2024 Third Quarter Update: Net Worth, Accounting, Your Money or Your Life, Anxiety

Numbers

At the end of the third quarter of 2024, my wife and I crossed the $200,000 net worth threshold for the first time. We ended September with $200,732/€180,352, corresponding to a quarter-over-quarter rise of 10.3%/6.63%.

I figured that we'd reach this point sometime this year, but the speed at which it happened has nevertheless surprised me. This has not been an awe-inspiring year of savings, and I feel like our money has just been going on a ride of its own making.

Accounting

One accounting change: I've included our rental deposit in our assets under the heading "Other Long Term Assets". Technically, it should function on our balance sheet as a long-term asset and for my landlord as a liability, even though the money is currently in his possession. This is similar to how customer deposits are liabilities on a bank balance sheet. It also remains an asset despite the risk that the deposit will be lowered upon moving out.

Taxes

I struggle with estimating and including tax liabilities in our accounting. Therefore, I simply haven't done it, although it's a major factor. For example, we had to pay a large estimated tax payment in September, most of which will almost certainly be returned to us. How do I include that? Most of it will be returned, but not all of it. And how best to include any accrued tax liability?

So should I throw up my hands and give up, as I've done, or make a lazy estimate?

Your Money or Your Life

Last month, I purchased Vicki Robin's Your Money or Your Life on Audible and listened while walking around the park. I won't write a big review at the moment, but there's a lot that's very good in the book.

What she does especially well is connect money with time. She frames the trade-offs in our choices very starkly, and I've been forced to reassess some of my lifestyle. That's especially true because I had some health scares during the last few months. Although those scares didn't add up to anything significant, I had to confront my fears about life and death.

Anxiety

I walk around with a lot of anxiety related to my economic success. This is true despite the ongoing success of my investment choices. Anxiety is, by its very nature, not happiness. What choices am I making, or better yet, what do I believe that provokes so much latent stress?

There are two avenues to disentangle:

• The fears about my "hopes and dreams" career field, which feels fundamentally precarious.
• My need to be perceived as successful, whether that translates to actual financial betterment or not.

I don't have answers at this point, only hunches. Under the first category, there's some reality underlying this anxiety. I work in a field full of economic uncertainty. My wife and I visited a friend over the weekend who's currently unemployed and on unemployment despite being respected in the field. A local employer is currently undergoing a change in management that will likely lead to a lot of employee turnover. Those employees may not be able to find new employment in this field.

Under the second, I do want to be seen as successful. It's the truth, but I don't know what the balance between being "seen as" and just "being" is, if that makes sense. In many senses, within my field, just going by the numbers, I am extremely successful. However, because I exist within this "hopes and dreams" world, my position does not confer great status on me.

And therein lies the tension. By the numbers, I should chill out and enjoy my life. By my nebulous sense of social status within my field, and my fear that my entire field might vanish, I can't.

Forecast

I suspect the next few months will be very good earning months for us both. Neither of us is going on any vacations, and there shouldn't be great expenses befalling us. We will have to pay some taxes, but we may also have some taxes returned to us.

Whether I can resolve these tensions in the next few months is uncertain. But I'll let you know my progress in the annual update. Until then, stay sane and healthy.

2024 First Half Update

Our net worth was $180,483/€167.735, representing a quarter-over-quarter change of -.71% and -.34% respectively. Quarter-over-quarter this was flat performance, but our first-half wealth growth in 2024 remains decent.

The Past Three Months

We've incurred a lot of spending in the past few months, which has slowed our savings rate. For one, our summer travel plans got expensive all of a sudden. We delayed buying our tickets to the US, which caused the price to creep up.

However, there's some spending that's just the result of carelessness. Some money leaks are happening, and I need to figure out where those are. For example, we're regularly exceeding our grocery budget. Some expenses are deliberate choices that nevertheless feel careless. I bought a new iPhone, which is expensive. My wife has doubled some of her lessons. I've been making some purchases in one of my side businesses. Each choice feels small in the moment, but they add together into reduced savings over time.

The stock market was also turbulent the past three months. I contemplated our wealth reaching the $200,000 in my last post, but as I hit "publish", the market gods reminded me not to get too complacent. That said, I wasn't worried about it as it was happening. Since I've adopted the ETF strategy, my mental health around investing remains healthy.

Third Quarter Forecast

I'm glad I waited before writing this post. In the latter half of June and in early July, we were expecting to have to pay enormous sums to the Finanzamt (the German tax authority) in estimated taxes. Because the pandemic depressed our incomes, our estimated taxes also correspondingly fell. When our incomes recovered, the Finanzamt wanted to adjust our estimated tax payments to new unheard-of levels. Thanks to the quick work of our tax preparer, we got the necessary paperwork organized and dispatched, which saved us from having to raid our savings just to cover estimated taxes.

It was a stressful moment, and it reminded me that I need to be more actively saving self-employment money as estimated tax funds. We shouldn't have allowed ourselves to get into that position.

That said, we're still digesting our elevated travel costs from the past few months. This will hamper saving. We also paid an outstanding tax bill from 2022, and that alone may wipe out any savings we accrue. It's hard to say without knowing the future.

Until next time, stay healthy.

First Quarter Update 2024

We had an excellent first quarter of 2024. Our net worth rose 8.42%/%10.82 quarter over quarter to $182,025/€168,542.

After I'd tallied everything, it hit me that we might cross the $200,000 mark sometime this year. It wouldn't even take outstanding performance. Even if our wealth compounds at 7% over the next two years, we'd pass that threshold sometime in 2025. Naturally, it's best to not become attached to any rate of return, but I'm trying to steel myself for the fact that growth might come more quickly than I'd anticipated.

Naturally, the primary mechanism of this is stock market growth. I've been saving every month, but the market has been easily outpacing my contributions. It's also been outpacing my spending (I went to the United States and bought a new iPhone this quarter). However, the reverse could just as easily be the case. So far in April, our portfolios have plunged more than our current year contributions. That kind of volatility is to be expected, but it's still bracing to see. Our contributions are gentle rows in a canoe that's already flowing through the water, but the current can still take us in unexpected directions.

Pension Valuation

We crossed the $100,000 mark sometime in late 2020, and I didn't recognize it at the time. I hadn't begun adding my German pension to the calculation, so life continued as normal. Frankly, I could probably goose the current numbers to equal greater than $200k now; all I'd have to do is value my pension as the equivalent of my contributions. But without a good reason to do so, I won't do that. When considering a pension rationally, the value of it can only equal or be greater than the value of contributions when viewed in hindsight.

One new emergent factor in my pension calculation is the reduction in life expectancy in the United States. Being American, I use the Social Security actuarial tables, and I have discovered that life expectancy has dropped by several years. I suspect this has to do with COVID-19, but regardless of the reason, with a potentially shortened lifespan, the valuation decreases.

Second Quarter Forecast

This has already been and will continue to be an expensive quarter.

The stock market thus far has been harsh to all factors. The one bright spot has been my small gold ETF position, but this is a mild retardant to the drawdown. Ex-US has also been relatively stable. However, this drawdown has already been nearly as severe as the cost of any of the spending I'm about to mention. If the drawdown continues, it will easily be greater than whatever spending we embark on.

My wife and I have decided it's time to do some remodeling and lifestyle upgrading, and we're spending on new bits of furniture and other household accouterments. It's nothing extravagant, but it's a cost. We will likely re-enter the world of TV ownership sometime in the next few months, for example. Ikea has also been padding its cash flow statements with our money.

We also plan to visit the US briefly this summer. My wife has an ill sibling, and we're taking some time to visit them. We also recently helped financially support this sibling's adult child, who had a cash crunch. Although they offered to reimburse us, I agree with Dave Ramsey that loaning money to family members is a way to hurt that relationship, so we gifted the money instead.

We also owe taxes from 2022. We don't know when the Finanzamt will hit us with the bill we know is due, but it's coming any day now.

Despite all that, we're doing well. Until next time. Stay happy and healthy.

2023 Update: New Worth, Reflections, Businesses

Staying the course worked.

When I wrote my end-of-year update for 2022, I was feeling pressure due to the severe drawdowns in our assets. 2022 was a rough year in nearly every asset class, and we were not spared. However, the choice to begin using ETFs for much of our portfolio meant that I didn't make any catastrophic choices despite the drawdowns, and that change paid off in 2023.

In 2023, I made additional changes, which have further solidified my temperament. Namely, my eliminating debt and restarting IRA contributions, I've taken steps that will pay off for decades while taking off some of the pressure to nail stock picks.

Net Worth Update

At the end of December 2022, I wrote:

However, December was also the first time that our net worth was down in every metric that I track. There are four comparisons at the top of my spreadsheet: USD month over month, EUR month over month, USD year over year, and EUR year over year. For the first time, all of these metrics were negative.

The story was very different in 2023.

Our net worth rose in December to $167,897/€152,080, which is a month-over-month rise of 6.6%/5.15%, a quarter-over-quarter rise of 13.90%/9.16%, and a year-over-year rise of 34.11%/30.10%. This represents an all-time high for our accumulated wealth.

2023 Changes

Debt and IRA

The biggest change was the decision to close out the loan I'd taken and restart my IRA contributions. This was not taken lightly, though some triggers made 2023 the year. I've mentioned those triggers before, but I'll summarize:

• A family conversation made me feel like I was being pushed into choices that I didn't agree with.
• Looking for emotional support to say "no" to family members, I found Dave Ramsey episodes.
• He's anti-debt, and I was in debt, and - after analyzing my feelings - I realized how stressed I was about it.
• His book Baby Steps Millionaires reminded me that tax-advantaged accounts are powerful tools for wealth building.

Looking back, had I not sold anything to pay for the debt reduction, I'd have more money today. But how would 2023 have felt? I didn't like that monthly payment to the loan company. I felt like our budget was overly tight because of it. It was a negative in my mental life, and although I'd have more money now had I simply persisted, I don't think I'd be as happy.

I filled up our IRA contributions for 2022 and 2023 early in the year, which meant I'd have to do the more complicated tax filing using the Foreign Tax Credit. I managed that, and it's not so bad, but U.S. tax filing remains a major net negative in our lives. Every year it's a stressful frightening experience.

Small Business People

We've been active small business people here in Germany. My wife made great strides in 2023, acquiring new customers and increasing her income. She diversified away from a single high-volume, low-paying customer and negotiated higher rates from several new clients. It was impressive.

I have several small businesses, and while they aren't able to compete with my wife's for income, they have increased our bottom lines. One of them is still in its infancy and therefore unprofitable, but I believe that will change in 2024. The other is almost pure profit. The attention is give towards them is what I might have in the past directed towards stock picking. This new focus is much more productive and fun.

This year, we've modified our budget spreadsheet to account for these varied sources of business income.

2024 Expectations

I don't know what will happen. At the end of 2022, I didn't expect that a single conversation with my sibling would so disrupt me. I didn't think I'd seriously enter this new line of business. I thought I might leave my job, which I didn't.

I know there will be disruptions, and there will be surprises. At least I hope so. If I could completely plan year 2024, that would be outrageously boring.

Until next time. Happy new year, happy saving in 2024, and stay healthy.

Third Quarter 2023 Update: Boredom Hack, Net Worth, Side Hustles, Taxes

I've had a breakthrough.

Here's a question: how much poor stock market performance is due to boredom? As in, if we're bored with our lives, are we turning to the markets purely for entertainment? For example, the speculative extremes during the pandemic may have been caused by people having nothing better to do.

In my own case, it's a likely factor in much of my own bad behavior. I have periods, especially since moving abroad, where I feel directionless. Due to the lack of upward mobility of my day job, it's hard to get excited about it when I'm at home. My wife can't absorb all of my neediness (nor should she be expected to, of course), but it has to go somewhere. My stock market life became an obsession and a fantasy, where maybe, just maybe, I could find the formula to let me bail on my day job and its constrictions.

This singular focus on it did some good things for me. Learning about companies is learning about the world. However, the anxiety of watching the market plagued my mental health. As a result, I've made a number of decisions that were poor and have led to head-scratching consequences. "What was I thinking?" has been a recurrent thought.

Two things have lightened my mental load. The first is having bitten the bullet and moved to mutual funds. Taking some of the pressure off of my individual stock positions came with an unfortunate tax bill (more on that later), but the concomitant reduction in anxiety has been worth it. The second is the reinvigorization of my side hustles. Over the summer, one of them got new life breathed into it. Having somewhere else to project my ambitions has been great for me.

Being too busy to worry about markets is an incredible hack. I go days now without looking at my portfolio's performance. It exists and does its thing. Honestly, as clever as I think the Wiseguy Portfolio is, I'm considering simplifying it even further because I want to spend even less time worrying about it and fiddling with it. Because there are more dividends from different funds coming in at any given time, and because I need to occasionally rebalance all these different funds, it gives me more chances to look at it and worry. It also eats up time that I could be using productively elsewhere.

I haven't made a final decision about that.

Net Worth

Our net worth increased quarter over quarter to $150,992 and €142,714, which is a quarter-over-quarter gain of 1.27% and 4.81% respectively.

The third quarter generally sees a lot of income come in (haha), which offset some of the market shenanigans. I got my summer bonus, and my wife also got some good-sized payments from her customers. Since our vacations were modest this year, we didn't have large summer outflows, and she could work more often uninteruptted.

The past two months have seen high market volatility, and my portfolio was hit. Bonds have been especially strongly hit, but some of my individual stocks have been beaten up too. Green Brick Partners, for example, has had a rough go of it due to some bad news in the mortgage market as well as Greenlight Capital selling a sizable chunk of their position to rebalance.

Side Hustle

One of my side hustles generated some sales, but I also had expenses that more than offset those. I'm trying to sell some things to keep the hit in line, but so far, I've been unsuccessful. I've also gotten a refund on one expensive item that will show up the next time I write one of these.

I want this side hustle to become a profit generator for me, and that's where most of my ambitious energy has been directed. The upside is that making wild swings in the side hustle might lead to imperfect results and some wasted money, but it won't lead to disaster like a bunch of stock trades can. And if I can make even a few multiples of profit on my invested money, I can have a return generator greater than most of my stock positions.

Taxes

In 2022, when I moved a lot of money to mutual funds, I did this by selling a bunch of individual stocks. This has led to a large tax bill in Germany, whis has taken me by surprise because I had a loss in the US.

The culprit was, besides myself, the weakened euro. Some of my trades were purchased when the euro was at a high point and sold when the euro was at a low point. This made gains more valuable and losses less potent. Because nearly all of my positions are dollar-denominated, I couldn't see my mistake, and as such, I had enough gains to have to accrue my first capital gains tax in Germany. Oops.

That hit hasn't landed in our net worth statement yet, but it's coming.

It's made me realize that it's very hard for me to determine the euro cost basis of my positions. I knew that I'd sold during a weak time for the euro, but I didn't realize that the difference would be that extreme. However, to determine my liability, I'd have to track every single lot purchase in a spreadsheet. Interactive Brokers does not provide good cross-currency tax planning tools, and if I don't do it myself, I'll just walk into this trap over and over again.

Final Thoughts

Even with the missteps, this was a good quarter. I feel relaxed about money for the first time in years, and I feel like I have somewhere to direct my creative energies outside of my day job.

We'll have some big costs coming up. My wife wants to see her family over Thanksgiving. The aforementioned tax bill will hit. I still have some investments I need to make in this side hustle. Hopefully, these costs are offset somewhat by some additional side hustle sales, some sales of personal items, and increased income from our day jobs. As for the stock market, it's anyone's guess.

Until next time, stay healthy.

2023 First Half Update

2023 Second Quarter Update:

The first quarter was full of re-evaluations of financial goals and strategies and was full of fear over impending disaster in my family. Back then, we had to make difficult decisions and have difficult conversations.

The second quarter of 2023 was much milder.

New All-Time High

After a year and a half of being in a net worth drawdown, we emerged at the end of June at a new all-time high. We're just shy of $150,000 at $149,097/€136,162. That's a quarter-over-quarter rise of 10.05%/9.05%.

The 2022 bear market, although not extreme by historical standards, was the worst extended drawdown we've had to live with during our married lives. Despite some losses, there were no disasters in our portfolios, and the stress lead to some necessary reappraisals of how best to allocate savings. I'm grateful for the lesson and happy to allocate most money to an ETF/mutual fund asset mix. While my stock picking has done well this year, I feel safer knowing that all of our eggs aren't in that basket.

The drawdown was exasperated by the drawdown of our incomes. My wife has a lull in her business as she changed strategies, and my extra income opportunities at work dried up. As the market corrected, we were unable to add money in any kind of aggressive way. However, both of those states have started to change: I've found new sources for additional work, and my wife's new business strategy is starting to pay off. It's exciting.

Family Disaster Averted

After much Sturm und Drang back in January and February, it appears that PoorParent will stay put. Staying put means staying in an uncomfortable but stable situation with a family member who has health problems.

It's clear that PoorParent isn't thrilled with this, but they also don't appear to be angry at me and Sib.

Honestly, Sib did most of the heavy lifting. I helped Sib define their own boundaries and see how they weren't respecting their own limits and desires. This lack of self-respect led to Sib not respecting my limits. But once Sib understood this, they had the uncomfortable conversation with PoorParent. Thus far, admittedly, I haven't spoken to PoorParent about my worries. They haven't brought it up, and I won't either.

Portfolio Performance

My individual stock portfolio returned 19.91% in the first half. This was mostly led by Greenbrick Partners and Apple Inc. Greenbrick is now a 1 bagger. It's had astounding performance. But so has Apple! Frankly, if there's any greatest mistake I've made while investing, it's selling even one share of Apple, and unfortunately, I've sold many more than one.

The laggard was Abbvie, which is facing increasing competition from Humira biosimilars. I may add more to the position if its price nears my purchase price.

The Wiseguy Portfolio as I've implemented it is hard to measure. Because it's across three different accounts and uses Vanguard "Admiral" funds in addition to ETFs, it means that getting close to the target weights is currently very tricky. Additionally, the iteration of the portfolio I call Wiseguy 2.0, which includes REITs, didn't take place until a few months ago.

An idealized version of the portfolio returned 12.07% in the first half of 2023. That underperformed the S&P 500, which returned 16.81%.

Second Half Financial Goals

As of yesterday, I have maxed out our 2023 IRA contributions. I put the final $2,000 into the US REITs portion because I refuse to hold a REITs ETF in my taxable accounts. Currently, I'm overweight REITs and US large-cap growth and through the rest of the year, I'll be adding to gold and the small cap value buckets in my taxable account.

We're also rebuilding our emergency fund. If we aim for 6 months of spending, then we need around €16,000, which we're not close to. I'm not planning on pulling a Ramsey and devoting every euro to that goal, however, and I will simply be adding monthly sums to it in addition to other saving. That kind of single-minded focus doesn't make sense when I have plenty of assets, and the risk to my livelihood is so low in comparison to the American "at will" employment reality.

That said, having extra cash would be reassuring.

We've also begun a small down payment fund. We're not devoting large sums to it yet, but it's frustrating not having anything saved for a better living situation.

My wife suggested a dog fund. We both want a dog someday, but we're concerned about the cost, so we've begun saving for it.

Wrap Up

I don't see any disasters on the horizon. The stock markets could always take a dive, which would be both a bummer and an opportunity. No matter what, we'll keep saving as best we can without running afoul of our dual tax situation. Until next time, stay healthy and keep saving. It adds up over time!

2023 First Quarter Update

When I decided to move to a quarterly posting schedule for these updates, I did so out of fear that I was getting repetitive. How many times could I write, "Net worth was up/down a bit... Mostly it was thanks to stocks one way or the other"?

Pretty dull.

The first quarter of 2023 was not dull, however. The consequences of one conversation rippled outward and touched all areas of our financial lives.

The Texts That Launched 1,000 Ships

One Sunday in January, I got a series of texts from my sibling (hereafter Sib) regarding my poor parent (hereafter PoorParent). It was a horrible conversation full of disagreements.

I've thought about writing more details about this, but it's much too personal. Long story short, the worries I laid out in My Baby Boomer Parent is Poor are threatening us much earlier than I had anticipated. The reality for me and Sib is that supporting PoorParent right now is only possible by severely limiting our lives in other ways. It would also make it more difficult to help PoorParent in the future when more dire situations arise.

Sib agrees with me now, but getting there was an unpleasant path.

Enter Dave Ramsey

I went to YouTube and looked up advice for people in my situation. There's hardly any, which is shocking, and the only person out there really talking about the duties or lack thereof of children when it comes to supporting their elderly poor parents is Dave Ramsey. So Dave Ramsey re-entered my life for the first time since I read his book Total Money Makeover back in 2009.

Although I'm not a pure Ramsey-ite, Dave's thinking has deeply influenced mine. Many of my money concepts can be directly linked to The Total Money Makeover. I've been budgeting for that long because, well, he told me too. I've become a true budget believer, and so has my wife. Even our "Blow" category is directly taken from his budget outline. Suffice it to say, I was primed to listen to what he had to say.

One thing that became clear was that I'm allowed to say no. To use his metaphor, I'm allowed to put on my own financial oxygen mask before I help other people, and that includes my parents.

Additionally, I now suspect that Sib and I had been enabling PoorParent. We can only take so much responsibility because we were much younger, but I can look to specific choices that PoorParent made that were emotionally and/or logistically supported by us. Had we gone along with fewer of these choices, we might currently have a better situation on our hands.

Tchüss, Debt

I was taking too much risk. That giant loan I took out in August 2021 was dumb. Sure, the interest rate was rock bottom, but so what? The monthly payments were annoying, and they limited our actual choices.

In February, I mostly paid it off after selling off a bunch of my individual stock positions. There's a pre-payment penalty for nearly all German debt, so I left slightly more than three scheduled payments to avoid that trap. You'll see a big change in the assets and liabilities of our net worth chart.

My thinking about the loan was wrong from the beginning.

FOMO

Reflecting, I got the loan after visiting America and feeling FOMO. I had this sense that I should do something, which is not a great emotional place from which to make decisions.

Most of the time, as I'm learning, the adult choice is just to keep on doing smart stable things. As Dave Ramsey describes it, his baby steps 4 and onward are pretty boring. Saving for retirement takes time, dedication, and patience. It's exciting in terms of the power of compound interest, but otherwise, it's a boring process. I've listened now to many calls into his show where someone has had a windfall and wants to do something to maximize their return on that money. For most people, the correct answer is to simply pay off any debt and their mortgage, and invest in mutual funds. This advice is often unsatisfactory for the caller, however.

Since I've become much less tolerant of holding individual stocks, the cognitive dissonance of being in debt while holding individual stocks became unbearable for me. I have no idea if I'm any good at picking stocks. For someone like me, borrowing money while owning individual stocks is especially dumb. I've learned in the past that my thinking goes crazy when I leveraged a position, and sure enough, I felt perpetually crazy.

The risk I had taken was:

• Job loss risk and risk that I couldn't make the future payments
• Increased risk of emotional volatility leading to poor decisions
• Currency rate risk (borrowed in euros to buy in dollars)
• Opportunity cost since that income was tied to monthly payments

It also bothered me philosophically that I was in debt. I liked being out of debt, and it was a point of pride that I'd paid off my student loans early. Along the way, yes, I had some installment plans, but there was never any interest attached. But now, I was in debt and paying interest. Yuck.

But even those installment plans need to be a thing of the past. Making choices for future me to pay for stuff is a mean thing to do to myself. It also assumes that the future looks like the present, which is not guaranteed.

Re-enter the IRA

During my Dave Ramsey rabbit hole, I listened to the Chris Hogan book "Everyday Millionaires" and read Ramsey's "Baby Steps Millionaires". One of the statistics was that most millionaires did it by steadily adding to their 401k plans. I hadn't added to my IRA since 2012, which was my loss because the money I'd put in between 2008 and 2012 - a total of $1,750 - had quintupled.

Therefore, after a decade of avoidance and fear, I've decided to continue adding to my IRA. For expats, this is tricky but doable. I'll have to use the Foreign Tax Credit rather than the Foreign Earned Income Exclusion to prevent tax payments to the US. This is more work, but having tax-sheltered investments is too important.

Wiseguy 2.0

I'll continue adding to the Wiseguy Portfolio allocation across my various accounts. Using Portfolio Performance, this is relatively easy to do with the Asset Allocation feature.

I've made an adjustment to weightings, however, which I'm thinking of as Wiseguy 2.0. There's now a 10% weighting to REITs, now that there's a tax-sheltered place for me to put them. REITs in a taxable account are dumb dumb dumb, which is why I left them out before. Within the REIT basket is a 25% allocation to ex-US REITs, so 2.5% of the total portfolio. That may seem paltry, but the fees on the Vanguard ex-US REIT fund are high. I'd like exposure, but until the fees come down more, I can't justify a heavy weighting.

To make space for the 10%, I've reduced the bond allocation to 10% from 20%. I'm taking more risk, which means that any future drawdowns will likely be more stomach-churning. However, I'm hoping this will also lead to long-term greater returns. I can't access my IRA money for another 30 years after all.

So Wiseguy 2.0 is this:

• 25% US Small Cap Value
• 25% US Large Cap Growth
• 25% ex-US Small Cap Value
• 10% Long-term bonds (both Treasury and Corporates)
• 10% REITs (75% US/25% ex-US)
• 5% Gold

Net Worth

Image: A stacked bar chart of our net worth over time. Click to enlarge.

As of March 31, 2023, our net worth rose since December by 8.22% in USD and 6.83% in EUR to $135,357 and €124,753 respectively. Liquid net worth is $99,747.

This new chart is meant to simplify viewing. The previous style was pretty difficult to read, and this new iteration makes it clearer. It also, perhaps a bit pretentiously, uses typical business accounting terms for some items, such as "Cash and cash equivalents". "Accounts receivable" at this point means strictly dividends for which the ex-dividend date has passed.

Stock Performance

Stocks have more or less been in an uptrend. Of the Wiseguy components, US large-cap growth, gold, and bonds have all done very well. Small-cap value has performed poorly, likely as a result of banking industry volatility. The purchase of the REIT funds accidentally corresponded with a bounce for that asset class, which wasn't intentional but worked out in my favor.

Spending

In addition to the big macro money moves, we've also re-committed to following our budget. We reined in our grocery spending, cut down on subscriptions, and otherwise made choices that resulted in lower spending overall. I'm also turning reward points (classified as "intangible assets") into groceries or money as much as I can.

We did buy a plane ticket for my wife to visit her family in the States. That was necessary. However, we've declined to go on a big vacation this summer in the US. This was a secondary set of conversations with my family that were difficult, but I'm at peace about it.

Simultaneously, the elimination of the debt also eliminated the lifetime interest cost, which I had added to the liabilities side of our balance sheet. That was about €2,000.

Second Quarter Forecast

Considering how much activity there was in the past three months, it's hard to consider what might happen in the next three. Here's some of what we know:

Our heating bill has gone up a lot. We'll have to eat a big upfront cost in April, and our monthly warm rent will rise. That's a bummer, but it's the situation Germany finds itself in.

My wife and I will likely plan some modest trip for the two of us. We'll probably pay for it before the end of June.

I'm going to aggressively add to my IRA until I hit the max for 2023. $6500 is a doable number, and I hope to never miss hitting the max ever again. I doubt I'll get there by the end of June though.

The last debt payment will be gone at the end of May. Good riddance.

Until next time, stay healthy and avoid FOMO.