Stocks Down 10%? Our Massive Financial Correction in October!
Yep, stocks trended downward for October 2023. To make matters worse, our expenses aren’t going dowing anytime soon. On top of getting robbed twice for our rims and tires, It’s been rough. We attempted to get a way through Vermont to see some foilage but even that fell through.
All this to say, it’s been a very spooky and moody Halloween month.
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 2023.
You will read about our Highs and 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 might sound farfetched at first, it’s definitely possible if you are intentional. It’s a process.
Even though we had over $150,000 in student loan debt, we were able to become millionaires in less than 10 years. Taking time to draft a great financial plan helps.
All to say that wealth has afforded my household, 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 for October 2023
The Game is Changing, Complaining about it won't Help. Best to Lean In.
While the market is turbulent and finances aren't great, it's time to focus on the long-term game. Try not to listen to the crowd. If they are leaning toward Bonds, my wife and I continue to dollar cost average. Buying low is part of the fundamentals. It feels counterintuitive and very uncomfortable. However, we found prosperity when others were fear-filled. Later, those same people will run into the fire when the stocks are red hot.
This is why you should 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 percent 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 September wasn't stellar, October was horrific. There is almost nowhere to hide when it comes to making money. The volatility is here to stay through 2025.
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 5.27 percent on $10,000 on iBonds from the government (TreasuryDirect). Or keep 3x-6x months' worth of expenses in a HYSA for as much as 5%.
Check Bankrates.com for the latest offerings.
Nearly 75% Investment Growth since October 2018 through October 2023
As you can see below, our household investments blew through our expectations. Even with the month going sour, the YTD is north of 10.40%, Investment wins aren't counted in the short run. It's the long run that counts.
While the market might close out around -18 percent in 2022, our average annualized returns are north of 15 percent.
See the screenshot below.
Nasdaq.com insights - U.S. equities declined in October, dropping more than 10% from July highs, We are now in correction territory. Big tech companies are still carrying the S&P. Most sectors, including Energy, Airlines, Media, Homebuilders, Chemicals, Semiconductors, Machinery, and Banks, underperformed.
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 market but would recommend that you start with $VOO. No need to sweat the details, just buy the index ETF and ride the wave. Especially if you hear Correction.
It's like buying stocks 10 percent off.
With more than $600,000 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.
Table 1. TNFG Financial Planning by Phases
| Phase 1.5 (current) Financial Foundation | Phase 2 (2024 - 2030) Fin-Progression |
| 1. Investing to match in the 401k, 2. Paid down credit card debt, 3. Max 401k contribution (limit $22.5k for 2023), 4. Max Traditional or ROTH IRA (limit $6.5k for 2023), 5. Max Health Savings Account (HSA)(limit $3.85k for 2023), 6. After-Tax Investment minimum $10k avg. annually, and 7. Aggressive Portfolio Allocation 90/10 8. Zero Student Loan Debt due to PSLF (August 2023) | 1. Acid Emergency Plan with $12.5k saved, and $50k in High Interest Savings Account (2030) 2. Credit Card Debt Free (2025), 3. Max 401k contribution (limit $23k for 2024), 4. Max Traditional or ROTH IRA (limit $7k for 2024), 5. Max HSA (ie limit $4.15k for 2024), 6. New Portfolio Allocation of 80% equities, 20% Cash Reserves, 7. After-Tax Invsting 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 we rolling 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 +$90,000. But things happened so, we readjusted to $82,000. Investing has a secondary bonus; it reduces our tax liability. We are still traveling and enjoying life so it's not all doom or gloom.
For context, my wife and I make north of $200,000 per year in our 9-5s. Since we live in the DMV, reducing our taxes is pivotal. To retain more of our dollars, we invest to the max in our investment accounts. Why tell you this? While you might not be at this income, the lessons on money were just as useful for us, when we were making less than $45,000.
An open mindset helps. 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 | $34,446 | $21,399 | $55,845 |
| QTR 2 | $26,119 | $21,650 | $47,769 |
| QTR 3 | $117,278 | $19,367 | $136,645 |
| Estimated QTR 4 | $24,114 | $19,584 | $43,698 |
Total | $201,957 | $82,000 | $283,957 |
Here's the Quick Summary:
What Happens Next!
The overall decrease in October was -0.51% percent. A cash value of -$5,148.
Our investment tanked almost $16,000. The financial experts say that the S&P will drag through 2024. 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 monthly food and dining costs are unrecognizable. For two adults and a dog that's nearly $1,000. Prior to 2020, I didn't think more than $700 was possible. Time and inflation are undefeated.
Auto & transportation costs went up to almost $1,400. Car alarm coming up as well as other security measures. We didn't end up traveling in October but we did lose out on $305.
Housing cost is going up due to related car issues. 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 2024, 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 2027. Crafting a new emergency savings plan as we speak.
The big ASK comes Thanksgiving week when we have to get the rest of the family on board. Each year we take the opportunity and engage in family future planning. With my father-in-law retiring, I'm thinking about new ways to grow.
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 2024. "Once you put in the work, then it's time to enjoy some much needed down time"
- Get to $100,000 in M1 Finance by 2026 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 investment portfolio by mid-2026. 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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