Well it finally happened, we had a negative return month. This is our first month in the red since January, which is pretty remarkable, and even in January we were barely negative. In fact we would have to look back to October 2020 for the last significant negative month which shows that a correction was probably long over due. Of course everyone, including us, loves to see their portfolio go up month after month but in reality that is not healthy or sustainable. While it’s never fun to see your portfolio decrease, sometimes dramatically, these pullbacks create the opportunity to take up new positions, add to existing positions or to dollar cost average. Plus they are a healthy aspect of a long term investment strategy.
We are nearly eight months into our full time RV journey and we are starting our second month in Arizona and we couldn’t be happier. With Mrs. RVF now fully retired it feels like we have reclaimed our lives and the freedom to do what we want, when we want, with no constraints is very liberating. Some days we wake up and just sit outside and enjoy the day while other days we explore, hike and take in what the surrounding area has to offer. It’s amazing how much there is to see and do outside of visiting the standard tourist spots.
In our last update I mentioned the last task we had was to figure out our medical insurance situation. This turned out to be a larger pain in the rear end than we had hoped it would be, but we got it done.
Once we got our COBRA packet from Mrs. RVF’s now former employer, it was clear that COBRA was not an option as $2000 per month is just a ridiculous number. Quite frankly I was willing to take my chances going uninsured and setting up an investment account dedicated to medical expenses before I paid that type of premium.
We looked into another option through some full time RV groups and they were much more reasonable and closer to our budget. We thought we had it figured out. We were wrong! It turns out I have a pre-existing condition which prevented us from getting insurance. Huh? Back in January I had a spot of skin cancer removed. The insurance didn’t cover a penny of the procedure or treatments so I paid cash. That qualifies as a pre-existing condition. The best part is the insurance we were considering doesn’t cover that same procedure either. They consider it a pre-existing condition. WTF! Yep, they disqualify people for something minimal and listed as a coverage exclusion which would already have to be an out-of-pocket expense if needed again. And insurance companies wonder why they are universally despised?
So we moved onto the next option, the dreaded ACA. I will be honest here, I have never been a fan of the program. It’s not about the healthcare aspect as much as the government’s ability to be fiscally responsible and not intrusive into peoples lives. I don’t trust politicians or bureaucrats to do the right thing. After Mrs. RVF talked me off the ledge, we reached out to an insurance agent who came up with a plan for us that we decided to use for the rest of the year as sort of a trial run. The timing works out with open enrollment at the end of the year and the cost is very low. Even though we are almost never in our home state of South Dakota, it will cover us for emergencies out of state, which is really all we care about.
The good news is that if we like the plan, we will probably upgrade to the next tier when open enrollment comes for 2022. We will have no income except dividends and the occasional work camping job. And with the current monthly premiums being so far below our budget there is no reason to not opt for the better coverage even if it costs more. So maybe this whole pre-existing condition nonsense was a blessing in disguise if it works out for us.
Here is how our portfolio performed in September 2021:
(Our original portfolio goal was $1.5m)
Portfolio = $1,562,155
Our Portfolio Decreased By $40,763 or 2.54% From The End Of August
Year-To-Date Our Portfolio Has Increased By 26.83%
Net Worth = $1,599,129
Our Net Worth Decreased By $40,091 or 2.45% From The End Of August
Year-To-Date Our Net Worth Has Increased By 10.89%
September is historically the worst performing month for the markets and this year was no different. However, when compared to the major indexes our portfolio performed quite well in a very volatile month. We were down 2.54% while the major indexes were all down north of 4%, so we actually held up better than I expected. Part of this is probably attributed to the fact we carry enough cash to cover emergencies and a years worth of expenses.
Another great thing that happens at the end of the quarter are those wonderful dividends. We are slowly building a dividend portfolio to gain some monthly income but that will take some time. Until then, the vast majority of our dividend income comes from quarterly dividends from mutual funds. The end of the third quarter brought with it $5,330 in dividend payments, all of which was reinvested. This is an increase of $855 or 19.1% from the third quarter last year which is great progress.
Heading into October I expect more of the same as there is still a lot of uncertainty lingering around the markets. I don’t feel as if we are going to see a full blown 10% correction as the underlying economy is still strong, but I expect choppy trading and some extremely volatile days throughout the next month. Hopefully as we move towards the holiday season some of the uncertainties are resolved and we can see a nice rally into the end of the year.
There you have it. Another month in the books. As we move to further implement our retirement plan there will probably be some portfolio changes coming. This is because we need to decide if we are keeping Mrs. RVF’s 401k in the employer plan or if we are going to move it to a rollover IRA. This is mostly dependent on the fees the plan will charge to leave it where it is. Starting next year we will begin a Roth IRA ladder from one or both of our 401k accounts. We are also exploring using IRS Rule 72(t) in place of a Roth IRA ladder for Mrs. RVF to bridge the gap to 59 1/2. But I need to weigh the pros and cons before we make that decision.
On another note we are making some changes to the blog. We recently updated our About Us page, added some blogs to our Recommended List, created a page for Books We Recommend and another page for our Campground reviews. Please take a moment and check out these new additions.
Thank you for reading our blog. As always we appreciate your time and any feedback you provide in the comments below. Make sure to follow us on social media for more updates as we explore the country.
Until next time……………..
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