Stocks are Down, May as well Buy the Dip!
May 2022 was a wild month. It’s kinda unsettling how most months are this positive and catastrophic at the same time, from an investment standpoint. Well at least we went drove from DC to Florida safely for my sister-in-law’s wedding.
If that wasn’t enough spending, we also had our first major surgery and a new puppy named Brownie. Pictures on Instagram, you can follow him too.
Table of Contents
If it’s not one thing, it’s the Stock Market
In market news, inflation got worse before it could get better. This means that families will start feeling the pinch for groceries and gas. All to the tune of over $5,000 in additional expenses for the year. The Federal Reserve also stated that we are likely in for an additional 22 rate hikes to bring this to heel.
Unfortunately, it will likely take a recession to close this lifestyle spending loop.
Inflation, Recession, and Monkey Pox
Intuitive ways to stop losing future opportunities; buy less for a period of time. Invest more in energy, utilities, and staples. Definitely pull back where you can and try not to stash money in a savings account. For example, if you have your money in a savings account at the bank for 0.01% while inflation is at 8.5% for the year, it means you are losing Negative 8.49% of your hard-earned money annually.
Try not to stand flatfooted out here.
Wait, what is a Monkey Pox? Never mind we have bigger issues.
Inflationary Opportunities and a Million more problems in May
There are asset classes that perform well in inflationary environments. For example, tangible assets like real estate and commodities. Others suck like tech, although this might be a great time to buy low.
Some specialized securities can maintain a portfolio’s buying power including certain sector stocks, inflation-indexed bonds, and securitized debt. So far, I’m playing the subtle dividend ETF game and prepping to Buy the Split in June.
Back to business. If you are new here, this blog post is all about TNFG’s monthly Net Worth Breakdown for May 2022. Additionally, there are always usable financial nuggets and aha moments that might help you along the way.
Building Toward Our May Goals
Strategic Changes from May and beyond
Beyond tightening the war chest for the second half of the year, we are headed into travel season. From Canada to the West Coast, there are tons to see. By 2023, it will be time to implement a 3-yr aggressive home pay-off strategy while purchasing our forever spot.
Secondly, the cousin-in-law already announced a Mexico trip for 2023 so we are all in.
Time to taper, the urge to splurge for the year’s end. Here’s the quick Summary of the Net Worth So Far:
All in all +0.90% which is better than zero? The cash value grew north of $6,371.
Our Expenses for May 2022
Our Food & Dining budget went from $800 in May 2021 to $624 this year. However, that was due to us being in Orlando for the wedding.
Free food at the in-laws is a mega perk.
The wedding cut into our budget by a nice $5,000 overall but $2,653. Brownie’s pet care, vet visit, and even grooming came up to a whopping nearly $1,600.
Pet care can get expensive but it was his intro month. And he is a cute fella, so he gets a pass for now.
The negative in Business Services from my wife’s side hustle and a few financial literacy seminar and workshops. In the end, the total was just $102. Cash flow positivity for the month but I’m sure we will have to pay these medical bills in June.
1. So Where were the May wins?
In order; Debt Repayment and that’s pretty much it.
Debt Repayment in 2022 is going well
The goal for total debt repayment is $100k in 12 months. This month was a great push for a $5.4k improvement. While student loans are in forbearance, this is the best time to work to pay off debts before they pop back up in October.
Bumpy road for investments
Although we kept on investing. Our heavy tech allocation is biting us in the A**. Growth is nonexistent in the near term. December will close out near normal but prior to the drop in 2023. Rebalancing will be key for us.
If you need tips on how to set up a solid portfolio, read How to Build a Long-Term Investment Portfolio Earning 250%.
Cash holdings increased
We have to get that number back to $3,000. That’s our Acid Emergency plan is holding up and the net/max financial plan hasn’t failed me yet. One built-in feature was medical claims from the health savings account.
Long story short, we have about $3,000 in medical/dental claims remaining. Since we paid for them out of pocket in the past, we are able to claim them at any time tax-free. HSAs are truly the ultimate Quadruple tax advantage asset.
Where did it go wrong? And does it even matter?
Food and unintended expenses
As stated early, I can’t control food costs due to inflation, shipping costs, and global labor shortages. My wife and I had a chat about financial blindsides. For her, it’s her sisters. We love them but combined they can’t say NO to each other.
We paid close to $200 for late-night tacos. That’s going to be a story at family reunions while we spend even more. Sometimes you have to know your financial blinders. But I’ll watch the families back.
3. What is the Next Step for Us?
Loads of travel in June. The Wife’s BDay month and getting back to shape afterward.
Beyond that here are our overarching goals for 2022:
- Keeping our expenses where they should be. “So stop equating happiness and social acceptance based on the money you spend.“
- Get to $50,000 in M1 Finance focusing on Growth and Dividend Income that generates at least $2,500 in passive income in 2023. 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 Million net worth in 2 Years. 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
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