Best Time to Invest? May proved that Buying the Dip Works!

May is always a wild month for investing. After the rush rebalancing act in January and way before the summer season, the world hinges on China’s rebound and US politics. It’s kinda unsettling how most months are this positive and catastrophic at the same time, from an investment and general governance standpoint.

The world is in a shaky space. Even with the resurgence of everything AI, just makes sure that you aren’t missing the human component. Check on your friends and family. Better yet, take care of yourself. Health is a strong component of wealth.

As for the TNFG family, we were spending like the sun won’t shine tomorrow. When my wife and I step foot out the door, that’s a $100 base expense sacrificed to the economy. If that wasn’t enough spending, we dropped over $1,000 for travel which includes paying for my mom’s trip to Orlando. At least, I ended up in the NY Times.

Check it out, It’s ‘More Expensive to Live,’ and Workers Are Tapping 401(k)s for Help.

If it’s not one thing, it’s the Stock Market

In market news, inflation went from bad to worse.

However, it looks like it got better only to go back again. US families are financially fatigued at this point. We are all feeling the pinch for groceries. The Average American is struggling to pay an extra $5,000 in additional expenses per year. The Federal Reserve is likely to pause rate hikes through the 4th quarter.

Unfortunately, it will likely take a rolling recession to close this lifestyle spending loop. I’m still holding out for an S&P 500 closeout of 4,500 pts. The Financial Samurai did a great breakdown of the expert analysis, and we are beating it so far.

Inflation, Recession, and Monkey Pox

Intuitive ways to stop losing future opportunities; buy less for a period of time. Treat the rest of 2023 as if you were in 2020. Invest more in Energy, Utilities, and Consumer Staples even if the Tech side is surging. Try to buy when quality companies are low. For example, Nvidia and Meta were down nearly 70% in 2022 and have since peaked north of 100% YTD. Those who bought in January benefitted greatly. For the rest of us, once the news drops we likely missed it.

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 +5% for the year, it means you are losing Negative 4.99% of your hard-earned money annually.

Try not to stand flatfooted out here while there are high-interest savings accounts going for plus 4% and bonds north of 7%.

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 typically suck like tech, which may lead to a BUY moment.

It’s all about how you want to approach long-term investing.

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 More in June.

Check out our TNFG portfolio on google sheets.

Back to business. If you are new here, this blog post is all about TNFG’s monthly Net Worth Breakdown for May 2023. 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 Mexico to South America, there are tons to see.

By 2024, it will be time to implement a 3-yr aggressive consumer debt pay-off strategy to crush the remaining student loan debt, the car loan, and even the rental property mortgage. 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 +3.16% which is better than zero? The cash value grew north of $26,774.

Our Expenses for May 2023

Our Food & Dining budget went from $800 in May 2021 to $1,000+ this year.

The wedding Travel budget keeps cutting into our lives. But it’s family.

We have a small shopping problem. I’m going to have to bring it up to the Mrs.

The Entertainment budget jumped out of nowhere. We went out four times. It’s killing us.

The negative in Business Services is from the rental property income minus all expenses. In the end, we are mildly cash flow positive and our tenants are great. They also renewed the lease. Not sure why my state waited months to cash that tax check.

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1. So Where were the May wins?

In order; Debt Repayment and that’s pretty much it.

Debt Repayment in 2023 is going well

The goal for total debt repayment is $70k in 12 months. This month was a mild push with a win for a $736 improvement. While student loans are in forbearance, this is the best time to work to pay off debts before they pop back up in September.

Bumpy road for investments

Although we kept on investing. Our heavy tech allocation hurt us in 2022 but came through in 2023. Growth will be sporadic in Q3. December will close out near normal but prior to the climb in late 2024. 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 decreased for now

The end-of-the-year goal is set for $5,000. We are currently at $2,500 but we will boost that number in December. How? Our Acid Emergency Plan. I’m telling you the net/max financial plan hasn’t failed us yet.

Long story short, we have about $3,500 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, Fixed costs, 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.

The rest is just the cost of life, things are just blowing up left and right. And we still need to do some repairs. The car and student loans are $1,000 per month. And our mortgages are $2,000. Our fixed costs are $4,000 per month before anything. I’m saying all this because most people don’t know how much they are spending.

And that’s worst. Make sure you are aware of your cash inflows and outflows. You want to be at least +$500 per month to be financially stable. Quadruple that and you will be a millionaire in no time.

3. What is the Next Step for Us?

Quick Philly Trip in June. Mrs. TNFG’s BDay month is in full effect and getting back to shape afterward.

Beyond that here are our overarching goals for 2023:

1. Keeping our expenses where they should be. “So stop equating happiness and social acceptance based on the money you spend.“
2. Get to $75,000 in M1 Finance focusing on Growth and Dividend Income that generates at least $2,500 in passive income in 2024. 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 Million net worth in 2 Years. To help monitor your savings, cash flow, net worth, investments, retirement, etc. All FREE with Empower formally Personal Capital! Sign up with my link & get a $20 Amazon gift card. *Terms apply. https://pcap.rocks/lawrencegonz

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