Anyone else happy to move on from January? Perhaps this update should be titled “The Good, The Bad and The Ugly” as it might be more fitting? January was busy, expensive, and at times, frustrating. I don’t mind rough months in the markets as they are needed in order to facilitate long term progress. I would prefer large market drops happen in months where we are not already committed to shelling out a lot of cash. As the Rolling Stones song goes “You can’t always get what you want.” Hopefully we got it all out of our system and can move forward to greener pastures. Let’s stick with our theme for a little levity.

The Good:

We made what should be our final payment towards our son’s college tuition. It’s always tough to make a transfer and see such a large hit to the account, but it’s an investment in our son’s future and in our future.

We also finished booking all of our stops for the rest of the year, and if nothing changes, we will come in under budget. The only thing left to worry about are one nighters in between long-term stops that will have to be booked last minute. Or if we don’t want to spend the money, we will just find a place to rest for free. You are not really an RV’er until you have slept in a Walmart, Cracker Barrel or truck stop parking lot.

The Bad:

We had a great deal of money go out the door as many expenses came up at the same time. All of these expenses were planned and budgeted for so they were not unexpected. It’s probably more of a psychological hit than anything else if we stay on target in the long run. And when I really think about it, this is no different than when we owned a home and those dreaded annual expenses came up. The only real difference is we don’t have a paycheck to fall back on or help smooth out the hit.

So what are these expenses? As mentioned above, we had to book campsites for the year and we were already late in doing so. We also had three extra months to book because our work camping gig for the Fall fell through. The drawback with this process was we had to shell out cash up front to hold sites. This can range from a small deposit of $50-$100 or in some cases they want the entire month at the time of booking. These up front payments will make our monthly budget look terrible in the month we book them, but should resolve over time when we don’t have to pay the fees later. As long as we stay at our average $750 per month budget we will be ok.

Next we had our annual RV maintenance. The timing of it stinks but it needs to get done so we don’t have bigger problems down the road, literally. Of note on this subject, and maybe I should have put this in the “Good” column, we had the service done on-site at our current location. It saved us over $800 compared to what we paid in the past living in California. Most of that savings came from labor rates that were 2/3rd’s cheaper than we paid for diesel engine service in California. That’s a huge and welcome savings.

The Ugly:

This one is a no-brainer, the stock market! The correction wasn’t unexpected as we were long overdue for the market to take a breather. On a personal level, the timing of it kind of sucked and put a big fat exclamation mark on what was an expensive and financially horrible month. But hey, that’s why we plan for this kind of stuff.

The reason why we hold a good amount of cash to live off of is so we don’t have to touch our investments in situations like this. Aside from the gut-wrenching swings in the market, we can sit back comfortably knowing we are covered for a good amount of time. Our dividend distributions are also reinvesting at a lower price while we wait for the market to find its footing.

Here is how our portfolio performed in January 2022:

(Our original portfolio goal was $1.5m)

Portfolio = $1,550,381

Our Portfolio Decreased By -$91,400 or -5.57% From The End Of December

Year-To-Date Our Portfolio Has Decreased By -5.57%

Net Worth = $1,591,998

Our Net Worth Decreased By -$90,425 or -5.38% From The End Of December

Year-To-Date Our Net Worth Has Decreased By -5.38%

While it’s pretty ugly, it’s important for us to remember these numbers are over-exaggerated due to a hefty tuition payment and prepaid expenses. When it comes to the market conditions, we still took a sizable hit, but it was more like -4.5% which tops the -5.86% hit to the S&P 500.

At the end of January, and in the first couple days of February, we have seen a nice bounce from correction levels. While I welcome the positive bounce off the lows I am also not getting too excited about it. There is still a lot of uncertainty and the Fed hasn’t done much to clear the picture past saying there will be rate increases and an end to the bond purchases.

All of this is ok and it’s the direction we need to go, but I still fear the Fed overshoots and slows the economy as a whole instead of just tempering inflation. As I said before, overshooting on rates could lead to a recession. Until we start seeing actual action taking place and the results from that action, the possibility of a recession can’t be discounted.

Now that we are starting our first full year of retirement, it will be fun to watch how our spending plays out compared to our budget. We started tracking this in October 2021 which was our first full month of retirement. In the final three months of the year, we came in $1,221 under our $5k per month budget. We will start 2022 in a hole but we should be able to dig out of it pretty quick as our monthly budget starts benefiting from the prepaid expenses.

Here is how we did on our spending for January 2022:

Monthly Budget = $5,000

Our total spend for January 2022 = $5,802

Over/Under Monthly Budget = -$802

Over/Under Budget YTD = -$802

We were over budget on our spending by about $800. This is actually good news because with the prepaid reservations and our annual maintenance we should have been over budget by close to $2k. Being able to save a good chunk of cash on our maintenance and staying close to home certainly helped.

Looking to next month, we will have annual expenses come up for vehicle registrations and we will also start the journey to our next location. This will result in an increase in fuel costs and probably some costly overnight reservations. I’m confident that we will be able to be at or below budget for February barring any unforeseen circumstances. We will be on the road for 4 days heading to our next stop and we will need to minimize expenses during that time.

There you have it for our good, bad and ugly update. We are ready to hit the road and move onto another adventure. As always we look forward to sharing it with you on our blog and all of our social media outlets.

Thank you for reading and we will see you on the road!

Joe

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