jANUARY net worth Update... THE BAD GETS WORSE
The BAD gets worse
January Monthly Net Worth Update
Well it finally arrived, the stock market correction everyone was waiting for.
Let panic ensue, sell, sell, SELL!… run for the hills.
I’m kidding… you know that’s not the strategy I preach here – which is all focused around well diversified long term investing, so I (and you) can be achieve financial freedom.
So how did my investments hold up over January where we saw the S&P and Nasdaq Indices both drop by more than 10%.
Before we get there ….life update.
Welcome to the first net worth update from Me The Millennial for 2022.
This is my 9th official entry and the 1st of 2022!!
If you didn’t already know I’m bringing you along for this financial independence retire early journey (the so called FIRE movement), and this month was a rocky one.
I hope you find these worthwhile, I would love some feedback in the comments section.
Let me know if you find these updates useful and anything further I should include. I’m happy to provide more detail on my investments, expenses or even my favourite coffee shops in Vancouver!
Shoutout for my favourite personal finance/investing blogger Financial Samurai who commented last month, super awesome.
*As always, I am not an expert or financial advisor, so nothing on this website should be considered financial advice. These are just my opinions, everyone is different. Always do your own research and have your own independent thought process.
Life Update: January 2022
January 2022, really took the theme of the ‘Good the bad and the ugly’ from December’s net worth update but instead focused solely on the BAD.
They say bad news comes in threes, well I’m hoping that’s true.
…touching the wooden table for luck as I sit here in Starbucks in downtown Vancouver sipping on a large Cappuccino, writing this post.
What were the three things?
1) Well first I’m still counting COVID
Which knocked me sideways over the New Year. Thankfully 3 weeks later I am fully recovered with no lasting effects.
I’ve gone back training (swimming, working out, cycling etc.) and there has been no issue with lung capacity or breathing.
Fingers crossed it stays this way.
2) Broken bones….
Playing a basketball friendly match, as part of a group games event, my girlfriend shattered her pinky finger!
Yes, that right ..shattered, from the force of a basketball?!
We spent the next 9 hours until 4:30 am in the A&E with Xrays, re-braking of the finger by the physician and lots of pain.
The result…4 weeks in a cast followed by another 4 for occupational therapy.
All that from a little pinky finger getting hit by a basketball.
The best part? I get the lucky job of cooking every meal, and cleaning every dish for the foreseeable future! 🙂
3) Car trouble…..
I had been looking to buy a car for the last couple of months.
It’s really needed where I currently live, especially if you are like me and love exploring and hiking across the Pacific NorthWest.
I went the used car route rather than a brand new car as touted by every financial guru outdoor….I hear Dave Ramsey shouting in my ear.
Spent weeks researching and finally pulled the plug on a used Kia Forte (2016) with very low mileage – 60,000 kilometers. I was onto a winner (see picture above)…I thought.
I noticed some small knocking sounds and slight vibration through the steering wheel on day 2.
For peace of mind I went and got a full diagnostic for $80 on day 3 by an independent mechanic.
To my shock he said there were potentially some major issues with the bearings or even the engine mount!
This was after the company I bought the car off had given me a report detailing their “150 point inspection” they completed.
Which right then I was really questioning what they even checked.
Thankfully as part of buying the car from the garage, ProTip: I used the benefit of an all cash offer to throw in a 7 day refund policy (or up to 500km).
Thank god I did.
It worked out okay and I got a full refund. But I was so thrown off by the experience, and not just this issue.
But also the crazy prices for used cars right now, I saw some 2 year old cars that were actually more expensive than the brand new factory versions!
I will be writing a full post on this given the experience I had and also the fact I will be jumping back in to the market to buy.
I am hoping it can be used for what to look for when shopping for a new/used car to find the best deal… and in some cases it may actually make sense to buy a new car!
Okay, less doom and gloom.
I’m excited for the new month, and recently set my financial goals for 2022 (make sure you follow the process I do every year..it works) which I am very motivated to smash.
Includes hitting a Net Worth of $450k by December, 2022!
I also set some personal goals. I signed up to a triathlon for September and recently joined a swimming club.
Okay wow, I’m starting to waffle here let’s get into this month’s numbers.
Net Worth Update (January, 2022)
As of Jan 31st my net worth is now $344k.
You might be wondering, wow my portfolio has held up really well given the volatility over the last month.
Only a drop of $2.5k since last month or less than 1%, especially when the broader market is down more than 10%.
But that doesn’t tell the whole story.
I contributed a lot more this month….
As you can see below I made additional contributions totalling ~$12k across my brokerage account and pension.
So in essence my portfolio decreased about $14.5k since last month stripping out the contributions.
The good news, this equates to roughly a 4% decrease in my portfolio. So I’ve actually outperformed the market fairly significantly.
I put this down to my well diversified portfolio, and the performance of my Gold and Energy stocks along with the REIT’s I own, that rallied in January.
If you want more detail on my holdings, check out my perfect dividend stock portfolio here.
Read on for a breakdown by category, and also what I spent for the month of January.
– Checking: $2.1k (+$0.6k) – No real change here – I hold very little cash as always – especially when we are being penalized roughly 7% every year due to inflation.
Cash is still trash.
– Brokerage: $296.5k (+$5k) – Increase of $5k this month, but I contributed $11k. Meaning a drop on my brokerage of $6k.
As you can see, over 80% of my financial net worth is in my brokerage.
Which is great as I can access it when I hopefully hit my financial independence goal of $1.5MM at age 35 and not be penalized for it. Unlike trying to access your pension accounts before retirement age.
I made some targeted investments in single stocks, namely some undervalued Chinese tech stocks – JD.com and Alibaba. If Charlie Munger is investing in the same stocks, I’m in good company.
My brokerage is made up of the following (approximate % allocations):
- Index Funds – 38%
- REITS – 10% I invest in Residential Housing REIT’s given the current inflation market – check out here why. My REIT’s are up more than 5% this month when the market has been down.
- Individual Stocks – 37%, I follow a well balanced diversified basket on stocks here
- Gold Stocks – 15%
Regarding the above allocation, it constantly changes. But I do want to increase my index funds and REIT allocation further and reduce my single stock exposure to below 15%.
The opposite happened this month because I wanted to take advantage of the crazy sell off hitting Chinese stocks over that last while.
Gold Stocks (Newmont Corporation and Barrick Gold) – I am content with my allocation. Gold is always a good hedge against inflation and has offered some protection to my portfolio over recent months.
– RRSP (Pension) $53.6k (-$3k) – Big hit this month on my pension. As mentioned last month given my age I opted for a mutual fund that is 100% US equities.
Given the volatility over the last month, the drop off is obvious. But over the long term, the US stock market has only went one direction. I’m not about to go against over 100 years of results.
– Car loan (bank) $6k – This was half the cost of the car which I decided to borrow from my bank and take advantage of the ultra low interest rates at the moment. Given that I got a full refund, I invested all of it into the market.
This is the main reason my contribution is way ahead of normal this month.
I followed my own logic for when it makes sense to borrow money to invest.
– Rent and Credit Card: $.5k – Spent way less this month, mainly due to being stuck in quarantining and also completing a successful dry January. Good for the wallet and the health.
January 2022, I am now worth, financially at least ~$344k.
I am still 23% of the way there to my $1.5m goal by age 35.
The experience from now doing this for many years, gives me the mental strength to not panic during a down day or week. This is how I cope with losing money in the stock market.
Calculate Your Own Net Worth
If you haven’t worked out your net worth before, or even if it’s just been a while since you’ve checked, do it now! Open up your accounts, and list down the key buckets of assets and liabilities (don’t sweat the small stuff to start, you can worry about this later).
The first step is having visibility into what your own financial breakdown looks like, and you can plan accordingly. Will also give you a realistic view of what you can achieve, and also what you need to cut back on to achieve your goal.
Let me know what you think of these net worth updates below and post in the comments where you are on your financial independence journey.
I would love to hear from you guys+gals!
I hope you find some of these areas helpful in your own journey to whatever your goal is. Follow along on my journey and subscribe to my newsletter and never miss a post, I keep my net worth updated here.
Have an awesome start to your 2022 🙂