Hey Money Wizards,
It’s time for another Net Worth Update!
This is the final one for an interesting year. So I’ll keep the usual intro short – I’m trying to leave my office job by age 35 with around a $1 million portfolio.
I’m currently 31, so let’s check on the progress!
Life Update: January 2022
After nearly two years of CONSTANT VIGILENCE (bonus points if anyone gets that reference), Omicron proved too contagious for the Money Wizard household to fend off any longer.
Lady Money Wizard picked it up from someone at her work. Luckily, she was fine. And strangely, I never got it?
In any case, it meant that we spent the first third of January mostly hanging around the house, drinking lots of water, and eating lots of healthy food in hopes of turbocharging that immune system.
I’d planned to take a ski trip near the middle of the month, but this slight curveball meant I never pulled the trigger on that one.
After our little quarantine-cation, we did go on a dining out bender to end the month. Hey, we had to celebrate Lady Money Wizard not losing her sense of taste somehow!
Otherwise, here’s to a better February!
Net Worth Update: January 2022
And the detailed spreadsheet that I keep:
A brutal month in the market.
In January, the real most powerful person in the country (Jerome Powell, sorry Mr. President…) announced The Fed’s economic plan for the upcoming year.
With inflation running wild, politicians were pressuring The Fed to get it under control. Their answer, as announced in January, was to raise interest rates over the upcoming year.
Through an economic game of dominoes that’s beyond the scope of some dude’s monthly net worth update, raising interest rates is one of The Fed’s main tools to slow inflation. Unfortunately, it also has the side effect of plowing down asset prices.
Not surprisingly, Wall Street traders sold stocks en-masse when they heard the news, resulting in the $20,000+ drop you see in poor Money Wizard’s portfolio.
International stocks increased thanks to some Roth contributions (more on that later) while U.S. stocks stayed exactly identical to the last month.
Overall, the thing I’m most happy about here is cash at only 3%. Because who wants cash when it’s getting crushed by double digit inflation each year?
Checking Account: $3,212 ($10,942)
The bad – As expected, I had to pay the piper and take care of last month’s $8,000 credit card bill.
The good – I was on top of my Roth contributions this year! While I usually procrastinate this for no good reason, this year I made the full $6,000 transfer at the beginning of the year!
Brokerage: $260,849 ($5,041)
Here’s the first place you’ll see the impact of the Fed’s announcement.
Not as bad as expected, thanks partially to my automatic monthly contribution and to a much lesser extent, the larger commodities portfolio (gold) I’ve been building up over the last year or two.
401(k): $265,049 ($13,133)
Ouch, now that’s pretty ugly.
Especially when you considered I added my usual $2,000 per month to this. (In 2022, I still plan on maxing out the 401k, as I have for the past few years.)
Roth IRA: $69,677 (+$3,760)
In January, I did my yearly chore of adding $6,000 to my Roth IRA. (The max allowed per year.)
Of the $6,000, I put:
- $5,000 into VTIAX (Vanguard’s International Stock Index Fund)
- $1,000 into VGSLX (Vanguard’s Real Estate (REIT) Index Fund)
So the final breakdown of the Roth is now about 75% VGSLX and 25% VTIAX.
But the more important thing I was thinking about when deciding on how to break down this year’s contributions? My overall portfolio.
The $5,000 into the International Stock Market index moved my overall allocation to about 10% international stocks and 10% real estate funds, which is more in line with my portfolio targets.
Rent Payable: $875 (+$44)
Natural gas prices are crazy right now, so even though we cut our usage in half by investing a ton of money into insulation, we could only run (but not hide!) from rising utility bills.
For newer readers, I share a house that was purchased by my now-wife. This number is my half of the mortgage, utilities, and a couple hundred dollars a month that we throw into a “home maintenance fund” to help prep for any big projects.
Credit Cards Payable: $4,177 ($4,201)
Last month the total was $8,387, so compared to that… this doesn’t look too bad!
(Hey, everything is relative!)
After pre-paying for a lot of 2022 trips and vacations, I’m glad to see this category start to return back down to earth.
Speaking of which, let’s check out my monthly spending.
Total Spending January 2022: $2,872
Umm… inflation much?
Dining Out: $569
Yeah, we went a little wild on the dining out this month.
Interestingly, we chose quality over quantity, although the result on the wallet was also quantity. The bulk of this was just three very fancy dinners that totaled $100, $150, and $200.
We celebrated a friend’s birthday at the breweries and distilleries, and let’s just say the shenanigans added up quick!
After searching Craigslist and Facebook marketplace for months to no avail, we gave up and eventually bought a perfect corner accent chair for our living room.
How was your start to the year?
I’ve got a good feeling about 2022! Maybe?
PS – Want to track your net worth like this? Personal Capital is my favorite tool to do so. The free software is truly awesome, so just check it out already!