Credit Card Debt
If you’re a new reader, let me start out as usual by explaining the credit card debt. I’m actually taking money from 0% APR balance transfer offers and instead of spending it, I am placing it in high-yield savings accounts that actually earn 3-4% interest or more, and keeping the difference as profit. Along with other deals that I blog about, this helps me earn extra side income of thousands of dollars a year. Recently I put together a series of step-by-step posts on how I do this. Please check it out first if you have any questions. This is why, although I have the ability to pay the credit card balances off, I choose not to.
Retirement and Brokerage accounts
Apparently this was the worst June since the Great Depression, with the S&P 500, Nasdaq, and Dow all losing around 9 to 10% last month alone. But it was only the worst June, not the worst month ever. Our overall portfolio didn’t fair quite so poorly due to our diversification into international stocks and bonds, but still sank nearly $7,000 in one month.
However, I remain confident in the fact that a globally diversified portfolio will perform adequately well over my time horizon of 20+ years. Add in the fact that shuffling investments around only serves to worsen my chances, and you get my same old brilliant plan of… doing nothing. I seriously had to skip over half of my financial magazines this month, with all their suggestions for “recession-proof” stocks.
Cash Savings and Emergency Funds
Our mid-term goal is to have $30,000 in net cash put aside for emergencies, for example if both of us find ourselves unemployed for an extended period and even have to start paying for things like health insurance on our own. We are now nearly 80% there at $23,810. After this is done, then I will focus on more contributions to my Self-Employed 401(k) plan at Fidelity. My timing just happened to work out well so far, with us accumulating cash while the markets are dropping.
Another tiny ~$500 of loan principal paid off. Since this is a “bad” month, I decided to pile on and reduce our estimated home value by 6%. Six percent is the approximate amount charged by a real estate agent, so we might as well count that in. I don’t like how our net worth is overly affected by such home value guesses, and am looking for a better way to measure our progress towards financial freedom.
You can see our previous net worth updates here.