Well as for February my finances saw a bit of a drop. This is due to we had an official correction which was a 10% drop in the market. What was interesting about this to me was this was my first one since really tracking my finances and investing religiously. So it was cool to me to see how I would react to it. I reacted exactly how I hoped I would. I did nothing and kept investing! Actually, I decided to do something I love and that is getting outdoors and hit some trail running.
Yet honestly, I was very surprised by the number of people that got worried in the financial groups I’m in. Many people were talking of selling stocks to take it out of the market to lock in their profits and get back in when the timing was right. This is what we call “timing the market”. Which is never a smart financial move in my book. We need to remember we are in this for the long run not for the short term. Also, try to not let our emotions rule us with our money choices.
This month I made $5,117 after my contributions to my 401K. Still trying to sell a few items around my house. Yet had some luck a friend of mine sold my coffee table for $25! This month I had a higher income due to $1,470 tax return. Which most of that is from me still being a college student.
Expenses total right at $2,522. Nothing fancy going on here. This is one of my higher expense months, or so I hope. The reason expenses are so high this month is a few key points. First I had an unplanned last minute trip to New Orleans for the weekend. Secondly decided to replace my trail and road running shoes. Had my old ones for two years which is way past the rotation time. Lastly, I started to buy a few cold weather running pieces and am about to buy a few hiking pieces. So these items I already had certain sinking funds for them. Yet I still must calculate them in my expenses just to be transparent. I also did eat out more than I should this month was the only really negative expense this month in my book. Also just remembered I paid to get my windshield on my car replaced this month.
So It’s month four of the sinking funds coming back. I’m keeping it simple with one for travel and one for vehicle costs. This month I saved $4,287 which is right around a 68% savings rate. Now I want to make sure people don’t get to hung up on the savings rate percentage. It’s high because I got a tax return. Also, some of the sinking funds below do get spent throughout the year. But I still like to count them because I put the money in a savings account. If there is money left over at the end of the year I invest it. Also noted I might cut back on the travel and maintenance sinking fund to knock out other goals quicker. I also switched my 401K from a Roth to a Traditional. I did this as I am still pending orders that I might get a $20K bonus for. So figure try to lower my AGI.
- $1,137 Traditional 401K
- $2,570 Money Market
- $200 Travel Sinking Fund
- $380 Maintenance Sinking Fund
Net Worth: $104,252
This is where it gets a little sticky now. My net worth posted on Personal Capital in the sleek graph below is wrong. Still, have some of that crypto that would not link to Personal Capital.
That is a +$1,144 gain since last month net worth update for January was $103,108.
My crypto is down almost $100 from what I originally invested in it. Luckily I only invested a small portion of my wealth in this. This is exactly why I preach to not get into speculative investments until you have a good foundation of wealth. Goes to show simplicity is the path to wealth. Still going to hold the crypto for this year. Not sure what I will do with it after that.
This month I got the opportunity to see what a 10% correction feels like emotionally. I’m still way ahead of what I thought I’d be at a few months ago. I also have not been focused on investing this year so far. My focus has been growing my cash holding in my emergency fund. I wanted it to go from $6K to $15K. As of today, it is sitting at $13,600. So I am close to my end goal. Next, my focus will be maxing my Roth IRA out at $5,500. I’m still back and forth on my emergency fund. $15,000 is about ten months for me of living expenses. I’m starting to believe in having more of my cash invested working hard earning me money. But recently a few events happened that had me take pause and decide to up my cash pile. One of those was the government shut down. As a military member, we were going to be forced to come to work with no pay. The second and big one to me is I am still pending orders and reenlistment. My current contract ends in six months. Everyone tells me I have nothing to worry about as I am a very competitive guy in my field. Yet I also believe it’s better to be safe than sorry. Right now If I had to get out in 6 months It is better to have a bigger cash pile to help with the transition then to have the money invested. Yes, I will lose a little in profit gains on that cash. My plan is once I get approved for reenlistment I can then reevaluate if I want to lower the emergency fund and invest some of the cash.
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Angela @ Tread Lightly Retire Early says
Frustrating how long they’ll string you out about reenlistments. Good news is that you have that great stockpile of cash to deal with whatever comes your way.
Financial Serenity Blog says
Not sure why I am just now seeing this lol. But as of last week, I got approved for not only reenlisting but for the orders, I wanted to San Diego. They are not easy orders and I won’t have much time for anything at all. Yet they will help me with future promotions meaning more income to invest and a higher pension. They also came with a $20K bonus. So I’m pretty happy now.