When Portfolios Turn Red – (February 2022 Net Worth Update)

This is the 25th update in my net worth series, in which I document my path to reaching two goals: 

  • $30,000 in annual passive income by 2025
  • $1 million net worth by 2027

You can check out my net worth tracker to see all of my up-to-date numbers.

Let’s see what happened last month.

When Portfolios Turn Red

Over the last month, the financial markets have been a bit bumpy. 

We’ve seen some pretty serious pullbacks in a lot of stocks, and the market has fallen by about 7% in January.

A lot of this appears to be tied to interest rate fears; investors are scared that the Federal Reserve is going to be raising interest rates in an effort to combat price increases.

This would increase the cost of borrowing, which would, in turn, pull down the markets. 

Simply put, there’s a lot of debt in the system. When you increase the cost of debt, it’s going to hurt. 

I wouldn’t be surprised if rate increases leads to some far greater turmoil in the broader market. 

The recent stock pullback isn’t a make or break situation for my portfolio. I’m still trying to put a lot of money into this portfolio and grow it to the point where it seriously moves the needle for me financially. 

Put another way, if I lose a few thousand dollars in the market in one month, that won’t throw me off of my whole financial journey. 

After all, the stocks that fall in price end up looking “cheaper” than before – assuming all the other fundamentals remain the same.

With that said, let’s get into the numbers.

February 2022 Net Worth Numbers

As a reminder, last month my net worth was at $110,483.33.

Assets – February 2022

Assets February 2022

Since last month, I’ve added a few thousand dollars to my stock accounts (mainly my M1 Finance account).

At the same time, the general market pullback erased some of my portfolio value.

The more money I funnel into this portfolio, the more we’ll start to see the volatility of the stock market reflected in my own holdings. 

As for my cash pile, it remains relatively unchanged. I did receive an annual bonus from my job, but almost all of that went into paying down debt.

A lot of that is going towards my HELOC, which is a revolving loan. I would prefer to keep it paid down as much as I can to leave the door open for other potential opportunities.

This leaves our assets at $734,268.47.

Liabilities – February 2022 

Liabilities February 2022

I did put a significant chunk of money towards the HELOC balance – about $10,000. 

Pretty much any extra cash we have is going towards the HELOC. We can always take money out of it again later.

There’s still an interest rate freeze on our student loan payments. If and when the interest freeze stops, we’re really going to have to make a decision regarding how we want to go about handling these loans. 

Our pile of liabilities shouldn’t be getting too much bigger after my wife graduates from her graduate program in August.

At that time, we’ll likely start focusing more on paying those student loans down.

Unless they’re still “free,” of course.

As of now, our liabilities this month are $617,961.72

My Net Worth – February 2022

All in all, that leaves us with $116,306.75 in net worth. 

This is an increase of $5,823.42 from the previous month.

Our debt ratio is at 84.16%

And our passive income remains at about $1,100 per month.

What’s Next?

Considering how volatile the markets have been, I’m pretty happy with where we stand this month.

My plan is to keep shoveling money into our portfolio while potentially paying down extra debt. Both will help our situation in the long run, so it’s not terribly important which one I’m focusing on at the moment.

We have a bit of a safety net with our $1,100 in passive income.

That money is generally going towards more investments and debt pay down, but we can use it however we see fit. It’s a nice baseline to have.

I view it as somewhat of an emergency income stream in the event that we lose another source. Our current passive income wouldn’t cover all of our expenses, but it could cover a portion of them.

Right now my focus has been on stocks. With the current turmoil in the stock market, it seems like there are a lot of good opportunities.

However, I would like to get another property relatively soon so we can keep building our income stream(s) to try and build a greater financial cushion.

As always, I’ll be sure to update you on my net worth changes as I attempt to reach $1 million in net worth and achieve financial freedom!

This website, and any communication stemming from it, while hopefully informative, should not be taken as financial or legal advice. Assume all links are affiliate links. I am an Amazon affiliate.

Jack Duffley

Jack Duffley is a real estate investor and attorney based in Houston, TX.

Recent Posts