Stocks Up 13%? Our Massive Financial Gains in October!
According to Experian, the US average total consumer debt in 2021 was $96,371. Up nearly 4% from 2020, when the average was $92,727. Americans are carrying as much as $6,271 of revolving credit card debt at more than 20% at any given time.
Making minimum payments would take more than 25 years and $9,173 in interest to repay. That’s a lot of time to be in chains.
Debt has been framed in fear for a long time but it doesn’t have to be that way. You can tackle it. It’s possible to pivot.
Along with car loans, student loans, and other personal loans, the average American spends more than 9% of their monthly income on debt payments.
In translation, most households are aggressively spending to stay faux lifestyle positive while diving into their savings. All the pent-up pandemic spending lead to rising demand and larger price tags. The old Supply and Demand prompt inflation to speed up.
According to Bankrate.com, 42% of Americans have racked up more credit card debt since Covid-19 began. Things are going to get more expensive before we stabilize the global economy. As for the TNFG household, October was a get-back-to-near-normal month.
It’s going to be crucial to shift cash flow quadrants and invest as soon as possible. Beyond what you read in the media, brace yourself for a hard landing in 2023. And try not to get too cute with money in this period.
Table of Contents
Are You New to TNFG? Welcome!
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 2022.
You will read about our Highs and 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 might sound farfetched at first, it’s definitely possible if you are intentional.
After intervening in a domestic violence issue to close off the month, I’m reminded that I’m lucky to be in this space. In short, the fact that I could intervene calmly is because I’ve seen too much violence in one lifetime. As you go from poor to wealthier, your environment becomes more and more insulated from the bad parts of town.
All to say that wealth has afforded me, distance and well-being. If you aren’t there yet; keep going. It’s not the money at the end of the road, it’s peace of mind. That part is priceless.
Compounding Efforts Meet Compounding Growth in October
The Game is Changing, It’s Best to Change with It
Try to become an active player that’s focused on the long-term game. Try not to listen to the crowd. Those who stick to the fundamentals of finances always end up top side. You really can’t afford to watch other people live their purposeful life.
Additionally, tune out excess information. I hear so much about estate planning from people who don’t even have a savings account. Recently, I’ve been in discussion about the Mega Backdoor ROTH. Something that’s only effective for the top 5% of the population.
Your attention on them is costing you, your life. Focus and be clear of mind.
I encourage you to listen to the Minority Mindset video below and take notes. It’s become harder to be financially 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 a +5% increase in home prices and a +2.5% increase in medical costs.
TNFG Wealth as of October 31, 2022 UPDATE
While October was a stellar month. In context, September was horrifying. Worst yet, the bulk of the year has been difficult. The Market is down as much as 25%. There is almost nowhere to hide when it comes to making money.
With interest rates rising due to Federal Reserve increases, High Yield Savings accounts (HYSA) and Treasury Bonds are back. You can grab as much as 8% on $10,000 on iBonds from the government. Or keep 3x-6x months’ worth of expenses in an HYSA for as much as 3%.
Check Bankrates.com for the latest offerings.
+191% Investment Growth from October 2017 through October 2022
As you can see above, our household investments blew through our expectations. Investment wins aren’t counted in the short run. It’s the long run that counts. Yes, the market might close out around -18%. I’m happy that our average is north of 30% over 5 years.
See the screenshot below.
Dow has the biggest monthly gain in more than 45 years. This represents the best monthly gain since January 1976. The month was up 14% while Facebook (Meta) tanked. Turns out the Metaverse is years away.
This news solidifies the need to stay invested in the long run. And the need to stick to the basics when you can. 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. And in some cases, we are floating north of 5%.
With almost $500,000 in invested assets, we are implementing 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. Besides you never know what will happen next.
BlackRock said “the markets are rallying on hopes that policy tightening is coming to an end“, which it thinks is premature.
Table 1. TNFG Financial Planning by Phases
| Phase 1.5 (current) Financial Foundation | Phase 2 (2023 – 2025) Fin-Progression |
| 1. Investing to match in the 401k, 2. Paid down credit card debt, 3. Max 401k contribution (limit $20.5k for 2022), 4. Max Traditional or ROTH IRA (limit $6k for 2022), 5. Max Health Savings Account (HSA)(limit $3.65k for 2022), 6. After-Tax Investment minimum $12.5k avg. annually, and 7. Aggressive Portfolio Allocation 90/10 | 1. Acid Emergency Plan with $5k saved, and $5k in High Interest Savings Account 2. Credit Card Debt Free, 3. Max 401k contribution (limit $22.5k for 2023), 4. Max Traditional or ROTH IRA (limit $6.5k for 2023), 5. Max HSA (ie limit $3.85k for 2023), 6. New Portfolio Allocation of 80% equities, 20% Cash Reserves, 7. After-Tax Invst. min. of $15k avg. annually, and 8. Cash flow Generation of +$12.5k 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 hasn’t been easy. Life is always throwing the next curve ball and we roll with the waves. Most people are more concerned that the challenges will take from them but in 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. We are still traveling and enjoying life so it’s not all doom or gloom.
As you see these numbers, just for context my wife and I make about $200,000 per year in our 9-5. We live in the DMV which is a quasi-high cost of living. In order to reduce our taxes, we invest to the max in our investment accounts. Why tell you this? Because not everything we do can be easily duplicated. We started out making less than $45,000 per year. I started at $23,000 before taxes.
What I think is more valuable here, is the mindset of planning. Thinking ahead and thinking often are the keys to improving your life.
Table 2. TNFG Wealth Cash Flow Year to Date (YTD)
| Total Debt Repayment i.e. Credit Card, Mortgage Principal, etc.. | Investment Contributions | Total Added Back to NW | |
| QTR 1 | $25,156 | $26,000 | $51,156 |
| QTR 2 | $49,716 | $21,000 | $70,716 |
| QTR 3 | $25,209 | $19,425 | $44,634 |
| Estimated QTR 4 | $20,335 | $14,444 | $34,779 |
Total | $120,416 | $80,869 | $201,285 |
Here’s the Quick Summary:
What Happens Next!
The downturn of September opened the floodgate for more spending in October. We went to Albuquerque, New Mexico chasing hot air balloons but the weather didn’t cooperate. But we made the best of it and went to Santa Fe, El Paso, White Sands, and even Mexico.
The overall great increase in October for almost +3.94%. A cash value of $29,315.
Our investment spiked over $30,000 which is 1/3 of my tax home pay annually. Financial experts say that the S&P will slow down in 2023. Grab the win while you can. Right now, it’s all about coiling up Wealth potential using the Net/Max financial plan.
What did Our October Expenses Look like?
Our groceries are beyond belief. For two adults and a dog that’s nearly $900.
Prior to 2020, I didn’t think more than $700 was possible. Time is undefeated.
Travels and Spending
Our travel costs started to stack up for October with prepayments for the November trip. We picked up $750 worth of euros for nearly the same price. Tourism is on sale if you can afford it.
All other prices are OK, given the state of the world. We did spring for Halloween this year. Pictures on our personal Instagrams. The first family Halloween was a success. The negative is income (inverse net of expenses) from the rental property for $1,400 and about $500 for a company presentation.
At this point, Amazon is part of our family. We’ve been donating to this company religiously. Instead of fighting against it, we now own more shares of the retail juggernaut. The goal is to reduce the big-ticket items and slow down the urge to keep spending.
Our net/max plan is still holding up. For 2023, we have to get back to side income. I would suggest that to everyone. With the recent health scares, we bumped our emergency savings up. And will continue to do so through 2025. Crafting a new emergency savings plan as we speak.
The big ASK come thanksgiving week when we have to get the rest of the family on board.
What is the Next Step for Us?
With the TNFG E-Books scraped for the year, time to vacation.
Beyond that here are our overarching goals for Year End 2022:
- Creating a new recession-resilient plan for 2023. “Once you put in the work, then it’s time to enjoy some needed down time“
- Get to $100,000 in M1 Finance by 2025 with a focus on Growth and Dividend Income that generates at least $2,500 in passive income. 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 2.5 Years. To help monitor your savings, cash flow, net worth, investments, retirement, and more. FREE with Personal Capital! Sign up with my link & get a $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.
- Easing off of toxic social media information and reconnecting with Nature and People.
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