Hey Money Wizards,
As you probably know by now, every month I track my updated Net Worth, so that I can hopefully leave my office job in the very near future.
I’m currently 32 with a goal of a million bucks within the next three years. The race is on!
Life Update: July 2022
July was all about family time, and I can’t count myself more fortunate.
We started the month on Lady Money Wizard’s side, with a long July 4th at a family cabin. Then, we ended the month with more of the same – this time on my side – hosting family who came all the way up to Minnesota from Texas. (For a perfectly timed retreat from the summer heat.)
In between, we spent quite a bit of time enjoying our state’s good months. Lots of bike rides on the new wheels, plenty of outdoor walks with The Money Pup, and my weekly beer-league softball.
It was a nice reminder. As long as you’re lucky enough for quality time like that, it doesn’t really matter what your portfolio is doing.
But of course, this website is all about the Benjamins! Onward!
Net Worth Update: July 2022
Hey, we’ve got some greenery!
After last month’s absolute massacre, the portfolio recovered slightly.
Why? Because up is down and down is up, apparently. Welcome to The Upsidedown.
In July, The Fed raised interest rates by 0.75%, for the second month in a row. Because what else are you gonna do when your job is to control inflation, and inflation is burning like wildfire? (Official inflation was 9.1% as of July, by the way.)
As we talked about before, The Fed raising interest rates usually crushes the stock market. So naturally, in this new upside down world, the market soared on the news!
All in all, the S&P500 rose 9.11% over the month, which doesn’t really make any sense at all and is reason number 5,231 why trying to actively trade the market is a bit like agreeing to pound your head against a wall.
Meanwhile, GDP fell for the second quarter in a row. Usually, that’s the official benchmark for a technical recession, but so far, the National Bureau of Economic research hasn’t been willing to pull the trigger on that call. (They cite the strong job market.)
Oh, and the yield curve inverted again. I’m not one for trying to predict the future, but that metric has signaled the last eight recessions in a row.
Not much to report here. The checking account showed a loss, but I think that’s mostly because I measured last month’s net worth update halfway through the month, so it’s not getting the benefit of my usual number of paychecks.
Otherwise, the brokerage and 401(k) accounts mostly followed the inexplicable stock market rally.
My Current Strategy
With all the doom in gloom (namely the yield curve inversion) it’s tempting to pull everything out and sit on the sidelines.
Sell! Sell! Sell!
But IMO, that’s a fool’s game.
If you’ve been following these Net Worth Updates for any period over the past 5 years that I’ve been publishing them, you know that there’s always some sort of concern on the horizon that a sufficiently nervous person could use as reason to stop investing.
But we all know that doing nothing is the only investment guaranteed to lose half its value every 24 years. (Even more in a high inflationary environment.)
That said, I do personally believe the yield curve inversion is one of the most reliable economic indicators. I talk about that in this post that semi-predicted the 2021 market crash.
But I also don’t really believe in selling investments.
If anything, I may divert some of my extra cash (and future paychecks) towards slightly less risky assets.
Remember those I-Bonds I’ve been talking about?
Now would probably be a good time for me to cross that $10,000 investment off my to-do list.
I’ll also keep those automatic stock market purchases going, because consistency is the name of the game there.
Total Spending July 2022: $1,881
Wow, July was a surprisingly frugal month.
Other than the usual food costs, we basically didn’t spend any money.
Travel was to a family cabin, and it seems that bribing family with beer in exchange for a free bed is quite the economical trade.
I think that “investment” in my new expensive bike might actually be paying off.
With the new bike in hand, we found ourselves more frequently planning free weekend activities like “local bike ride” instead of “hundred dollar meal out.”
If every month was this cheap, we might be able to bump up that early retirement date!
How is you summer going?
Hope all is well! Financially and otherwise.
PS – Want to track your net worth like this? Personal Capital’s free net worth tracker is my favorite tool to do so. The free software is truly awesome, so just check it out already!