Progress in a bear market? Mixing it up as a strategy – October 2022 Freedom update

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So, September was the worst month for the U.S. stock market in over a decade. The month (and Q3) ended with losses for the S&P 500, Dow, and Nasdaq.

And because most of my net worth is in index funds, I lost out too – despite continuing to dump funds into various accounts.

Not that I’ve had time to notice. Having a toddler and a newborn in the same house is… tiring.

But if anything, it’s helping me stick to my investment plans?

I love being a dad

Really, I just kept everything trucking along, which I’m happy about because I do think this is an excellent time to buy in at lower valuations. In another 10 years, we’ll all be ecstatic about the buying opportunities right now. It’s hard to be excited when you’re in the midst of it.

I also paid down some of my 0% APR credit card debt and added more cash to my taxable brokerage and my son’s UTMA accounts. But mostly focusing on our newborn, who’s now three weeks old and already so vibrant.

October 2022 Freedom update

So, it’s not a great feeling: knowing I added $2,000 to my 401k but that it’s also down $903 for the month. It creates the sensation that I’m losing money / creating losses / flushing cash down the drain. In a sense, I am – for now.

My investing horizon is around 15 to 20 more years, and I know long-term the trend is upward but dang. I get the feeling that I shouldn’t have looked or am checking on it too much or something, especially since I’ve been in this halfway zone for a whiiiile now. It’s such a particular headspace one needs to occupy and yeah, it’s an old hat that I don’t want to be used to wearing.

I’m currently reading The Psychology of Money so maybe that’ll help me get my head back in the game. So far, it’s a really well-written book. Mostly about human nature as it relates to money.

The stock market last week/month/quarter

Did I also mention I’ve been really tired? Like, so tired? I don’t think I’ve slept more than three hours at a stretch for a few weeks and it’s… you know.

Lol

New focus on saving cash?

I keep going back and forth on whether to put more in my taxable brokerage account or save cash. As the real estate market keeps tanking, I’m thinking more and more that I can get an investment property at a great price sometime early next year. Even if I finance with the current mortgage rates, I can always refinance down the road.

I could also make it a short-term rental and just make sure the estimated earnings would more than cover a potential mortgage payment. I think the market has farther to fall, so now would be the time to sock away extra cash and step away from investing any extra cash (I’ll leave my automatic investments alone).

Boyhood

I’m leaning that way, but still undecided. I’m mostly just sitting back and watching the market’s real-time downward spiral.

This will great fodder for thought in those wee hours.

Hitting the HVAC debt

I had a new HVAC system installed back in June and slapped it all on a credit card with a 0% APR offer through December 2023. I’ve got it down to ~$15,000 which is perfect because the rate expires in 15 months.

The plan is to now pay $1,000 per month every month to get rid of it.

I keep fighting the impulse to go really hard on it because I don’t like knowing I have a credit card balance. Something about my urge to pay credit cards in full every month combined with my past struggles to pay off my debt really doesn’t like that.

I like science

The reframe for that is that I gave myself a 0% APR loan and I get to pay myself back for something I really needed while the bank floats all the expense. Thanks, bank! All I have to do is stick to paying myself back. That was so nice of Past Me to look out for Current Me and Future Me.

I like that much better, and it feels truer to my original intention. Man, money traumas are hard to break!

By the numbers

In the last 30ish days, I:

  • Continued investing $2,000 per month in my 401k
  • Increased my savings by $2,000
  • Lost $8K of my investment value (this has been up and down basically all year)
  • Gained another $2,800 toward my home equity and appreciation
  • Stashed away $800 in my taxable brokerage account and Warren’s UTMA

That’s quite a lot, especially considering the last few weeks.

October 2022 Freedom update

No surprises here

 CurrentLast MonthChange2022 Goal 
ASSETS
Overall investments$186,415$194,811-$8,396As much as possible
401k (contributions only)$16,500$14,500+$2,000$20,500
401k (overall balance)$31,904$32,807-$903As much as possible
Traditional IRA$94,117$100,273-$6,156xx (can't contribute)
Roth IRA$42,755$45,533-$2,778$6,000 (in contributions)COMPLETE!
Taxable brokerage + UTMA$10,124$9,426+$698$25,000 (total invested)
Savings$10,298$8,298+$2,000$30,000
Primary home equity + appreciation$44,957$42,156+$2,801$20,000COMPLETE!
LIABILITY
Credit card/HVAC upgrade$15,506$17,962-$2,456$12,000
Net worth in Personal CapitalSo $235,049-$770$500,000 (overall goal)Track your net worth with Personal Capital

Could I put all my effort into the credit card, the taxable brokerage, or just saving all my extra cash? Yes, but I’ve got a little here and a little there.

I don’t know which one thing will be the most likely successor, so my strategy is to give each one a fighting chance. Even if something totally tanks, everything else backs it up. And if they all tank, well… there are bound to be other things to worry about.

I like the variance of all this, at least until I get a more solid plan formed. That’s where I seem to usually end up: with a good mix and balance. Strong Virgo energy.

October 2022 Freedom update bottom line

Like everyone, I’m eager for good news re: the stock market. I know this is a natural (and necessary) part of the investing journey, but it sucks to lose ground on my goal from day to day, despite all my efforts. Maybe I’m not as patient as I thought I was? This is definitely an opportunity to keep working on that. It’s not a straight line that goes up and to the right.

We’ll see how October and (Q4) turn out and then go from there. Until then, I’ll be in a land of endless diaper changes and smelling that newborn head as much I can because I know it’s all gonna change so fast. It already is. Our baby is already getting so strong and chubby.

If you’re in the market for a new travel credit card, consider using my links to apply. I’ll get a commission and will use it for the ongoing diaper fund.

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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Out and Out has partnered with CardRatings for our coverage of credit card products. Out and Out and CardRatings may receive a commission from card issuers.


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About Harlan

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

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