Well, here we go again! It seems that there is no end in sight for the market volatility that has plagued us this year. And rightfully so, as this is the result of the fed failing to do it’s job and our government leadership being grossly incompetent.
This isn’t to say we are not long overdue for a correction or even a recession, because we are. However the runaway inflation freight train, which is the worst part of this whole economic disaster, was 1) mostly avoidable and 2) could have been tempered with an economic strategy based on facts and data followed by doing what’s best for our country and our economy.
Instead, we are witnessing what happens to an economy when politicians put pipe dreams and political payback ahead of the people and practicality. Add a negligent and incompetent fed chairman to the equation and it brings us to where we are today. And if people think the fed is actually a non-partisan entity then I have a bridge in New York I would like to sell to you.
If we can set aside our political ideologies for a minute and look at the actions and reactions taking place the truth is obvious. When politicians get in trouble they blame everything and everyone because they can’t admit their policies are horrible. This is what we are seeing now and in particular with our oil and inflation problem. It’s Covid, it’s Russia, no wait it’s the big bad oil companies and their profiteering ways!
The problem politicians have when deploying the strategy of deflect and blame is that the laws of supply and demand are not red or blue. They don’t really care about your political agenda. Plus the concept itself is pretty simple to understand. And there is nothing politicians hate more than simplicity and an informed populace. If people really want the truth, and chose to not be blinded by their propensity to vote for a donkey or an elephant, it’s very easy to see how we got to this point.
The fact is that oil literally drives everything in our economy. Sure living in an electric world sounds great, but we are not even close to being ready for that step on any level. So until then, oil is the driving force behind our economic well-being. And this is where we went completely wrong.
We were energy independent and killing the Keystone pipeline and cutting oil supply was probably one of the dumbest moves ever made by a politician. Not only did it cost people their jobs, it made us dependent on foreign sources once again. The truth is that we have more oil resources than we need right here at home. We are also able to access those resources in a cleaner and more efficient manner than any other country. The notion that getting our resources from other countries, controlled by tyrants, that have zero regulations and use questionable labor is somehow better for the environment is absurd.
Now we are unable access all of our resources because of these shortsighted policies and we have poor refining capacity because it’s nearly impossible to add more. That doesn’t stop the politicians from making a spectacle calling for more refining capacity while they damn well know there is none to be had because of their policies and regulations.
So instead of remaining energy independent we decided to take oil from Russia and they in turn decided to start a war. If that wasn’t bad enough the best solution our government came up with was to start pathetically begging Saudi Arabia and OPEC for more oil production. But there is that little problem where our leaders decided to take a stand and use tough rhetoric in order to score political points during an election. The Saudi’s found that to be insulting, whoops! Because of this the Saudi’s decided to give our government the silent treatment and the middle finger while laughing all the way to the bank enjoying those high oil prices.
Now don’t get me wrong, I have zero problem with taking a tough stance or insulting the Saudis and their reprehensible actions. But taking that type of posture is best done when you are not looking at buying what they are selling. In politics or when dealing in the world economy sometimes you have to play the long game with people even if you find them repulsive. To paraphrase one of my favorite movies “you have to look out for number 1, and be sure not to step in number 2”.
By cutting off the pipeline, ending our own energy independence and depending on Russia, of all places, to makeup the oil shortfall at home, our leaders stepped in a gigantic steaming pile of number 2. And just when you thought it couldn’t get any more embarrassing for our leaders, the Saudi’s, remembering the rhetoric, were all too happy to give us another serving!
This is the domino effect of stupid policy and we all get to pay for it. It’s a lesson about what happens when politicians are shortsighted and desperate to satisfy a fringe base. It’s a lesson about making monumental decisions without considering the current political and geopolitical environment or the possible fallout down the road of those decisions. And most of all, it’s a lesson for voters. Ultimately it’s our fault for allowing such incompetence to exist in our government.
Just remember, when you go to the gas station or to the grocery store and see high prices or empty shelves you don’t get to swipe a political affiliation rewards card and get a party discount. Government incompetence doesn’t know your affiliation or political leanings and it sure as heck does not discriminate. Everyone gets screwed equally.
Here is how our portfolio performed in June 2022:
(Our original portfolio goal $1.5m)
Portfolio = $1,317,367
Our Portfolio Decreased By $110,200 or 7.72% From The End Of May
Year-To-Date Our Portfolio Has Decreased By -19.76%
Net Worth = $1,365,430
Our Net Worth Decreased By $106,800 or -7.25% From The End Of May
Year-To-Date Our Net Worth Has Decreased By -18.83%
As you can see it was another dreadful month and our portfolio is now down over $300k for the year and $180k below our F.I.R.E number. On a percentage basis we are beating the S&P which is down almost 21% for the year, but it’s of little consolation.
It will be interesting to see what happens in the second half of the year as data starts rolling in that reflects the impact of the fed rate hikes. I still believe we will enter into a recession, if we aren’t in one already, as the fed was way too late to the party. In their haste to regain some form of credibility they will probably overshoot causing a larger slowdown.
If you listen to Powell he has slowly hedged his position by changing his wording in interviews and statements. First it was “no recession”, then it was “not likely”, then he moved further saying “it could happen” and now he is at “want to avoid it, but it will be hard.”
His words sound eerily similar to his rhetoric on inflation and he certainly doesn’t exude the confidence needed to help the markets find a bottom. In all honesty he sounds lost and completely incompetent. Do we really have a fed chairman that is guessing?
Here is how we did on our spending for June 2022:
Monthly Budget = $5,000
Total spend for June 2022 = $5,542
Over/Under Monthly Budget = -$542
Over/Under Budget YTD = -$3,471
Less Prepaid Site Fees = $1,503
Net Over/Under Budget YTD = -$1,968
As expected we had another expensive month as were over budget by $542. This overage is directly attributed to the cost of fuel as we paid almost $1k in fuel just to get to Pennsylvania from Alabama. We also let our son drive our Jeep for work so our gas expense has also increased a little, but it’s worth it to help him out.
We mentioned in our last update that we decided to top off our RV before parking in Pennsylvania just in case prices continue to jump. Since we are currently sitting with a full tank we will not have to spend money on fuel until sometime in September. Hopefully by then pricing will be a little better and being in a lower tax state will probably help too.
Despite how it looks we are doing pretty good on our budget and the second half of the year should balance out some of our first half overage. Of course fuel prices remain a concern and we are doing what we can to save money elsewhere on our budget to help offset the cost.
This is turning into a true test of our planning as just about every worst case scenario has come to fruition since we officially retired. From record inflation to the worst start in 40 years for the markets there isn’t much more that could go wrong in the first year of retirement. As we try to weather the storm we are adjusting expectations and even looking at different options for our travels. Being able to quickly adjust is one of the benefits of this lifestyle and we might need to use it to our advantage if the opportunity comes.
Until then we will remain vigilant and look for opportunities while enjoy our time in Pennsylvania with our son.
Thank for reading our blog! See you on the road………….
P.S. If you haven’t heard we started an online store called StuckonCamping where you can get some of our designs on stickers, magnets, shirts, hats, tote bags and more! Check it out for camping, RV, Jeep and other outdoor designs!
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4 thoughts on “June 2022 Financial Update”
Another great report. Thank you for telling it like it is. Our politicians have created this problem in our country. You spelled it out pretty well.
People need to know that their voting habits cause these issues. They need to quit voting for party and research the candidates running and vote on your values.
No candidate will ever be 100% on you values, but if that candidate covers the majority of your values, we will start having some change.
But if folks vote on emotions over one issue, they screw themselves over for everything else.
Loving your travels. I’m so glad we met and got to spend time together at M&M.
All the best,
LikeLiked by 1 person
100% Correct! Thanks for the reply. Look forward to meeting up again. Hopefully not at a repair shop next time. 😕