Mid-Month Update

I’ve started and stopped blog posts a few times this month. Mostly because these are unusual times and what more can I lend to the conversation that hasn’t already been said.

Looking back at our February update I have to say that I severely underestimated the impact and fallout from the Coronavirus. Past viruses came and went with little to no economic impact. The Coronavirus has spread rapidly and forced society as we know it to come to a screeching halt. This in turn is leading to a global economic shutdown and the financial markets reacting wildly due to the unlimited uncertainty. Continue reading “Mid-Month Update”

February 2020 Financial Update

Oh where to begin on this one? In our January update we talked about the end of the month impact on the financial markets from the Coronavirus. At that time we had some panic selling that turned the markets negative for the month and wiped out some nice gains. I was tempted to buy into the market, but ultimately decided to hold off which turned out to be a good decision.

Then came February and the panic took full hold with massive irrational moves to the downside. For me, it was time to move once we passed the 10% correction threshold. I half jokingly tweeted on Friday the 28th as the market closed that I thought we were near the bottom.

By this time I had already made my move.

This was a decision based on how the market was reacting at the time. Although they were still down on the day the Dow clawed its way back up from a 1000 point loss to close down 400 and the NASDAQ actually closed green by less than a point. It wasn’t about timing the market because as I have said before, that is a fool’s errand. The market was showing some level of buying support and that is something I look for in irrational times. It turned out to be a good move so far as the markets rallied on Monday and even with Tuesday’s Fed-induced pullback, they are still off their lows as I write this.

Now, I don’t write this to pat myself on the back. The markets could have, and still can, very easily collapse further. Because of this I also hedged by increasing a monthly contribution in case there is a need to average down. Either way we keep buying at reduced prices for the time being.

The point of this is that there is no reason to panic in uneasy times. It sucks to lose money, but there are long term benefits for those that can keep a level head and see the big picture. There are a ton of quotes from the Warren Buffett’s of the world that we could insert here, but I’m sure you already know them and they don’t need to be constantly repeated.

This is the beauty of having a long term investing outlook. Our timeframe is not today, tomorrow, next month, next year or even next decade. Our timeframe is forever. Again, insert Warren Buffet quote here.

So let’s see where all of this market madness dropped us off at the end of February:

Portfolio = $992,770

Portfolio Goal = $1,500,000

Amount needed to reach goal = $507,230

Our portfolio decreased by $52,319 or 5.01% from the end of January

Year-to-date our portfolio is down 5.33%

Net Worth = $1,203,920

This is a decrease of $50,557 or 4.03% from the end of January

Year-to-date our Net Worth is down 3.75%

As you can see we took quite a hit in February. It’s probably the worst we have had when it comes to dollars, but not on a percentage basis. This puts us back at September 2019 levels which in the big picture isn’t too bad considering the run we have been on.

If I have one small thing I was a little bummed about is was falling below the $1M portfolio threshold. But that quickly rebounded and hopefully it stays that way. I understand that this was more likely than not to happen eventually because we need market corrections for long term growth.

So where do we go from here? I stand by my statement that this virus, while bad, is not the real reason for the market sell off. It might be the catalyst, but it’s not the reason. The reason is that the markets were overheated and well overdue for a correction. The virus gave people looking for a reason to sell their opportunity to do so. Once that process started and fear set in, it snowballed with a little help from the folks in the media. You might disagree but that’s my opinion.

If you haven’t already please read the excellent write up from MMM for a very level headed assessment of the situation.

Going forward I expect this hysteria to wind down and for the markets to refocus on economic conditions and the upcoming election. There is no doubt that there will be some impact on corporate earnings and the economic indicators will also take a hit. However unless there is a sudden and dramatic increase in cases and deaths in the United States I believe this will only be a speed bump in the road for the economy as opposed the full blown recession some in the media are fearing. As I have said before, the November election poses a larger risk to the economy than the Coronavirus. Again, my opinion.

March brings the end of the 1st quarter which also means dividend payouts will start rolling in. I’m hoping some of the moves we made at the end of last year increases our dividend income. March will be our first chance to compare our new allocation against the same period last year. I’m not expecting a huge increase but I would like to see movement in the right direction.

We continue to inch towards the Summer months which is when the fun really begins. Stay tuned for that.

Have you ever tried timing selling everything you own, including your home, while trying to work, plan a three week road trip, assist a kid preparing to start college with trying to get scholarships all while also making accommodations so you have a future place to live? Yeah, it’s a-lot of fun.

Thank you for taking time to read our blog. We look forward to bringing you updates on our future adventures as they unfold. One thing is for sure, it’s going to be very busy.

Until next time…………………….

Joe

Full-Time RV Finances

In our last blog I discussed that we are moving forward with going full time in our RV later this year. As you will recall we didn’t expect to have to make plans so far in advance, but it became quickly apparent after a visit to one of the resorts that we were actually almost too late. Since then we put down deposits for November and December to reserve a space.

While this is a current unexpected expense, it is refundable if we don’t meet our timeframe goal and need to cancel. It also gives us some much needed flexibility by booking two months instead of one. Additionally if we do meet our November 1st goal, the deposits go toward the space and the out of pocket cost will be lower at that time. So there really is no risk of losing any money by making this move and it gives us peace of mind. Continue reading “Full-Time RV Finances”

Reality Bites

As we inch closer to March it has quickly become clear that we need to start making some plans and decisions.

We were at our favorite campground recently and stopped by the office to inquire about their extended stay rates for when we decide to go full time in our RV. They gave us the rate, which is just below our budgeted amount 👍🏻, and then the young lady said we had better book it soon as October is already getting full. Wait, what? October is getting full already? Are you kidding me?

This comment thrusted us into a situation of needing to better understand how this whole process works as we were not planning on making a decision until after the College Road Trip 2020 in August/September. It turns out now there is no way we can wait that long if we hope to have a place to live after our house sells. What we thought would be a smooth glide until the second half of the year is now turning out to be a sprint to a goal date. Continue reading “Reality Bites”

January 2020 Financial Update

As goes January so goes the year. Well, that’s the old Wall St. adage at least. If that holds true we are in for a down year I guess. But wait, wasn’t January was flying high until the dreaded Coronavirus started spreading across the globe. So are we now saying a week of panic selling is now indicative of the entire month and in turn the entirety of 2020? You see how ridiculous old adages and knee jerk panic selling and buying can be. Continue reading “January 2020 Financial Update”

Healthy Life, Happy FI

It’s been a couple of weeks since I posted our last blog. I didn’t know if it was writer block, burnout or just sheer laziness. But I didn’t feel like writing or doing much of anything for that matter.

It’s interesting because just when things are going well and excitement for our future plans should be building, I seemed to have hit a funk. Business has been great, the markets have been great and we have a couple of small weekend trips booked. We also started mapping out our college road trip and even have a preliminary itinerary for getting to the university on time. Planning these trips is one of my favorite things to do, but I’m finding it hard to enjoy it this time. What the heck is going on? Continue reading “Healthy Life, Happy FI”

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. Continue reading “December 2019 Financial Update”

2019 Year In Review

2019 was a year of change and planning for our future.

After stumbling onto the F.I.R.E. movement and realizing we didn’t need to work into our 60’s, or even mid 50’s as we had always planned, we started taking our finances more serious. We cut back quite a bit on our spending and increased our savings rate nicely. We have never been able to accomplish a 50% plus savings rate because we have always had a sizable lifestyle and also took on the equivalent of a second mortgage with our RV. However, we did manage to move the needle in the right direction after cutting some costs and scaling back on frivolous spending.

On the downside, sort of, when I decided to move on from my job and start our business our savings rate went down to almost nothing for the last quarter of the year. Hopefully this is just a small set back as the business grows and contributes more to our finances. Continue reading “2019 Year In Review”

Financial Independence and Mortality

Sometimes little things occur and bring a renewed focus and a reminder of why we work to achieve financial independence and the life of freedom that comes with it.

I have had several of these moments over the last few years. They usually occurred in the corporate setting where I was just plain tired of the daily rat race. Many times I realized I was missing important events our son was involved in exchange for being miserable at work. It’s never a good feeling to have to choose work over family because financially you have no choice.

Recently I had another one of these moments, but this one was different and much more emotional. Maybe the holiday season had some additional influence but it hit me hard. Continue reading “Financial Independence and Mortality”

November 2019 Financial Update

Here we are, heading into the final month of 2019. It’s amazing how time flies by when you are busy and focused.

Business continues to pick up and there were only a few days in the beginning of November where we didn’t have any appointments booked. Since that time we have received a steady flow of business and increased billing for services. On paper we already have enough revenue in billed services to cover all of the start up costs and expenses up to this point. So after a little more than two months we are at break even which is a nice accomplishment.

Another positive was actually receiving our first payment for services. And just in time too, because the business account we opened was getting very low on funds and I didn’t want to dip into our personal account again. We wanted to do the old frame and hang your first dollar tradition, but how do you do that with a check? I just made a copy and quickly deposited it so we had some funds in the account. Continue reading “November 2019 Financial Update”