportunity that an effective cash flow management strategy offers.
In March, we pulled money from our group investments. The extra $13.5k came in handy when paying down credit cards and absorbing the new car loan coming in April-May 2023. We also found that we overpaid into my wife’s 401k due to her company’s acquisition. Being an accounting/tax major finally paid off. We took the extra $2k and purchase our flights and hotel for the year-end trip.
Our cash stays very active.
Beating March Madness, Looking Ahead Beyond Inflation
Although we didn’t beat the buzzer, we got each other. I really couldn’t do this journey alone.
Beyond that here are our overarching goals for 2023:
- Front Load our ROTH IRAs by Mid Year to invest in Google, Amazon, Nova Nordick, and CVS. Adding to our long-term strategy to retire early with north of $3M.
- Investing $1,250 per month in M1 Finance Brokerage focused on Growth and Dividend Income that generates at least $1,000 in passive income in 2025. 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 with the push for a $1,00,000 net worth. To help monitor your savings, cash flow, net worth, investments, and retirement; use the Empower App (formally “Personal Capital”) Sign up with my link & get a $20 Amazon gift card. *Terms apply. https://pcap.rocks/lawrencegonz
- Prepare for an Epic Financial Literacy Month: (4) Workshops, 2 Podcast Interviews, and a New Blog Series just for readers. Pushing to build out the website until we hit a $1,000,000 net worth valuation. After April 2024, I should be leaning toward Personal Finances for Federal Employees.
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