Groceries up 70%. At least, Our Debt is Down $100k
Table of Contents
Debt has been framed in fear for a long time but it doesn’t have to be that way. You can tackle it.
Next Goal for us: How to top the Business Insider Feature.
Average household debt rises during pandemic to over $150K. October saw the highest increase in household debt in contrast to the high increase in household savings of 2020.
Translation, pent up spending is aggressively taking over, even with rising costs. According to Bankrate.com, 42% of Americans have racked up more credit card debt since Covid-19 began.
To put it in context, the average person owes $5,525 in credit card debt with an interest rate north of 16.16%.
Things are going to get more expensive before we stabilize the global economy. As for the TNFG household, October was a spending month.
My mother-in-Law came to town so we knew that our grocery costs were going to be high but that sucker went through the roof. Our 2019 average of groceries was less than $500 per month.
This month? $1,000 with the extra zeroes. It’s been ridiculous.
The boost in spending coupled with the labor shortage and inflation are making companies more profitable on the balance sheet side. All of which lead to richer companies fueling happier investors. You really can’t afford to sit on the sideline.
You have to shift cash flow quadrants and invest as soon as possible.
The TNFG household’s net worth made up for our timid third quarter. We are up over $35,000 with investment growth doing the heavy lifting. Honorable mentions for the month include $DWAC and $TSLA. Best part of all this, my wife finally see the $1M finish line.
Are You New to TNFG?
If you are new, this article is part of the Net Worth series. In this post, I’ll showcase the TNFG monthly Net Worth Breakdown for October 2021.
You will see some Highs and I definitely don’t shy away from the Lows. Additionally, there are always usable financial nuggets that might help you along the way.
I’ve also been known to be the most transparent financial literacy person on social media, you can even peep out how much you should be investing monthly to become a Millennial Millionaire (below). While it sounds crazy at first, it’s definitely possible if you are intentional.
Compounding Efforts Meet Compounding Growth in October
The Game is Changing, It’s Best to Change with It
Most people are merely spectators, content with shouting from the sideline. Too bad, active players aren’t listening to the crowd. Translation: you can’t afford to watch other people live their purposeful life. Your attention on them is costing you, your life.
I encourage you to listen to the Minority Mindset video below and take notes. It’s become harder to be financial illiterate. Prices will increase. You can still do something about it today. Why?
Turns out:
- Companies are giving 3% raises to stay afloat and competitive,
- That 3% raise is being overtaken by 3% price inflation annually, And
- Your Zero percent isn’t keeping up with +5% increase in home prices and +2.5% increase in medical cost.
TNFG Wealth as of October 31, 2021 UPDATE
*Smooth but dramatic climb, however there was an update in software that was subsequently corrected. It duplicated the ROTH IRA at the credit union and classified it erroneously as a savings account.
+40% Investment Growth for October 2020 to October 2021
As you can see above, our household investments has been killing our expectation. It is solidifying our need to stay invested in the long run. Like a lot of other people, we didn’t start with much but we are working to live more in the coffer for the next.
We are currently keeping pace with the DOW however, we will need to shake things up going into 2022. To think, I started with $500 rollover into my 401k in 2014. Almost $500,000 and 7 years later, it’s time to implement phase two (see table 1 below).
While I can’t speculate the flow of the game until retirement, I’m an AGILE player. I stay flexible with the cards that are dealt.
Table 1. TNFG Financial Planning by Phases
| Phase 1 (current) Financial Foundation | Phase 2 (2022 – 2024) Fin-Progression |
| 1. Investing to match in the 401k, 2. Paid down credit card debt, 3. Max 401k contribution (limit $19.5k for 2021), 4. Max Traditional or ROTH IRA (ie limit $6k for 2021), 5. Max HSA (ie limit $3.6k for 2021), 6. After-Tax Investment Minimum $15k annually, and 7. Aggressive Portfolio Allocation 90/10 | 1. Acid Emergency Plan, 2. Credit Card Debt Free, 3. New Portfolio Allocation of 85% equities, 10% Cash Reserves, and add 5% Crypto Assets, 4. After-Tax Invst. Minimum of $25k Annually, and 5. Cash flow Generation of +$12k annually |
Net/Max Financial Style – Debt Pay Off + Investing by QTR
Year End Closeout Goals from November to December
We’ve been investing while paying off debt, but it haven’t been easy. Life is always throwing the next curve ball and we we rolling with the waves. Most people are more concern that the challenges will take from them but it truth, you really have to dig to find the lesson.
That’s the piece that you need on your quest.
The investment contribution goal for the year is about +$80,000. Especially great since it reduces our tax liability and the debt repayment goal is about $100,000 but that escalated to $110,000.
Table 2. TNFG Year to Date
| Total Debt Repayment ie Credit Card, Mortgage Principal, etc.. | Investment Contributions | Total Added Back to NW | |
| QTR 1 | $31,613 | $20,579 | $52,193 |
| QTR 2 | $25,097 | $19,161 | $44,258 |
| QTR 3 | $23,551 | $21,245 | $44,796 |
| Estimated QTR 4 | $30,000 | $20,000 | $50,000 |
Total | $110,261 | $80,985 | $191,247 |
Here’s the Quick Summary:
What Happens Next!
The downturn of September opened the floodgate to an explosive month. Overall great increase in October for almost +6.49%. Investments edged up by +$36,400.
The true cash value added almost $41,000 which represents 36% of my salary in one month. The financial experts say that the S&P has another 6% to go for 2021.
Wealth velocity is powerful if you have a great financial plan.
What did Our October Expenses Look like?
Our groceries cost over $1,000
Even though my mother-in-law was in town, it’s still wild that we’ve gone up this much. There was a time that our grocery bills were on average $600 tops.
This is a 70% increase. Turns out, my wife was not surprised since she does most of the grocery runs. It’s borderline ridiculous.
Rental Nightmares
The rental property is giving me so many issues. The hazing is real from Blinds being replaced to an entire AC system’s meltdown. This is likely to cost us $5,000 in November which effectively means that the rental is still operating in the red since we got it in 2017.
And, we still need to address the garage to bring us flush for another $5,000.
New Phone Who Dis
On top of all of this, I NEED to get a new phone. Since my wife wants to track me for safety when I go on long runs, I will be switching over to team iPhone. That, and a new Peloton will set us back about $3,500. At this point, we are just flowing money away. The net/max plan is still holding up and helping us reach our goals.
Our YTD investments for the last 10 months at $68,006 while our YTD total debt repayments were $90,711. Tough times mean that I need to redouble my own efforts and close in on passive income.
What is the Next Step for Us?
New TNFG E-Books will be available on the website late November.
Beyond that here’s our overarching goals for 2021:
- Shifting investments money goals to experience goals in 2022. “Once you put in the work, then it’s time to enjoy some much needed down time“
- Get to $50,000 in M1 Finance focusing on Growth and Dividend Income that generates at least $2,500 in passive income in 2022. Check out the portfolio in real time. If you like the platform and want to start investing, I have the $30 for $30 referral if you need it (Limited Time) – https://m1.finance/SYdqDJ2SyADC.
- Shooting for a sustained investment rate with the push for $1 Million net worth in 2 Years. To help monitor your savings, cash flow, net worth, investments, retirement and more FREE with Personal Capital! Sign up with my link & get $20 Amazon gift card. *Terms apply. https://pcap.rocks/lawrencegonz
- Work on the Financial Griot Podcast content with my co-hosts to enrich the lives of our listeners. The wealth building community is growing.
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