Browse Tag: Financial Scorecard

Q1 22 Financial Scorecard: One Step Closer

The first quarter of 2022 was another turbulent period for our world.

While the COVID-19 pandemic may finally be waning, it appears we could be living with endemic conditions for the foreseeable future. A year ago, the recent rollback of many pandemic restrictions we have experienced would probably have been greeted enthusiastically by the financial markets. Alas, times have changed.

Russia’s attack on Ukraine is the most significant military action in Europe since World War II, and has led to unimaginable suffering for the innocent victims of an increasingly unhinged Vladimir Putin. The Russian offensive also contributed to volatile financial and commodity markets around the world, despite generally favorable pandemic trends.

Closer to home in the United States, inflation remains at the highest levels we’ve experienced in decades. Thus far, Federal Reserve Chairman Jerome Powell and President Joe Biden have proven themselves much better at empty rhetoric than substantive action that attempts to improve the lives of the average American.

The end result from a financial perspective was a broad U.S. stock market that fell as much as 13% from the end of 2021 through early March, before rallying to finish the first quarter of 2022 down nearly 5%. That decline had a material impact on our finances as we get closer to potential early retirement. Fortunately, we received our annual bonus for 2021 in early March, which helped offset the paper losses we experienced.

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The first quarter of 2022 was another turbulent period for our world.

While the COVID-19 pandemic may finally be waning, it appears we could be living with endemic conditions for the foreseeable future. A year ago, the recent rollback of many pandemic restrictions we have experienced would probably have been greeted enthusiastically by the financial markets. Alas, times have changed.

Russia’s attack on Ukraine is the most significant military action in Europe since World War II, and has led to unimaginable suffering for the innocent victims of an increasingly unhinged Vladimir Putin. The Russian offensive also contributed to volatile financial and commodity markets around the world, despite generally favorable pandemic trends.

Closer to home in the United States, inflation remains at the highest levels we’ve experienced in decades. Thus far, Federal Reserve Chairman Jerome Powell and President Joe Biden have proven themselves much better at empty rhetoric than substantive action that attempts to improve the lives of the average American.

The end result from a financial perspective was a broad U.S. stock market that fell as much as 13% from the end of 2021 through early March, before rallying to finish the first quarter of 2022 down nearly 5%. That decline had a material impact on our finances as we get closer to potential early retirement. Fortunately, we received our annual bonus for 2021 in early March, which helped offset the paper losses we experienced.

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Q4 21 Financial Scorecard: A Strong Finish to Another Crazy Year

2021 marked the first full year of our lifetimes living under global pandemic conditions, and hopefully it will be the only one! Despite the continuing authoritarianism, economic upheaval, suffering and fear associated with the COVID-19 coronavirus pandemic, the U.S. stock market had another incredible run last year.

For the full year, the S&P 500 returned nearly 29%, including reinvested dividends. Returns in the fourth quarter were particularly strong, at around 11%, which helped our portfolio bounce back from a move in the wrong direction during Q3.

As we begin 2022, we’re closer to financial independence and early retirement than we’ve ever been. I’m cautiously optimistic this may be the year when we can finally exit the rat race – potentially a year later than originally hoped when I started writing here in 2017, but in line with my thoughts when we reset our plans in the early stages of the pandemic. For the first time since we started on this journey, we’ve achieved two of the three long-term financial goals we’ve been pursuing.

Of course, plans are always subject to change. Bidenflation continues to eat away at the purchasing power of Americans, supply chains around the world remain disrupted, and coronavirus cases are still near record levels as we approach two years since we first heard the phrase “15 days to slow the spread.” Three weeks into 2022, our finances look materially worse than they did at the end of December, as the S&P 500 has dropped over 7% already this year, and the NASDAQ has plunged around 11%! Hopefully markets will stabilize in the coming weeks, and over the next few months emergency measures associated with the pandemic will evolve into a common sense approach to potentially living with endemic conditions as we get closer to warmer weather in the Northern Hemisphere.

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2021 marked the first full year of our lifetimes living under global pandemic conditions, and hopefully it will be the only one! Despite the continuing authoritarianism, economic upheaval, suffering and fear associated with the COVID-19 coronavirus pandemic, the U.S. stock market had another incredible run last year.

For the full year, the S&P 500 returned nearly 29%, including reinvested dividends. Returns in the fourth quarter were particularly strong, at around 11%, which helped our portfolio bounce back from a move in the wrong direction during Q3.

As we begin 2022, we’re closer to financial independence and early retirement than we’ve ever been. I’m cautiously optimistic this may be the year when we can finally exit the rat race – potentially a year later than originally hoped when I started writing here in 2017, but in line with my thoughts when we reset our plans in the early stages of the pandemic. For the first time since we started on this journey, we’ve achieved two of the three long-term financial goals we’ve been pursuing.

Of course, plans are always subject to change. Bidenflation continues to eat away at the purchasing power of Americans, supply chains around the world remain disrupted, and coronavirus cases are still near record levels as we approach two years since we first heard the phrase “15 days to slow the spread.” Three weeks into 2022, our finances look materially worse than they did at the end of December, as the S&P 500 has dropped over 7% already this year, and the NASDAQ has plunged around 11%! Hopefully markets will stabilize in the coming weeks, and over the next few months emergency measures associated with the pandemic will evolve into a common sense approach to potentially living with endemic conditions as we get closer to warmer weather in the Northern Hemisphere.

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Q3 21 Financial Scorecard: The Path Forward Slows

After five consecutive quarters making material progress on two of our primary FIRE goals, we were probably well overdue for some difficulties in the third quarter. While total returns for the S&P 500 were slightly positive in Q3 21, the Dow Jones Industrial Average and Nasdaq were both down for the quarter. Moreover, things got more challenging as the cooler weather arrived in September, which delivered the worst monthly stock market returns since the COVID-19 pandemic kicked into high gear around the world in March 2020.

The more challenging financial markets had a negative impact on our portfolio, and our expenses were also higher than normal. Some of those expenses were under our control, as we took our first family vacation in two years in August, enjoying several days in Maine while COVID cases were much lower than they are today. Unfortunately, the rampaging inflation the Biden administration has only reluctantly started to acknowledge took a big bite out of our wallet, as the townhouse we have rented several times over the years cost 60% more a night than it did in 2019! We also completed the HVAC project I mentioned last quarter, which was a much larger expense than our trip, but it will be nice to have reliable heating for the entire house as we head into what will almost certainly be another cold winter.

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Q2 21 Financial Scorecard: Nearing the Finish Line!

The ebullient financial markets continued to reach stratospheric levels during the second quarter of 2021. The S&P 500 returned 8.6% during Q2, pushing the market higher by more than 15% for the first half of the year. Those fantastic results boosted the ROMT family’s finances, moving us closer to our early retirement and financial independence goals!

As I noted last quarter, my mindset has shifted to “when” I’ll reach FIRE, from “if” I’ll reach FIRE, and strong stock market returns in recent weeks haven’t changed the way I’m feeling. That said, uncertainty in the U.S. remains elevated, with Coronavirus cases and deaths climbing again, a new administration that seems hell-bent on spending and taxing its way to higher inflation, and continued social unrest and increased polarization among our country’s citizens. While it seems like a strange time to potentially walk away from a steady paycheck, there’s always going to be something crazy happening somewhere, and the numbers suggest our financial position is sound. During Q2, I let my boss know I was unlikely to be around for the long term, so at this point, it’s just a matter of deciding when enough is enough!

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Q1 21 Financial Scorecard: The FIRE is Getting Hot!

While the Earth remained in the grip of the worst global pandemic in a century, the financial markets continued their inexorable march towards record levels during the first quarter of 2021. The S&P 500 delivered a total return of more than 6% over the past three months, in stark contrast to the 20% plunge during the same time period last year, when Coronavirus lockdowns started around most of the world.

Not surprisingly, it was a good quarter for the ROMT family’s finances. With the stock market continuing to climb over the first two weeks of April, we’re increasingly close to reaching our financial independence and early retirement goals!

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Q4 2020 Financial Scorecard: A Great Finish to a Crazy Year

2020 will likely be remembered as one of the craziest years in our lifetimes. A year ago, I never would have thought that going to the grocery store without a facemask could feel more dangerous than BASE jumping. For the record, I haven’t done either over the past ten months – but hope to head out in public without a mask at some point in the future!

Over the past twelve months, we’ve experienced the worst global pandemic in a century, the highest U.S. unemployment rate since the Great Depression, and the most contentious presidential election of my lifetime. While the value of the S&P 500 index dropped by more than one-third during February and March, the bear market was incredibly short-lived. By the second half of the year, the U.S. stock market was regularly hitting new record highs, and the S&P 500 generated full-year returns of more than 18%!

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Q3 20 Financial Scorecard: Heading Towards the New Normal

Another quarter of pandemic life is behind us, but life’s certainly not back to normal. New cases of COVID-19 are climbing around the country, and it seems like the dreaded “second wave” could emerge over the coming months. We’re also just weeks away from the U.S. presidential election. Regardless of whether President Donald Trump or Joe Biden wins, the result will ultimately have an impact on our personal finances and pursuit of FIRE.

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Q2 2020 Financial Scorecard: Time For a Change in Plans

My employer recently went through a round of layoffs. While my job was safe, many of my colleagues, and millions of Americans, have lost their jobs over the past several months. COVID-19 cases continue climbing in many parts of the country, massive social changes are taking place, and what seems like one of the most important presidential elections of my lifetime is just four months away.

The world has changed a lot in 2020, which has caused us to rethink our plans around our pursuit of early retirement and financial independence.

Part of me has been tempted to use the massive uncertainty as the impetus to walk away and focus on what’s most important to us.

But the more rational part of me thinks it would be crazy to abandon a good paycheck until we have a much better idea what life in the United States might look like in 2021, 2022, and beyond.

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Q1 2020 Financial Scorecard: A Whole New World

It seems frivolous to be writing our latest financial scorecard in the midst of everything that’s going on in the world today. The first quarter of 2020 will go down in history as one of the most eventful for the American economy, global financial markets, and society at large, as the COVID-19 coronavirus reached pandemic levels, impacting life around the world.

The coronavirus is closing in on two million confirmed cases, and has already killed over 100,000 people in what will likely become the most significant global pandemic since the outbreak of the Spanish Flu a century ago. In addition to the grim human toll, the coronavirus contributed to the worst first quarter performance in the history of the S&P 500 Index, which plunged 20% as fear of what the future holds ended the longest bull market in American history, triggering record jobless claims and a likely recession.

The result on our personal finances was, predictably, quite negative. While the ROMT family may have reached financial independence in late 2019, that’s no longer the case. But right now our family, friends, neighbors, and colleagues are all safe and healthy, which more than makes up for some smaller numbers in our financial spreadsheets!

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Q4 2019 Financial Scorecard: Kinda Sorta Financially Independent!

stock-market-2616931_1920The U.S. stock market finished the decade on a strong note, with returns of 8.5% for the S&P 500 during the fourth quarter of 2019. For the full year, the S&P 500 climbed 29%, its best performance since 2013!

Those great returns helped our financial situation improve more than expected over the last three months of the year. As a result, the ROMT family achieved one of the three financial goals we set on our path towards financial independence and early retirement!

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