December 2019 Financial Update

Goodbye 2019! What a year for the markets as well as personal change and direction. And if everything goes as planned for 2020 this ride will not stop.

The month of December unexpectedly proved to be the busiest month on the business front. It seemed like there was a mad rush to close out real estate deals before the end of the month so bookings were up and so was revenue. Because of this I expect January to be slow as the pipeline reloads. However, I am very new to this industry so this is just a gut feeling and hopefully I’m wrong.

In our November update I mentioned that I started tracking our passive income. After figuring out how to track this in our system I created a report and then went back and retooled our data to get some historical prospective. It turns out that the huge amount in 2018 was just an anomaly created by an abnormally large capital gain distribution in one of our mutual funds. We are still earning a nice amount but well short of the $44k from 2018.

I was only able to go back so far on our data because we have changed institutions over time. It’s more hassle than it’s worth to go back and reopen those accounts in our system and then fix the data to get more history. Here is how our annual passive income breaks out for the last three years. 2019 = $30,828; 2018 = $44,322; 2017 = $34,447

As you can see 2018 was a banner year for passive income. However, in my opinion this is misleading and actually a negative. I think there is more recognized capital gains because of the markets selling off at the end of 2018 and mutual funds trying to lock in gains before it was too late. 2019 was a far more superior year as far as market activity and therefore there was less capital gain distributions. Why sell and recognize capital gains when market momentum is roaring higher?

Anyhow, it’s nice to finally have a method to track this information. It will come in handy as we move towards relying on passive income for daily living expenses in the future. This will currently cover about 50% of our annual living expenses. That’s a bit lower than originally thought when I first came up with the 2018 number, but still good nonetheless.

Here is where we finished the month of December and 2019:

Portfolio- $1,047,518 (Cash and Investments)

Portfolio Goal – $1,500,000

Amount needed to reach goal – $452,482

Our portfolio increased by $25,825 or 2.53% from the end of November.

Year-to-date we are up 25.98%.

Net Worth – $1,250,886

This is an increase of 2.00% from the end of November.

Year-to-date we are up 23.47%

As anticipated 2019 was an excellent year financially. We cracked the $1M portfolio mark in October and never seemed to look back. We ended the year with just below a 26% gain in our portfolio and a 23.5% increase in our net worth. You can’t ask for more than that!

As we start 2020 everyone is anticipating the market will move higher and historically they do in an election year and after a year of big gains. However, we are reaching the point of overheating and there needs to be a break and a pullback at some point. The market is always looking for a catalyst and they might have found it with the Iran situation. I don’t think any pullback will be prolonged, but it is a necessary evil for the markets to move higher in the long run.

Nothing can go up indefinitely nor should any investor want it to. There needs to be solid underlying economic data, which we have, to help support price expansion. In my opinion at this time prices have outpaced the data and a pause in the run up is needed to allow further justification. I believe we will continue higher this year, just not at this time. Again, just my opinion and I’m no expert.

As I always say, none of this immediate stuff really matters as we are invested for the long term. I personally enjoy watching the day to day stuff but I don’t recommend it for others if you can’t stomach seeing losses.

We are excited about our 2020 plans and will keep updates coming on the blog and other social media. This is shaping up to be a very busy year for us, especially after June, and we are looking forward to the challenges we face to get to our goals.

Thank you as always for taking time to read our blog.

Until next time……………

Joe

4 thoughts on “December 2019 Financial Update

  1. Congratulations on reaching the $1 million milestone! 2019 was indeed an outstanding year for stocks and I hope it encourages more people to start investing.

    However, 2020 might be the year of the great correction everyone is expecting and the coronavirus panic may have kickstarted it. However, patience is key and one should not panic sell solid positions. If anything, a correction is the perfect opportunity to purchase quality companies at a discount.

    All that being said, I look forward to reading your future posts!

    Liked by 1 person

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