Crypto crash, a new UTMA account, and timid stock market – June 2022 Freedom update

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It’s been a scorching month. 🔥 I lost money to crypto, started an UTMA account for my son, and pulled the trigger on a brand new HVAC system – to the tune of $20K+.

Throw in some court appearances 😒 and continuing to get the house together, and it was more than enough to make the month fly by.

June 2022 Freedom update

In Knoxville for a work trip

And then the travel! I drove to Dallas and flew to Austin for Tori Amos concerts, and flew to Knoxville for work. It was SO good to be on planes!

I was going to visit family in Memphis for a weekend, but that trip never happened. And I won’t be making any other trips for a while. I’ll share more about this in a few weeks. Between life and the pandemic, it seems I’m destined to be a travel blogger who doesn’t blog for a little while yet. I’ve got my points poised for several big trips and continue to accrue them.

To the update!

June 2022 Freedom update

The market continued to be up and down. A seven-week losing streak came to an end, and the movements were a little more mild, though the gloomy predictions and outlook continued.

To take advantage of the ongoing dip, I upped my 401k contribution to 30% of my check and will continue to dollar cost average with VFIAX until I max it out for the year.

Inflation felt like it hit its peak in March and April, but the ongoing war in Ukraine (over 100 days now), rising fuel prices, ongoing supply chain issues from fresh Covid lockdowns in China, and a Federal Reserve that wants to keep raising interest rates through the rest of the year contributed to a push/pull effect all month. 😵‍💫

How darest thou

Somewhere in the midst of that, I came to terms with the fact that I need to install an HVAC system. Prices could come down once the supply chain recovers… but for now it seems like they’re going up.

This old house is getting by on window units and one paltry little furnace. It’s just not enough to keep the place heated and cooled, especially for my little one.

Plus, I’d like to keep this house as an investment property and couldn’t expect tenants to keep up with ACs and a finicky furnace. At least, I wouldn’t want to deal with those systems as a renter.

So, after much hemming and hawing, I decided it’s time to start upgrading systems – and it’s definitely reflected in this net worth update (and will continue to be for some time).

Effects of HVAC

Yes, I want to talk about this a little more – in a new section, even. 🌬

After getting a few cost estimates, we decided the best way to slice it is to get a traditional HVAC unit installed for the second floor, and a ductless mini split for the first.

So, that’ll be two new systems – and they need power. Another upgrade I’ll make is to the electrical panel and wiring, so that’s more added cost.

Heating and cooling is awesome

And, my property value continues to increase. This upgrade has to happen at some point – and to wait is to kick the same can down the road.

I do want to keep this property in the family for perpetuity, so I feel like the added comfort, modernity, and energy efficiency will pay off both short-term and long-term.

To pay for it, I used a balance transfer promo offer. I transferred $18,000 from a card I don’t use often to my checking account. There was a 3% ($540 fee) to access the funds, and I have to pay it back in full by December 2023.

That’s 19 months. If I pay back $1,000 a month, I’ll be able to avoid interest. It was better than financing or taking out a personal loan. And I have enough saved to pay for the electrician and additional costs.

So with this, my savings rate will drop again – and I’ll use more of my available credit, which increases my debt ratio. But it’s not like I qualify for a ton of new cards anyway, and I’m confident I can repay the cost and get caught up over the next year or so. Let’s go – heating and cooling!

Was I saving too much?

Yes and no. I think having $30,000 in savings is a lot for an emergency fund, but I’m keeping my eye open for another investment property around Oklahoma City. It’s a great place to invest – especially now, while things are still relatively cheap.

The city has a lot going for it, with low unemployment, a growing population, and initiatives to revitalize. I find it extremely livable – and the traffic isn’t nearly as bad as it was/is in Dallas.

This article from Bitches Get Riches (amazing site, love them) says:

Ladies! Queers! Children! I love you so much. Please stop hoarding cash, you precious chucklefucks. You’re losing money doing it. There are better ways to make yourself safe. I need you financially stable and politically powerful, m’kay?

They’re proponents of using a credit card when you need extra cash, assuming no extra debts and job stability, and get into how marginalized people tend to oversave. I feel more secure than ever in my job and line of work. So much that I’m confident I could get a new job quickly if I needed one.

But really, I was saving that money for opportunities. And when it came down to it, I jumped on the chance to improve my house. The new HVAC and mini split should last a while. I’d also eventually love to get solar panels installed and upgrade the plumbing… but that’s another project for another time.

Stablegains/crypto

Well, it happened: I got burned by crypto and lost some money. I have lingering shame about this, but want to share anyway in the spirit of honesty.

In last month’s update, I mentioned how I’d put $1,000 into a DeFi/Terra/Anchor account called Stablegains (ha!). Well, Terra crashed hard. To literally nothing. I think I got $33 out of that $1,000 back. Yeah – dismal.

I’ve mentioned wanting to learn more about bitcoin, ethereum, DeFi, and other alternative/crypto investments. And now, yes, I’m appropriately soured on the experience.

Booooo here’s me in an airport

For now, I’ll focus on investments I understand: index funds, real estate, and potentially REITs (such as Fundrise). But more crypto? No more – not for a while.

In a conversation, a friend brought up a great point about crypto. People are hoarding it and using it as an investment. But that wasn’t the intent for it.

Crypto was intended to be an alternative currency to buy goods and make transactions – not as a long-term investment. Until it’s more widespread and understood, I’m not in a position to speculate or lose any more cash.

So, while it was an experiment done in good faith, I learned my lesson: stick to what you know. Index funds FTW.

Warren’s UTMA

Another thing I did was start an UTMA account for my two-year-old son. I cruised over to Fidelity and started his account with $1,000. I plan to add some cash here and there.

I also updated my other accounts to include him as a beneficiary, so the idea is to keep padding my accounts and add to his when I’m able.

That’s something that made me really proud as a dad. I look forward to sharing his account with him, talking about it, and watching his money grow through the years. I want him to feel empowered about money and financially literate.

Dad and son

That’s something I never had while growing up. Money was a sore subject and discussed mostly in anger, described in terms of lack. I had a lot of wounding about the topic and it took me a long time to dig myself out of debt and begin collecting assets as an adult.

I still often feel like I got started too late.

But I don’t want that to happen to him. Instead, I plan to talk about money in an informative and practical way. It won’t be an off-limits or taboo topic like it was for me. I want to empower him to take ownership of his money and future early and often.

Healing my money wounds and viewing cash as a tool has done so much for my confidence and outlook on life. That’s how I want him to think about money, too.

By the numbers

Unless this month is amaaaazing for the market, I already expect next month’s update to be lower. This week, I’m paying for the HVAC, mini split, and upgraded electrical, so the house appreciation and investments will have to pick up the slack for spending on those items and services.

I think it’s… something… (hilarious? unsurprising? exasperating?) that I keep hovering around this $240K mark, but remain optimistic that it’s all headed in a good direction.

Also, I left my savings goal at $30,000 even though I no longer identify with that number. I’ll have to think on it; leaving it alone for now.

Finally, I’m adding Warren’s UTMA to my taxable brokerage account for tracking purposes.

 CurrentLast monthChange2022 Goal 
ASSETS
Overall investments$195,998$195,980+$18As much as possible
401k (contributions only)$8,500$6,667+$1,833$20,500
401k (overall balance)$27,979$26,482+$1,497As much as possible
Traditional IRA$104,600$106,261-$1,661xx (can't contribute)
Roth IRA$47,502$48,300-$798$6,000 (in contributions)COMPLETE!
Taxable brokerage + UTMA$9,854$8,955+$899$25,000 (total invested)
Savings$8,172$8,170+$2$30,000
Primary home equity + appreciation$36,162$29,665+$6,497$20,000COMPLETE!
LIABILITY
Credit card/HVAC upgrade$18,434xxxx$12,000
Net worth in Personal Capital$239,242$239,425-$183$500,000 (overall goal)Track your net worth with Personal Capital

Most of my accounts are down, but I continued to invest – and actually increased my overall contributions. After this month, I’ll need to focus on repaying my credit card for the HVAC upgrade. I’ve added that line item here, too. I’ll shoot to pay off $1,000 a month, and more if I can swing it. I’ll have to rely on my freelance work to pay for this. I love it, but wow, I’m working so much to pay for everything these days.

That’s the current state of my finances. It won’t always be this way, but I’m grateful and feeling secure this month. I suppose that’s about as good an outcome as any, all things considered.

June 2022 Freedom update bottom line

In the last 30ish days, I:

  • Lost $1,000 to crypto – lesson learned to stick with what I know
  • Added $1,000 to kick off Warren’s UTMA account
  • Took out a $18,000 balance transfer to pay for HVAC upgrade to my house
  • Started rethinking my savings rate and goal, but no clear answer just yet
  • Kept investing every single pay period
  • Got a bit more equity + appreciation on my house

The stock market is the only market where people are afraid to buy things at a discount.

I’ll be able to add much more color to this month’s update in my July update. Life’s happening fast. Warren continues to grow and find his autonomy and independence. Things are good and I am happy.

Financially, I’m empowered despite the big cash outlay for HVAC. Last year, that would’ve frightened me. Now, I can handle whatever comes up – and even make major upgrades to my house if I want to.

I’m thinking much longer-term now, especially as I consider generational wealth and leaving this to Warren and eventually, to his children.

For now, I’m enjoying the house, my family, work, and spending some cash when it counts. I can see the changes in myself as I review my progress. Small steps make up big shifts over time.

Thank you to everyone who reads these updates. It means the world to me. 🌌

Stay safe and scrappy out there! ✨

-H.

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About Harlan

Digital nomad living on the road and working toward financial independence.

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  1. I feel your crypto pain! I bought $2k of XRP at $2 and it’s now $0.40. I sold all my BTC at $19k right before it went to $60k. Meh…

    Your stable job is pretty awesome right about now and something I’d love to have. Been years since I’ve earned any income, sadly.

    Yes yes yes put your son on the path to financial awesomeness at an early age. It’s one thing I wish I learned at a much earlier age. Wasn’t until my mid-30s that I started investing and that’s lots of lost time in the market. It is what it is, and you can’t go back in time. Just gotta keep on keepin’ on.

  2. It’s crazy how we are all working so hard to pay so much of everything now! What is cheap these days?! Nothing. Thanks for the article link really got me thinking.

  3. Well congrats for only losing $1k. Based on your total portfolio, losing only $1k is actually a “good loss” It means you were diversified where the loss doesn’t affect you going forward. What you have to remember is you were trying to get a 15% return. Regardless of what stable gains said, or what the Defi industry was preaching about the safety and stability of a stable coin, US government bonds were paying 1-2%. That is the risk free rate and you were getting a 13% premium. There is NO such thing as a 15% risk free return. Any returns like this either are likely to disappear and or turn out to be a ponzi scheme or some kind of scam. I still personally think crypto offers value but only as a diversifer and to added potential outsize returns over a long time horizon (10+ years). The key is to do like institutions and only allocate 1-2% of your assets. This way the down side is limited, but the upside is not.

  4. Holy smokes HVAC units are expensive. I remember years back a friend had to pay over $10k for theirs that went out but due to the design of the townhouse a crane was require to lift it to the roof of the structure. Sounds like you’ve been super busy! Love the pictures.

    I applaud what you’re doing for your son at such a young age. Hopefully by then the cost of education comes down but that’s just wishful thinking. Years from now you’ll look back and be glad that you did.

    I too lost some money in crypto. Almost got greedy but that little voice that lost money on a penny stock in 2006 said not to make an aggressive bet. Gains were never guaranteed. I think I lost around $1300-1500, haven’t exactly calculated it. You’re also right on the money about the stock market. I don’t think I’ve ever seen so many people long term bearish since the dot-com bubble burst.

    Proud of you. Sometimes I have to remind myself that even though it doesn’t look like I’m making progress I really am with a longer term view.. Another $35k to go before I hit $200k in investments. I still think a massive recession is coming, some think we’ll see prices for things like real estate start to come down considerably in certain markets. Take care. -Elliot

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