Financial Independence Report – August 2022

Michael QuanFI / FIRE, Investment, Misc, Net WorthLeave a Comment

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Financial Independence Report – August 2022

Take a peek at our Financial Independence Report – August 2022.  This includes a synopsis of our net worth and monthly cash flow activity.


Learn HOW to calculate your net worth, but NEVER define yourself by it.  Curious as to WHY I calculate and share our personal net worth?  I explain it here.

Want to track your finance automatically and for FREE?  See how I use Personal Capital to help create these financial reports.  If you’re new to budgeting, download my F.I.R.E. Budget spreadsheet.


August – Overview & Updates

Wow, a lot has happened in the past month. First, let’s get to some good and fun news.

In August I snagged my best ROI on an NFT to date. And the crazy part is this happened in a complete NFT bear market!

Part of this win was skill due to timing when to press “buy” on the Veve app, but of course, there was luck involved too. You see there were only 10,000 issues available and only 250 of these were secret rares (SR). The special thing about this comic was that it’s the first appearance of Spider-man in a comic! So, even in a down market, there was a ton of demand for this drop.

Well, I went for it as did some of my other NFTs Unlocked members. I only tried it on a single device and it cost me $20 in gems. And as luck would have it, I scored the SR version and my $20 instantly turned into one of the most valuable NFTs in my collection.

Nearly a month later, it’s still valued at $15k! That’s a 750X return on my initial $20 investment. Other NFTSU members who caught the drop didn’t get the SR, but they did catch some other versions which are valued at a minimum of $500… that’s still a 25X!

As I wrote in my newsletter this past week, I don’t share this to impress you, but to impress upon you that opportunities still exist. But, you have to stay in the game.

On the media front, CBS8 invited me back once again to comment on the new inflation data. I had to scramble once again as I needed some TV clothes quickly as I had less than a day to prepare.

Michael Quan Press

Luckily I got a nice blazer from H&M for a reasonable price.

In August I also hosted a live call – RECESSION PROOF which covered how I’m thinking about this downturn AND how I intend to grow our assets during this time. Over 600+ people have watched this now and if you’d like to see watch it, you can find more details here.

Now, for the not-so-good stuff… this past month was painful to watch. Our net worth plummeted across multiple asset classes as the effects of the recession trickle their way in.

Alright, let’s get to the numbers…

Net Worth Summary

August saw a FAT drop in our net worth. Perhaps it’s the biggest one to date by dollar amount.

We finished the month at $2,935,584 vs. $3,062,885 this past July.  This is a -$127,301 decrease to our net worth or -4.0% by percentage.

This month saw a loss of value across the board from all asset classes, primarily made up of our real estate holdings and our stock portfolio.

Cash Flow

Our cash flow was also NEGATIVE for August.

Cash flow was DOWN again this month and came in at $4092.

Income

Income for August was also DOWN from the last month to $12,607.


Our recurring income is primarily made up of my wife’s teacher salary, rental income, dividend income, misc investment income, and online income (coaching, online related, book, etc.).

Well, the income that’s missing isn’t technically missing. We pulled in $1940 in addition to what’s shown above for the STR in Las Vegas. However, we purchased a new sofa bed as the original one broke. So, this expense offset the income and on the flip side, our expenses were actually higher if we included the sofa bed which was ~$2400.

I am starting to see the STR rental vacancies start to pick up. I’m not sure if this is seasonal, or a function of the recession.

Expenses

August’s expenses of -$16,698 were UP compared to last month.

Outside the sofa bed purchase I just mentioned, the second half of the invoice hit for the water main repair… another $5500… ouch! Luckily, I was able to negotiate no credit card fees, so I was able to collect some extra points from this large transaction AND we’re definitely going to have a lot of losses for the coming tax year.

Going out to eat has definitely been digging into our cash flow, so we plan to eat in more. We also had some property taxes due and a prepaid vacation for the upcoming Fall break at Disneyland.

Finally, note that our mortgage payment for our primary residence has been cut down to $2500 which includes our PITI (principal, interest, taxes, & interest) PLUS an extra $300 that goes straight towards the principal (to accelerate our mortgage payoff). I had previously been paying off more of it, but because the interest rates are so high now, I’m in no rush to pay it off when our rate is 2.875.

Portfolio Balances (Equities)

Although we had a nice bump up the prior month with stocks, the FED remains hawkish and the markets are continuing to respond downward.

And while I don’t usually recommend timing the markets, I knew we are going to need a chunk of cash for my wife’s car replacement (it’s close to being dead… it’s an 2008 Jetta), so I sold off $36k of VTI just as Jerome Powell made his comments in Wyoming the past week. This move saved us an extra $1000+ in losses we didn’t incur over the following few days of downward drops.

So far, I’ve set the money aside in my CIT bank account earning 1.4%, and purchased $10k worth of iBonds for my wife.

It’s going to get uglier for a bit. So hang on!

 

Asset allocation hasn’t changed much, but you can see the value of our portfolio went down a whopping $74k last month alone.

Final Thoughts

On the health front, I finally got confirmation that I have a serious heart condition called Fib. This means that I am having regular episodes where my heartbeat is off rhythm and it also puts me at a higher risk for stroke. Thankfully, my risk is still pretty low as I’m quite healthy otherwise. I continue to focus on eating an ample amount of veggies daily and exercise quite regularly (yay for tennis!). Nevertheless, facing this health condition as I get older makes me consider my mortality.

So, I have been doing some soul searching recently on where I’d like to be and go next. Financially Alert will always be a part of me, and I could also see myself pivoting to explore other areas within the next few years. I feel quite thankful and blessed to be able to have this option as afforded by my FIRE life. But, I do feel called to do more… just not sure where yet.

That said, if you see me changing up Financially Alert a bit, you’ll know why. I can’t believe it’s been 7 years since starting up this blog! It’s led to some amazing growth for me: deep friendships, a book deal, TV appearances, and of course financial coaching.

FinCon22 is around the corner and I’m excited to meet up with my mastermind prior to the conference. These times are always powerful and helpful to draw energy and inspiration on what’s next. This year I’ll be speaking on two different panels. One about publishing a book, and the other on digital assets (i.e. crypto/NFTs). This will be fun as I get to speak, but I don’t have to prepare anything in advance.

With that said, where is your heart currently? Are you achieving to the best of your potential? Or, are you settling for good enough? We’re going to see some tough times ahead and those who can find strength and persistence will come out the other side stronger than ever.

Readers, how was your August? Are you ready to weather the storm?

 

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