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What a month! The stock market had its worse first half since:
- 1970 for the S&P 500
- 1962 for the Dow
- Ever for the Nasdaq
It’s still firmly in bear market territory – and I believe it has farther to fall. There are real-world issues that need solving that no amount of interest rate hikes from the Fed can touch. Namely supply chain backups, geopolitical tension from the Russia-Ukraine invasion, and lower company earnings and forecasts from too many of the wrong products and a tight labor market.
Interest rate increases are affecting home sales, and certain sectors are seeing hiring slowdowns (particularly tech). So how’s it affect me, the average investor?
Well, I contributed $2,000 to my 401k last month, but my overall 401k balance is only up $146. That means my money is losing value in real-time. It also means I’m getting more stocks at a lower cost basis. Instead of lowering my contributions during this volatility, I opted to increase them.
And the accounts I don’t touch (my Roth IRA that’s maxed for the year and my traditional IRA) are negative since last month.
The average bear market lasts for under a year, but the average bull market lasts nearly three years and has much higher highs than the bear market’s lowest lows, percentage-wise.
So I’m staying the course, sticking to my plan – and I have huge news I’m finally ready to share! Ahhhhh!!!!
In This Post
July 2022 Freedom update
So the big news is:
We’re having another baby!!!!!!
This September, we’ll welcome a new little one to our family.
We are beyond excited to have another baby. Warren will be a big brother, and we’ll have a new baby boy in about a month and a half.
He’s the reason I was so keen to get a new HVAC system installed. We’re building the nursery now and getting ready for the baby shower – and I really wanted to get the heating and cooling figured out before the baby gets here. Because when that happens, we’ll be focused primarily on him for… a while.
It’s also why I’ve been spending more money recently. My net worth is taking a turn backward, mostly because of the market. But I’ve been spending more to get ready for the new addition, too – a confluence of factors.
Whew, I’ve been wanting to talk about this for so long! But now he’s nearly here and it’s starting to feel real. Our lives will be totally different – again – later this summer.
The journey into fatherhood has been incredibly intense. I’m catching up to all the changes. So much is different, but I absolutely love being a father and parenting. September will be a busy month!
As mentioned, the HVAC installation took a bite out of my finances – but I simply had to get it done. It’s been a few weeks and it’s blazing hot here in OKC. The house has been cooled well and it’s working like a dream.
Despite all the dips and gains, my current net worth drop is nearly identical to the balance on the card I used to pay for the upgrade ($18K). It’s 0% interest until December 2023, so I’ll be paying it off a little at a time until then.
It was the best thing for the house and to get ready for the new baby. I couldn’t let my family deal with window units this summer and one small furnace this winter. Plus, the house is appreciating well, so this was also an investment toward that end.
Next year, I’ll get around to improving the deck and landscaping, but… one thing at a time. We have much more coming up before that’ll be a possibility.
Recession, bear market, losing gains
As far as my money mindset, making this financial journey during a(nother) recession – (and as a millennial) – suuucks.
It’s hard to see the constant negatives knowing it’s probably going to keep dropping. Inflation is high and recovery likely won’t happen until 2024. Not being negative here – just realistic.
Also not complaining, but DAMN, it does feel like my generation keeps living with recessions and setbacks one after another. I do believe we’re living in a recession now.
Of course, having this new baby will distract me for a while. I’m OK with backsliding. Remind me of this when the bull market returns and I’m shooting toward my goal at warp speed.
But for now, I keep hovering around this halfway mark despite my efforts. I’m figuring out how FIRE fits with parenthood. And I’ll continue investing no matter what happens.
Slow and steady wins the race. I have 786 days to reach my $500,000 goal. Will it happen? We’ll see. I still think it will. 😛
By the numbers
In a way, it’s good that I’m making home improvements now. With stocks dipping so much since the bear market began on January 3, I might as well take all my losses at once – in the hopes that the gains come back in a big way.
I think Q2 earnings reports will be a bloodbath, and Q3 forecasts will get lower. I think the Fed has another 75 basis point increase on the docket for this month, and that investor confidence is low. But dips are part of the cycle, and a healthy part. Valuations were getting waaay too high. It’s good to have a reset sometimes.
Between the new baby, paying down the HVAC, and rebuilding my savings, I’m stretched to the max. I’m doing my best – and that’ll have to do.
But the constant losses are hard. I’m reeling. I’m also sticking to my plan and dollar-cost averaging my investments. No one knows where the bottom is, so I’ll keep buying every two weeks despite what the market is doing.
In fact, even if I never add another red cent to my accounts, I’ll end up with $1.5M in 20 years, assuming an overall 10% return. The foundation is set. Now I’m hoping compound interest will work its magic.
|Current||Last Month||Change||2022 Goal|
|Overall investments||$184,392||$195,998||-$11,606||As much as possible|
|401k (contributions only)||$10,500||$8,500||+$2,000||$20,500|
|401k (overall balance)||$28,125||$27,979||+$146||As much as possible|
|Traditional IRA||$97,167||$104,600||-$7,433||xx (can't contribute)|
|Roth IRA||$44,144||$47,502||-$3,358||$6,000 (in contributions)||COMPLETE!|
|Taxable brokerage + UTMA||$9,147||$9,854||-$707||$25,000 (total invested)|
|Primary home equity + appreciation||$38,559||$36,162||+$2,397||$20,000||COMPLETE!|
|Credit card/HVAC upgrade||$18,325||$18,434||-$109||$12,000|
|Net worth in Personal Capital||$220,660||$239,242||-$18,582||$500,000 (overall goal)||Track your net worth with Personal Capital|
So that’s it for this month.
Life’s good. Tbh, I’m too over the moon about our new baby to really think about anything else. This money stuff will resolve itself. I know I’m still on my way – and that’s a good place to be.
In the last 30ish days, I:
- Added $2,000 to my 401k
- Saw a dip because of the HVAC + the market
- Kept investing every single pay period
- Got a bit more equity + appreciation on my house
- Ended with a dip this month over last
- Continued getting ready for a new baby!
But the big news this month is that in about 45 days, I’ll be a father to another beautiful son. We’re concerned with getting the house and nursery together, and steeling our resolve and reserves for all the nursing, diaper changes, wake up calls, and all the rest that come with a newborn. I’m preparing to be eternally tired, basically. 😵💫
Life really is wild and magical and unpredictable. I’m enjoying it. Everything happening now is part of the journey – financial, emotional, human. We are so ready to meet baby Beck and get him settled in.
Thank you to everyone who reads these updates. It means the world to me. 🌌
Stay safe and scrappy out there! ✨
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