Confronting the Stock Market Crash – (May 2022 Net Worth Update)

This is the 28th update in my net worth series. I’m documenting my path towards two goals:

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

For a detailed look at my current holdings, you can check out my net worth tracker, which I update monthly.

https://youtu.be/oSauNErcBB4

Confronting the Stock Market Crash 

Some months are much better than others, and April was a pretty rough month for the stock market.

A lot of stocks got crushed on earnings, which sent ripples throughout the broader market.

The Federal Reserve is raising interest rates, there’s an invasion in Ukraine, and strained supply chains are continuing to cause a number of issues.

As we’ve seen many times, when people get fearful, they sell their stocks and real estate.

People look to get into a cash position or pay down debt.

And due to inflation, it gets harder to afford certain things, so many people might be forced to liquidate what assets they have to get by.

Now we’re far from being in dire straits, but the situation can always change quickly.

We might see another positive surge in the market soon enough.

That’s one of the difficult parts of investing, you get a lot of swings in the short term.

So I don’t focus on the swings. I just look for deals and try to improve my personal situation.

As billionaire investor Sam Zell once said, “We don’t invest in markets; we invest in deals.”

I’ll try to do the same for the long run.

Anyways, let’s get into the numbers.

May 2022 Net Worth Numbers

As a reminder, my net worth last month was at $133,101.74. 

Assets – May 2022

I am owed a tax refund from the state of Illinois, which was a bit unexpected.

I did have to pay a little bit over $1,000 for my federal tax bill, which was significantly lower than I was expecting because I ended up contributing to my HSA and traditional IRA so I could “buy” a few deductions. 

I’m see my HSA as an emergency fund of sorts. It’s mostly restricted to be used for healthcare expenses, which is probably where an unlikely emergency would affect me anyways. So we’re more protected in that case should something bad happen that comes with a lot of medical expenses.

In the meantime, I can take that tax deduction now and save on my tax bill. 

My stock accounts were not helped by the market pullback. After funding my HSA and IRA, I threw a few thousand at my taxable M1 Finance portfolio, but it was not enough to negate the market pullback. 

I lost over $12,000 in my M1 Finance accounts over the last month, not including the few grand I lost over my other holdings. 

This leaves our assets at $752,991.85.

Liabilities – May 2022 

The biggest change from last month is I no longer have a balance for federal income taxes. 

I had estimated about $4,500, the tax bill ended up being closer to $1,000 because of all the deductions I earned by funneling some money into my HSA and IRA. 

Now I’m just waiting on my Illinois tax refund. Otherwise, I should be all good for taxes until next year.

There’s only one more tuition payment to make before my wife is finally done with her graduate program to become an audiologist. She’s applying for jobs right now, and we’ll see where she winds up. 

Meanwhile, as long as the interest rate freeze is in place, there’s no rush to pay these student loans back.

Once we’re dual income, it shouldn’t be too much of a hassle to pay them down over the next couple of years. 

In total, our liabilities this month are $626,006.10. 

My Net Worth – May 2022

That leaves us with $123,985.75 in net worth. 

That’s a decrease of $5,115.99 from last month.

Our debt ratio is at 83.03%. 

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

What’s Next?

The stock market has seen a pretty rough start to 2022. My portfolio was not spared.

This last month stung a bit. I’m confident that if I continue to invest aggressively, I’ll be more than fine over the long term.

I just have to be very disciplined in continuing to trust the process.

Once my wife starts her career in the next few months, that’ll be super helpful for giving use more disposable income to work with.

She’s looking at opportunities in Chicago and in Houston. Once we figure out where she’ll be working for her next full time job, that’ll tell us where our next primary residence will be.

In any case, I’ll keep you updated on my road to a $1 million net worth, no matter how bumpy.