Two Percent Net Worth Monthly Growth Goal

First week of September and the U.S. Bureau of Labor Statistics released some unexpected numbers this month. 8% unemployment rate in our country. We went from a low 3.5% in February – a record – to almost 15% in April. I don’t know whether to think that people are starting to think the Covid-19 is nothing more than a flue virus. I have never seen such a quick drop in unemployment rate. This is a good sign.

Take look at the chart:

But regardless of what the unemployment rate is or where our economy or world economy is heading we will always have our personal financial goals to attain. My goal of obtaining a $10 million net worth in ten years is on track. I have my goal set. You have to bring these goals alive. Just like investing or owning a stock, you do not see the stock, you do not smell it, you do not touch it. You have to bring it alive. It is the same with net worth. You have to give life to it. I give it life by monitoring my net worth daily. Yes it is a bit too much, but it helps me bring it alive. It is like a baby.

2% Net Worth Monthly Growth Goal

Remember how I monitor my net worth daily. Well part of monitoring my net worth daily is to check if I will be able to make my monthly net worth goal. I set my monthly net worth goal to 2% monthly. In the year I want to be able to have a growth of 24%. I know. It is aggressive. But this is the only way you can attain financial independence. Ask any financial blogger or successful young retiree. Nothing is easy in life. You have to push yourself every day.

This year with the Covid-19 and the huge financial impact on the economy and the stock market, we all suffered. Interestingly enough, the only month that I did not grow my net worth was in March and April. But it was not negative. I always try my best to increase my net worth.

1.04% March Madness

March was bad. My net worth only grew by 1.04%. I did not make the 2% growth goal but it was not negative either. So I see it as a win. I did not let this discourage me. It meant that there certain issues that were not under my control. I did not run away from stocks. In fact I bought more. I bought a good position in oil.

1.31% April Fools Month

It was definitely an April’s fool month. The virus was everywhere. People were freaking out. People ran from stocks and anything having to do with investing. Every time I see these fools making mistakes and running from undervalued stocks I only go back to my favorite investors, Warren Buffet. Remember this quote?

People get scared and run away from good deals. And then are quick to buy when the masses, everybody is raising their hands to buy something that is overpriced. It is psychology. We economist study this all the time. Unfortunately, or fortunately, we go against the masses. I ended up buying more stocks in oil. The news outlets sell bad news and along with it more advertising.

Again, I did not meet my 2% net worth goal growth. But you know what, I new I was going to make it. I was waiting for the moment when like my daughter told me on “it’s green daddy, we can go shopping,” read the article here.

4.2% May – Sell in May and Go Away

There is a saying in Wall Street traders. Sell in May and Go Away. Basically it means you get dump all your stock positions and hold on to cash. Cash is king. The notion is that the period from November to April are the strongest for the stock market and for businesses to sell their goods and report good selling numbers. Think Thanksgiving and Christmas. Black Friday and Santa. It also dates back to when back in the day in the U.K. aristocrats, merchants, and bankers who would leave the city of London and escape to the country during the hot summer months so there was little in terms of financial or economic activity.

But back to my goal. I made up the slow months of March and April. Also got rid of my oil position and went away. 4%. I basically I was able to average 2% with the additional 2% in May. Not bad. This is what makes the net worth come alive. I just pumped some blood into this bad boy.

Keep in mind that part of increasing your net worth is also the combination of getting rid of debt. I rarely carry any credit card debt. Credit card debt is a scam to make you poor. It is a legal form of slavery. You are hooked on paying interest rates and never getting out of debt. The deb that I lower every month is my mortgage debt. The one for my primary home and the rental property. I send extra money to the principal on both loans every month.

June, July, August and September – Over 2% Net Worth

I was able to get 2% growth on these months thus far. June, July August and September already. I don’t know if we will get a second wave of the pandemic in the fall and winter. If we do then it may put my 2% net worth growth at risk for the winter months. Either way, I will do my best to at least not get to a negative net worth growth.

Here is how Feb to Sept looks like thus far.

Goals

It is important for you to set goals. Set realistic goals. Ones that you can attain. Give life to those goals. As you all know I have two beautiful kids (well to us parents all our kids are beautiful). They had their horseback riding private lessons this Sunday. I came along with my wife. While I was watching them ride and each getting special attention from each of their instructors, it got me thinking. This is why I invest and this is why I save and this is why I increase my net worth every month. I want my kids to enjoy life and have some of the good memories that will last forever.

I know, I know. Not all kids are fortunate. And not all kids have soccer lessons, karate lessons, horseback riding lessons and ballet lessons like my kids do. But you know what, there is nothing wrong with providing these things to your kids if you can afford them. That is, after all, the reason we, me, you, work hard for right? Anybody can do it if they work hard and save towards creating a portfolio of passive income-generating investments.

Some of our neighbors are worse. One of my wife’s friend texted her last night to inform her that she had decided to send her son to a private school because she wanted her kid to interact with other students. That school’s tuition is $42,000 a year. And their daughter, she is already attending kindergarten classes at another private school that cost almost the same.

I am not there yet. I don’t know if I would take almost $100,000 a year of my income to send my two kids to private school. At least not yet. You can’t find good private schools here in the Washington DC region for anything less than that. Perhaps this couple are in a different financial situation than me. $100,000 is perhaps nothing compared to their income which may be over $1,000,000 a year. Again, I am not there yet. But will soon. Another goal right?

I started this post with unemployment numbers. Unemployment will go up or down, it does not matter. What I am concerned about whether my net worth is going up. You should focus on that too. Sure statistics and economic information is important and gives us an indication as to where our country is heading. Whether we will have an economic boom or whether we will enter a recession or our taxes will go up. Whatever happens in the economic cycle we cannot control. We can control our savings rate and our income rate. Focus on that. Don’t forget that at the end of the day, it is all about the net worth.

Don’t forget to read the other articles.

Sincerely,

The Economy Chief

What to read a brief bio of the Economy Chief? Sure. Click Here – Economy Chief bio.