How We Improved Our Wealth Cash Flow for March

March madness finally concluded; the big lesson, make sure your cash flow is competitive going forward. The pandemic kicked off five years ago. Do you remember your net worth? How much did you spend in 2019? Have you done the work?

It’s critical to move the wealth needle for your household.

Inflation wrecked countries like Venezuela and Argentina. While OPEC and China continue to add economic pressure on the US. All of these global issues translated into higher costs for American households. When prices won’t go down, the next best thing is to 1. cut back on spending, 2. increase your income, 3. decrease your use of credit, and 4. invest for the long term. Unfortunately, most households are doing the exact opposite.

We have to agree that the world is changing, it’s time to change with it.

Inflation Madness, TikTok Zaddy Emerges, and the Russian-Ukraine Conflict?

This March was a Bear that wasn’t.

The net worth of households and nonprofit organizations increased by $4.8 trillion to $156.2 trillion in the fourth quarter of 2023. The change was driven by an increase in the value of directly and indirectly held corporate equity, which rose by $4.7 trillion.

Stocks staged impressive returns in the first quarter, gaining over 10%, taking total returns to just shy of 30% over the last 12 months. Stock prices pushed higher in the first quarter despite diminished expectations for Federal Reserve rate cuts in 2024.

Household debt grew by 2.4% in Q4 2023. Home mortgage debt expanded by 2.1% while nonmortgage consumer credit grew by 3.3%. Consumer credit growth bounced back as expected to meet holiday demands. We are stuck between a robust economy that doesn’t work for everyone and a hard place.

TikTok still wasn’t banned and will Trump get arrested, it’s all up in the air. It’s like we are in the limbo zone. 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 think we finally have our front runners. It’s Biden versus Trump again.

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.

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 $1,500 in their total annual expenses since 2023. Unfortunately, this will be sustained if we can’t get people to stop spending on credit and stop trading on margins.

All about Inflation Madness and the Cost-of-Living Crisis Pot of Gold

This is our TNFG monthly Net Worth Breakdown for March 2024.

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 2024 – Inflation, Prices of Goods and Gas are going up; everything else not so much.

Our next household financial goal is to hit $1.5M Net Worth (of which, $1M in our total investment portfolio) by April 2025.

Unanticipated costs are coming out of the woodwork to make this difficult, but we will manage. The new car (at 5.04 percent to pay off in 72 months) has added nearly $2,000 net cash outflow per month. We have to clear it out by 2027 or sooner. 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 $30k later this year, life is handing out hard lessons. 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, 2024 (below)

Investments bounced back as we await the next Federal Cut

Wall Street ended the quarter better than I thought. Investors drove stock prices higher in the first quarter of 2024, 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 climbed more than 10% to post its biggest first-quarter gain since 2019. The benchmark index in late January hit its first record high in two years, as it built on a surge in late 2023, and has not looked back, setting more than a dozen highs without a significant pullback so far in 2024. The Nasdaq, despite falling Thursday, rose more than 9.1% over the same period. The Dow added 5.6%.

Our portfolio is up 27.79% 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 was to knock down credit card debt. We dropped it down $5k.

This year has less Passive Income but the Mrs. received a 10% raise. Well, it’s better than nothing. I’m also adding roughly 10%.

Our savings are going back up with a total of $5,000 by the end of the year. We don’t tend to keep too much inflation savings on hand since it’s technically losing purchasing power. This point confuses people a lot. Wealthy people are typically not cash-rich. Instead, we opt for an active cash flow management approach. However, we have a robust Acid Emergency strategy instead.

All in all +4.64% in a month was extraordinary (a dollar value of over $58,542).

Our Household Expenses for March 2024

Gone are the months of +2k net passive income support.

Instead, we are paying the $2k for the new car and the associated car insurance. While not big in March, travel purchases are typically a bigger item but we are cooking up something different this year. We spent less than February which is great.

Income was robust for the month and we are happy about the bonus. The after-tax version always hurts the soul. It’s all about the net version. With the income at $16k and the expenses at $10k, we were left with nearly $6k. After that, we 10x our net worth for the month.

Cash flow management is the key to building wealth effectively.

While I see a lot of people pushing the Debt Free Journey or the FIRE movement, I’m just sitting 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. We netted +$1,704 over the last month.

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 2024:

1. Back Load our ROTH IRAs to invest in the Sinister Six. Adding to our long-term strategy to retire early with north of $3M.
2. 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 2026.
   • 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.
3. 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
4. Prepare for an Epic Financial Literacy Month: (2) Workshops, (2) Podcast Interviews, and (4) Blog Posts. Pushing to build a $1,000,000 investment portfolio.
   • After April 2025, I should be leaning toward more Personal Finances content specifically for Federal Employees.

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